Agenda item

 Members were presented with the unaudited 2009/10 Statement of Accounts as required by the Accounts and Audit Regulations 2003. The report provided Members with details on the key issues raised in the Council’s accounts. Included in this were the Pension Fund accounts which formed part of the Pension Fund Annual Report which had been approved by the Pensions Committee at its meeting on 23 June 2010. 

The Head of Accountancy Services informed Members the audit of the accounts by the Council’s external auditor, Deloitte, was due to start on 5 July 2010 and the auditor’s findings would be reported to this Committee at its meeting in September.

The Head of Policy attended the meeting and provided Members with an overview of the Annual Governance Statement for 2009/10, which formed part of the Statement of Accounts.

Issues raised and comments made included:

• Leader’s Statement on page 19 of the agenda was missing
• Treasury Management – It was noted that in relation to Heritable Bank, the Council had received £5.28m back
• Income and Expenditure Account – page 44 of the agenda – Expenditure on Services – Education and Children’s Services. The difference in expenditure and income was caused by property revaluations. This variance was due to impairments on school buildings revalued as part of the 5 year rolling re-evaluation programme
• Cash Flow Statement – Under Revenue Activities, Other Operating Cash Payments – this amounted to £316m which was the biggest item of cash outflows, a breakdown of which was provided in a note to the accounts

Notes to Main Financial Statements

·          Long Term Contracts – Reference was made to Jarvis PLC going into administration which meant they could not meet their obligations under the Barnhill School PFI Contract with the Council. Members were informed that another organisation would be taking over this contract

·          Long Term Contracts – Reference was made to the 10 year contract with Dalkia Energy & Technical Services and Members asked for further details including the terms of the contract.

·          External Audit Costs - Discussion took place on the cost of £535,000 and Members were informed that this cost would be reduced with the Comprehensive Area Assessment and Use of Resources work having been abolished

·          Under summary of Treasury Management Policy, Members noted the sentence which referred to the speculative procedure of borrowing purely in order to invest being unlawful

·          Fund Balances and Reserves – Reference was made to two new earmarked reserves relating to Schools Earmarked Reserves and Grant Funded Reserves and Members were informed that the Schools Earmarked Reserves included reserves from Building Schools for the Future and Grant Funded Reserves were grant payments received in advance that had previously been held in creditors

·          Events after the Balance Sheet Date – Members noted that Hillingdon Homes would be transferring back to the Council on 1 October 2010. The Chairman informed Members that he had contacted the Borough Solicitor regarding his membership of the Board of Hillingdon Homes and he had been advised that he would only have a conflict of interest as Chairman of the Audit Committee if there was to be any disagreement between the parties involved

·          Section 65 – Agreement for Learning Disability Services – reference was made to the agreement the Council had with the Primary Care Trust (PCT) which provided support to 660 clients at a gross cost of £34m which included approximately 105 PCT clients for which the Council received £10.4m

·          Equal Pay – Back Pay Provision. The Head of Accountancy Services reported that most of the Council’s staff that had been affected by this had negotiated a settlement.

·          Pensions Schemes Basis of Estimation – Financial Assumptions.  The Chairman noted that the expected return on equities had increased from 7.0% to 7.8%. Members were informed that this was partly offset by a decrease in the discount rate used to measure future liabilities.

The Chairman referred to the Annual Governance Statement and the Members agreed that it would be good practice if the Chief Executive or the Deputy Chief Executive attended the Committee next year to introduce the statement.

Members noted that in relation to Member Training, two Risk Management training sessions had taken place for Members.                        

Resolved –

1.      That approval be given to the unaudited Statement of Accounts for the financial year ended 31 March 2010    and the Chairman be asked to sign and date the Statement of Accounts to formally complete the Committee’s approval of the accounts.

2. That the Annual Report for the Pension Fund for the financial year ended 31 March 2010 be noted.