Draft Audited 2022/23 Accounts and Draft 2022/23 Annual Audit Report
Perth and Kinross Council · 11 December 2023
Back to Audit and Risk Committee — 11 December 2023 and its agenda
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PERTH & KINROSS COUNCIL AUDIT & RISK COMMITTEE 11 December 2023 DRAFT AUDITED 2022/23 ANNUAL ACCOUNTS DRAFT 2022/23 ANNUAL AUDIT REPORT Report by the Head of Finance (Report No. 23/363) 1. PURPOSE 1.1 This report presents the Council’s draft Audited 2022/23 Annual Accounts in accordance with the Local Authority Accounts (Scotland) Regulations 2014 and draft 2022/23 Annual Audit Report. 2. RECOMMENDATIONS 2.1 It is recommended that the Committee: • approves the Audited 2022/23 Annual Accounts – see Appendix 1. • authorises the Leader of the Council, the Chief Executive and the Head of Finance to sign the Audited 2022/23 Annual Accounts and the Head of Finance to sign the Letter of Representation – see paragraph 5.5. • Notes the contents of Audit Scotland’s Draft 2022/23 Annual Audit Report – see paragraph 6.3. 3. STRUCTURE OF THE REPORT 3.1 This report includes the following sections: • Section 4 - Background • Section 5 - Draft Audited 2022/23 Annual Accounts • Section 6 - Draft 2022/23 Annual Audit Report • Section 7 - Conclusions 4. BACKGROUND 4.1 In line with legislative requirements, the Audit & Risk Committee considered the Unaudited 2022/23 Annual Accounts on 26 June 2023 (Report No. 23/196 refers). 4.2 The Unaudited 2022/23 Annual Accounts were then submitted to Audit Scotland, the Council’s external auditors on the same day (26 June 2023).
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4.3 The Annual Accounts are prepared in accordance with the 2022/23 CIPFA Code of Practice on Local Authority Accounting (“the Code”). 4.4 These accounts also comply with the Local Authority Accounts (Scotland) Regulations 2014 which revoked the Local Authority Accounts (Scotland) Regulations 1985. 4.5 The Unaudited 2022/23 Annual Accounts were available for public inspection between 30 June and 20 July 2023 (inclusive). During this period, Audit Scotland received no objections to the Unaudited 2022/23 Annual Accounts. 5. DRAFT AUDITED 2022/23 ANNUAL ACCOUNTS 5.1 The audit of the 2022/23 Annual Accounts took place between July and November 2023. The audit considered not only the financial statements but also areas such as financial performance and corporate governance. 5.2 Two primary audit misstatements were identified. Firstly, in relation to the Council’s share of Tayside Pension Fund following a review of the actuarial assumptions during the audit. And secondly, in relation to the valuation of land and buildings. More information on these is included in Exhibit 3 within the draft 2022/23 Annual Report. None of the misstatements identified within Exhibit 3 have an impact on the level of resources available to the Council. In addition, there were a few minor presentational adjustments. 5.3 Approval of the Accounts at today’s meeting will provide authorisation for the Leader of the Council, the Chief Executive and the Head of Finance to sign them. The Draft Audited 2022/23 Accounts (unsigned) are attached to this report at Appendix 1. 5.4 The Head of Finance will also sign the Letter of Representation included at Appendix 2. Once signed, the Draft Audited 2022/23 Annual Accounts and Letter of Representation will be passed to Audit Scotland so that they may issue their opinion in the form of an audit certificate. 5.5 ACTION: The Committee is asked to approve the Draft Audited 2022/23 Annual Accounts and authorises the Leader of the Council, the Chief Executive and the Head of Finance to sign them and also to authorise the Head of Finance to sign the Letter of Representation. 5.6 All signatures will be provided electronically using a system recognised by Audit Scotland that ensure the signings comply with the legislative requirements. 6. DRAFT 2022/23 ANNUAL AUDIT REPORT 6.1 The Draft 2022/23 Annual Audit Report is set out at Appendix 3. The Draft 2022/23 Annual Audit Report sets out Audit Scotland’s opinions and conclusions on the overall audit and their findings to be reported under ISA260: Report to those Charged with Governance. The Draft 2022/23
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Annual Audit Report also includes the findings in relation to Perth & Kinross Charitable Trusts which were distributed separately to Trustees. 6.2 The key messages from the 2022/23 audit are set out in the Audit Conclusions on page 3 of Appendix 3 and are summarised as follows: Audit of 2022/23 annual accounts 1. Audit opinions on Perth & Kinross Council’s 2022/23 Annual Accounts and the connected charities’ 2022/23 financial statements are unmodified. Financial management and sustainability 2. The Council’s budget setting and financial management arrangements operated effectively during 2022/23. 3. The budget included a planned draw on reserves of £32.3 million and the actual outturn was £16.4 million less than this. 4. There are clear links to Corporate Plan priorities within the Medium- Term Financial Plan and cumulative funding gaps of up to £192 million are projected over the next six years. 