Agenda item

Consider various draft annual reports and accounts by Chief Financial Officer prior to their submission to the External Auditors:

6.1       With reference to paragraph 7 of the Minute of 28 June 2016, there had been circulated copies of a report and associated papers by the Chief Financial Officer on the draft Annual Report and Accounts for Scottish Borders Council, Common Good Funds, Charitable Trusts, Bridge Homes LLP, SB Supports LLP and SB Cares LLP.  The report provided the Audit and Scrutiny Committee with an opportunity to scrutinise the draft Annual Reports and Accounts for the year ended 31 March 2017 for Scottish Borders Council and associated Group Accounts prior to submission for External Audit Inspection by the statutory deadline of 30 June 2017.  The report referred to the protocols and timeline associated with the overview of accounts as set out in the Local Authority Accounts (Scotland) Regulations 2014.  In addition, Section 12 of the Local Government in Scotland Act 2003 required annual accounts to be prepared in accordance with proper accounting practice, primarily comprising the Code of Practice on Local Authority Accounting in the United Kingdom 2016/17 and the Service Reporting Code of Practice 2016/17 supported by International Financial Reporting Standards (IFRS).  Following audit and a public inspection period the finalised Audit report and Audited Accounts would be presented to the Audit and Scrutiny Committee for approval in September 2017 prior to consideration by Council.

6.2       Mr Robertson summarised the draft Unaudited Annual Accounts for the year to 31 March 2017 for Scottish Borders Council and advised Members that the revenue out-turn showed £0.128m underspend.  Financial Plan Savings of £8.96m had been achieved representing 73% on a permanent, recurring basis.  An analysis of the sources of revenue funding and revenue expenditure by Department was provided.  With regard to Significant Trading Operations it was noted that SBc Contracts had achieved a cumulative net surplus over 3 years of £1.25m.  The report explained that in 2016/17, turnover was £18.3m, an increase of £4m (28%).  28% of the total turnover was generated by external work and this was £0.057m down on the previous year.  Mr Robertson explained the Statutory Accounting Adjustments and noted that the net impact on the General Fund Balances of these adjustments was broadly neutral with no effect on Council taxpayers.  He further explained that the Balance Sheet showed that net assets of the Council excluding Pensions Liabilities were £213.8m at 31 March 2017.  Pensions Liabilities for year ending 31 March 2017 totalled £216m which was an increase of £74.4m from the previous year.  Included in the current liabilities was a provision of £4m for de-commissioning of landfill sites.  With regard to 2016/17 capital outturns, there had been a total expenditure of £51.5m with timing movement of £7.5m and underspend of £0.3m.  Efficiencies of 27% were still required and Management continued to explore ways to achieve this on a permanent, recurring basis. 

6.3       With reference to the Common Good and Trust Annual Report and Accounts for year ended 31 March 2017, these had been circulated and Mr Robertson highlighted the key points as detailed in the report and Appendices.  With regard to the nine Common Good Funds, the total net assets for the year were £13.746m, a reduction of £149k from the previous year, and fixed assets were £10.7m.  With regard to the six SBC Trust Funds, Mr Robertson explained that each was a Registered Charity and was reported separately in terms of the Unaudited Annual Reports and Accounts for 2016/17.  The Total Net Assets across the six Funds was £4.0m, with Fixed Assets of £1.8m.  Mr Robertson explained that in addition to those mentioned, there were a further 177 Trusts which were not registered at this time.  In response to a question, Mr Robertson advised that work was ongoing at the moment to look at how these additional 177 Trusts could be correctly closed, consolidated and relocated within the appropriate SBC Charity.  Consultation within the local communities would be required and the process was likely to take some time to complete.  Progress would be reported in due course.  The financial statements for Bridge Homes LLP for the year ended 31 March 2017 showed a Property value of £5.4m for 45 units, which was funded by the SBC loan of £4.6m and £0.8m from Affordable Housing Contribution.  The Accounts showed a 3rd year trading profit of £0.021m.  With reference to Scottish Borders Supports LLP and SB Cares LLP, the financial statements for each were detailed in the Appendices to the report and it was noted that £0.647m of surplus from SB Cares was returned to SBC.  Discussion followed and Mr Robertson answered questions in relation to the points raised by Members.  It was also noted that Councillor Weatherston’s name had been incorrectly recorded within the Common Good Funds’ and Charitable Trusts’ Annual Reports and Accounts.  Mr Robertson would amend the reports as appropriate prior to submission to the External Auditors.

DECISION

(a)        NOTED the Draft Annual Report and Accounts 2016/17 for Scottish Borders Council and associated Group Accounts; and

(b)       AGREED to support their submission, subject to minor amendments as discussed at the meeting, for review by the External Auditors, Audit Scotland.