Agenda Document Pack - Grampian Valuation Joint Board - 27/06/2025
Moray Council · 27 June 2025
Back to Grampian Valuation Joint Board — 27 June 2025 and its agenda
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Grampian Valuation Joint Board Friday, 27 June 2025 NOTICE IS HEREBY GIVEN that at a Meeting of the Grampian Valuation Joint Board is to be held at Council Chambers, Council Office, High Street, Elgin, IV30 1BX on Friday, 27 June 2025 at 09:30. BUSINESS 1. Sederunt 2. Declaration of Member's Interests 3. Minute of the meeting held 31 January 2025 5 - 10 4. Annual Audit Plan Year Ending 31 March 2025 11 - 88 5. Unaudited Annual Accounts for 2024-25 89 - 160 6. Revenue Budget Monitoring Statement 1 April to 31 May 2025 161 - 166 7. Risk Management 167 - 176 8. Complaints Handling Performance 177 - 180 9. Valuation Roll and Council Tax Valuation List 181 - 188 10 Electoral Registration 189 - 192 11. Staff Vacancies, Recruitment and Upskilling Existing Staff 193 - 194 12. Governance 195 - 200 13. Question Time Page 1
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GUIDANCE NOTES * Declaration of Group Decisions and Members Interests - At the beginning of the meeting, immediately following the Sederunt, the Convener will, in terms of Standing Order 25, seek declarations from individuals on any financial or other interests. ** Written Questions - Any member can put one question to the Convener about relevant and competent business not already on the Agenda for a meeting of the Board. No member can put more than one question at any meeting. The member must give notice in writing of their question to the Clerk 4 working days prior to the meeting. A copy of any written answer provided by the Convener will be tabled at the start of the relevant meeting. The member who has put the question may, after the answer has been given, ask one supplementary question directly related to the subject matter but no discussion will be allowed. *** Question Time - At each ordinary meeting of the Board, 10 minutes will be allowed for question time when any member can put one question to the Convener regarding any matter within the remit of the Board. The Member who has put the question may, after the answer has been given, ask one supplementary question directly related to the subject matter, but no discussion will be allowed. In the event of further information/investigation being required in order to answer the question, the Clerk who will arrange for a written answer to be provided within 7 working days. Page 3
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Grampian Valuation Joint Board SEDERUNT Councillor Donald Gatt (Chair) Councillor Stephen Smith (Depute Chair) Councillor Desmond Bouse (Member) Councillor Moray Grant (Member) Councillor Dell Henrickson (Member) Councillor Neil MacGregor (Member) Councillor Marc Macrae (Member) Councillor Ciaran McRae (Member) Councillor Sam Payne (Member) Councillor Mel Sullivan (Member) Councillor Iain Taylor (Member) Councillor Lynn Thomson (Member) Councillor Sonya Warren (Member) Councillor Judy Whyte (Member) Clerk Name: Lindsey Robinson Clerk Telephone: 07966 120593 Clerk Email: committee.services@moray.gov.uk Page 4
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MORAY COUNCIL Minute of Meeting of the Grampian Valuation Joint Board Friday, 31 January 2025 Council Chambers, Council Office, High Street, Elgin, IV30 1BX PRESENT Councillor Donald Gatt, Councillor Moray Grant, Councillor Dell Henrickson, Councillor Neil MacGregor, Councillor Marc Macrae, Councillor Sam Payne, Councillor Stephen Smith, Councillor Mel Sullivan, Councillor Iain Taylor, Councillor Lynn Thomson, Councillor Sonya Warren, Councillor Judy Whyte APOLOGIES Councillor Desmond Bouse, Councillor Ciaran McRae IN ATTENDANCE Mark Adam, The Assessor and ERO; Jim Barron, Depute Assessor and ERO (Aberdeenshire); Linda Smith, Principal Admin Officer and Depute ERO; Lorraine Paisey, Treasurer to the Board; Dafydd Lewis, Audit and Risk Manager; Angela Pieri and Andrew Wallace, External Auditors, Grant Thornton; and Lindsey Robinson, Committee Services Officer. 1. Chair Councillor Donald Gatt, as Convenor of the Grampian Valuation Joint Board, chaired the meeting. 2. Declaration of Member's Interests In terms of Standing Order 25 and the Councillor's Code of Conduct, Councillor Smith declared, in relation to item 5 "External Audit Annual Audit Report, that he was the Convenor of the North East Scotland Pension Fund Board. Councillor McGregor declared, for the same item, that he was the Depute Convenor of the North East Scotland Pension Fund Board. The Board noted that there were no further declarations from Members who were present at the meeting where any item of business in which they have any financial or other interest is to be dealt with. 3. Minute of the meeting held 04 October 2024 The minute of the meeting held 4 October 2024 was submitted and approved by the Board. Councillor Smith sought clarification on item 8 "Revenue budget monitoring statement 1 April to 31 August 2024", as the Treasurer to the Board had advised that she would feed back to the Board on the issue that was raised. Item 3. Page 5
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The Treasurer to the Board advised that the figures had been checked and confirmed that the funding was adequate. 4. Internal Audit Plan 2025-26 The meeting had before it a report by the Audit and Risk Manager advising the Board of the planned internal audit coverage of the Assessor's service for the financial year ending 31 March 2025. Following consideration, the Board unanimously agreed to note the contents of the report. Councillor Henrickson joined the meeting during discussion of this item. 5. External Audit Annual Audit Report for financial year ending 31 March 2024 Angela Pieri and Andrew Wallace, External Auditors, Grant Thornton gave an overview of the salient points from the Annual Audit Report and thanked the Treasurer to the Board and her team for their assistance. During consideration Councillor Grant sought clarification on why there was a delay in the process and why Moray Council has no formal journal processes. Mr Wallace advised that the delay was due to the Moray Council audit taking precedence over the GVJB audit. He further advised that the journal processes are being looked at as the GVJB uses the same processes as Moray Council and it was something that was picked up in the council audit. He stated that having no approval process means there is a higher risk, so the audit takes longer as a larger sample is required. The Treasurer to the Board added that all payments are checked before being processed. She further advised that the more informal journal processes are for internal processes, but this will be replaced by a more formal authorisation process from the next financial year in response the audit. 6. Audited Accounts Report for the year ending 31 March 2024 The meeting had before it a report by the Treasurer to the Board submitting the audited Annual Accounts for the financial year ending 31 March 2024 to the Board for consideration and approval. Following consideration, the Board unanimously agreed to: i. approve that the Annual Accounts are signed, having regard to the Annual report from the External Auditor considered earlier in the meeting; ii. note the variance of £498,000 for 2023/24; iii. £447,00 being returned to constituent authorities leaving a balance on the General Fund of £238,000, and an earmarked reserve for Non Domestic Rates Reform of £509,000; and iv. approve the Letter of Representation. Page 6
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7. Revenue Budget Monitoring Statement 1 April to 31 December 2024 The meeting had before it a report by the Treasurer to the Board asking the Board to consider the revenue Budget Monitoring Statement for the period 1 April to 31 December 2024 and the Estimated Outturn position for the year 2042/25. Following consideration, the Board unanimously agreed to: i. note the revenue Monitoring Statement for the period 1 April 2024 to 31 December 2024; and ii. note the estimated outturn forecast for the year 2024/25. 8. Financial Planning for 2025-26 and Future Years The meeting had before it a report by the Treasurer to the Board asking the Board to consider the budgets that will form the three year revenue Budget from 2025/26 onwards, and to discuss the operational issues facing the Assessor and Electoral Registration Officer in the medium to long term. It also asked the Board to approve the budget for 2025/26 and the requisitions to the constituent authorities for that year. Following consideration, the Board unanimously agreed to: i. note the indicative two year budget from 2026/27 onwards and that his will be further adjusted during the preparation of the Revenue Budget for 2026/27; ii. note the various scenarios which could impact on the revenue budget and the range of potential assumptions and risks; iii. note the operational issues facing the service; iv. approve the budget for 2025/26 set out in Appendix 1 to the report; and v. approve the requisitions to the constituent authorities set out in paragraph 6.3. 9. Governance - Accommodation The meeting had before it a report by the Assessor and ERO updating the Board on the current position regarding the Board's three offices. During consideration, Councillor Grant sought clarification on whether the lease at Woodhill House would continue. In response, the Assessor and ERO advised that he could not confirm anything, but he has a meeting on 13 February where this is one of the items to be discussed. Councillor Taylor sought clarification on what the savings would be by moving the Elgin office into the Moray Council annexe. Page 7
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The Assessor and ERO advised that no financial terms had been agreed with Moray Council but if 232 High Street is sold then the Board would receive 47.8% of the value. Following consideration, the Board unanimously agreed to: i. note the content of the report; and ii. allow the Assessor, in discussion with the Treasurer and the Clerk, to take any necessary decisions regarding the relocation of staff to alternative office accommodation in Elgin. 10. Governance - Policies The meeting had before it a report by the Assessor and ERO updating the Board on the review of the Board's Anti Fraud and Corruption Policy and the Code of Conduct for Employees. Following consideration, the Board unanimously agreed to: i. note the content of the report; ii. approve the changes to the Anti Fraud and Corruption policy in Appendices 1 and 2; and iii. approve the changes to the Code of Conduct for Employees in Appendices 3 and 4. 11. Valuation Roll and Council Tax Valuation List The meeting had before it a report by the Depute Assessor and ERO (Aberdeen and Moray) providing an operational update on the valuation services provided by the Assessor including the performance levels achieved during the period 1 April 2024 to 15 January 2025. The Board joined the Convenor in congratulating the team on their hard work. Following consideration, the Board unanimously agreed to note the contents of the report. Councillor Payne joined the meeting during the discussion of this item. 12. Electoral Registration The meeting had before it a report by the Principal Admin Officer updating the Board on current developments in electoral registration. During consideration Councillor Smith sought clarification on the trial of the Modern Polling product at the Fraserburgh and District by-election and what feedback was being provided. The Principal Admin Officer advised that she had not had any details but would contact the Elections Officer at Aberdeenshire Council for feedback. Page 8
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Councillor Grant sought clarification on what the Modern Polling product was and what happened to the postal voters who did not meet the registration verification requirements by the deadline. The Principal Admin Officer advised that Modern Polling is a tablet device held at the polling stations, so all information is electronic, although for this by-election paper copies of the registers were provided as a backup as it was a trial. Having everything electronically means that the ballot paper accounts can be set through to the count centre at the end of the poll and can be dealt with by the count staff before the ballot box has arrived, speeding up that process. With regard to postal voters, the Principal Admin Officer advised that several attempts were made to contact voters to advise of the cut-off date and time, and if this had passed they were advised to attend their polling station if he wished to vote. Councillor Grant sought clarification on whether there were any issues contacting overseas electors. The Principal Admin Officer advised that they were successful during the records checks and that the number of overseas electors was lower than at previous General Elections, so time was taken to ensure all of the procedures were in place. Councillor Sullivan sought clarification on whether there would be a big impact on ERO staff if the Modern Polling product was rolled out at a large election and if there would be an extra cost to the Board. The Principal Admin Officer advised that a licence had to be purchased and was of the opinion that a roll out could be covered with the current staffing levels. She further advised that it would be difficult to comment on any additional costs as each election is different. Following consideration, the Board unanimously agreed to note the content of the report. 13. Vacancies The meeting had before it a report by the Depute Assessor and ERO (Aberdeenshire) updating the Board on the current staff levels, recruitment, and the upskilling of existing staff. During consideration, Councillor Sullivan sought clarification on whether the long- term vacancies could be taken as a cost saving. In response, the Depute Assessor and ERO (Aberdeenshire) advised that although the team were coping, it is not sustainable to conduct statutory duties with the vacancies, so they need to be filled. Councillor Grant sought clarification as to whether there was a pattern behind the vacancies with regard to location or professional qualification. The Depute Assessor and ERO (Aberdeenshire) advised that there was a lack of qualified chartered surveyors with an interest in NDR. He further advised that historically the Banff and Elgin offices have been harder to recruit to, but this is changing. Page 9
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Following consideration, the Board unanimously agreed to note the contents of the report. 14. Public Performance The meeting had before it a report by the Assessor and ERO seeking approval for the publication of the 2024/24 Public Performance Report. During consideration, Councillor Grant sought clarification as to whether stress was the cause of the increase in staff illness. In response, the Assessor and ERO advised that less staff resources can cause stress but that the increase was largely due to long-term absences which were not work related. Following consideration, the Board unanimously agreed to: i. note the content of the report; and ii. the publication of the Public Performance Report 2023/24 as at Appendix 1. 15. Question Time The Board noted that no questions were asked. Page 10
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REPORT TO: GRAMPIAN VALUATION JOINT BOARD ON 27 JUNE 2025 SUBJECT: ANNUAL AUDIT PLAN FOR THE YEAR ENDING 31 MARCH 2025 BY: TREASURER TO THE BOARD 1. REASON FOR REPORT 1.1 The purpose of this report is to inform the Board of the External Auditor’s Annual Report. 1.2 The Annual Audit Plan sets out the risks which the External Auditor has identified during the audit planning process and sets out the approach which the External Auditor will take, including Wider Scope and Best Value issues. It highlights non-payroll expenditure, management over-ride of controls (both of which are required by Auditing Standards), valuation of land and buildings, pension scheme and implementation of the new requirement for lease accounting as areas of risk. An Audit Risk Assessment underpins the report. 2. RECOMMENDATIONS 2.1 It is recommended that the Board: (i) scrutinises and notes the Audit Risk Assessment; and (ii) considers and notes the contents of the External Auditor’s Annual Plan for 2024/25. 3. BACKGROUND 3.1 In September 2022, the Accounts Commission confirmed the appointment of Grant Thornton as the external auditor for the Board for financial years 2022/23 to 2026/27 inclusive. 3.2 In delivering the public audit for Moray, Grant Thornton will provide independent assurance that public money has been spent appropriately and provides value. Audit work is carried out in accordance with International Standards on Auditing, the Code of Audit Practice and any other relevant guidance. Item 4. Page 11
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3.3 The audit includes consideration of Best Value as part of the Wider Scope audit. The Wider Scope audit will otherwise be limited to consideration of financial sustainability and the Annual Governance Statement. 3.4 Grant Thornton’s Annual Audit Plan (AAP) for 2024/25 is attached as Appendix 1 to this report. The Plan sets out the scope of the audit work and the auditor’s approach to the audit. The AAP is risk based and details the initial risks identified at the planning stage by Grant Thornton on pages 10 to 15. These will direct the focus of audit testing, and the AAP sets out the planned work to be undertaken for the audit of the financial statements for the year ending 2024/25. 3.5 In order to assist with the assessment of risk, an Informing the Audit Risk Assessment was completed by senior managers, and this is attached as Appendix 2. The Board is asked by the Auditor to scrutinise the Audit Risk Assessment. 3.6 Page 8 of the AAP shows the baseline audit fee for 2024/25 as £11,010, which is an increase of 4.6% on the previous year. In the main this fee is set by Audit Scotland. Additional fees are identified as liable to be incurred in respect of work relating to the implementation of International Financial Reporting Standard (IFRS) 16 on leases but these are not yet quantifiable. 3.7 The annual accounts timetable, including key deadlines are shown on page 29 of the AAP. The timetable anticipates that the Board will be asked to consider the Annual Audit Report and approve the Audited Annual Accounts at its meeting on 30 January 2026. 4. CONCLUSION 4.1 The Audit Plan will direct the work of the External Auditor. Any additional work required will be reported on as part of the Annual Audit Report Author of Report: Lorraine Paisey, Treasurer Background papers: Held within Accountancy Section, Moray Council Ref: SPMAN-1293228629-1299 Page 12
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Grampian Valuation Joint Board External Audit Plan Financial year ending 31 March 2025 Prepared for those Charged with Governance and the Auditor General for Scotland 27 June 2025 Page 13
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Contents Section Page 1. Key developments impacting our audit approach 03 2. Introduction and Headlines 05 3. Identified risks 09 4. Our approach to materiality 18 5. IT audit strategy 22 6. Wider scope and best value arrangements 24 7. Logistics 28 8. Fees and related matters 32 8. Independence considerations 35 9. Communication of audit matters with those charged with governance 37 10. Delivering audit quality 39 11. Appendices 43 Grampian Valuation Joint Board External Audit Plan 2024/25 2 Page 14
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Key developments impacting our audit approach 01 Grampian Valuation Joint Board External Audit Plan 2024/25 3 Page 15
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|© 2025 Grant Thornton UK LLP Commercial in Confidence 4Grampian Valuation Joint Board External Audit Plan 2024/25 4 Key developments impacting our audit approach Our commitments • As a firm, we are absolutely committed to audit quality and financial reporting in the local government sector. • To ensure close work with audited bodies and an efficient audit process, our preference as a firm is either for our staff to work on site with you and your staff or to develop a hybrid approach of on-site and remote working. • We would like to offer a formal meeting with the Treasurer twice a year as part of our commitment to keep you fully informed on the progress of the audit. • We will consider your arrangements for managing and reporting your financial resources as part of our audit in completing our wider scope work in relation to financial sustainability. • We will continue to provide you and your Board with sector updates providing our insight on issues from a range of sources via our Board updates. • We hold annual financial reporting workshops for our audit bodies to access the latest technical guidance and interpretation, discuss issues with experts and create networking links with other client to support consistent and accurate financial reporting across the sector. Page 16
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Introduction and Headlines02 Grampian Valuation Joint Board External Audit Plan 2024/25 5 Page 17
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Introduction and headlines (1) Purpose • This document provides an overview of the planned scope and timing of the external audit of Grampian Valuation Joint Board (VJB) for those charged with governance. • We are appointed by The Accounts Commission as the external auditors of Grampian VJB for the five year period 2022/23 to 2026/27. Respective responsibilities • The Code of Audit Practice (the Code) summarises where the responsibilities of auditors begin and end and what is expected from the audited body. Our respective responsibilities, and that of the Grampian VJB are summarised in the Appendix of this Audit Plan. We draw your attention to this and the Code. Scope of our Audit • The scope of our audit is set in accordance with the Code and International Standards on Auditing (ISAs) (UK). We are responsible for forming and expressing an opinion on Grampian VJB’s financial statements, which have been prepared by management with the oversight of those charged with governance (Grampian VJB). Our audit of the financial statements does not relieve management or the Grampian VJB of your responsibilities. It is your responsibility to ensure that proper arrangements are in place for the conduct of your business, and that public money is safeguarded and properly accounted for. As part of our wider scope work, we will consider how you are fulfilling these responsibilities. Our audit approach is based on a thorough understanding of Grampian VJB and is risk based. Other Audit Matters We summarise other audit matters for Grampian VJB awareness. This includes: • Consideration of going concern in accordance with Practice Note 10. • In accordance with the Code and planning guidance we also required to complete and submit a number of information returns and other deliverables to Audit Scotland during the year. Grampian Valuation Joint Board External Audit Plan 2024/25 6 Page 18
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Introduction and headlines (2) Significant risks Those risks requiring special audit consideration and procedures to address the likelihood of a material financial statement error have been identified as: • Management override of controls (ISA (UK) 240); • Risk of fraud in expenditure recognition – non payroll expenditure (cut-off) (PN10); • Valuation of land and buildings; • Valuation of defined benefit pension scheme. We will communicate significant findings on these areas as well as any other significant matters arising from the audit to you in our Audit Findings (ISA 260) Report. Grampian Valuation Joint Board External Audit Plan 2024/25 7 A lower materiality threshold will of £25,000 will be used on the Senior Officers Remuneration table within the Remuneration Report. We will revisit our materiality throughout our audit including updating to reflect the draft unaudited financial statements for 2024/25. Wider Scope and Best Value Audit In accordance with the Code, our planning considers the Wider Scope and Best Value areas of audit. We have concluded that Grampian VJB is a ‘less complex body’ and therefore, carry out more limited wider scope work as set out in this Audit Plan. We will consider the arrangements put in place by Grampian VJB to meet their Best Value obligations. The audit plan sets out our risk-based audit approach for Grampian VJB. This plan outlines our initial risk assessment and is reported to those charged with governance (Grampian VJB) and will be shared with Audit Scotland. Materiality We have calculated our planning materiality to be £113,900 (PY: £98,440) for Grampian VJB, which equates to 2.5% (PY: 2%) of your prior year gross expenditure as per the audited 2023/24 financial statements. Performance materiality has been determined as £85,425 (PY: £73,830) and is based on 75% (PY: 75%) of planning materiality. We are obliged to report uncorrected omissions or misstatements other than those which are ‘clearly trivial’ to those charged with governance. Clearly trivial has been calculated at 5% of materiality being £5,700 (PY: £4,922). Adding value through the audit Our overall approach to adding value through the audit is clear and upfront communication, founded on our public sector credentials. We use our LEAP audit methodology and data analytics to ensure delivery of a quality audit. We invited members of your financial reporting team to our annual Local Government Chief Accountants workshop, which is led by our internal financial reporting technical team. Page 19
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Introduction and headlines (3) Audit Fees Audit fees were shared by Audit Scotland with Grampian VJB in January 2025. The fee set by Audit Scotland is £9,510. Audit fees are paid to Audit Scotland who in turn pay Grant Thornton UK LLP. The baseline audit fee has been agreed with the audited body. We reserve the right to review our fee during the audit should significant delays be encountered and/or new technical matters arise. There will be changes to the above audit fee due to anticipated increased work required on the audit and the introduction of new requirements as follows: • IFRS 16 applies for the first time in 2024/25 – the additional audit fee will be determined later in the audit once Grampian VJB have provided us with all details on the lease assets to be accounted for under IFRS 16. • Additional testing of journals - due to lack of authorisation control we have levied an additional fee of £1,500 for extra work we will require to complete in our testing of journals as the control environment requires a higher level of testing. With the additional fee, the audit fee is currently £11,010 but will increase once we have established level of work required for IFRS 16. We reserve the right to review our fee during the audit should significant delays be encountered and/or new technical matters arise. Grampian Valuation Joint Board External Audit Plan 2024/25 8 Page 20
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Identified risks03 Grampian Valuation Joint Board External Audit Plan 2024/25 9 Page 21
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Significant risks identified (1) Significant risks are defined by ISAs (UK) as risks that, in the judgement of the auditor, require special audit consideration. In identifying risks, audit teams consider the nature of the risk, the potential magnitude of misstatement, and its likelihood. Significant risks are those risks that have a higher risk of material misstatement. “In determining significant risks, the auditor may first identify those assessed risks of material misstatement that have been assessed higher on the spectrum of inherent risk to form the basis for considering which risks may be close to the upper end. Being close to the upper end of the spectrum of inherent risk will differ from entity to entity and will not necessarily be the same for an entity period on period. It may depend on the nature and circumstances of the entity for which the risk is being assessed. The determination of which of the assessed risks of material misstatement are close to the upper end of the spectrum of inherent risk, and are therefore significant risks, is a matter of professional judgment, unless the risk is of a type specified to be treated as a significant risk in accordance with the requirements of another ISA (UK).” (ISA (UK) 315). In making the review of unusual significant transactions “the auditor shall treat identified significant related party transactions outside the entity’s normal course of business as giving rise to significant risks.” (ISA (UK) 550). Significant risk Description Fraud in Revenue Recognition Under ISA (UK) 240 there is a rebuttable presumed risk that revenue may be misstated due to the improper recognition of revenue. This presumption can be rebutted if the auditor concludes that there is no risk of material misstatement due to fraud relating to revenue recognition. (rebutted) Having considered the risk factors set out in ISA 240 and the nature of the revenue streams at Grampian VJB, we have determined that the risk of fraud arising from revenue recognition can be rebutted, because: • there is little incentive to manipulate revenue recognition. • opportunities to manipulate revenue recognition are very limited. Therefore, we do not consider this to be a significant risk for Grampian VJB Management should expect engagement teams to challenge management in areas that are complex, significant or highly judgmental which may be the case for accounting estimates, going concern, related parties and similar areas. Management should also expect to provide to engagement teams with sufficient evidence to support their judgments and the approach they have adopted for key accounting policies referenced to accounting standards or changes thereto. Where estimates are used in the preparation of the financial statements management should expect teams to challenge management’s assumptions and request evidence to support those assumptions. Grampian Valuation Joint Board External Audit Plan 2024/25 10 Page 22
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Significant risks identified (2) Significant Risk Description Fraud in expenditure recognition Due to the presumption that there are risks of fraud in expenditure recognition, we are required to evaluate which types of expenditure, expenditure transactions or assertions give rise to such risks. As set out in Practice Note 10: Audit of Financial Statements of Public Sector Bodies in the United Kingdom (PN10) issued by the Public Audit Forum, which applies to all public sector entities, we consider there to be an inherent risk of fraud in expenditure recognition. Grampian VJB expenditure includes both payroll and non- payroll costs. We consider payroll costs to be well forecast and are able to agree these costs to underlying payroll systems. As such we believe there is less opportunity for a material misstatement as a result of fraud to occur in this area. We therefore focus our risk on the non-payroll expenditure streams; other service expenses and support service recharges. Our testing will include a specific focus on year end cut-off arrangements, including consideration of the existence of accruals in relation to non payroll/non finance expenditure. We will: • Evaluate your accounting policy for recognition of expenditure for appropriateness and compliance with the CIPFA/LASAAC Code of Practice 2024/25. • Perform detailed testing of expenditure transactions at and around year end to verify the accounting period transactions relate to and confirm that transactions have been recognised in the correct accounting period. • Review the judgements and estimates made by management when recognising accruals at year end within the financial statements, and where appropriate challenge management accordingly. Grampian Valuation Joint Board External Audit Plan 2024/25 11 Page 23
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Significant risks identified (3) Significant risk Description Management override of controls Under ISA (UK) 240 there is a non-rebuttable presumed risk that the risk of management override of controls is present in all entities. Our risk focuses on the areas of the financial statements where there is potential for management to use their judgement to influence the financial statements alongside the potential to override the entity’s internal controls, related to individual transactions. We have therefore identified management override of controls, in particular journals, management estimates and of transactions outside the course of business as a significant risk of material misstatement. We will: • Document our understanding of and evaluate the design effectiveness of management’s key controls over journals. • Analyse your full journal listing for the year and use this to determine our criteria for selecting high risk journals. • Test the high risk journals we have identified. • Gain an understanding of the critical judgements applied by management in the preparation of the financial statements and consider their reasonableness. • Gain an understanding of the key accounting estimates made by management and carry out substantive testing on in scope estimates. • Evaluate the rationale for any changes in accounting policies, estimates or significant unusual transactions. Grampian Valuation Joint Board External Audit Plan 2024/25 12 Page 24
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Significant risks identified (4) Significant risk Description Valuation of land and buildings In accordance with the CIPFA/LASAAC Code of Practice, subsequent to initial recognition, Grampian VJB is required to hold property and property, plant and equipment (PPE) on a valuation basis. The valuation basis used will depend on the nature and use of the assets. Assets are measured at current value which is Existing Use Value for Land and Buildings and Depreciated Historic Cost for Equipment and Furniture, which is used as a proxy for current value. Grampian VJB appoint Moray Council’s internal valuer to undertake a rolling programme of valuations across their asset base, valuing land and buildings at least once every five years. In the intervening periods, Grampian VJB carries out an indexation exercise to assess the material accuracy of the assets not revalued in year. As at 31 March 2024, Grampian VJB held PPE of £0.680 million, including land and buildings of £0.627 million. A full revaluation exercise was undertaken during 2023/24 and no formal revaluation is expected in 2024/25. However, Grampian VJB still require to make an assessment on whether there has been a material movement in the valuation of land and building assets in the current year. This process is led by the valuer, who will carry out an assessment over whether there has been a material change in the valuation of land and building assets during the year. Therefore, a key part of our audit challenge will be reviewing management’s assessment on whether there has been a change in value since the last revaluation date. Given the nature of valuation that involves assumptions and judgements, there is an inherent risk of material misstatement in the year end valuation. We focus our audit attention on changes in valuations compared to last year, and this work is deemed a significant risk requiring special audit consideration. We will report an updated risk assessment for the valuation of land and buildings in our Annual Audit Report in September. We will: • Evaluate management’s processes and controls for the calculation of the valuation estimates, the instructions issued to their management experts and the scope of their work. • Evaluate the competence, capabilities and objectivity of the valuation expert. • Write to the valuer to confirm the basis on which the valuations were carried out. • Challenge the information and assumptions used by the valuer to assess completeness and consistency with our understanding. • Evaluate the valuer’s report to identify assets that have large and unusual changes and/or approaches to the valuation – these assets will be substantially tested to ensure the valuations are reasonable. • Evaluate the assumptions made by management for any assets not revalued during the year and how management has satisfied themselves that these are not materially different to current value. Grampian Valuation Joint Board External Audit Plan 2024/25 13 Page 25
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Significant risks identified (5) Significant risk Description Defined benefit pension scheme Grampian VJB participates in the North East Scotland Pension Fund, a local government pension scheme. The scheme is a defined benefit pension scheme and in accordance with IAS 19: Pensions, Grampian VJB is required to recognise its share of the scheme assets and liabilities in its Statement of Financial Position. In 2023/24, Grampian VJB applied the asset ceiling test as prescribed by IFRIC 14 which limited the measurement of a defined benefit asset to the ‘present value of economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan.’ The pension asset can be recognised as the lower of the net pension asset or the present value of any economic benefits available. Grampian VJB’s actuaries undertook this assessment and the asset value in the accounts was reduced as the present value of the benefits available were lower than the pension asset. The net liability arising from the unfunded defined benefit obligation remained as there is no right to offset this. Grampian VJB’s actuary will also provide an annual IAS 19 actuarial valuation of Grampian VJB’s net liabilities in the pension scheme. There are a number of assumptions contained within the valuation, including: discount rate; future return on scheme assets; mortality rates; and, future salary projections. Given the material value of the scheme’s gross assets and gross liabilities and the level of estimation in the valuation, there is an inherent risk that the defined benefit pension scheme net liability could be materially misstated within the financial statements. This risk is focussed on the appropriateness and reasonableness of the underlying assumptions adopted by the actuary and the suitability of these for Grampian VJB. We will: • Evaluate management's processes and controls for the calculation of the gross asset and gross liability and estimates, the instructions issued to the actuarial expert and the scope of their work. • Evaluate the assumptions made by the actuary in the calculation of the estimate, using work performed by an auditor’s expert commissioned on behalf of Audit Scotland and additional follow up procedures (where required). • Evaluate the data used by management’s experts in the calculation of the estimates. • Perform substantive analytical procedures over the gross assets, gross liabilities and in year pension fund movements, investigating any deviations from audit expectations. • Assess the accuracy and completeness of the IAS 19 estimates and related disclosures made within the Council’s financial statements. • Review management’s assessment of the application of IFRIC 14 (if applicable). • Evaluate the response received from the NESPF auditor in line with the Protocol for Auditor Assurances for Local Government Pension Schemes. During the course of our audit engagement, we will continue to assess the appropriateness of our planned approach and update where appropriate. Grampian Valuation Joint Board External Audit Plan 2024/25 14 Page 26
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Other risks identified (1) Risk Description IFRS 16 – Right of Use Assets In line with the Code of Audit Practice for Local Authority Accounting in the UK, Grampian VJB is required to adopt IFRS 16 Leases. 2024/25 will be the first year Grampian VJB will account for leases in line with IFRS 16. Under IFRS 16 a lessee is required to recognise right-of-use assets and associated lease liabilities in its Statement of Financial Position. This will result in significant changes to the accounting for leased assets and the associated disclosures in the financial statements in the year ended 31 March 2025. Further detail on the implications of this Accounting Standard is set out at Appendix 4. Our initial discussions with officers at Grampian VJB have indicated that: • Grampian VJB has established systems and processes to capture the data required to account for right-of-use lease assets in accordance with IFRS 16. • revised its accounting polices for the year ended 31 March 2025 to reflect the requirements of this accounting standard. We will assess the existence, accuracy and completeness of the right-of-use assets and associated lease liabilities, and the related disclosures, during our audit. As this is a new area of focus for 2024/25, any work will be subject to an additional audit fee. Grampian Valuation Joint Board External Audit Plan 2024/25 15 Page 27
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Other matters (1) Other work In addition to our expected responsibilities under the Code of Practice, we have a number of other audit responsibilities, as follows: • We audit parts of your Remuneration Report, as required under the Code, and check whether these sections have been properly prepared (opinion). These procedures are performed to a lower materiality. • We read the sections of your Statement of Accounts which are not subject to audit and check that they are consistent with the financial statements on which we give an opinion (opinion). • We carry out work to satisfy ourselves that disclosures made in your Annual Governance Statement are in line with requirements set out in Delivering Good Governance in Local Government: Framework (2016) (opinion). • We consider our other duties under the Code and planning guidance (2024/25), as and when required, including: • Supporting Audit Scotland’s reporting to the Accounts Commission. • Contributing to Audit Scotland Performance Reports and providing regular updates to Audit Scotland to share awareness of current issues. • Contributing to the National Fraud Initiative (NFI) report. • Notifying the Controller of the Audit when circumstances indicate a statutory report may be required. • Completing mandated information requests and returns and notifying Audit Scotland of any cases of money laundering or fraud. • Review of Technical guidance prior to issue by Audit Scotland. Grampian Valuation Joint Board External Audit Plan 2024/25 16 Other material balances and transactions Under International Standards on Auditing, "irrespective of the assessed risks of material misstatement, the auditor shall design and perform substantive procedures for each material class of transactions, account balance and disclosure". All other material balances and transaction streams will therefore be audited. However, the procedures will not be as extensive as the procedures adopted for the risks identified in this report. Internal control environment During our initial audit planning we will develop our understanding of your control environment (design and implementation) as it relates to the preparation of your financial statements. In particular we will: • Consider key business processes and related controls. • Assess the design of key controls over all significant risks we have identified. This will include key controls over: • Journal entries and other key entity level controls. • The completeness of accruals and liabilities recorded within the general ledger. • The completeness and accuracy of information provided to the actuary to perform the valuation of the net pension fund liability. • The review of actuarial outputs including key assumptions made by the actuary and significant movements impacting the net pension liability. • The review of valuation outputs including key assumptions made by the valuer. Our focus is on design and implementation of controls only. We do not intend to assess or place any reliance on the operating effectiveness of your controls during our audit. Page 28
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Other matters (2) Going concern assessment As auditors, we are required to obtain sufficient appropriate audit evidence regarding, and conclude on: • whether a material uncertainty related to going concern exists; and • the appropriateness of management’s use of the going concern basis of accounting in the preparation of the financial statements. The Public Audit Forum has been designated by the Financial Reporting Council as a “SORP-making body” for the purposes of maintaining and updating Practice Note 10: Audit of financial statements and regularity of public sector bodies in the United Kingdom (PN 10). It is intended that auditors of public sector bodies read PN 10 in conjunction with (ISAs) (UK). PN 10 was updated in 2020 to take account of revisions to ISAs (UK), including ISA (UK) 570 (Revised September 2019) on going concern. PN 10 allows auditors to apply a ‘continued provision of service approach’ when auditing going concern in the public sector, where appropriate. Audit Scotland’s also issued further guidance in a Going Concern publication in December 2020). Within our wider scope work we will conclude on Grampian VJB’s arrangements to ensure financial sustainability. Internal Audit We read and understand the work of Internal Audit during the year, and how this work feeds into management’s governance processes and inclusion within the Annual Governance Statement. We do not rely directly upon the work of Internal Audit, and our approach is fully substantive. Grampian Valuation Joint Board External Audit Plan 2024/25 17 Financial reporting developments During our audit we will actively discuss emerging financial reporting developments with you. We invited members of your finance team to our LG technical audit workshops earlier this year. The workshop will include focus on the new accounting and audit requirements for IFRS 16 on leases, and good practice information for those bodies preparing group accounts. Progress against prior year audit recommendation As part of our final account's procedures, we will follow up on the implementation of prior year audit recommendations and report on progress against the recommendations in full within our Annual Audit Report. Interim testing As part of our interim procedures, we will complete testing on a number of areas when efficient to do so, which will cover the first nine months of the financial year. This will include: • Payroll - starters, leavers and changes in circumstances • Payroll substantive analytical procedure • Other service expenditure Page 29
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Our approach to materiality04 18Grampian Valuation Joint Board External Audit Plan 2024/25 Page 30
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Our approach to materiality (1) The concept of materiality is fundamental to the preparation of the financial statements and the audit process and applies not only to the monetary misstatements but also to disclosure requirements and adherence to acceptable accounting practice and applicable law. Matter Description Planned audit procedures Determination We have determined planning materiality (financial statement materiality determined at the planning stage of the audit) based on professional judgement in the context of our knowledge of the business, including consideration of factors such as shareholder expectations, industry developments, financial stability and reporting requirements for the financial statements. We have determined financial statement materiality based on a proportion of the gross expenditure of Grampian VJB for the financial year. Materiality at the planning stage of our audit is £113,900 (PY: £98,440), which equates to 2.5% of your prior year gross expenditure for the year. Performance materiality for Grampian VJB has been set at £85,425 (PY: £73,830) which is based upon 75% of materiality. • We determine planning materiality in order to: – establish what level of misstatement could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. – assist in establishing the scope of our audit engagement and audit tests. – determine sample sizes. – assist in evaluating the effect of known and likely misstatements in the financial statements. Other factors An item does not necessarily have to be large to be considered to have a material effect on the financial statements • An item may be considered to be material by nature when it relates to: – instances where greater precision is required (e.g.. the Senior Management and Councillor Remuneration and Pension Benefits Tables). Reassessment of materiality Our assessment of materiality is kept under review throughout the audit process • We reconsider planning materiality if, during the course of our audit engagement, we become aware of facts and circumstances that would have caused us to make a different determination of planning materiality. 01 02 Grampian Valuation Joint Board External Audit Plan 2024/25 19 03 Page 31
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Our approach to materiality (2) Matter Description Planned audit procedures Matters we will report to Grampian VJB Whilst our audit procedures are designed to identify misstatements which are material to our opinion on the financial statements as a whole, we nevertheless report to Grampian JVB any unadjusted misstatements of lesser amounts to the extent that these are identified by our audit work. Under ISA 260 (UK) ‘Communication with those charged with governance’, we are obliged to report uncorrected omissions or misstatements other than those which are ‘clearly trivial’ to those charged with governance. ISA 260 (UK) defines ‘clearly trivial’ as matters that are clearly inconsequential, whether taken individually or in aggregate and whether judged by any quantitative or qualitative criteria. • We report to Grampian VJB any unadjusted misstatements of lesser amounts to the extent that these are identified by our audit work. • In the context of Grampian VJB, we propose that an individual difference could normally be considered to be clearly trivial if it is less than £5,700 (PY: £4,922). If management have corrected material misstatements identified during the course of the audit, we will consider whether those corrections should be communicated to the Board to assist it in fulfilling its governance responsibilities. Misstatements, including omissions, are considered to be material if they, individually or in the aggregate, could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements; Judgments about materiality are made in light of surrounding circumstances, and are affected by the size or nature of a misstatement, or a combination of both; and Judgments about matters that are material to users of the financial statements are based on a consideration of the common financial information needs of users as a group. The possible effect of misstatements on specific individual users, whose needs may vary widely, is not considered. (ISA (UK) 320) Grampian Valuation Joint Board External Audit Plan 2024/25 20 04 Page 32
