Agenda item

            The Deputy Chief Executive and Director of Finance and Resources submitted for the Committee’s consideration the following report:

 

“1.0      Purpose of Report/Summary of Main Issues

 

1.1             The purpose of this report is to present to the Strategic Policy and Resources Committee, the Statement of Accounts of the Council, including the Annual Governance Statement, for the period ending 31 March 2022.

 

1.2             The Statement of Accounts are an important element of the council’s overall corporate governance framework as they provide assurance to Members and ratepayers on the stewardship of the council’s finances and its financial position.

 

1.3       The Statement of Accounts for the year ended 31 March 2022, which can be accessed from the Council website here, have been prepared in line with the Code of Practice on Local Authority Accounting in the United Kingdom 2021/22 based on International Financial Reporting Standards and the Department for Communities Accounts Direction, Circular LG 02/22 dated 7th January,  2022 and 23rd March, 2022.

 

1.4       I can confirm that the Statement of Accounts for the year ended 31 March 2022 has been prepared in the form directed by the Department for Communities and in my opinion the Statement of Accounts give a true and fair view of the income and expenditure and cash flows for the financial year and the financial position as at the end of the financial year.

 

2.0       Recommendations

 

2.1       The Committee is asked to:

 

                                            i     approve the Council’s Statement of Accounts and incorporated Annual Governance Statement for the year ended 31 March 2022; and

 

                                          ii     agree that this report should not be subject to call-in (as indicated above) because it would cause an unreasonable delay which would be prejudicial to the Council’s and the public’s interests given that the statement of accounts must be published by 30th September, 2022.

 

 

3.0       Main Report

 

            Key Issues

 

            Normal Approval Process

 

3.1       The Committee will be aware that the normal approval process allows for the Statement of Accounts to be presented to the Audit and Risk Panel to allow them to review the annual statement of accounts.  Specifically, to consider whether appropriate accounting policies have been followed and whether there are concerns arising from the financial statements or from the audit that need to be brought to the attention of the council prior to this report going to the SP and R Committee.

 

            However, the Audit and Risk Panel was postponed on 13th September, in line with agreed protocol for the passing of HM Queen Elizabeth II.  The meeting has now been reconvened for Wednesday 21st September, at which the Statement of Accounts will be discussed, any issues raised by the panel will be verbally reported to this Committee.

           

            Audit Opinion

 

3.2       It is the Local government Auditors’ opinion that:

 

·        the financial statements give a true and fair view, in accordance with relevant legal and statutory requirements and the Code of Practice on Local Authority Accounting in the United Kingdom 2021-22, of the financial position of Belfast City Council as at 31 March 2022 and its income and expenditure for the year then ended; and

 

·        the statement of accounts have been properly prepared in accordance with the Local Government (Accounts and Audit) Regulations (Northern Ireland) 2015 and the Department for Communities directions issued thereunder; and

 

·        the part of the Remuneration Report to be audited has been properly prepared in accordance with the Department for Communities directions made under the Local Government (Accounts and Audit) Regulations (Northern Ireland) 2015; and

 

·        the information given in the Narrative Report for the financial year ended 31 March 2022 is consistent with the financial statements.

           

            Reserves

 

3.3       General Fund

 

            The credit balance on the General Fund has increased to £62,218,726 (of which £48,145,477 relates to specified reserves).  The movement on the reserves balance is summarised in Table 1 below:

 

Table 1: Summary of Reserves Position

 

Opening Balance	£54.9m
In year movement in reserves	£ 7.3m
Closing Balance	£62.2m
Specified Reserves at year end	£48.1m
Balance Available	£14.1m

 

3.4       Capital Fund  £12,220,031

 

            The Capital Fund is made up of:

 

·        Belfast Investment Fund (£1,368,532) - created to support key partnership projects to regenerate Belfast and help lever substantial funds from other sources

 

·        Local Investment Fund (£800,741) to fund smaller local regeneration projects

 

·        City Centre Investment Fund (£7,688,069) to support the Belfast City Centre Regeneration Investment Plans

 

·        Social Outcomes Fund (£2,362,689) to support City Centre projects which might not generate a direct financial return but would enhance the overall City Centre offer and support the attraction of investment.

 

3.5       Neighbourhood Regeneration Fund £10,000,000

 

            This fund is to support neighbourhood regeneration and tourism projects in local neighbourhoods.

3.6       Leisure Mobilisation Fund £621,287

 

            This fund is to support the Leisure Transformation Programme and will cover programme level costs including communications, engagement and procurement costs.

 

3.7       Capital Receipts Reserve £1,068,583

 

            These are capital receipts which have originated primarily from the sale of assets and which have not yet been used to finance capital expenditure.

 

3.8       Other Fund Balances and Reserves £1,731,811

 

            This relates to the Election Reserve (£735,037) which has been set up to smooth the cost of running council elections, the BWUH Subvention Fund (£703,151) to support national and international organisations in bringing their conferences to Belfast and the BWUH Sinking Fund (£293,623) to support planned maintenance and future capital works at the new exhibition centre.

 

3.9       Debt

 

            The overall level of trade debtors had increased this year from £5.2m at 31st March 2021 to £7.1m at 31st March 2022. Whilst the COVID 19 pandemic had an impact on overall debt levels, the main reason is an increase in public authority debt at year end.  An analysis of trade debtors, inclusive of VAT, for the last two years is shown below:

 

Table 2: Analysis of Trade Debtors

 

	31 March 2022	31 March 2021
Less than three months	£5,450,710	£3,963,319
Three to one year	£1,070,718	£481,307
More than one year	£553,310	£772,373
Total	£7,074,738	£5,216,999

 

3.10      Creditors

 

            The Department for Communities has set councils a target of paying invoices within 30 days.  During the year the council paid 71,202 invoices totalling £187,290,662.

 

 

            The average time taken to pay creditor invoices was 17 days for the year ended 31 March 2022.  The Council paid 57,882 invoices within 10 days, 66,649 invoices within 30 days, and 4,553 invoices outside of 30 days.  The council endeavours to process invoices as quickly as possible and has an improvement plan to support this process.

 

3.11      Annual Governance Statement (AGS)

 

            The Statement of Accounts includes an Annual Governance Statement for the year 2021/22, which has been prepared in line with the Accounts Directive provided by the Department for Communities, NIAO guidance and is consistent with the principles of the CIPFA/SOLACE Framework ‘Delivering Good Governance in Local Government’.   Specifically, the Annual Governance Statement sets out:

 

·        scope of responsibility of the Council in relation to governance

·        the purpose of the governance framework

·        the governance framework in place

·        review of effectiveness of the governance framework

·        update on the significant governance issues from prior year

·        significant governance issues to be disclosed for current year

 

3.12      The Annual Governance Statement is approved by the Chair of the Strategic Policy and Resources, the Chief Executive and the Director of Finance and Resources. It is subject to review by the LGA (NIAO) as part of their annual audit.

 

            Financial and Resource Implications

 

3.13      None

 

            Equality or Good Relations Implications/Rural Needs Assessment

 

3.13      None.”

 

            After discussion, during which the Deputy Chief Executive and Director of Finance and Resources confirmed that the Audit and Risk Panel, at its meeting on 21st September, had agreed to recommend to the Committee that it approve the Council’s Statement of Accounts and incorporated Annual Governance Statement for the year ended 31st March, 2022, the Committee adopted the recommendations.