To consider the following:
· Report of the Head of Financial Services
· WAO Audit of Financial Statements Report – Powys County Council
· WAO Audit of Financial Statements Report – Powys Pension Fund
· Letter of Representations for Powys County Council
· Letter of Representations for the Powys Pension Fund
· Statement of Accounts 2018-19 – Powys County Council
· Statement of Accounts 2018-19 - Powys Pension Fund
· Annual Governance Statement 2018-19
Minutes:
Documents:
· Report of the Head of Financial Services
· WAO Audit of Financial Statements Report – Powys County Council
· WAO Audit of Financial Statements Report – Powys Pension Fund
· Letter of Representations for Powys County Council
· Letter of Representations for the Powys Pension Fund
· Statement of Accounts 2018-19 – Powys County Council
· Statement of Accounts 2018 -19 – Powys Pension Fund
· Annual Governance Statement 2018-19
Discussion:
Report of the Head of Financial Services
· The Accounts had been submitted 2 weeks ahead of the deadline
· The Auditor General proposes to issue an unqualified opinion on both the Powys County Council and Pension Fund accounts
· If the Committee approve the Accounts today, the Chair and S151 Officer will have authority to sign the Accounts
· The Committee have had two seminars, one to consider the draft Accounts and one to consider the changes made to the final Accounts
· One misstatement had not been amended – this was for £374K and relates to Plant Property and Equipment
· The impact on liabilities of the McLeod judgement, which refers to age discrimination within the pension scheme, has resulted in an increased impact on liabilities of the County Council Accounts of £10.13M and £7.1M on the Pension Fund
· The process had been completed within a shorter timescale and had taken a project management approach
· Continual improvements are being made and are recognised – there are always further improvements that can be made
· Resources are under continued pressure and the S151 Officer needs to ensure that finance can be delivered as efficiently and effectively as possible
· No-one took up the opportunity for public inspection
· Training for staff is ongoing
WAO Audit of Financial Statements Report – Powys County Council
· The Auditor General’s responsibilities were outlined
· Significant issues identified were corrected and therefore would not affect the Auditor General’s opinion
· Post project learning has been analysed and discussed with Finance
· Tighter deadlines in future may mean more uncorrected amendments
· A revaluation of assets had been carried out on a different basis to previous years. The WAO were asked if the new basis was correct and whether that was common throughout Wales. The Audit ascertained that assets had been revalued in line with the CiPFA Code. Each authority appoints its own valuers. The WAO were satisfied that the revaluation had been appropriate and in line with professional criteria. There had been a change of valuer following a tendering exercise. The WAO would consider what steps the Authority had taken in challenging the revised valuation whether this had been an increase or decrease.
· It was suggested that an explanation of the misstatement of £374K could be explained in more user- friendly terms for those of the public who may wish to view the accounts
· The level of materiality has been defined – the level of materiality agreed by the WAO had been £4.97M which was deemed appropriate
· The WAO had published a report regarding errors and misstatements, and in what circumstances these need to be corrected – this would be considered at a future Audit Committee
· The WAO were asked if it was possible to benchmark the Authority’s financial performance against that of other local authorities and whether any other authority had failed to produce its Accounts. The WAO reported that there are some authorities whose accounts were signed off by the end of July, and others which still had to be signed off. The early closing agenda was progressing and on track. Further improvements were expected next year, and it was anticipated that the Authority should succeed in meeting the earlier deadline.
· The Head of Financial Services reported that the rest of the organisation did not always understand their role at a transactional level to deliver improvements
· A query was raised regarding the provision within the Accounts for falling land prices. All issues which impact on assets are reviewed as appropriate. Borrowing is not affected by the value of the asset but there may be an impact in the future.
· The Committee noted that it was part of the challenge for the Accounts. Is the Committee providing sufficient challenge, and should this be mentioned within the WAO report? The WAO had no criticism of the scrutiny of the Accounts. An effectiveness workshop was held last year which had been facilitated by the WAO. The Committee had been provided with a brief on the draft accounts and on any adjustments made to the final accounts thus having two opportunities to gain a better understanding and ask further questions.
· What is the formula to assess the Authorities contribution to the Pension Fund in light of the McLeod judgement? The Pension Fund is currently undergoing revaluation, and this will form part of that consideration. The MTFS addresses an additional provision to the Pension Fund. Any further adjustments will be considered once the Actuary’s report has been received.
· Scrutiny now reviews financial aspects within their work, but this requires further development. It is essential that managers see this as their responsibility and not one solely for Finance. Finance Panel works with the monthly outturn reports. The Head of Financial Services reported that more detailed consideration of unit costs and linking performance and cost more easily were the way forward.
WAO Audit of Financial Statements Report – Pension Fund
· The report was similar in layout and content to that for Powys County Council
· The Auditor General is expected to issue an unqualified opinion
· The materiality threshold is £6.54M
· The accounts had been received ahead of the statutory deadline
· The one key issue is the McLoud judgement – this will have implications across the public sector
· No significant difficulties had been encountered
· The task is a huge challenge, and the WAO welcomed the help and co-operation of the Financial Reporting and Policy Accountant and his team
· The Committee queried why the figure quoted in both sets of accounts differed in respect of the McLeod judgement. The liability for the Authority was reported on the main Statement of Accounts, the Pension Fund was reported on the basis of active liabilities as at the last valuation in 2016.
Letters of Representation
· Detail within these letters had been reported in the Head of Financial Services report
Outcomes:
· The 2018-19 Statement of Accounts were approved. The Chair and Section 151 Officer were authorised to formally sign the Statement of Accounts
· The Statement of Accounts to be published by the 15th September 2019.
· The 2018-19 Pension Fund Accounts were approved. The Chair and Section 151 Officer were authorised to formally sign the Pension Fund Statement of Accounts.
· The Pension Fund Accounts be published by the 15th September 2019.
· The 2018-19 Annual Governance Statement was approved for signing by The Leader of the Council and the Chief Executive.
· The Annual Governance Statement be published by the 15th September 2019.
Supporting documents: