Agenda item

Draft Statement of Accounts 2016/17


The Committee considered the draft un-audited Statement of Accounts summarising income and expenditure for the financial year to 31 March 2017 together with details of the Council’s assets, liabilities and reserves at that date.  It was noted that:


·  The Council was required to submit a draft copy of the Statement of Accounts to the External Auditors by 30 June in line with the amended Accounts and Audit Regulations 2011.  The final audited Statement of Accounts would be submitted to the Committee for approval in September 2017.


·  Long term liabilities had increased by £16.9m, predominantly resulting from the increase in the pensions liability following the annual assessment of the fund by actuaries acting on behalf of Kent County Council.  There was a corresponding reduction in the value of unusable reserves.  Whilst this had a substantial impact on the net worth of the Council as recorded in the Balance Sheet, statutory arrangements in place to fund the deficit meant that the financial position of the Council remained healthy.  The deficit was currently being addressed through increased contributions to the fund over the working life of employees, as assessed by the scheme actuary.


·  The Officers had made efforts to “de-clutter” the Statement of Accounts in recent years by removing unnecessary and immaterial disclosures.  The remaining disclosures were considered necessary in order to comply with accounting standards.


·  In terms of Key Performance Indicators, the net contribution generated from commercial activities was down against the budget due in part to the failure of the Mote Park Café to deliver income targets in 2016/17.  A recovery strategy had been implemented and the Café was now breaking even.


In response to questions by Members, the Director of Finance and Business Improvement explained that:


·  Consideration would be given as to how the Council’s main sources of income could be cross referenced in the narrative report to where they show in the main financial statements.


·  The Accounts showed that the balance on the general fund and earmarked reserves had decreased by £1.5m to £17.343m at the end of 2016/17, including unallocated balances.  The decrease related to the use of New Homes Bonus previously set aside for capital expenditure to fund large acquisitions in 2016/17.  The table set out in note 7 to the Accounts should be amended to show contributions to balances of £2.815m, unallocated balances of £9.329m and a total General Fund Balance of £17.343m as at 31 March 2017.  An update on movements in all balances would be included in the first quarter budget monitoring report in September, including movement in balances for New Homes Bonus.


·  Current projections indicated that the Council had sufficient cash to fund planned capital expenditure during 2017/18 and following that it would be necessary to borrow to fund capital projects.


·  Consideration would be given as to how more detailed information about what infrastructure projects the NHB has been spent on might be included in the Accounts. 


The Director of Finance and Business Improvement also confirmed that he would circulate details about the way in which parish precepts are treated, as compared with precepts payable to Kent County Council, the Police and Crime Commissioner and the Fire and Rescue Authority, to all Members of the Committee and the Parish Council representative.


RESOLVED:  That subject to the points raised in the discussion, the draft un-audited Statement of Accounts for the year ending 31 March 2017, attached as Appendix A to the report of the Director of Finance and Business Improvement, be approved. 


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