The Charter Trustees are asked to consider and approve the Annual Governance Statement 2019/20.
Please note that the paper attached for this item also relates to item 8 below.
The Charter Trustees considered the Annual Governance and Accountability Return, which had been circulated to each Trustee and a copy of which appears as Appendix ‘C’ to these Minutes in the Minute Book which included the Annual Governance Statement for 2019/20.
The Responsible Financial Officer (RFO) explained that the format was a prescribed format for a smaller authority determined by the Charter Trustees expenditure which was above £25k but below £6.5m. He reported that the document referred to various dates for public inspection which had been amended due to Covid-19 and therefore the Charter Trustees were not in breach of any dates. The RFO reported that the Charter Trustees were required to approve this document by end of August, on 1 September a period of public inspection would commence, and the audited accounts would be published by the end of November 2020.
The Charter Trustees were referred to page 3 of the document which provided a summary of the internal audit conclusions and fed directly in from the Internal Audit report which indicated the action proposed to improve controls. This would mainly require producing bespoke financial regulations and a risk register for the Charter Trustees.
The RFO reported that the Annual Governance Statement on page 4 of the document overall indicated that there was a sound system of control in place. He explained that there was one ‘No’ which related to the development of a risk register which was in hand as referenced in the previous agenda item. He reported that the main substance of this agenda item was section 2 the accounting statements and confirmed that the return covered items 7 and 8 on the agenda. He reported that the Charter Trustees had raised a precept of £124k with expenditure of just over £86k and reserves of £37,657. The Charter Trustees were advised that that this was consistent with the budget position reported in January 2020 and a more favourable position. The RFO reported that the Charter Trustees had incurred VAT costs of £11k which had been offset by savings from civic events and regalia. The RFO suggested that it would be helpful for the Charter Trustees and the public to see more details on the statements and therefore he proposed to bring forward mid-year estimates for 2020/21 and a breakdown of the budget for 2019/20 to the Charter Trustees meeting in October. The RFO confirmed that the statements were compliant with the legal requirements.
Councillor Iyengar sought clarification on the accountability return part 3 and asked what a healthy balance of scores was and how that reconciled with the table later in the document. He also asked why a disclosure for a smaller authority was being completed. The RFO explained that the no’s related to the internal audit report. He confirmed that it was not that there were no internal controls in place but that they could be improved and tailored for the Charter Trustees. The RFO highlighted that the only area with minimal control and a no related to the risk register. In response to the second question the RFO explained that the return was the format that a smaller authority should fill in as it was a separate and independent organisation from the Council. The RFO acknowledged that the statements were abbreviated which was why he had suggested that it would be useful to submit a detailed breakdown to the Charter Trustees at its meeting in October.
The RFO in response to a number of questions on the detail of the statement explained that in terms of the balance brought forward this was the first year of the Charter Trustees so there was no balance to bring forward. He explained that £18,950 referred to in January 2020 was the budgeted position at that stage. In respect of rounding up the figures in the statements the RFO would make arrangements for this to be undertaken once approved and prior to publication. The RFO confirmed that there was a list of assets as referenced in the internal audit report and arrangements could be made for these to be circulated to the Charter Trustees. The Charter Trustees were advised that the staff costs were referenced in the internal audit and when setting the budget for next year additional staffing elements that could be charged would be considered.
Councillor Judes Butt referenced (e) on page 6 of the document and sought clarification on the VAT position. The RFO confirmed that VAT had been appropriately accounted for. He reported that there had been an assumption that the Charter Trustee would be able to reclaim VAT under section 33 of the VAT Act under the umbrella of BCP Council but unfortunately this was incorrect and the Charter Trustee had incurred £11K which cannot be reclaimed. The RFO reported that Officers had made representations to HMRC and a statutory instrument would be laid before parliament on 14 October 2020 that would come into effect on 4 November 2020 and provided there are no parliamentary delays from that point onwards the Charter Trustees would be able to reclaim VAT under section 33 of the VAT Act. A Charter Trustee asked for clarification on how the Charter Trustees would be compensated for the loss of the £11k. The RFO reported that unfortunately there was no insurance cover and the Charter Trustees would not receive any reimbursement.
A Charter Trustee asked if the number plate on the car used by the Mayoralty was an asset owned by the Charter Trustees. Officers indicated that they would advise the Charter Trustees of the position.
A Charter Trustee asked if £11k of vat losses had been incurred so far what further losses may there be until the Statutory Instrument was laid and becomes effective. The RFO reported that the £11k was the full year of VAT for 2019/20 and he would expect a further £5k approximately.
(a) the Annual Governance Statement for 2019/20 be approved.
(b) an Outturn report and in year quarterly budget monitoring report setting out the position for 2019/20 and projection for 2020/21 be submitted to the Charter Trustees meeting on 28 October 2020.
(c) that the Statement of Accounts for 2019/20 be approved.
Voting – Agreed
Councillors Judes Butt, Daniel Butt, May Haines, Mohan Iyengar, Karen Rampton and Tony Trent abstained from the above decision.