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Our approach to materiality (3) Amount (£) Qualitative factors considered Materiality for Grampian VJB’s financial statements £113,900 Our materiality has been set at 2.5% of prior year gross expenditure of Grampian VJB as per the 2023/24 financial statements. In setting this threshold, the following factors have been considered: • There were no significant findings in the 2023/24 audit report. • No significant deficiencies have been identified with the Grampian VJB control environment. • The level of public interest in Grampian VJB for Scotland by the public and the Scottish Government. Materiality for specific transactions, balances or disclosures – Remuneration Report £25,000 Due to the sensitivity of the disclosures to the users of the financial statements, a lower materiality threshold has been applied to the Senior Officers remuneration table within the Remuneration Report. All other remuneration disclosures will be audited at headline materiality. 21Grampian Valuation Joint Board External Audit Plan 2024/25 21 Page 33
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|© 2025 Grant Thornton UK LLP Commercial in Confidence IT audit strategy05 Grampian Valuation Joint Board External Audit Plan 2024/25 22 Page 34
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|© 2025 Grant Thornton UK LLP Commercial in Confidence IT audit strategy In accordance with ISA (UK) 315, we are required to obtain an understanding of the IT environment related to all key business processes, identify all risks from the use of IT related to those business process controls judged relevant to our audit and assess the relevant IT general controls (ITGCs) in place to mitigate them. Our audit will include completing an assessment of the design and implementation of ITGCs related to security management; technology acquisition, development and maintenance; and technology infrastructure. IT application Audit area Planned level IT audit assessment Advance Business Solutions e5 System Financial reporting • ITGC assessment (design and implementation effectiveness only) iTrent Payroll • ITGC assessment (design and implementation effectiveness only) CIPFA Asset Management PPE • ITGC assessment (design and implementation effectiveness only) The following IT applications are in scope for IT controls assessment based on the planned financial statement audit approach, we will perform the indicated level of assessment: Grampian Valuation Joint Board External Audit Plan 2024/25 23 Page 35
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Wider Scope Arrangements06 Grampian Valuation Joint Board External Audit Plan 2024/25 24 Page 36
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Wider scope and best value arrangements (1) Wider Scope Our responsibilities under the Code extend beyond the audit of the financial statements. Under the Code and supporting guidance: “Supplementary guidance - wider scope audit, less complex bodies and Best Value” issued by Audit Scotland, there is an exemption in relation to the normal wider scope audit requirements of the Code for public bodies which are smaller and have limited financial activity (referred to as “Less Complex Bodies”). As required by the Code and this supporting guidance. we have assessed both the quantitative and qualitative risk factors related to Grampian VJB and concluded that Grampian VJB qualifies for this exemption for 2024/25. From a quantitative perspective the gross revenue, gross assets and gross liabilities of Grampian VJB are not expected to exceed the £10.2 million limit set out in Audit Scotland’s guidance, and from a qualitative perspective we have not identified any wider scope risks beyond financial sustainability that would require further consideration during the audit. Our wider scope work at Grampian VJB will be limited to the following areas specified for Less Complex Bodies in the Code: Best Value in other local government bodies Auditors’ duty to consider the arrangements to secure Best Value applies to other bodies that fall within section 106 of the Local Government (Scotland) Act 1973 (the 1973 Act). We will consider the arrangements put in place by Grampian VJB to meet their Best Value obligations as part of our wider scope work. 25 Financial Sustainability Concluding on the financial sustainability of the body and the services that it delivers over the medium to longer term. Annual Governance Statement A review of the Annual Governance Statement Grampian Valuation Joint Board External Audit Plan 2024/25 Page 37
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Wider scope and best value arrangements (2) 26 No significant weaknesses in arrangements identified or improvement recommendation made. No significant weaknesses in arrangements identified, but improvement recommendations made. Significant weaknesses in arrangements identified and key recommendations made. Grampian Valuation Joint Board External Audit Plan 2024/25 This section of our report documents our conclusions from audit work on the wider scope areas set out in the Code. We take a risk-based audit approach to wider scope work. We will continue to review your arrangements before we issue our Annual Audit Report. Financial Sustainability Appropriate arrangements were in place. No significant risks have been identified. Our initial planning work has not identified a significant risk in relation to Grampian VJB’s arrangements for financial sustainability. As part of our work, we will consider whether Grampian VJB is planning effectively to continue to deliver it services over the medium to longer term. Page 38
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Wider scope and best value arrangements (3) 27Grampian Valuation Joint Board External Audit Plan 2024/25 As part of the budget setting process for 2024/25, Grampian VJB have prepared a three-year budget covering 2024/25 to 2026/27, with the 2024/25 budget approved in January 2024. The indicative 3-year budget prepared to 2026/27 identifies Grampian VJB's expected expenditure over the 3-year period. There is a gradual increase in expenditure over time and there is an in-built assumption that Grampian VJB will receive requisitions from the partner authorities to match their expenditure each year. The budget set for 2024/25 proposed net expenditure of £5.178 million, split between core budget of £4.754 million and NDR reform budget of £0.424 million. The most significant portion of spend in the budget relates to employee benefits, which represents around 76% of expenditure. The proposed total requisition was £5.022 million, split between core budget of £4.754 million and NDR reform budget of £0.268 million. Grampian VJB intend to utilise £0.156 million of NDR reform reserves to balance the budget. The latest financial report to 31 December 2024 was presented to the Board in January 2025. This confirmed Grampian VJB were projecting an underspend against budget of £0.694 million; £0.538 million underspend against core budget and £0.156 million underspend against NDR reform budget. The biggest element of the underspend relates to projected underspends in staff costs due to vacant posts. Grampian VJB have also received an additional £0.376 million of government grant income which was not included in the initial budget. At the planning stage there is not a risk identified to financial sustainability in the short term. Grampian VJB have a history of underspending against agreed budget. We will update the results of our work on financial sustainability in our Annual Audit Report. Page 39
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Logistics07 Grampian Valuation Joint Board External Audit Plan 2024/25 28 Page 40
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|© 2025 Grant Thornton UK LLP Commercial in Confidence 29Grampian Valuation Joint Board External Audit Plan 2024/25 29 The Audit Timeline - Logistics (1) Planning March 2025 Key Dates Final October 2025 Completion October/November 2025 Key elements • Planning meeting with management to set audit scope • Planning requirements checklist to management • Agree timetable and deliverables with management • Issue the Audit Plan to management and Grampian VJB • Review of key judgements and estimates • Undertake payroll testing (first nine months of starters, leavers, changes in circumstances and payroll substantive analytic) Key elements • Audit teams to complete fieldwork and detailed testing • Weekly update meetings with management Key elements • Draft Audit Findings issued to management • Audit Findings meeting with management • Draft Audit Findings issued to Grampian VJB • Audit Findings presentation to Grampian VJB • Annual Audit Report • Finalise and sign financial statements and audit report Year end: 31 March 2025 Grampian VJB meeting: 30 January 2026 Audit phases: Draft Audit Plan submitted to Audit Scotland 31 March 2025 We are required to submit audit plans to Audit Scotland by 31 March 2025, and the target date to submit audited accounts and the Annual Audit Report is by 30 September 2025. We have set out below our planned timescales for the Grampian VJB audit, and it is expected that target timelines will not be met due to capacity at the authority. Grampian VJB meeting: 27 June 2025 Page 41
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|© 2025 Grant Thornton UK LLP Commercial in Confidence The Audit Timeline - Logistics (2) Audited body responsibilities Where audited bodies do not deliver to the timetable agreed, we need to ensure that this does not impact on audit quality or absorb a disproportionate amount of time, thereby disadvantaging our other audit engagements. Where additional resources are needed to complete the audit due to an audited body not meeting their obligations, we are not able to guarantee the delivery of the audit to the agreed timescales. In addition, delayed audits due to client issues may incur additional audit fees. Our requirements To aid the audit process, you need to ensure that you: • produce draft accounts, comprising financial statements and related reports, of good quality, by the deadline you have agreed with us; • prepare good quality working papers which support the figures included in the financial statements, in line with the working paper requirements schedule that we have shared with you, and make these available to us at the start of the year end audit visit; • provide all agreed data reports to us at the start of the audit, which are fully cleansed and reconciled to the figures in the financial statements; • ensure that all appropriate staff are available to us for queries over the planned period of the audit , or as otherwise agreed, and; • respond promptly and appropriately to all audit queries, within agreed timescales. Grampian Valuation Joint Board External Audit Plan 2024/25 30 Page 42
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|© 2025 Grant Thornton UK LLP Commercial in Confidence 31Grampian Valuation Joint Board External Audit Plan 2024/25 31 Our team and communications Service delivery Audit reporting Audit progress Technical support Formal communications • Annual audit closure meeting • The Audit Plan • The Annual Audit Report • Audit planning meetings • Audit clearance meetings • Communication of issues log • Technical updates Informal communications • Open channel for discussion • Communication of audit issues as they arise • Notification of up-coming issues (where appropriate) Angela L Pieri Engagement Lead T: 0161 214 6337 E: Angela.L.Pieri@uk.gt.com Andrew Wallace Audit Manager T: 0141 223 0671 E: Andrew.D.Wallace@uk.gt.com Lucy X Bell Audit Senior / In-charge • Key contact for senior management and Audit, Performance and Risk Committee • Overall quality assurance • Audit team management • Resource management • Wider scope and best value reporting • Day-to-day point of contact • Audit planning/interim • Audit fieldwork Pool of technical specialists (e.g. internal valuers, IT audit) Jorge Alcaraz Avellaneda Audit In-Charge T: 0141 229 9181 E: Jorge.Alcaraz.Avellaneda@uk.gt.com Page 43
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Fees and related matters08 Grampian Valuation Joint Board External Audit Plan 2024/25 32 Page 44
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Audit Fees Across all sectors and firms, the Financial Reporting Council (FRC) has set out its expectation of improved financial reporting from organisations and the need for auditors to demonstrate increased scepticism and challenge and to undertake additional and more robust testing. As a firm, we are absolutely committed to meeting the expectations of the FRC on audit quality and public sector financial reporting. This includes, for Audit Scotland contracts, meeting the expectations of the Audit Scotland Quality Team and the Scottish quality framework. Audit fees were shared by Audit Scotland with the Treasurer in January 2025. Audit fees are paid to Audit Scotland who in turn pay us. We reserve the right to review our fee during the audit should significant delays be encountered and/or new technical matters arise. Relevant Professional Standards Audit Scotland set the baseline audit fee. We can increase the fee, from the baseline, for the inclusion of additional risks, new technical matters or specific client matters identified. We are required to consider all relevant professional standards, including paragraphs 4.1 and 4.2 of the FRC’s Ethical Standard (revised 2024) which state that the Engagement Lead must set a fee sufficient to enable the resourcing of the audit with partners and staff with appropriate time and skill to deliver an audit to the required professional and Ethical standards. Grampian Valuation Joint Board External Audit Plan 2024/25 33 The baseline fee of £9,510 has been set by Audit Scotland. In accordance with Audit Scotland guidance, we are able to discuss a variation to the audit fee where additional work is required. Additional work required for IFRS 16 and additional testing of journals is set out on page 34. Page 45
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Audit Fees (2) Audit fees for 2024/25 Additional Fees (Non-Audit Services) Fee Assumption In setting the fee for 2024/25 we have assumed that you will: • prepare a good quality set of accounts, supported by comprehensive and well-presented working papers which are ready at the start of the audit • provide appropriate analysis, support and evidence for all critical and significant judgements and estimates made in preparing the financial statements • provide early notice of proposed complex or unusual transactions which could have a material impact on the financial statements • Provide ongoing access to officers and management experts throughout the audit and timely responses to audit queries. Grampian Valuation Joint Board External Audit Plan 2024/25 34 Service Fees (£) External Auditor Remuneration £20,560 Pooled Costs £520 Contribution to Performance Audit and Best Value Nil Sectoral cap adjustment -£11,570 2024/25 Initial Fee £9,510 Additional audit fee for journals £1,500 2024/25 Fee (excluding IFRS 16) £11,010 Service Fees (£) At planning stage we confirm there are no planned non-audit services Nil Journals Due to the control environment in place at Moray Council, we are required to complete additional work in to satisfy the management of override risk. We have levied an additional fee of £1,500 for the additional work we will be required to complete in our testing of journals. We levied an additional fee in our 2023/24 audit also for this work. IFRS 16 - Leases This is the first year Grampian VJB will account for leases in accordance with IFRS 16 and additional work will be required to gain an understanding of how leases have been recognised in the accounts. An additional audit fee will be required for this work and will be determined later in the audit once Grampian VJB have provided us with all details on the lease assets to be accounted for under IFRS 16. Page 46
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Independence considerations09 Grampian Valuation Joint Board External Audit Plan 2024/25 35 Page 47
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Independence considerations Ethical Standards and ISA (UK) 260 require us to give you timely disclosure of all significant matters that may bear upon the integrity, objectivity and independence of the firm or covered persons (including its partners, senior managers, managers). In this context, there are no matters that we are required to report. As part of our assessment of our independence at planning we note the following matters: We confirm that there are no significant facts or matters that impact on our independence at planning as auditors that we are required or wish to draw to your attention and consider that an objective reasonable and informed third party would take the same view. The firm and each covered person have complied with the Financial Reporting Council’s Ethical Standard and confirm that we are independent and are able to express an objective opinion on the financial statements. No non-audit services provided by Grant Thornton UK LLP have been identified. Any changes and full details of all fees charged for audit related and non-audit related services by Grant Thornton UK LLP and by Grant Thornton International Limited network member Firms will be included in our Annual Audit Report at the conclusion of the audit. Matter Conclusions Relationships with Grant Thornton We are not aware of any relationships between Grant Thornton and Grampian VJB that may reasonably be thought to bear on our integrity, independence and objectivity. Relationships and Investments held by individuals We have not identified any potential issues in respect of personal relationships with Grampian VJB or investments in Grampian VJB held by individuals. Employment of Grant Thornton staff We are not aware of any former Grant Thornton partners or staff being employed, or holding discussions in respect of employment, by Grampian VJB as a director or in a senior management role covering financial, accounting or control related areas. Business relationships We have not identified any business relationships between Grant Thornton and Grampian VJB. Contingent fees in relation to non-audit services No contingent fee arrangements are in place for non-audit services provided. Gifts and hospitality We have not identified any gifts or hospitality provided to, or received from, a member of Grampian VJB’s board, senior management or staff (that would exceed the threshold set in the Ethical Standard). Grampian Valuation Joint Board External Audit Plan 2024/25 36 Page 48
