To note the Head of Finance’s verbal update.
Minutes:
The Head of Finance & Housinggave a verbal update regarding the Statement of Accounts, highlighting the following:
- This meeting was the time of the year when a draft statement of accounts for the previous financial year was given to the committee. The draft statement of accounts was not ready that was why this was a verbal update. The reason why the accounts were not ready was due to a nationwide issue relating to an alteration in the method of accounting, as well as factors relating to the pandemic. Only 9% of local authorities had completed their statement of accounts; and
- It was emphasised that this was the first time that the council had been in the position of not having the statement of accounts ready.
David Eagles the council’s external auditor provided a verbal update on the progress of the completion of the statement of accounts:
- That nationwide issues were caused by the discrepancy in the valuation of infrastructure assets. The Chartered Institute of Public Finance and Accountancy (CIPFA) had been attempting to deal with this issue;
- In February 2022 it was determined that it was not possible for proper accounting processes to take place when an infrastructure asset was removed from use;
- What had happened when an infrastructural asset was removed from use was that the cost, the accumulative deprecation, and the net impact of that were accounted for. The new code had an additional element that meant that cost needed to be accounted for on a geographical basis. It was not possible to comply with this requirement; and
- CIPFA were attempting to change the code to address the method of accounting outlined above. External auditors were not able to issue an opinion until this issue has been clarified.
In response to questions, the external auditor and the Head of Finance & Housing provided the following answers:
- In terms of what Haringey Council could have done to foresee this issue, there was little that could be done. The council found themselves in a nationwide problem. The external auditor advised to the committee that the council were following the same processes as the majority of local authorities, it was a case of waiting for the situation to resolve itself nationally;
- There were not local authorities in a more advanced position for accounting for their infrastructure assets than Haringey Council. This was because all local authorities had to account for these assets in the same way. The external auditors were not making any criticism of the way the council had dealt with this issue; and
- The Head of Finance & Housing relayed that the council would make their best endeavours to meet the deadline for the 2022-23 accounts; however, external factors would have to be considered. For example, if the existing infrastructure asset valuation issue persisted. The local authority was liaising with other boroughs, partners and independent bodies to find a solution to the issue.
RESOLVED
To note the Head of Finance & Housing’s verbal update.