Review of Accounting Policies 2017-18
To seek endorsement of the Accounting Policies to be used in formulating the Financial Statements for the authority for the financial year 2017/18.
To advise Members on the earlier closedown requirements that will be effective from the 2017/18 financial year (i.e. for the accounts prepared for the year ended 31 March 2018).
The Principal Accountant (General Fund) sought Member endorsement of the Accounting Policies to be used in formulating the Financial Statements for the authority for the financial year 2017-18. Members were also advised on the earlier closedown requirements that will be effective from the 2017-18 financial year (i.e. for the accounts prepared for the year ended 31 March 2018).
The Principal Accountant (General Fund) stated that the Accounts & Audit (England) Regulations 2015 requires local authorities to prepare their annual financial statement of accounts in accordance with ‘proper accounting practice’; it is not statutory but CIPFA highly recommend that the accounting policies to be used to prepare the authority’s financial statements are taken through an authority’s appropriate Finance Committee.
It was explained that the Code for 2017-18 had been published and a review of the Council’s accounting policies had been conducted to ensure that they were in line with the requirements of the Code. There were no major changes identified to the Code or any that would affect the council’s accounting policies for 2017-18 however the wording of the three policies listed on page 14 have been reviewed to provider greater clarification on how they are practically applied, in part following comments made by the external auditor last year.
The Principal Accountant (General Fund) advised that there has been a departure from previous years with regard to the requirements on closing the accounts earlier; effective from the 2017-18 financial year, the Accounts and Audit (England) Regulations 2015 specify the requirement to accelerate this process so that the draft annual statement of accounts are produced by 31st May and audited, approved and published by 31st July following the end of the financial year.
The Principal Accountant (General Fund) explained that in preparation of the change, the council brought forward the timetable for the production of the draft statement of accounts for 2016-17 with a draft statement of accounts being prepared by 19 May 2017, allowing time for quality assurance processes to take place between the 19 and 31 May 2017. It would mean that Members would not be given the chance to view the draft statement of account before it went to the external auditors, however the final audited version would be taken to the July Committee to be signed off by Members.
Following a concern from a Member regarding transactions under £85K being considered trivial, the Assistant Director explained that the external auditors do not consider anything below £85K to be significant when compared to the size of the account. Any errors or misstatements found below this level will not be reported to the Finance & Audit Committee.
Following a lengthy discussion on Members being able to view the draft statement of accounts before signing off the final version, the Assistant Director assured the Committee that the draft statement is published online for them all to view and a few dates in June would be looked into to see if an additional session could be held for Members to discuss and feedback their observations to officers.
Members endorsed the use of the Accounting Policies as outlined at Appendix Two to this report, subject to further comments from the Council’s external auditor.
- 1. F&A Covering Report - Review of Accounting Policies 2017-18, item 51. PDF 88 KB
- 2. Accounting Policies 2017-18 Revised, item 51. PDF 136 KB