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Communication of audit matters with those charged with governance 10 Grampian Valuation Joint Board External Audit Plan 2024/25 37 Page 49
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Communication of audit matters with those charged with governance Our communication plan Audit Plan Annual Audit Report Respective responsibilities of auditor and management/those charged with governance Overview of the planned scope and timing of the audit, form, timing and expected general content of communications including significant risks and Key Audit Matters Planned use of internal audit Confirmation of independence and objectivity A statement that we have complied with relevant ethical requirements regarding independence. Relationships and other matters which might be thought to bear on independence. Details of non-audit work performed by Grant Thornton UK LLP and network firms, together with fees charged. Details of safeguards applied to threats to independence Significant matters in relation to going concern Significant findings from the audit Significant matters and issue arising during the audit and written representations that have been sought Significant difficulties encountered during the audit Significant deficiencies in internal control identified during the audit Significant matters arising in connection with related parties Identification or suspicion of fraud involving management and/or which results in material misstatement of the financial statements Non-compliance with laws and regulations Unadjusted misstatements and material disclosure omissions ISA (UK) 260, as well as other ISAs (UK), prescribe matters which we are required to communicate with those charged with governance, and which we set out in the table here. This document, the Audit Plan, outlines our audit strategy and plan to deliver the audit, while the Annual Audit Report will be issued prior to approval of the financial statements and will present key issues, findings and other matters arising from the audit, together with an explanation as to how these have been resolved. We will communicate any adverse or unexpected findings affecting the audit on a timely basis, either informally or via an audit progress memorandum. Respective responsibilities As auditor we are responsible for performing the audit in accordance with ISAs (UK), which is directed towards forming and expressing an opinion on the financial statements that have been prepared by management with the oversight of those charged with governance. The audit of the financial statements does not relieve management or those charged with governance of their responsibilities. Grampian Valuation Joint Board External Audit Plan 2024/25 38 Page 50
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Delivering audit quality11 Grampian Valuation Joint Board External Audit Plan 2024/25 39 Page 51
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Delivering audit quality (1) How our strategy differentiates our service Our investment in a specialist team, and leading tools and methodologies to deliver their work, has set us apart from our competitors in the quality of what we do. The FRC highlighted the following as areas of particularly good practice in its recent inspections of our work: • use of specialists, including at planning phases, to enhance our fraud risk assessment • effective deployment of data analytical tools, particularly in the audit of revenue • clear oversight at group level when working with component auditors, including detailed review of working papers to flush out the critical issues early. Our quality strategy We deliver the highest standards of audit quality by focusing our investment on: Creating the right environment Our audit practice is built around the markets it faces. Your audit team are focused on the Public Sector audit market and work with clients like you day in, day out. Their specialism brings experience, efficiency and quality. Building our talent, technology and infrastructure We’ve invested in digital tools and methodologies that bring insight and efficiency, and invested in senior talent that works directly with clients to deploy bespoke digital audit solutions. Working with premium clients We work with great public and private businesses that, like you, value audit, value the challenge a robust audit provides, and demonstrate the strongest levels of corporate governance. We’re aligned with our clients on what right looks like. Our objective is to be the best audit firm in the UK for the quality of our work and our client service, because we believe the two are intrinsically linked. Grampian Valuation Joint Board External Audit Plan 2024/25 40 The right people at the right time We are clear that a focus on quality, effectiveness and efficiency is the foundation of great client service. By doing the right audit work, at the right time, with the right people, we maximise the value of your time and ours, while maintaining our second- to-none quality record. Bringing you the right people means that we bring our specialists to the table early, resolving the key judgements before they impact the timeline of your financial reporting. The engagement leader always retains the final call on the critical decisions; we use our experts when forming our opinions, but we don’t hide behind them. Page 52
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Delivering audit quality (2) Wendy Russell Partner, UK Head of Audit Quality underpins everything at Grant Thornton, as our FRC inspection results in the chart below attest to. We’re growing our practice sustainably, and that means focusing where we know we can excel without compromising our strong track record or our ability to deliver great audits. It’s why we will only commit to auditing businesses where we’re certain we have the time and resource, but, most importantly, capabilities and specialist expertise to deliver. You’re in safe hands with the team; they bring the right blend of experience, energy and enthusiasm to work with you and are fully supported by myself and the rest of our firm. Good or limited improvements required Significant improvements required Improvements required FRC’s Audit Quality Inspection and Supervision Inspection (% of files awarded in each grading, in the most recent report for each firm) 0% 20% 40% 60% 80% 100% Grampian Valuation Joint Board External Audit Plan 2024/25 41 Digital differentiation We’re a digital-first audit practice, and our investment in data analytics solutions has given our clients better assurance by focusing our work on transactions that carry the most risk. With digital specialists working directly with your teams, we make the most of the data that powers your business when forming our audit strategy. Oversight and control Wherever your audit work is happening, we make sure that its quality meets your exacting requirements, and we emphasise communication to identify and resolve potential challenges early, wherever and however they arise. By getting matters on the table before they become “issues”, we give our clients the time to deal with them effectively. Page 53
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Delivering audit quality (3) Grampian Valuation Joint Board External Audit Plan 2024/25 42 Audit Quality Framework The Audit Quality Framework (AQF) published by Audit Scotland sets out it’s approach to achieving high quality public audit by all auditors and providers. The AQF is the framework used to provide the Auditor General and the Accounts Commission with robust, objective, and independent quality assurance, over the work conducted on their behalf by Audit Scotland and external firms. This work includes delivering the respective performance audit and Best Value work programmes and the annual audits of public bodies across Scotland’s public sector. Audit quality is at the core of public audit in Scotland and is the foundation for building consistency and confidence across all audit work. High-quality public audit provides the public, decision-makers, and politicians, with the assurance and information they need, and it helps Scotland’s Parliament hold public bodies to account. This is more important than ever when public services face rising demand and tightening budgets Annual Audit Quality Report Audit Scotland’s Audit Quality and Appointment (AQA) team prepares an annual Audit Quality Report to provide assurance on audit quality, including compliance with the Financial Reporting Council’s Ethical Standard, to the Auditor General for Scotland and the Accounts Commission. This annual report summarises the AQA’s assessment of audit quality conducted on audit work, delivered by Audit Scotland and the six appointed firms (including Grant Thornton UK LLP) on behalf of the Auditor General for Scotland and the Accounts Commission on the 2022/23 audits. The report provides evidence that auditors have designed and implemented audit quality arrangements to assure the quality of their audit work and highlights areas for further improvement. This report is available at Quality of public audit in Scotland: Annual report 2023/24 and is published on annual basis. Independent External Reviews Independent external assurance offers the highest level of assurance to stakeholders. ICAEW replaced ICAS for 2021/22 independent reviews following a successful tendering exercise undertaken by Audit Scotland in 2022. ICAEW review audit files to assess the quality of audit work and compliance with the International Standards on Auditing (UK), Financial Reporting Council’s Practice Note 10 and Audit Scotland’s Code of Audit Practice. External reviews cover the firms and Audit Directors in Audit Scotland over a three-year cycle, with the external review results shown within the chart below for the last five financial years. Page 54
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Appendices12 Grampian Valuation Joint Board External Audit Plan 2024/25 43 Page 55
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|© 2025 Grant Thornton UK LLP Commercial in Confidence 44Grampian Valuation Joint Board External Audit Plan 2024/25 44 Appendix 1 - Respective responsibilities Grampian VJB Your responsibilities include: • Maintaining adequate accounting records and working papers • Preparing accounts for audit, comprising financial statements, which give a true and fair view, and related reports • Establishing and maintaining a sound system of internal control • Establishing sound arrangements for proper conduct of affairs, including the regularity of transactions • Maintaining standards of conduct for the prevention and detection of fraud and other irregularities • Maintaining strong corporate governance arrangements and a financial position that is soundly based • Establishing and maintaining an effective internal audit function. External Audit Our responsibilities include: • Compliance with the FRC Ethical Standard • Compliance with the Code and UK Auditing Standards (ISA’s UK) in the conduct and reporting of our financial statements audit • Compliance with the Code and guidance issued by Audit Scotland in the conduct and reporting of our wider scope work • Providing assurance on specified returns and other outputs (where required), as specified in guidance issued by Audit Scotland • Liaison with and notifying Audit Scotland when circumstances indicate a statutory report may be required. • Contributing to relevant performance studies (as set out in Audit Scotland’s Planning Guidance for 2024/25). The Code sets out auditor responsibilities and responsibilities of the audited body. Key responsibilities are summarised below. Please refer to the Code for further detail. Page 56
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Appendix 2 - The Grant Thornton Digital Audit – Inflo A suite of tools utilised throughout the audit process 01 Collaborate Ingest Detect Information requests are uploaded by the engagement team and directed to the right member of your team, giving a clear place for files and comments to be uploaded and viewed by all parties. What you’ll see • Individual requests for all information required during the audit • Details regarding who is responsible, what the deadline is, and a description of what is required • Graphs and charts to give a clear overview of the status of requests on the engagement The general ledger and trial balance are uploaded into Inflo. This enables samples, analytical procedures, and advance data analytics techniques to be performed on the information directly from your accounting records. Journals interrogation software which puts every transaction in the general ledger through a series of automated tests.From this, transactions are selected which display several potential unusual or higher risk characteristics. What you’ll see • Journals samples selected based on the specific characteristics of your business • A focused approach to journals testing, seeking to only test and analyse transactions where there is the potential for risk or misstatement 02 03 Grampian Valuation Joint Board External Audit Plan 2024/25 45 Page 57
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Appendix 3 - New or revised IFRS Amendments to IAS 21 – Lack of exchangeability IAS 21 has been amended by the IASB to specify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. The amendments are effective in the UK from 1 January 2025. IFRS 18 Presentation and Disclosure in the Financial Statements IFRS 18 will replace IAS 1 Presentation of Financial Statements. All entities reporting under IFRS Accounting Standards will be impacted. The new standard will impact the structure and presentation of the statement of profit or loss as well as introduce specific disclosure requirements. Some of the key changes are: • Introducing new defined categories for the presentation of income and expenses in the income statement • Introducing specified totals and subtotals, for example the mandatory inclusion of ‘Operating profit or loss’ subtotal. • Disclosure of management defined performance measures • Enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes. IFRS 18 will be effective in the UK from 1 January 2027.Amendments to IFRS 9 and IFRS 7 – Classification and measurement of financial instruments These amendments clarify the requirements for the timing of recognition and derecognition of some financial assets and liabilities, adds guidance on the SPPI criteria, and includes updated disclosures for certain instruments. The amendments are effective in the UK from 1 January 2026. IFRS 19 Subsidiaries without Public Accountability: Disclosures IFRS 19 provides reduced disclosure requirements for eligible subsidiaries. A subsidiary is eligible if it does not have public accountability and has an ultimate or intermediate parent that produces consolidated financial statements available for public use that comply with IFRS Accounting Standards. IFRS 19 is a voluntary standard for eligible subsidiaries and is effective in the UK from 1 January 2027. Grampian Valuation Joint Board External Audit Plan 2024/25 46© 2025 Grant Thornton UK LLP The following IFRS Standards and amendments have been recently issued but have not yet been adopted by the Code of Audit Practice. Many of the items below will have limited or nil applicability for Grampian VJB, but are included for completeness purposes. IFRS 17 Insurance contracts IFRS 17 replaces IFRS 4. IFRS 17 provides consistent principles for all aspects of accounting for insurance contracts. It removes existing inconsistencies and enables investors, analysts and others to meaningfully compare companies, contracts and industries. It has been effective in the UK since 1 January 2023. Page 58
