Agenda and draft minutes

To appoint a person to preside over the element of the meeting which will be held jointly with the Audit Committee.

It was RESOLVED that Cllr Carolina Veres be appointed to preside over the join element of the meeting.

At this Juncture, the Democratic Services Officer outlined the procedure that would be followed for the joint meeting.

Apologies for absence were received from Councillors Sandra Barr, Akin Elekolusi and Robin Parker.

There were no declarations of interest.

The Committee is requested to receive a presentation from the Assistant Director (Finance) on the External Auditor’s (Azets Audit Services Limited) Audit Results Report for consideration and approval and the audited 2023/24 Financial Report including the Statement of Accounts.

Following the presentation, Members will be invited to ask questions of clarification.

At this juncture the Statement of Accounts Committee will adjourn to allow the Audit Committee to consider the report and to agree to any recommendations.

At the rise of the Audit Committee the Statement of Accounts Committee will reconvene and Members will receive details of any recommendations from the Audit Committee on this matter.

The Audit Committee and Statement of Accounts Committee meeting jointly received a presentation from Assistant Director (Finance) on the Statement of Accounts 2023/24.

The presentation from the Assistant Director (Finance) included the following information:

·         The 2023/24 balance sheet showed a decrease from £691M to £669.5M, primarily due to asset revaluation and movements in investments.

·         Long-term investments decreased by £2.3M, while investment properties increased by £1.8M.

·         £8.6M moved from long-term to short-term assets.

·         £13M borrowed for 2024/25, with an additional £7.5M long-term borrowing in 2023/24.

·         Pension liabilities fluctuated but did not impact general fund or HRA directly.

·         General fund remained resilient, with no cuts made this year, but the HRA faced financial challenges and required future savings.

The Assistant Director (Finance) stated that the Council aimed to improve financial reporting and valuations in 2024/25 to move towards an unqualified audit opinion.

The External Auditor (Azets) were invited to address the Committee.

Azets advised the Committee that:

·         Achieving a clean audit opinion required full assurance over two prior years plus the current year. Due to delays, disclaimers were likely for 2024/25 and 2025/26.

·         Assurance over pensions depended on the next triennial valuation, complicated by a change in the pension fund auditor.

·         Unlike private sector accounts, local government reserves were affected by statutory overrides, making it harder to verify opening balances.

·         Audit firms were working together to establish an acceptable approach, but regulatory endorsement was needed to ensure consistency.

·         A proposed Local Audit Office was being considered to provide clearer direction, while a statutory override to accept past balances was considered but risked undermining financial accuracy.

·         The focus for 2024/25 would be on fully auditing certain balances, identifying areas requiring retrospective review, and assessing the feasibility of back-auditing key figures like property, plant, and equipment.

Responding to a question regarding the Council’s pension liability, the Chief Finance Officer advised that the valuation process took various factors into account, such as age and life expectancy projections. Those factors influenced liabilities, which fluctuated over time due to market conditions. The triennial valuation determined the level of employer contributions required to maintain the fund’s stability.

Responding to a question regarding complexities of Local Government finances and the subsequent challenges that might arise in a potential transition, Officers commented that each council in Hertfordshire had a different financial position, which added further complexity to any potential transition. The Committee heard that the issue of disclaimed accounts was not unique to Stevenage—it was a national problem. Officers advised that a pragmatic approach would be required, as historical challenges in the audit process had impacted councils across the country.

A Member asked a question regarding the significant work required to resolve the audit disclaimers and whether there was the capacity to complete this work. Officers responded that a key issue was a lack of resources both within councils and among external auditors. The Committee heard that, over the past decade, financial constraints had significantly reduced finance team capacity, while the complexity of local government finance had increased.  ...  view the full minutes text for item 3.

To consider any Part I Business accepted by the Chair as urgent.

There was no Urgent Part I Business.

To consider the following motions –

1.     That under Section 100(A) of the Local Government Act 1972, the press and public be excluded from the meeting for the following items of business on the grounds that they involve the likely disclosure of exempt information as described in paragraphs1 – 7 of Part 1 of Schedule 12A of the Act as amended by Local Government (Access to Information) (Variation) Order 2006.

2.     That Members consider the reasons for the following reports being in Part II and determine whether or not maintaining the exemption from disclosure of the information contained therein outweighs the public interest in disclosure.

Not required.

To consider any Part II Business accepted by the Chair as urgent.

There was no Urgent Part II Business.