The Section 151 Officer submitted a report to present the final Statement of Accounts for 2013-14 attached at appendix A to the report, which were due to be signed off by the external auditors, KPMG and associated Letter of Representation of the Council.

            The Audit Manager - KPMG took Members through the Audit of Financial Statements report, which sets out the issues that the external auditors are required to report on, and summarises the outcomes of work and areas which require attention by the Authority, together with proposals.

            He explained that the audit had gone smoothly, with good support from Officers in the Finance Department who produced a good, accurate set of accounts.  He explained that it was not KPMG’s role to sign off the Financial Statement, but to recommend to the WAO, and they had recommended an unqualified positive outcome.  He advised that a couple of issues were highlighted in view of adjustments, and also two recommendations.  He informed the Committee that the report had not included financial statements for County Borough Supplies and Coychurch Crematorium which were audited separately.

            The Committee congratulated the finance team on their unqualified reports and the Deputy Section 151 Officer formally thanked KPMG for their professionalism and hard work in completing the Statement of Accounts on behalf of the Authority.

            One Member asked for an explanation as to why in 2013 there was a deficit in unusable reserves as opposed to a surplus of over £91m in this financial year.

            The Finance Manager explained that his Department was responsible for producing a Statement of Accounts on behalf of the Authority to comply with both Statutory and Accounting Regulations and Requirements, in order to present a true and fair view for both income and expenditure, and also balances and reserves, to include an income and expenditure statement in accordance with standards, showing either a surplus or deficit.  A range of expenditure items were included in that reserve, which were mainly to do with the pension fund, which had gained £90m on the pension liability and as of the 31^st March 2013 there was a balance of £7,320m in earmarked reserves.

            He explained that it was important to recognise the impact that transactions had on the Authority’s general fund and Council Tax, which are reflected to in order to comply with accounting practice.  However, as they do not impact on the Council Tax position, there is a requirement to show the difference between what is accounted for and separately what the Authority should be charging, such as pensions which have to comply with International Standards as the amount of pension paid in by employees of the Authority in any financial year through contributions has to be reflected.  As far as Council Tax and the general fund are concerned, the Authority is required to reflect the costs of employer’s contributions to the pension fund actuarial, received over a three year period so that future liabilities can be worked out to ascertain what the employers’ annual contributions need to be to meet future costs.  He advised that as accounting practice reflects the liability within a year, this creates disparity.

            A Member asked for details of the Escrow account.

            The Chief Accountant explained that the Escrow account related to the Asda development in Bridgend town centre where Bridgend Town Football Club was required to move out of their Coychurch Road site.  A planning condition attached to this move was that a sum of money be held by the Authority in an Escrow account on behalf of the club for a period of five years, to enable the Club to secure a replacement site and facilities within the Borough.  Recent activity has occurred where Bryntiriton and Pencoed Football Clubs had merged with Bridgend FC and work had now commenced on three new pitches.  He advised that the other two Clubs had similar development agreements in place and money held by the Authority on behalf of Bridgend FC and during the year payments had been released for the replacement facilities.

            Another Member requested detailed information on the dispute between the Authority and the Contractor over the final costs of the Bridgend Resource Centre’s capital contract.

            The Finance Manager advised that the dispute was going to arbitration where the contractor would present their case, as the Authority’s representatives still strongly believed the position was in accordance to their valuation.  The Deputy Section 151 Officer confirmed that she would report back to the Committee on the findings of the case.

RESOLVED:         That the Committee:

·         Approved the audited Statement of Accounts 2013-14;

·         Noted and agreed the Final Letter of Representation to the Wales Audit Office;

Noted the Appointed Auditor’s Audit of Financial Statements Report.