Items 5 and 6 were considered together.
The Head of Finance presented the 2021/22 Statement of Accounts for Monmouthshire County Council and thanked the various teams for their contribution to the final document, and Audit Wales for its constructive and helpful approach. The Committee was reminded that the main reason for the delay was due to the technicality regarding the valuation and disposal of infrastructure assets.
The Audit Wales Officer presented the ISA260 response to the accounts and thanked the Finance Team welcoming the good working relationship.
Following presentation of the report, questions from Committee Members were invited:
· A Member asked if similar problems with deadlines are anticipated for this year. The Head of Finance stated that initial discussions suggest that draft accounts will be earlier this year. The Audit Wales Officer added that the delays had a subsequent effect with other sector audits. Discussions with Welsh Government are in progress and it is hoped that the deadlines will be brought forward from January incrementally year on year to return to original timescales.
· The Chair questioned the reference to reduced Finance Team capacity and changes in personnel across departments and queried how this is being addressed. The Head of Finance confirmed that it is planned to build resourcing to make permanent appointments in the Finance Team to improve capacity for future years. Discussions have started early with other departments to prepare for year-end information. It was requested that the Head of Finance reports back on work to return the Finance Team to full capacity in the summer. The Deputy Chief Executive referred to the vast amount of work involved in the budget setting process this year. There are issues that will draw on the Finance Teams in terms of budget and cost monitoring e.g. social care is a significant overspend. It was confirmed that the savings proposals aim for a more sustainable footing. Capacity issues are likely to continue.
· The Member queried the overstatement of creditors of £361,000. The Head of Finance suggested that this situation reflected the lateness in receiving grant funding from Welsh Government that caused significant administrative issues. In discussion with Audit Wales, it is planned to treat the late award of grants appropriately in future to avoid a recurrence.
· A Member expressed concern about the changes to timescales combined with capacity issues were likely to cause problems with scheduling. It was suggested that, in the ISA260 response, there should be commentary about why there was a missed deadline and the consequences. It was suggested and agreed by Audit Wales that there should be reference that there was understanding of the reasons why adjustments weren’t made to uncorrected misstatements. In terms of the timetable, it is anticipated that there will be correspondence with authorities to confirm future deadlines.
· A Member referred to Council Tax increases and queried the difference in Council and market valuations for Council Tax bandings. The Head of Finance was requested to provide a response outside the meeting.
· The Chair referred to the statement that from 1 April 2021 to 31 March 2025 a temporary relief to the CIPFA code is allowed not to report gross cost and accumulated depreciation for infrastructure assets. He queried the level of confidence in meeting requirements post March 2025. The Head of Finance explained that detailed work was carried out four years ago to determine infrastructure assets e.g. meterage and condition of roads. The assets were componentised in preparation for the proposed Highways Network Assets legislation and subsequently shelved by CIPFA. These records will form the base data for post March 2025.
The Deputy Chief Executive wished to thank the Head of Finance and Finance Team, and Audit Wales Officers for the work in closing the accounts in difficult circumstances. The thanks were echoed by the Committee.
Referring to the report recommendations, the Committee noted that the accounts have been amended since the draft version was published to reflect the outcomes of the external audit process, and as noted within the Audit Wales ISA260 Audit of accounts report.
The Governance and Audit Committee approved the final audited Monmouthshire County Council statement of accounts for 2021/22.