5. One of the Council’s major capital projects has been paused due to inflationary cost pressures and the Council is developing an asset management strategy. Other wider scope audit work 6. The Council continues to have a clear vision and a transformation and change strategy that is extensive and ambitious. 7. Reporting of performance has improved although further work is required to monitor actions against previous Best Value recommendations. 6.3 ACTION: The Committee is asked to note the contents of Audit Scotland’s Draft 2022/23 Annual Audit Report. 6.4 It is anticipated that the final 2022/23 Annual Audit Report will be issued by Audit Scotland following completion of the final accounts process. 7. CONCLUSIONS 7.1 Audit Scotland’s findings on the 2022/23 audit are set out in the Draft 2022/23 Annual Audit Report which is attached Appendix 3 to this report. Author(s) Name Designation Contact Details Scott Walker Strategic Lead – Finance & Business Support chxfinance@pkc.gov.uk Alison O’Brien Corporate Accounting Manager
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Approved Name Designation Date Stewart Mackenzie Head of Finance 4 December 2023 Karen Donaldson Chief Operating Officer
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ANNEX 1. IMPLICATIONS, ASSESSMENTS, CONSULTATION AND COMMUNICATION Strategic Implications Yes / None Community Plan / Single Outcome Agreement None Corporate Plan Yes Resource Implications Financial Yes Workforce Yes Asset Management (land, property, IST) Yes Assessments Equality Impact Assessment Yes Strategic Environmental Assessment Yes Sustainability (community, economic, environmental) Yes Legal and Governance None Risk None Consultation Internal Yes External None Communication Communications Plan None 1. Strategic Implications 1.1 Corporate Plan 1.2 The Council’s Corporate Plan 2022 – 2027 lays out seven outcome focussed strategic objectives which provide clear strategic direction, inform decisions at a corporate and service level and shape resources allocation. They are as follows: (i) Tackling poverty (ii) Tackling climate change and supporting sustainable places (iii) Growing a sustainable and inclusive local economy (iv) Enabling our children and young people to achieve their full potential (v) Protecting and caring for our most vulnerable people (vi) Supporting and promoting physical and mental wellbeing (vii) Placing communities at the heart of how we work 1.3 This report relates to all these objectives. 2. Resource Implications 2.1 Financial 2.1.1 There are no direct financial implications arising from this report other than those reported within the body of the main report.
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2.2 Workforce 2.2.1 There are no direct workforce implications arising from this report other than those reported within the body of the main report. 2.3 Asset Management (land, property, IT) 2.3.1 There are no direct asset management implications arising from this report other than those reported within the body of the main report. 3. Assessments 3.1 Equality Impact Assessment 3.1.1 Under the Equality Act 2010, the Council is required to eliminate discrimination, advance equality of opportunity, and foster good relations between equality groups. Carrying out Equality Impact Assessments for plans and policies allows the Council to demonstrate that it is meeting these duties. 3.1.2 The information contained within this report has been considered under the Corporate Equalities Impact Assessment process (EqIA) and has been assessed as not relevant for the purposes of EqIA. 3.2 Strategic Environmental Assessment 3.2.1 The Environmental Assessment (Scotland) Act 2005 places a duty on the Council to identify and assess the environmental consequences of its proposals. 3.2.2 The information contained within this report has been considered under the Act. However, no action is required as the Act does not apply to the matters presented in this report. 3.3 Sustainability 3.3.1 Under the provisions of the Local Government in Scotland Act 2003 the Council has to discharge its duties in a way which contributes to the achievement of sustainable development. In terms of the Climate Change Act, the Council has a general duty to demonstrate its commitment to sustainability and the community, environmental and economic impacts of its actions. 3.3.2 The information contained within this report has been considered under the Act. However, no action is required as the Act does not apply to the matters presented in this report.
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4. Consultation 4.1 Internal 4.1.1 The Executive Leadership Team have been consulted in the preparation of this report. 2. BACKGROUND PAPERS 2.1 No background papers, as defined by Section 50D of the Local Government (Scotland) Act 1973 (other than any containing confidential or exempt information) were relied on to any material extent in preparing the above report. 3. APPENDICES Appendix 1 – Draft Audited 2022/23 Annual Accounts Appendix 2 – Letter of Representation Appendix 3 – Draft 2022/23 Annual Audit Report