Issue - meetings

To consider a report of the Director of Corporate Operations presenting the Annual Statement of Accounts.

Members received a report of the Director of Corporate Operations presenting the updated Annual Statement of Accounts.

Further to the previous meeting, the Director of Corporate Operations explained that a statutory override had been put in place by central government to provide a temporary measure to resolve the national issue relating to the accounting for local authority infrastructure assets. Members heard that this solution agreed with County Council’s previous position and confirmed that no action would need to be taken in respect of older assets, but would require new assets to be appropriately valued going forward. The external auditors, Ernst and Young, confirmed that this would now enable them to sign off the Statement of Accounts for 2021/22.

In response to Members questions it was heard that an audit firm elsewhere in the country had raised the matter and been unable to sign off a set of accounts as a result, at which point it became a national issue and it was not possible for any accounts requiring accounting for local authority infrastructure assets to be signed off until a resolution was put in place. It was heard that the County Council had been in a favourable position, having already had the accounts for 2020/21 signed off when the matter arose, which many Councils had not.

It was noted that infrastructure assets generally depreciate to a zero value at the point the infrastructure asset is replaced, which was generally accepted to be at 20 years. The County Council, like the majority of Councils nationally, did not hold records going back to record the depreciation value of assets replaced before 20 years, but moving forward this would be put in place. This was in keeping with generally accepted audit practice and the County Council had previously not been required to keep these records as the road infrastructure was not a commercial asset.

RESOLVED:

·         That the Audit Committee notes the temporary solution that has been put in place to resolve the national issue relating to the accounting for local authority infrastructure assets.

·         That the Audit Committee reconfirms their approval of the Statement of Accounts for 2021/22 for Hampshire County Council and the Hampshire Pension Fund (Appendix 1) reflecting the changes to the PPE disclosure note as a result of the temporary solution put in place to resolve the national issue relating to the accounting for local authority infrastructure assets through changes to the CIPFA Code and the statutory accounting override introduced by DLUHC.

·         That the draft letters of representations for Hampshire County Council and the Hampshire Pension Fund be noted (Appendix 2).

·         That delegated authority be given to the Director of Corporate Operations to approve minor changes to the accounts agreed between the County Council and EY prior to the final audit opinion being issued and the publication of the accounts.