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Appendix 4 - IFRS 16 - Leases Lessee accounting up to 31 March 2024 Until April 2024, when a local government body gained the use of an asset under a lease agreement, it had to determine whether it was a finance lease or an operating lease. The distinction was based on which entity had substantially all the risks and rewards of ownership. It was important because finance leased assets were deemed capital and accounted for on the authority’s balance sheet, whereas operating lease costs were charged to expenditure over the life of the lease. Lessee accounting from 1 April 2024 From the adoption by local government of IFRS 16 leases on 1 April 2024, the distinction between operating and finance leases for lessees has been removed. Now all leases, apart from those that are deemed low value or short term, are accounted for on balance sheet by lessees. Asset and liability recognised Under IFRS 16, lessees recognise their right to use an asset and also a liability for the present value of the total amount they expect to pay over the period of the agreement. Initially, the right of use asset and the liability are usually recognised at the same value, unless there have been any relevant payments before the start of the lease. After initial recognition, the right of use asset is valued the same way as owned assets of a similar type and the liability is increased for interest due or changes in expected payments due to the application of a rate or index such as RPI, and decreased for amounts paid. Public sector adaptation In the public sector, the definition of a lease has been extended to include the use of assets for which little or no consideration is paid, often called “peppercorn” rentals. This is one instance where the right of use asset and associated liability are not initially recognised at the same value. For peppercorn rentals, the right of use assets are initially recognised at market value and any difference between that and the present value of expected payments is accounted for as income, similar to the treatment of donated assets. Judgements required Most of the information needed to determine the appropriate figures for the accounts will come from the lease agreement. However, sometimes judgements may need to made by management. Such judgements may include: • determining what is deemed to be a low value lease. This is based on the value of the underlying asset when new and is likely to be the same as the authority’s threshold for capitalising owned assets. • determining whether an option to terminate or extend the lease will be exercised. This is important as it affects the lease term and subsequently the calculation of the lease liability based on the expected payments over the lease term • the valuation of the right of use asset after recognition. An expert valuer may be required to support management in this. Lessor accounting IFRS 16 has preserved the distinction between finance and operating lease accounting for lessors. The key things that lessors need to be aware of are: • assets leased out for a peppercorn rental should be treated as finance leases if they have, in substance, been donated to the operator • if the asset is sub-let, the consideration of whether the sub-lease is a finance lease or an operating lease takes account of the value and duration of the head lease rather than the value and life of the underlying asset Page 59
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|© 2025 Grant Thornton UK LLP Commercial in Confidence Appendix 4 - IFRS 16 - Leases Questions to consider Questions for local government bodies to ask themselves include: • How have you gained assurance on completeness, that you have identified all your leases including those for a peppercorn rent? • Have you set your threshold for low value leases? • How have you identified all options to terminate or extend existing leases and assessed the lease term on the basis of the likelihood you will exercise them? • Have you reconciled your operating lease commitments as disclosed in your 31 March 2023 accounts under IAS 17 to your lease liability under IFRS 16 on 1 April 2024? • How have you gained assurance that right of use assets are carried at the appropriate value at the balance sheet date? • If you are an intermediate lessor, have you reassessed whether the leases out are finance or operating leases with reference to the terms of the head lease? • Have you updated your systems to ensure that the budgetary and accounting impact of all leases is identified in a timely and effective manner. Page 60
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© 2025 Grant Thornton. All rights reserved. ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton International Ltd (GTIL) and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another’s acts or omissions. Grampian Valuation Joint Board External Audit Plan 2024/25 49 Page 61
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Informing the audit risk assessment Grampian Valuation Joint Board 2024/25 Page 63
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Commercial in confidence Table of Contents Section Page Purpose 4 General Enquiries of Management 6 Fraud 9 Fraud Risk Assessment 10 Laws and Regulations 15 Impact of Laws and Regulations 16 Related Parties 18 Going Concern 20 Accounting Estimates 22 Accounting Estimates - General Enquiries of Management 23 Appendix A – Accounting Estimates 26 2 Page 64
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Commercial in confidence Purpose The purpose of this report is to contribute towards the effective two-way communication between GVJB's external auditors and GVJB’s Audit Committee, as 'those charged with governance'. The report covers some important areas of the auditor risk assessment where we are required to make inquiries of the Audit Committee under auditing standards. Background Under International Standards on Auditing (UK), (ISA(UK)) auditors have specific responsibilities to communicate with the Audit Committee. ISA(UK) emphasise the importance of two-way communication between the auditor and the Audit Committee procedures, specify matters that should be communicated. This two-way communication assists both the auditor and the Audit Committee in understanding matters relating to the audit and developing a constructive working relationship. It also enables the auditor to obtain information relevant to the audit from the Audit Committee and supports the Audit Committee in fulfilling its responsibilities in relation to the financial reporting process. Communication As part of our risk assessment procedures we are required to obtain an understanding of management processes and the VJB’s oversight of the following areas: • General Enquiries of Management • Fraud, • Laws and Regulations, • Related Parties, • Going Concern, and • Accounting Estimates. 3 Page 65
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Commercial in confidence Purpose This report includes a series of questions on each of these areas and the response we have received from GVJB’s management. The Audit Committee should consider whether these responses are consistent with its understanding and whether there are any further comments it wishes to make. 4 Page 66
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Commercial in confidence General Enquiries of Management Question Management response 1. What do you regard as the key events or issues that will have a significant impact on the financial statements for 2024/25? Staffing vacancies, as well as continued impact of change brought in by implementation of Elections Act 2022. 2. Have you considered the appropriateness of the accounting policies adopted by GVJB? Have there been any events or transactions that may cause you to change or adopt new accounting policies? If so, what are they? Accounting Policies are reviewed each year as the Accounts are prepared and changes incorporated where deemed necessary. Implementation of IFRS 16 Leases is mandatory from 1 April 2024, so the GVJB financial statements for 2024/25 will therefore reflect the transition to this new accounting standard. 3. Is there any use of financial instruments, including derivatives? If so, please explain No derivatives. Financial Liabilities – measured at amortised cost and include: Creditors for requisitions due to be returned to constituent authorities, Trade payables for goods and services received. Financial Assets – measured at amortised cost and include: temporary investment in the Moray Council Loans Fund, trade receivables for goods and services provided. 4. Are you aware of any significant transaction outside the normal course of business? If so, what are they? Not aware of any significant transactions 5 Page 67
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Commercial in confidence General Enquiries of Management Question Management response 5. Are you aware of any changes in circumstances that would lead to impairment of non-current assets? If so, what are they? Not aware of any specific circumstances. 6. Are you aware of any guarantee contracts? If so, please provide further details N/A 7. Are you aware of the existence of loss contingencies and/or un-asserted claims that may affect the financial statements? If so, please provide further details N/A 8. Other than in house solicitors, can you provide details of those solicitors utilised by GVJB during the year. Please indicate where they are working on open litigation or contingencies from prior years? N/A 6 Page 68
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Commercial in confidence General Enquiries of Management Question Management response 9. Have any of the GVJB’s service providers reported any items of fraud, non-compliance with laws and regulations or uncorrected misstatements which would affect the financial statements? If so, please provide further details Not aware of any instances of fraud 10. Can you provide details of other advisors consulted during the year and the issue on which they were consulted? Mercer for Actuarial Services in relation to IAS 19 Employee Benefits. 11. Have you considered and identified assets for which expected credit loss provisions may be required under IFRS 9, such as debtors (including loans) and investments? If so, please provide further details None required 7 Page 69
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Commercial in confidence Fraud Matters in relation to fraud ISA (UK) 240 covers auditors responsibilities relating to fraud in an audit of financial statements. The primary responsibility to prevent and detect fraud rests with both the Audit Committee and management. Management, with the oversight of the Audit Committee, needs to ensure a strong emphasis on fraud prevention and deterrence and encourage a culture of honest and ethical behaviour. As part of its oversight, the Audit Committee should consider the potential for override of controls and inappropriate influence over the financial reporting process. As GVJB’s external auditor, we are responsible for obtaining reasonable assurance that the financial statements are free from material misstatement due to fraud or error. We are required to maintain professional scepticism throughout the audit, considering the potential for management override of controls. As part of our audit risk assessment procedures we are required to consider risks of fraud. This includes considering the arrangements management has put in place with regard to fraud risks including: • assessment that the financial statements could be materially misstated due to fraud, • process for identifying and responding to risks of fraud, including any identified specific risks, • communication with the Audit Committee regarding its processes for identifying and responding to risks of fraud, and • communication to employees regarding business practices and ethical behaviour. We need to understand how the Audit Committee oversees the above processes. We are also required to make inquiries of both management and the Audit Committee as to their knowledge of any actual, suspected or alleged fraud. These areas have been set out in the fraud risk assessment questions below together with responses from GVJB’s management. 8 Page 70
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Commercial in confidence Fraud risk assessment Question Management response 1. Has GVJB assessed the risk of material misstatement in the financial statements due to fraud? How has the process of identifying and responding to the risk of fraud been undertaken and what are the results of this process? How do the VJB’s risk management processes link to financial reporting? The main financial systems of the Grampian Valuation Joint Board (“the Board) replicate those of the Moray Council; hence audit assurances provided in terms of the controls within the Council systems can be relied upon as being applicable to financial systems relating to the Board. The Board also has established risk management, governance and operating procedures to mitigate the risk of material misstatement in the financial statements. The Board’s Code of Corporate Governance requires the identification and prioritisation of risks to the organisation’s aims and objectives. These risks are detailed within a register and are subject to ongoing review with reports submitted to the Board annually or more frequently if there is a significant change to the risk profile. The latest version was included in the agenda for the Board meeting on 28 June 2024. 2. What have you determined to be the classes of accounts, transactions and disclosures most at risk to fraud? Accountancy maintains a risk register to record risks, controls, etc. In addition, Internal Audit will also review and test transactions to ensure compliance with Board’s Regulations and Procedures. The use of IDEA, a computer assisted software system is used to analyse and select a sample for testing. 3. Are you aware of any instances of actual, suspected or alleged fraud, errors or other irregularities either within GVJB as a whole, or within specific departments since 1 April 2024? If so, please provide details No irregularity noted below the £5,000 reporting threshold. 9 Page 71
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Commercial in confidence Fraud risk assessment Question Management response 4. As a management team, how do you communicate risk issues (including fraud) to those charged with governance? Risks are detailed within a register and are subject to ongoing review by the Board’s senior management team with reports submitted to the Board annually or more frequently if there is a significant change to the risk profile. 5. Have you identified any specific fraud risks? If so, please provide details Do you have any concerns there are areas that are at risk of fraud? Are there particular locations within GVJB where fraud is more likely to occur? No issues noted. However, specific concerns have been raised within the Council regarding the threat of a successful cyber attack. The Council’s CMT/ SMT has discussed the risk, and the Corporate Risk Register includes a section for Information Technology. In addition, as part of the risk-based approach to preparing the Annual Audit Plan, an internal audit review has been undertaken regarding the Council’s cyber security controls. A follow up review to evidence implementation of the recommendations was reported to the Council's Audit and Scrutiny Committee on 11 September 2024. The audit reviewed systems, practices and an assessment of the controls in place to protect the Council from a cyber-attack. The audit also reviewed Information, Communication and Technology (ICT) security policies and procedures to ensure they are regularly reviewed and promote best practices. A follow-up review is currently in progress, and it is hoped that this will be reported to the Audit and Scrutiny Committee meeting on 24 June 2025. 6. What processes do GVJB have in place to identify and respond to risks of fraud? The Board has established procedures for dealing with the risk of fraud e.g. Financial Regulations and an Anti Fraud & Corruption Policy. 10 Page 72
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Commercial in confidence Fraud risk assessment Question Management response 7. How do you assess the overall control environment for GVJB, including: • the existence of internal controls, including segregation of duties; and • the process for reviewing the effectiveness the system of internal control? If internal controls are not in place or not effective where are the risk areas and what mitigating actions have been taken? What other controls are in place to help prevent, deter or detect fraud? Are there any areas where there is a potential for override of controls or inappropriate influence over the financial reporting process (for example because of undue pressure to achieve financial targets)? If so, please provide details The Grampian Valuation Joint Board (“the Board) was established as part of the 1996 re- organisation of local government in terms of the Valuation Joint Boards (Scotland) Order 1995 and is vested with the functions of the three valuation authorities (Aberdeen City Council, Aberdeenshire Council and Moray Council) in the area of the former Grampian Region. When the Board was originally established it was agreed that it would also be responsible for electoral registration. The Board comprises 15 members who are appointed by the three councils. Aberdeen City Council and Aberdeenshire Council both appoint six members and Moray Council appoints 3 members. The Board is required to appoint three officers; a Clerk, a Treasurer and an Assessor & Electoral Registration Officer. The role of Clerk to the Board is discharged by Moray Council’s Chief Executive and the role of Treasurer to the Board is discharged by Moray Council’s Chief Financial Officer. This scheme of delegation sets out the matters that are delegated to the officers of the Board. As detailed previously, the main financial systems of the Grampian Valuation Joint Board replicate those of the Moray Council; hence audit assurances provided in terms of the controls within the Council systems can be relied upon as being applicable to financial systems relating to the Board. The responsibility for developing and maintaining a sound control environment rests with management. However, the Audit and Risk Manager prepares a risk-based audit plan which considers the Council’s strategic objectives and associated risks. While the prevention of fraud and error rests with management through the design and operation of suitable systems of control, reviews undertaken by Internal Audit will make recommendations to improve the control environment. Internal Audit also coordinates the Council’s participation in the National Fraud Initiative, a data matching exercise involving a range of public sector bodies. This activity is viewed as complementary to other audit activities, and participation assists Internal Audit in assessing the potential for the occurrence of fraud and related fraud risk An annual review is undertaken by the Internal Audit Service of the Board’s activities and 11 Page 73
