To note the draft, unaudited Statement of Accounts for 2022/23.

The Head of Strategic Finance presented the 2022/23 Draft Statement of Accounts, the key points included:

i.             the accounts had been prepared in accordance with the International Financial Reporting Standards (IFRS);

ii.            Herefordshire Council was part of the 30% of local authorities that had published the Draft Statement of Accounts in accordance with the statutory deadline of 31 May 2023 for public inspection and for external audit;

iii.          attention was drawn to the principal sections and to the fact that the document had been streamlined, whilst maintaining compliance with the required standards;

iv.          the external auditor had highlighted additional audit procedures in respect of the valuation of land and buildings and investment properties, and the valuation of pension fund net liability (minute 9 (External Auditor's Draft Annual Plan 2022/23) above;

v.           the council relied upon independent professional expert valuers and actuaries, with the results being subject to internal challenge and external audit testing; and

vi.          the financial outturn position for 2022/23 was an overspend of £5.6 million and this differed to the comprehensive income and expenditure statement as a result of technical accounting adjustments.

On behalf of the committee, the Chairperson thanked the officers involved for the efficient preparation of the Draft Statement of Accounts.

Officers responded to questions from committee members:

1.           The Director of Resources and Assurance outlined the principal assumptions used by the actuaries in relation to Pension Fund Liability.

2.           The Head of Strategic Finance explained: the setting of a balanced budget by Council in February; the monitoring of performance, with this reported to Cabinet quarterly; the use of the financial resilience reserve; and the consideration being given to reserve balances as part of medium term planning.

3.           The Head of Strategic Finance commented on the increase in unusable reserves, principally due to the pension reserve, and confirmed that reserves were monitored throughout the year, with updates provided to Cabinet on the planned use of reserves.

4.           The Head of Strategic Finance provided an overview of the sector issue around the accounting for infrastructure assets and the review undertaken during 2022/23 on the useful life of different elements.  The work to be undertaken by the external auditor was also outlined.

Resolved:

That the Audit and Governance Committee note the draft, unaudited Statement of Accounts for 2022/23.