To seek the Audit and Governance Committee’s approval of the 2013/14 Statement of Accounts and Annual Governance Statement.

The Section 151 Officer presented to members the 2013/14 Statement of Accounts and Annual Governance Statement and action plan.

Statement of Accounts

The Statement of Accounts must meet with international financial standards and are laid out according to these requirements.

The key areas identified were that

·         Although Adult Social Care did overspend, due to savings in other areas the result was a break even position.

·         The general reserve funds were at £5.1million which exceeds the minimum policy requirement.

·         Reserves for specific items of £23.9m had been set aside.

Each part of the Statement of Accounts was presented to the committee in turn.

The position on the Balance sheet showing an increase in Net Assets was highlighted to members. It was confirmed the previous reductions were due to schools taking on Academy status, the increase this year was partly due to the increase in reserves. The decrease in Pension liability was also highlighted.

With regard to Academy Schools, it was confirmed that the authority, although technically still owning the land, have no control over it for a number of years. Therefore, the asset will appear on the schools’ balance sheets.

Concerning the Pension deficit, the Section 151 Officer confirmed that a lot of time has been spent with the pension actuary, Mercer, discussing the pension deficit. Triennial valuations take place to assess the amount that needs to be set aside.

Concerning point 2.4.2 of the report, members asked the Section 151 Officer to provide details of the ‘Other Small Schemes’ listed in the Summary of Capital Expenditure. The Section 151 Officer confirmed this will be provided to the next meeting of the committee. (UPDATE – this information was emailed to members of the committee on 17 October 2014)

Concerning officers’ remuneration, members requested officer’s supply details of how many staff are earning less than £50,000 per annum, in order to make a comparison with the number receiving over this amount. The Section 151 Officer confirmed this will be provided to the next meeting of the committee. (UPDATE – this information was emailed to members of the committee on 17 October 2014)

In answer to a query about the term ‘Members Allowances,’ the Assistant Director Governance, confirmed this is how the payments are referred to in the constitution. The Chairman confirmed this matter could be discussed when the committee next discuss the constitution.

Concerning a query about the apparent drop in the Collection Fund, it was confirmed that this is due to the change in Council Tax Benefit to the localised Council Tax Reduction Scheme.

Annual Governance Statement

The Section 151 Officer advised that the Annual Governance Statement was in a different, stronger, format this year and was more action focused.

The six principles of good governance were explained, highlighting how Herefordshire Councils principles link to them. Taking these six principles an Action Plan has been written which has identified 12 areas, showing what action is to be taken, the lead officer and when action is due.

It was pointed out that para 17 on page 4 of the report should read

The Audit and Governance Committee’s terms of reference encompass responsibility for review of the constitution and in 2014 a cross party working group is to be established to inform this work reporting to the committee.

Members of the committee welcomed the Action Plan and the following points were made in discussion.

·         Having a rolling programme of actions in each meeting works well.

·         A timetable of work should be drawn up based on the dates the actions are due to be completed.

·         Changes in membership of committees should not mean good practices should be lost.

·         Chairs of committees should work closely together to make sure areas of work are not either ignored or duplicated.

·         Information needs to be passed to members early.

·         Members should feel responsible for the action plan as well as officers.

·         When creating working groups the committee should look outside for other members with relevant experience.

·         Challenges will face the county in the future with regard to having an aging population. Pressure will be in place to recruit and retain staff.

Resolved:

THAT the Audit and Governance Committee

(a)  Approve the 2013/14 Statement of Accounts;

(b)  Agree the draft letter of representation is signed by the Chair and Chief Finance Officer; and

(c)  Approve the Annual Governance Statement.