Agenda item
Statement of Accounts for the Year Ending 31st March 2024
Report of: The Head of Financial Services
Purpose of report: To submit the Council’s Statement of Accounts and Letter of Representations for approval and authorisation.
Recommendation(s):
That the Committee:
1. Note the report and the potential audit trajectory.
2. Approve the 2023/24 Statement of Accounts as agreed by the Head of Financial Services and authorise the Chair of the Committee to sign the Accounts incorporating any further changes arising from ongoing audit.
3. Agree to the signing of a Letter of Representations for 2023/24 incorporating any statements required by the external auditor arising from the ongoing audit to enable it to be signed and dated on date of signing and to enable the opinion to be issued (paragraph 10).
Minutes:
Bill Lewis, Financial Accounting Manager, was present to answer questions.
The Chair informed the Committee that he would submit a list of specific questions to the Financial Accounting Manager via email outside of the meeting and recommended members also do so.
The Financial Accounting Manager presented the report to the Committee stating that the purpose is to seek the Committee’s approval for a delegation for the statements to be signed off. He provided the Committee with some background information describing that the Council obtained disclaimed opinions on the 2021/22 and 2022/23 accounts which will inhibit the achievement of a clean audit. He directed the Committee to p.157 which outlines the potential trajectory depending on progress of the heavy workload. He informed the Committee that the best option would be for the Council to obtain an unmodified opinion, also referred to as unqualified opinion, by 2026/27. Furthermore, he explained that a few unsubstantial changes are likely to be made to the statement of accounts for 2023/24 but assured the Committee that these would be communicated to the Chair and Head of Financial Services assuming the recommendation to provide the delegation is agreed. It was clarified that the delegation would cover the Statement of Accounts for 2023/24 and a letter or representations for 2023/24 for which a draft is not available prior to national review at EY. The Committee was provided a previous example from 2022/23 within the agenda pack; the Financial Accounting Manager noted that questions can change each year depending on the audit and national moves.
The Chair focused on p.157 and asked the External Auditor if he felt confident that the predicted trajectory will represent Oxford City Council to which he commented that each year is dependent on the previous and that the trajectory provided is based on national guidance. The External Auditor confirmed that he expects most councils to achieve this but would not commit to certainty.
Councillor Muddiman queried the potential consequences of devolution on the accounts to which the Financial Accounting Manager was unable to provide a definitive answer. He predicted that any accounts would be combined during the creation of the new organisation and noted that the trajectory would be delayed. The External Auditor noted the question required a hypothetical response but drew on the example of Buckinghamshire to explain what happened during the transition to a unitary authority, noting all assets and liabilities were subsumed into a new body. Councillor Muddiman sought clarification on whether it is still incumbent on the new body to carry on with retrospective work on the accounts for previous entities to which the External Auditor advised that this would not be the case. He did not speculate any further.
The Chair questioned whether the disclaimer would affect the terms on which the council companies could obtain borrowings. The Head of Financial Services explained that local authorities are distinct from the expectations within the private sector and therefore noted that he would not expect considerable impacts on ODS and OX Place. The Committee heard that, as the Chief Financial Officer, he could provide a letter of support to companies to support borrowing despite the presence of disclaimed accounts. He noted belief that this should smooth out any issues. The Head of Financial Services also clarified to Councillor Smith that this would not affect treasury management.
The Chair reiterated that specific questions could be emailed to the Financial Accounting Manager, and answers would be circulated to all Committee members.
The Committee:
a. Noted the report and the potential audit trajectory.
b. Approved the 2023/24 Statement of Accounts as agreed by the Head of Financial Services and authorise the Chair of the Committee to sign the Accounts incorporating any further changes arising from the ongoing audit.
c. Agreed to the signing of a Letter of Representations for 2023/24 incorporating any statements required by the external auditor arising from the ongoing audit to enable it to be signed and dated on date of signing and to enable the opinion to be issued (paragraph 10).
Supporting documents:
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AG covering report -Statement of Accounts 2023 24 v3, item 30.
PDF 257 KB View as DOCX (30./1) 172 KB
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Appendix 1 Draft Statement of Accounts 2023 24, item 30.
PDF 1 MB
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Appendix 2 Letter of Representation 2022 23 - Example, item 30.
PDF 292 KB View as DOCX (30./3) 467 KB