Agenda item

The Acting Assistant Head of Finance introduced the 2021/22 draft Statement of Accounts.  Following presentation of the report, Members were invited to ask questions:

·       A Member commented on the thoroughness of the report, especially in the aftermath of Covid, and congratulated the Team on the document. Noting the strengthened position of the balance sheet, it was queried if any major effect is anticipated on the current year’s accounts due to Pension Scheme movements.  The Assistant Head of Finance agreed these can cause a large change on the balance sheet. Future pension fund liability has decreased by £47.5 million because of a decrease in the estimated future scheme liabilities and recovery in scheme assets primarily as a result of the year-on-year impact of Covid. The fund is for the long-term funding of pensions and annual variations can skew balance sheet figures. However, any such liability will not arise in one single year. This is being addressed through higher employee/employer contributions to the fund. The Triennial valuation exercise has recently shown that projections for employer contributions within our medium-term financial plan are in line with the most recent triannual exercise.

·       A Member noted a big increase in reserves allocated to schools and questioned how quickly the reserves will be drawn on by Schools.  The Acting Assistant Head of Finance confirmed that the authority is working closely with schools to ensure effective use of balances. No deadlines are set as Headteachers are best placed to decide on effective investment to improve learning standards and schools have different paces of recovery.  Answering points raised, it was explained that the schools reserves are not earmarked for recurrent expenditure; the fairer funding agreement with schools covers capital expenditure. The expectancy is balances will be reduced over the next 2/3 years whilst accepting that some schools are ahead of others in recovering standards.

·       In response to questions, it was agreed that consideration would be given to amending the final version of the Statement of Accounts to reference significant occurrences nationally and globally and to better reference abbreviations. The Audit Wales work is progressing well with no major issues identified. The Audit Wales Officer explained some resourcing issues, but no significant slippage is expected.

·       The Acting Assistant Head of Finance confirmed Welsh Government guidelines that schools should hold maximum balances of £50,000 (Primary) and £100,000 (Secondary).

·       Referring to Oak Grove Solar Farm, Castlegate Business Park and Newport Leisure Park, a Member queried if costs (such as repayment of loans) should be recorded against net income. It was explained that these reserves are sinking funds for unexpected pressures such as tenancy voids in Newport Leisure Park, and maintenance at the Solar Farm. Balances represent what’s available at the end of March 2022.

·       The Assistant Head of Finance explained that the value of Heritage Property represents an existing use value. Museum exhibits and Nelson Collection were revalued this year. These values will be published in the Statement of Accounts for next year. 

·       Considering the grant of £400,000 for 20mph speed limit scheme and funds availability for scheme reversal, the Deputy Chief Executive will discuss with Welsh Government if unspent funds are rolled forward or returned. 

·       On behalf of the Committee, the Chair thanked the Finance Team for their significant work in compiling the accounts. 

·       The Chair enquired about capabilities and capacities in the team and asked for an indication of the level of key person dependency, succession planning, people related risks and status of operational controls. The Assistant Head of Finance confirmed there are vacancies. The wellbeing of existing staff is a key theme.  Common to the Finance sector generally, there are recruitment difficulties. The team is experienced with a good knowledge base to allow flexibility.  Succession planning is a key consideration when recruiting. 

The Deputy Chief Executive confirmed that the senior role will be appointed imminently.  He thanked the Finance Team for their extraordinary efforts whilst under-resourced.

·       Clarification was provided regarding the banding of officer renumeration table. The left-hand column shows total employees in each pay band and the right-hand column shows the number that are teaching staff. It was confirmed that a salary is for the Executive Headteacher of two schools; one located in Torfaen. A proportion of the salary will be recouped from Torfaen County Borough Council.

·       It was confirmed that there will be no material events after the balance sheet date.

As recommended, the Governance & Audit Committee:

·       noted the 2021/22 draft Statement of Accounts and highlighted any queries and comments.

·       noted that following the completion of the external audit process, the audited Statement of accounts for 2021/22 will be presented to this Committee at a later meeting.