Agenda item

The Committee had before it a report by the External Audit Director which presented External Audit’s Annual Audit Report on the 2023/24 audit.    

The report recommended:-

that the Committee review, discuss and comment on the issues raised within this report and the attached appendix.

In response to a question relating to the materiality level and how this related to day to day matters, the External Audit Director advised that the materiality concept was based on professional audit judgement.  He further advised that on receipt of the draft accounts a further assessment of materiality is undertaken to determine if appropriate. 

In response to a comment relating to unspent grants, the External Audit Director advised that as part of their process, the creditors balances were tested to ensure that the amounts were correct and that unspent funds were accrued correctly providing a full evidence trail to confirm the amounts unspent.  The Chief Officer – Finance advised that the grants process was complex where it was important that the Council were claiming all that they were entitled to whilst making sure that funding was used for specific purposes and identifying whether funds could be retained for future years.

In response to a request for more information on service concession savings and increased investment in the joint venture with BP, the Chief Officer – Finance advised that the service concession savings had provided flexibility in the application of debt repayments for the 3Rs schools to extend the borrowing over the life of the asset and that a decision was made in March 2024 to use some of the funds for capital projects.  He further advised that the reference to BP should refer to the Sports Village, where he asset was valued each year and held as an investment asset.

In response to a question relating to whether there was a figure for bus lane enforcement charges, the Chief Officer – Finance advised that there had been a significant value collected during 2022-23 and 2023-24 which a remaining balance in the accounts of £4.2m.  He further advised that the monies collected were used for roads infrastructure improvements across the city with reports presented to the Finance and Resources Committee.

In response to a question relating to the definition of committed and uncommitted reserves, the Chief Office – Finance advised that uncommitted reserves were the minimum amount of funds held for resilience purposes and not set aside for any specific purpose which was supported by the Reserves Policy which was proved annually and committed reserves were made up of grant funding held for future years, to be spent on specific projects and second home income for Council Tax to be used for affordable homes.

In response to a question relating to the reasons why the borrowing levels had increased and whether the increase in the general fund reserves could be used to reduce the need for borrowing, the Chief Officer – Finance advised that the reserves were not always useable funds due to funds set aside for specific purposes and that during the budget process the value of the reserves were used to determine where funds could be used.  He further advised that rising debt was a mixture of long term and short term borrowing and linked to the significant investment in housing projects and capital projects.

In response to a question relating to whether the Committee could get assurance that the use of service concession monies this year would not add increased debt in future years, the External Audit Director advised that external audit were content with the application of the policy that allowed the greater flexibility to spread the debt over the life of the asset.

The Committee resolved:-

to note the content of the report and the attached ISA 260 report to those charged with governance – 2023-24 Annual Accounts Audit.