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Commercial in confidence Fraud risk assessment Question Management response 9. How does GVJB communicate and encourage ethical behaviours and business processes of it’s staff and contractors? How do you encourage staff to report their concerns about fraud? What concerns are staff expected to report about fraud? Have any significant issues been reported? If so, please provide details The Board has established procedures for dealing with the risk of fraud, i.e., Financial Regulations and an Anti Fraud & Corruption Policy. The Treasurer to the Board is also the Chief Financial Officer of the Moray Council. The Board has a statutory responsibility to make arrangements for the administration of its financial affairs under the direction of a proper officer - the Treasurer. The duties and functions of the Treasurer are detailed within the Board’s “Scheme of delegation to officers”. The Council has incorporated within its standing orders and procurement procedures, arrangements in respect of contracts for the supply of services, goods or materials and the execution of works. These ensure that established and consistent contracting procedures are available for use by the Board, and all procuring officers are either fully trained or are given support by Procurement Officers as part of the Supported Tender Process. No significant issues were noted regarding fraud. 10. From a fraud and corruption perspective, what are considered to be high-risk posts? How are the risks relating to these posts identified, assessed and managed? There is an expectation that all staff and elected members will act within the law and with honesty and integrity at all times. In particular, all staff and elected members are expected to refrain from engaging in fraudulent or corrupt activity of any kind and shall refrain from the offering, making or accepting bribes, whether financial or otherwise. Governance standards promote values and behaviours for the Board that demonstrate how it will uphold good practice and high standards of conduct. These include codes of conduct for both elected members and employees and reflect the principles of public life identified by the Nolan Committee, including selflessness, honesty and integrity. This also takes in the Duty (Public Service) and Respect principles added by the Scottish Government. The Board and its officers are subject to a framework of local arrangements that include • GVJB Standing orders • GVJB Code of conduct • GVJB Code of Corporate Governance • GVJB Scheme of Delegation 12 Page 74
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Commercial in confidence Fraud risk assessment Question Management response 12. What arrangements are in place to report fraud issues and risks to the Audit Committee? How does the Audit Committee exercise oversight over management's processes for identifying and responding to risks of fraud and breaches of internal control? What has been the outcome of these arrangements so far this year? Detailed reporting arrangements for preventing fraud and corruption are included within the Financial Regulations. There is no Audit Committee, instead functions are met by the GVJB. Membership to the Board comprises councillors from Moray, Aberdeenshire and Aberdeen City Councils. In accordance with the Public Sector Internal Audit Standards (PSIAS) the Audit and Risk Manager reports functionally to the GVJB on various issues relative to the work of the Internal Audit Service, including special investigations. The Board considers reports produced by Internal and External Audit. The reports will include recommendations to strengthen internal controls and in turn reduce the risk of fraud and related behaviours going undetected. 13. Are you aware of any whistle blowing potential or complaints by potential whistle blowers? If so, what has been your response? None noted 14. Have any reports been made under the Bribery Act? If so, please provide details None noted 13 Page 75
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Commercial in confidence Law and regulations Matters in relation to laws and regulations ISA (UK) 250 requires us to consider the impact of laws and regulations in an audit of the financial statements. Management, with the oversight of the Audit Committee, is responsible for ensuring that GVJB's operations are conducted in accordance with laws and regulations, including those that determine amounts in the financial statements. As auditor, we are responsible for obtaining reasonable assurance that the financial statements are free from material misstatement due to fraud or error, taking into account the appropriate legal and regulatory framework. As part of our risk assessment procedures we are required to make inquiries of management and the Audit Committee as to whether the body is in compliance with laws and regulations. Where we become aware of non-compliance or suspected non-compliance we need to gain an understanding of the non-compliance and the possible effect on the financial statements. Risk assessment questions have been set out below together with responses from management. 14 Page 76
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Commercial in confidence Impact of laws and regulations Question Management response 1. How does management gain assurance that all relevant laws and regulations have been complied with? What arrangements does GVJB have in place to prevent and detect non-compliance with laws and regulations? Are you aware of any changes to the VJB’s regulatory environment that may have a significant impact on the VJB’s financial statements? The 14 Scottish Assessors monitor and address any legal requirements impacting them on a regular basis throughout the year at meetings of the Scottish Assessors’ Association Governance Committee, which reports to either SAA Plenary meetings or Assessors’ Committee meetings. Unaware of any such changes 2. How is the Audit Committee provided with assurance that all relevant laws and regulations have been complied with? Reports are presented to the Board 3. Have there been any instances of non-compliance or suspected non-compliance with laws and regulation since 1 April 2024 with an on-going impact on the 2024/25 financial statements? If so, please provide details No 4. Are there any actual or potential litigation or claims that would affect the financial statements? If so, please provide details None 15 Page 77
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Commercial in confidence Impact of laws and regulations Question Management response 5. What arrangements does GVJB have in place to identify, evaluate and account for litigation or claims? The Board receives legal advice from Moray Council’s Head of Governance, Strategy & Performance. The legal section of Moray Council has teams which specialise in different areas of activity and will be involved at the request of the Assessor and the Board in the implementation of more complex changes and in any areas where legislation is unclear. Where necessary external advice will be sought. 6. Have there been any reports from other regulatory bodies, such as HM Revenues and Customs, which indicate non-compliance? If so, please provide details No 16 Page 78
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Commercial in confidence Related Parties Matters in relation to Related Parties GVJB are required to disclose transactions with bodies/individuals that would be classed as related parties. These may include: ■ bodies that directly, or indirectly through one or more intermediaries, control, or are controlled by GVJB; ■ associates; ■ joint ventures; ■ a body that has an interest in the authority that gives it significant influence over the VJB; ■ key management personnel, and close members of the family of key management personnel, and ■ post-employment benefit plans (pension fund) for the benefit of employees of the VJB, or of any body that is a related party of the VJB. A disclosure is required if a transaction (or series of transactions) is material on either side, i.e. if a transaction is immaterial from the VJB’s perspective but material from a related party viewpoint then the VJB must disclose it. ISA (UK) 550 requires us to review your procedures for identifying related party transactions and obtain an understanding of the controls that you have established to identify such transactions. We will also carry out testing to ensure the related party transaction disclosures you make in the financial statements are complete and accurate. 17 Page 79
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Commercial in confidence Related Parties Question Management response 1. Have there been any changes in the related parties including those disclosed in GVJB’s 2024/25 financial statements? If so please summarise: • the nature of the relationship between these related parties and GVJB • whether GVJB has entered into or plans to enter into any transactions with these related parties • the type and purpose of these transactions No changes since 2023/24 2. What controls does GVJB have in place to identify, account for and disclose related party transactions and relationships? Senior Officers and Elected Members make annual returns and any significant factors that arise as part of this process would be factored into the Related Parties Note in the Annual Accounts. 3. What controls are in place to authorise and approve significant transactions and arrangements with related parties? Normal procedures following the Authorisation policy would apply – transactions over £25,000 are checked by the Chief Financial Officer. 4. What controls are in place to authorise and approve significant transactions outside of the normal course of business? For significant transactions that are new and outside the normal course of business approval is required from the Treasurer. 18 Page 80
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Commercial in confidence Going Concern Matters in relation to Going Concern The audit approach for going concern is based on the requirements of ISA (UK) 570, as interpreted by Practice Note 10: Audit of financial statements and regularity of public sector bodies in the United Kingdom (Revised 2020). It also takes into account the National Audit Office's Supplementary Guidance Note (SGN) 01: Going Concern – Auditors’ responsibilities for local public bodies. Practice Note 10 confirms that in many (but not all) public sector bodies, the use of the going concern basis of accounting is not a matter of significant focus of the auditor’s time and resources because the applicable financial reporting frameworks envisage that the going concern basis for accounting will apply where the body’s services will continue to be delivered by the public sector. In such cases, a material uncertainty related to going concern is unlikely to exist. For this reason, a straightforward and standardised approach to compliance with ISA (UK) 570 will often be appropriate for public sector bodies. This will be a proportionate approach to going concern based on the body’s circumstances and the applicable financial reporting framework. In line with Practice Note 10, the auditor’s assessment of going concern should take account of the statutory nature of the body and the fact that the financial reporting framework for Board bodies presume going concern in the event of anticipated continuation of provision of the services provided by the body. Therefore, the public sector auditor applies a ‘continued provision of service approach’, unless there is clear evidence to the contrary. This would also apply even where those services are planned to transfer to another body, as in such circumstances, the underlying services will continue. For many public sector bodies, the financial sustainability of the body and the services it provides are more likely to be of significant public interest than the application of the going concern basis of accounting. Financial sustainability is a key component of value for money work and it is through such work that it will be considered. Page 81
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Commercial in confidence Going Concern Question Management response 1. What processes and controls does management have in place to identify events and / or conditions which may indicate that the statutory services being provided by GVJB will no longer continue? Regular reporting on the GVJB’s finances would highlight any conditions which may mean the GVJB is no longer able to deliver statutory duties. 2. Are management aware of any factors which may mean for GVJB that either statutory services will no longer be provided or that funding for statutory services will be discontinued? If so, what are they? Not aware of any factors. 3. With regard to the statutory services currently provided by GVJB, does GVJB expect to continue to deliver them for the foreseeable future, or will they be delivered by related public authorities if there are any plans for GVJB to cease to exist? It is expected that the GVJB will continue to deliver statutory services. 4. Are management satisfied that the financial reporting framework permits GVJB to prepare its financial statements on a going concern basis? Are management satisfied that preparing financial statements on a going concern basis will provide a faithful representation of the items in the financial statements? The annual accounts will be prepared on a going concern basis and this will provide a faithful representation of the items included in the financial statements. Page 82
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Commercial in confidence Accounting estimates Matters in relation to accounting estimates ISA (UK) 540 (Revised December 2018) requires auditors to understand and assess a body’s internal controls over accounting estimates, including: • The nature and extent of oversight and governance over management’s financial reporting process relevant to accounting estimates; • How management identifies the need for and applies specialised skills or knowledge related to accounting estimates; • How the body’s risk management process identifies and addresses risks relating to accounting estimates; • The body’s information system as it relates to accounting estimates; • The body’s control activities in relation to accounting estimates; and • How management reviews the outcomes of previous accounting estimates. As part of this process auditors also need to obtain an understanding of the role of those charged with governance, which is particularly important where the estimates have high estimation uncertainty, or require significant judgement. Specifically do Audit Committee members: • Understand the characteristics of the methods and models used to make the accounting estimates and the risks related to them; • Oversee management’s process for making accounting estimates, including the use of models, and the monitoring activities undertaken by management; and • Evaluate how management made the accounting estimates? We would ask the Audit Committee to satisfy itself that the arrangements for accounting estimates are adequate. 21 Page 83
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Commercial in confidence Accounting Estimates - General Enquiries of Management Question Management response 1. What are the classes of transactions, events and conditions, that are significant to the financial statements that give rise to the need for, or changes in, accounting estimate and related disclosures? Valuation of Property, Plant & Equipment Valuation of Pension Liability 2. How does the VJB’s risk management process identify and address risks relating to accounting estimates? By engaging with experts in each of the areas identified the risk of material misstatement is reduced. 3. How does management identify the methods, assumptions or source data, and the need for changes in them, in relation to key accounting estimates? The results of prior year audits are looked at and whether there was any material concerns raised or amendments made – in those instances accounting estimates would be reviewed. 4. How do management review the outcomes of previous accounting estimates? The results of prior year audits are looked at and whether there was any material concerns raised or amendments made – in those instances accounting estimates would be reviewed. 5. Were any changes made to the estimation processes in 2024/25 and, if so, what was the reason for these? No changes were made in 2024/25. Page 84
