The Head of Finance and Investment will provide a verbal update.
Minutes:
Statement of Accounts 2020/2021
The Head of Finance and
Investments provided a verbal update.
The statutory date for approval of the audited statement of accounts for
2020/21 was 30 September 2021.
However, the audit of the accounts was not yet finished and, as a
result, the approval report on the audited accounts and planned training for
Members would be delayed until the work had been completed.
The Covid-19 pandemic and the
ongoing impact on local authority finance teams, the overall financial position
of Councils generally, and the work required by external auditors to undertake
the audit had been significant. These
factors had resulted in delays in audit work being undertaken and audits being
signed off nationally. Many audits had
still not started due to delayed audit opinions relating to previous years and
workload for finance teams and audit firms.
Middlesbrough Council’s audit was progressing well and was ahead of many
other authorities in comparative terms.
There were some complex
expenditure and funding arrangements to assess as a result of Covid-19, in
respect of uncertainty around material assets and liability values. This work needed additional discussion and
evidencing by auditors. There had also
been staffing issues at both the Council and for local auditors also. Middlesbrough Council had had a vacancy at
Chief Accountant level since early last year.
The aim was to complete the audit in the next one to two
months and the audited Statement of Accounts would either be presented to
Members for approval at the Corporate Affairs and Audit Committee meeting
scheduled for 9 December 2021, or at an ad hoc meeting if completed
earlier.
As a result of the statutory deadline not being met, a
notice would be placed on the Council’s website with the draft accounts from 30
September 2021, with a note to explain that the audit was ongoing and the
audited accounts were not yet available for publication.
It was highlighted that no other Tees Valley local authority
had been able to complete their audit of accounts within the statutory
timeframe.
Responding to members’ queries it was clarified that the
main areas of focus were pensions accounting and covid
business grants. It was confirmed that
there were no penalties for late approval of the accounts.
The Chair requested that Members received notification of
training as early as possible.
Value Added Tax
The Council had appointed a new VAT officer who had been in
post since 23 March 2021.
In relation to purchasing cards, the auditor had previously
raised an issue of council staff using their purchasing cards but either not reclaiming
any relevant VAT, and/or not retaining receipts and invoices as proof for HMRC.
In general there were a number of
internal controls that need improving on the use of purchasing cards and most
of this was in terms of awareness and compliance with business process that the
Council used in this area. This was
being led by the Procurement team who had issued updated procedure notes and
some direct training to remind users of what was required. The main approach on VAT would be awareness
via training sessions for managers and staff, publicity via the procurement
forum on purchasing cards, and also in VAT newsletters.
AGREED that the information provided was received and noted.