Agenda item

(i)                 Report by Head of Finance

(ii)               Draft Financial Statements (to be circulated under separate cover)

The Council had before it (1) a report by the Head of Finance which explained the background to the preparation of the Council’s draft Financial Statements for the financial year 2009/10; and (2) a copy of the draft Financial Statements.

The report explained that the Council was required by statute to annually present a set of draft accounts to Audit Scotland by 30^th June, and that elected members should receive a copy of these accounts by that date.

The report explained that the General Fund had increased in value by £4.008million and this had been created as a result of three significant factors (1) an operational budget surplus of £9.141million; (2) non-recurring funding streams of £10.633million; and (3) the use of earmarked sums to the value of £15.766million.

The report stated that the operational budget surplus reflected an improvement of £5.756million when compared to the estimated position reported to the Finance and Resources Committee on 6^th May 2010. The report explained that the favourable movement was due to increased grant income, reduced costs associated with the delivery of the social work service, further savings achieved against capital financing costs, a review of insurance provision/funds held, reduced costs to be set against contingencies and the inclusion of provisions for Council Tax/Housing Benefit Subsidy assessments by the Department of Works and Pensions.

The report stated that in analysing the final unaudited position compared to budget, significant elements that made up the movement had, to a large extent, been identified and explained throughout the year within the regular monitoring reports to the Finance and Resources Committee.

The report also provided information in relation to the Housing Revenue Account, Capital Expenditure and the Common Good. The report concluded that the outturn for the Common Good was better than had been budgeted and forecast, principally because of rising asset valuations. The Housing Revenue Account had a surplus of £1.896million. Total capital expenditure in 2009/10 was £105.472million, of which £48.547million had been spent on the Housing Revenue Account programme and £52.417million on the Non-Housing programme. A further £4.508million related to Consent to Borrow granted during the year by the Scottish Government to fund specific costs in relation to equal pay.

The report recommended:-

that the Council -

(a)              note the draft accounts, which would be submitted to Audit Scotland by 30^th June 2010;

(b)              note that the audited Financial Statements would be presented to the Audit and Risk Committee, along with the external auditor’s report to members in the autumn, and would come back to a Council meeting thereafter;

(c)               note the actual position and the better than projected outturn on the General Fund;

(d)              note the position on the Housing Revenue Account;

(e)              note the capital expenditure levels for the year and the means by which this was funded;

(f)                 note the favourable movement in the Common Good;

(g)              note that under the Internal Trading Account requirements all of the services classified as significant trading operations, with the exception of Property Letting, had achieved a cumulative surplus on an aggregate rolling basis over the three year period from 1^st April 2007;

(h)               note and approve, as detailed in the report, the earmarked sums and commitments and the consequential uncommitted working balances remaining, for the General Fund, the Housing Revenue Account and Common Good, based on the outlined commitments;

(i)                 note that in accordance with the strategy to restore revenue balances, there was an improved reserves and balances position at the year end; and

(j)                 note that a fuller analysis of financial outturn against budget would be presented to individual service committees and the Finance and Resources Committee in due course.

The Council resolved:-

(i)                 to approve the recommendations; and

(ii)               to thank all staff involved in achieving the improved financial position.