Agenda item

a) Appendix A – Middlesbrough Council - Draft Summary

of Accounts 2020/21

b) Appendix B – Middlesbrough Council - Draft Statement

of Accounts 2020/21

A joint report of the Director of Finance and the Executive Member for Finance and Governance was presented for Members of the Corporate Affairs and Audit Committee to note and review the draft Statement of Accounts for 2020/21.

The Audit and Accounts regulations 2015 had been amended for 2021.  The statutory timetable had been revised to reflect the continuing impact on local authorities and their finance teams of the pandemic, plus recommendations from the Redmond Review. The dates had been revised to the end of July and the end of September for the draft and audited accounts respectively.

Although Covid-19 had had a significant effect on both the Council and the preparation of the statement of accounts for this year, the statutory deadline had been met for the preparation of the draft Statement of Accounts.

The draft Statement of Accounts for 2020/21 agreed with the Financial Outturn report to Executive on 15 June 2021 which showed an almost balanced revenue budget position and the year-end position on the Investment Strategy. The general fund balance was £10.5 million as at the 31 March 2021 and slightly above the minimum level recommended by the Director of Finance within the Council’s medium term financial plan, of £9.4m. There had been a number of significant changes in the balance sheet of the Council, mainly increases in pension liabilities and changes in earmarked reserves. Although the balance sheet now had more liabilities in total than assets, it was expected that the asset values on both pensions and property would recover in the medium to longer term. There would be no immediate financial pressures on the Council’s financial plans as a result of this

The Head of Finance and Investment provided a detailed presentation of the Draft Statement of Accounts 2020/2021 highlighting the following elements:

•    The report was complex, and Members were required to consider the draft statement of accounts and highlight any issues they were interested in.

•    Members were encouraged to ask questions and seek further information.  

•    The report was only for noting until external auditors had qualified the accounts. The Committee would then be responsible for signing off the accounts from a political perspective.

•    The Covid pandemic had changed the time scales for completing this work, which was a reflection of how complex the accounts now were. For example, this year’s draft accounts needed to be completed by the end of July and finalised by the end of September.

•    The audit process had taken longer than normal, due to resourcing issues. The committee was advised it was probable the September deadline would be missed. If auditor exceeded their deadline a notice will be issued advising of this. 

Members were invited to make general comments and observations for further analysis. Comments and observations included; how Covid payments worked; the investment strategy; the Middlesbrough Development Company; explanation of business rates reduction in the town; town centre development and training on officer remuneration. TM: More information on the MDC and its actions in Middlesbrough; code of corporate governance review and wat progress had been made on this issue.

AGREED as follows:

1.  the Draft Statement Accounts published by the Director of Finance on the 19 July 2021, was noted.

2.  Committee Members would undertake further training to enable them to fulfil their statutory role.