PAPER B

AUDIT PANEL – 29 JULY 2004

FINAL ACCOUNTS 2003 - 2004

REPORT OF THE CHIEF FINANCIAL OFFICER

REASON FOR AUDIT PANEL CONSIDERATION

This report is to provide the Panel with the opportunity for more detailed scrutiny of the Council’s Statement of Accounts which were presented to the Council for approval on 21 July 2004; to allow any detailed questions asked by Members at the Council meeting to be given full consideration prior to providing a written response; to remind members of the Panel of the changing arrangements for approval of the accounts and inspection by members of the public; and to note a change to the arrangements in future years (subject to Council approval on 21^st July) giving delegated authority to the Panel, sitting as a properly constituted Special Accounts Committee, to consider and approve the Statement of Accounts each year.

ACTION REQUIRED BY THE AUDIT PANEL

The Panel is invited to note the contents of the report and to seek clarification of any issues arising there from. In particular, the Panel is asked to:

Ø Scrutinise the Council’s Statement of Accounts and seek any information and explanations with regard to the content of the accounts

Ø Consider any detailed questions asked by a Member at the Council meeting on 21 July 2004, seek information and explanations and agree the nature of a written response

BACKGROUND

The requirements with regard to approval of the Statement of Accounts by Members are set out in the Accounts and Audit Regulations 2003. One of the main requirements of the Regulations is that the Statement of Accounts should be approved by an appropriate committee of the Council, or otherwise by the Council sitting as a whole, such approval to take place as soon as is reasonably practicable after the year end date, and in any event prior to the date specified in the Regulations. For the year ending 31 March 2004 the date specified is 31 August 2004. Within the next two year period i.e. for the year ending 31 March 2006 and subsequent years, the date for approval by Members will be advanced to 30 June each year.

The aim of the changes to the Regulations is to provide for greater accountability, transparency and openness in the provision of information by bringing forward the date for approval and publication of the accounts of local authorities, and by providing improved access to the accounts by electors. This process can be assisted by encouraging consistent standards through requiring up to date and proper accounting practices to be followed, and by encouraging authorities to take corporate responsibility for their decisions.

Approval by Members must be by the full Council or by an appropriate committee of the Council (one which is proportionally representative). For the future, and bearing in mind the implications

of advancing the date for approval and the requirement for proper scrutiny of the accounts, it is suggested that accountability and openness are better served by delegating formal approval of the annual accounts to this Panel, sitting as a Special Accounts Committee.

On this occasion, the Statement of Accounts was presented to the Council on 21 July 2004 for approval. However, in the interests of proper corporate governance practice, the Panel are being afforded the opportunity to perform a more detailed scrutiny role.

STRATEGIC CONTEXT

The Annual Statement of Accounts provides details of how the Council has performed in financial terms during the previous financial year. It also provides broad information on assets, liabilities and financial reserves at the year end date, notes on specific entries, details of potential significant future liabilities, and details with regard to the Council’s Pension Fund. The Statement of Accounts is prepared in accordance with the requirements of the Code of Practice on Local Authority Accounting in the United Kingdom.

CONSULTATION PROCESS

The Accounts and Audit Regulations 2003 require the Council’s accounts and accounting records to be available for inspection by members of the public for a period of 20 working days. An advertisement must be placed in at least one local newspaper advising the public, and giving 14 days notice, that the accounts will be available for inspection, and advising of the dates, times and places the public can see and copy relevant documents. However there are some restrictions on availability of documents, notably those containing personal information are treated as confidential and are not available for inspection.

FINANCIAL, LEGAL, CRIME AND DISORDER IMPLICATIONS

The full Statement of Accounts is attached to this report (Appendix A). The audit of the accounts is scheduled to commence during August 2004 and the Audit Commission expect to be able to issue their report before 30 November 2004, the statutory date for publication of the audited Statement of Accounts.

The Accounts and Audit Regulations 2003 require approval of the Statement of Accounts to be by the Council sitting as a whole, or by a politically proportionate committee with delegated powers to make such a decision. In the absence of such a committee, approval has to be by the Council, and for this purpose the accounts were presented to the Council for approval on 21 July 2004.

APPENDICES ATTACHED

Isle of Wight Council Statement of Accounts (Appendix A)

Isle of Wight Council Statement on Internal Control Supporting detail (Appendix B)

BACKGROUND PAPERS USED IN THE PREPARATION OF THIS REPORT

Accounts and Audit Regulations 2003

CIPFA Code of Practice on Local Authority Accounting in the United Kingdom

CIPFA Guidance on the Statement of Internal Control in Local Government

Contact Point : Stuart Fraser Tel : 823657 E-mail : [email protected]

PAUL WILKINSON

Chief Financial Officer