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Commercial in confidence Accounting Estimates - General Enquiries of Management Question Management response 6. How does management identify the need for and apply specialised skills or knowledge related to accounting estimates? Each area is looked at in isolation and the skills/knowledge/capacity of relevant Services considered. 7. How does the VJB determine what control activities are needed for significant accounting estimates, including the controls at any service providers or management experts? Ensuring that relevant information is provided on time and accurately to ensure that the information received can be relied upon. 8. How does management monitor the operation of control activities related to accounting estimates, including the key controls at any service providers or management experts? Regular updates provided by preparers of the Accounts on any issues that arise. 9. What is the nature and extent of oversight and governance over management’s financial reporting process relevant to accounting estimates, including: - Management’s process for making significant accounting estimates - The methods and models used - The resultant accounting estimates included in the financial statements. The unaudited accounts are reported to the Board and then again upon completion of the audit. External Audit reporting also helps to inform on estimates. Page 85
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Commercial in confidence Accounting Estimates - General Enquiries of Management Question Management response 10. Are management aware of any transactions, events, conditions (or changes in these) that may give rise to recognition or disclosure of significant accounting estimates that require significant judgement (other than those in Appendix A)? If so, what are they? Not aware of any additional areas where new estimates would be required to be disclosed. 11. Why are management satisfied that their arrangements for the accounting estimates, as detailed in Appendix A, are reasonable? No major changes required to annual accounts in previous years 12. How is the Audit Committee provided with assurance that the arrangements for accounting estimates are adequate ? Annual accounts are reported to the GVJB. 24 Page 86
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Commercial in confidence Appendix A Accounting Estimates Estimate Method / model used to make the estimate Controls used to identify estimates Whether management have used an expert Underlying assumptions: - Assessment of degree of uncertainty - Consideration of alternative estimates Has there been a change in accounting method in year? Depreciation & Amortisation Straight Line method over the useful life of the asset. Moray Council Estates section provide useful life estimates. Moray Council Internal Valuers No Accruals Based on actual entries in the ledger, or on information received from departments. No In most cases based on actual ledger entries so no estimation. Where estimates are provided we know it will be based on professional judgement and we would query if it was materially different from estimates provided. No Valuation of Land & Buildings Measured at current value Liaison with Moray Council Estates section Moray Council Internal Valuers All valuations carried out by Moray Council’s Head of Estates in accordance with the methodologies and bases for estimation set out in the professional standards of the Royal Institution of Chartered Surveyors No Valuation of Pension Liabilities Based on information from Actuaries. Information provided to actuaries based on year end position reducing the need for use of estimates. Yes Disclosure in accounts regarding the changes that could happen and the impact it would have on the figures included in the accounts No 25 Page 87
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REPORT TO: GRAMPIAN VALUATION JOINT BOARD ON 27 JUNE 2025 SUBJECT: UNAUDITED ANNUAL ACCOUNTS FOR 2024/25 BY: TREASURER TO THE BOARD 1. REASON FOR REPORT 1.1 To consider the unaudited Annual Accounts for the Grampian Valuation Joint Board for the year ended 31 March 2025. 2 RECOMMENDATION 2.1 It is recommended that the Board considers the unaudited Annual Accounts of the Grampian Valuation Joint Board for the year ending 31 March 2025. 3. BACKGROUND 3.1 Joint Boards are required to account for their activities to the communities that they serve and to have the financial effect of those activities audited by External Auditors. 3.2 In accordance with the Local Authority Accounts (Scotland) Regulations 2014, it is a statutory requirement that the unaudited Annual Accounts are presented to the Board’s appointed Auditor by the 30 June in the next financial year. 3.3 The unaudited Annual Accounts for 2024/25 have been prepared in accordance with the Code of Practice on Local Authority Accounting, supported by International Financial Reporting Standards. 4. 2024/25 ANNUAL ACCOUNTS 4.1 Copies of the unaudited Annual Accounts for the year ended 31 March 2025 have been distributed with this report. Item 5. Page 89
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4.2 At the meeting on 26 January 2024, the Board agreed the Revenue Budget for 2024/25 (paragraph 6 of the Minute refers) of £5,178,000. The requisitions to constituent authorities were set at £5,022,000 with £156,000 being funded from the earmarked NDR reserve. 4.3 The core budget was set at £4,754,000, with an additional £424,000 budgeted for NDR Reform. 4.4 The net expenditure for the year, as shown on APPENDIX 1, was £4,167,000 resulting in an underspend of £1,011,000. The budgeted use of reserves (£156,000) was not required and therefore the overall year end variance is £855,000. Implementation of IFRS 16 Leases 4.5 The implementation of the accounting standard IFRS 16 Leases has changed how lease costs are presented in the accounts. Previously, lease payments were included in service expenditure, directly affecting the net cost of services. From 1 April 2024, under IFRS 16, these costs are now split into interest (shown below the net cost of services) and principal repayments (treated as financing activity). As a result, the net cost of services appears lower, which can give the impression of a higher surplus. However, this is purely a presentational change—the underlying lease costs remain the same. During the transition period, it was agreed that the lease of office accommodation at Woodhill House is applicable to the rules of IFRS 16 and a Right of Use asset and lease liability were created. 4.6 For transparency and in order to present the true surplus to the Board, the lease payment has been removed from the service expenditure (under Property Costs) and shown as interest and principal with the adjusted surplus of £730,000 shown on the Appendix. 4.7 The estimated outturn reported to the Board on 26 January 2024 was £694,000 of an underspend. Reserves 4.8 The Board at its meeting on 28 January 2011 (paragraph 4 of the Minute refers) agreed to create a General Reserve from the surplus generated in that year and that transfers to the General Fund would be restricted to 3% of the total budget in any one year and that the cumulative balance of the fund would not exceed 5% of the total budget. 4.9 In setting the 2023/24 Revenue Budget, the Treasurer clarified that the cumulative balance on the uncommitted part of the General Fund should be calculated on the budget for the Joint Board’s core costs alone and exclude budgets with a separate funding stream e.g. NDR earmarked reserve for implementation of the Barclay Review. Page 90
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4.10 The General Fund balance was adjusted to reflect the maximum amount that can be held per the policy and is now £237,000. 4.11 It was agreed at the meeting of the Board on 7 February 2020 that an earmarked reserve could be created to allocate any unspent budget on NDR Reform to cover the implementation of the reform in future years. 4.12 The budget for 2024/25 included a provision of £424,000 to meet the cost of preparations to deliver reforms to NDR following the Barclay review. As mentioned in paragraph 4.3 above, there was an underspend of £58,000 which has been year transferred to the earmarked reserve, bringing the balance to £567,000. 4.13 As was reported to the Board on 31 January 2025, £376,000 of government funding was received for the introduction of the Electoral Integrity Programme (EIP), in order to meet the requirements of the Elections Act 2022. The full amount has been put to an earmarked reserve for use in 2025/26. 4.14 The total of the Usable Reserves £1,180,000 as shown in Note 17 to the Accounts is the balance of the General Reserve (£237,000), the earmarked NDR portion (£567,000), and the earmarked Electoral Integrity Programme portion (£376,000). Refund to Authorities 4.15 Following the transfer out of the General Fund and into the NDR and EIP earmarked reserves an anticipated £297,000 falls due to be returned to the constituent authorities. The confirmed audited amount will be reported at the first Board meeting after the audit work is complete. The split of the estimated refund between authorities is shown below: 2024/25 Proposed Surplus Refund to Authorities % £ Aberdeen City Council 38.53 114,434 Aberdeenshire Council 45.40 134,838 Moray Council 16.07 47,728 Total 100.00 297,000 Accounts 2024/25 4.16 The Comprehensive Income and Expenditure Statement shows a surplus of £0.220m on the provision of services for the year. After allowing for the reversal of statutory charges for International Accounting Standard 19 (IAS19) of (£0.174m), depreciation totalling (£0.146m) and IFRS 16 Lease principal £0.107m this leaves the net £0.433m to be transferred in to reserves: £58,000 to the NDR reserve, £376,000 to the EIP reserve and £1,000 out of the General reserve. 4.17 The Movement in Reserves Statement in the Annual Accounts shows the movement in the year on the various reserves held by the Board, analysed into Page 91
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Usable Reserves, i.e. those that can be used to fund expenditure, and Unusable Reserves, i.e. those that have been created for specific accounting entries and do not represent distributable funds. 4.18 The Usable Reserves show the reserves which members of the Board have control over: the General Reserve of £237,000, the earmarked NDR Reserve of £567,000, and the earmarked Electoral Integrity Programme portion of £376,000. 4.19 The Unusable Reserves record accounting entries which the Board is required to disclose and do not represent funds available for use. These include balances for the Revaluation Reserve, Capital Adjustment Account, Pensions Reserve and the Employee Statutory Adjustment Account. More detail on the purpose of these reserves and the movements during the year in them are described in Note 18 of the Accounts. 5. VARIANCES Significant Variances between Budget and Actual for 2024/25 5.1 The actual result for the year, set out in the unaudited annual accounts, forms APPENDIX 1 to this report. 5.2 The main reason for the underspend in 2024/25 is the ongoing challenges in recruiting staff. Employee costs were £412,000 under budget, including £179,000 related to budgeted posted within the NDR provision. Although the Local Government pay award exceeded the 3% budget provision, the additional cost was offset by the overall underspend in staffing. The underspend was primarily due to vacancies and part-year vacancies throughout the year. 5.3 Property costs were under budget by £123,000 overall. However, once the £125,000 IFRS 16 lease adjustment is taken into account, the position is broadly in line with budget. Within this category, there were other variances, including an underspend of £23,000 on Repairs and Maintenance. 5.4 Within Supplies and Services, there was an underspend of £14,000 on Valuation Appeals and £12,000 on printing and stationery. However, this was partly offset by an overspend of £10,000 on Specialist Services. There were also a few smaller variances across other areas within this category. 5.5 Income received during the year was above budget by £476,000 in total; with the additional £376,000 government grant received, as discussed above. A further £93,000 from income due to favourable interest rates in the year. Significant Variances between Forecast and Actual Variances for 2024/25 5.6 As outlined in paragraph 4.4, the total underspend for 2024/25 was £1,011,000. This compares to the estimated variance of £694,000 that was reported to the Board in January. Page 92
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5.7 The main differences between the forecast and the final outturn were in staffing and property costs. Staffing was forecast to be underspent by £448,000, with the actual year-end underspend slightly lower at £412,000. Property costs were expected to show an overspend of £43,000 but instead resulted in an underspend of £123,000 (prior to the £125,000 IFRS 16 adjustment). IT Maintenance and Support was projected to overspend by £54,000 but came in on budget. 5.8 Further details of these and other variances can be found in the Appendix. 6 CONCLUSION 6.1 The Board met the statutory deadline for the submission of the annual accounts to the External Auditor by 27 June 2025. 6.2 The Board generated a surplus of £730,000 for the year to 31 March 2025. It is anticipated that a total of £297,000 will be returned to constituent authorities following the annual audit. Author of Report: Aaron Cory, Trainee Accountant Background papers: Held within Accountancy Section, Moray Council Date: 23/05/2025 Page 93
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Appendix 1 Line Total Budget Actual Variance Estimated Outturn Estimated Variance No. 2024/25 31-Mar-25 31-Mar-25 2024/25 2024/25 £'000 £'000 £'000 £'000 £'000 Employee Costs 1 Salaries 3,181 2,902 279 2,850 331 2 National Insurance 338 300 38 303 35 3 Superannuation 320 285 35 287 33 4 Additional Pensions 25 28 (3) 25 0 5 Other Employee Costs 7 3 4 5 2 6 Training 71 12 59 24 47 Total Employee Costs 3,942 3,530 412 3,494 448 Property Costs 7 Accommodation Charges 309 209 100 351 (42) 8 Repairs and Maintenance 27 4 23 27 - 9 Energy Costs 15 15 - 15 - 10 Cleaning 5 5 - 6 (1) Total Property Costs 356 233 123 399 (43) Transport Costs 11 Staff Travel and Subsistence 50 53 (3) 66 (16) Total Transport Costs 50 53 (3) 66 (16) Supplies & Services 12 Equipment, Furniture & Materials 9 7 2 10 (1) 13 PPE 1 - 1 1 - 14 Reference Books 13 19 (6) 23 (10) Page 95
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15 Printing & Stationery 18 6 12 18 - 16 Postages & ER Printing 434 420 14 434 - 17 Telephones 10 13 (3) 12 (2) 18 Advertising 1 - 1 1 - 19 IT Maintenance & Support 220 220 - 274 (54) 20 Valuation Appeals 30 16 14 30 - 21 Members' Allowances 4 11 (7) 4 - 22 Fees, Charges & Subs 8 10 (2) 10 (2) 23 Specialist Services 30 40 (10) 30 - 24 Conference Fees & Subsistence 2 2 - 3 (1) 25 Other Supplies & Services 4 11 (7) 5 (1) Total Supplies & Services 784 775 9 855 (71) Support Services 25 Lead Authority Charge 65 71 (6) 65 - Total Support Services 65 71 (6) 65 - Gross Expenditure 5,197 4,662 535 4,879 318 Income 26 Sales and Other Income (15) (22) 7 (15) - 27 Government Grant - (376) 376 (376) 376 28 Interest on Revenue balances (4) (97) 93 (4) - Total Income (19) (495) 476 (395) 376 29 Net Expenditure 5,178 4,167 1,011 4,484 694 30 Requisitions (5,022) (5,022) - (5,022) - 31 Approved Use of Reserves (156) - (156) (156) - Page 96
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32 (Surplus)/Deficit for Year (as reported) (0) (855) 855 (694) 694 33 Add: Lease Interest (IFRS 16) 0 18 (18) 0 - 34 Add: Lease Principal (IFRS 16) 0 107 (107) 0 - 35 Adjusted (Surplus)/Deficit for Year (0) (730) 730 (694) 694 Page 97
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UNAUDITED ACCOUNTS ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2025 GRAMPIAN VALUATION JOINT BOARD Page 99
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If you need information from the Moray Council in a different language or format, such as Braille, audio tape or large print, please contact: ياروم سلجم لᘘق نم تامولعم ᣠإ ةجاح ᢝᡧᣚ متنك اذإ نوكتو ةغلᗷ وأ ويدوأ ةناوطسأ ،يا ᢔᣂلا لثم فلتخم لᜓش ᣢعوأ ةفلتخم نوكت نأ مط ب لاصّتﻹا ءاجّرلاف ةظᘭلغ فورح لامعتساᗷ ةعوب Jei pageidaujate tarnybos Moray tarybos teikiamą informaciją gauti kitokiu formatu, pvz., Brailio raštu, garso įrašu ar stambiu šriftu, kreipkitės: Jeśli potrzebują Państwo informacji od Rady Okręgu Moray w innym formacie, takim jak alfabet Braille'a, kasety audio lub druk dużą czcionką, prosimy o kontakt: Se necessitar de receber informações por parte do Concelho de Moray num formato diferente, como Braille, cassete áudio ou letras grandes, contacte: Ja Jums vajadzīga informācija no Marejas domes (Moray Council) citā valodā vai formātā, piemēram, Braila rakstā, audio lentā vai lielā drukā, sazinieties ar: اي نابز رگيد یسک ےس لسنوک ےروم وک پآرگاتروص راکرد تامولعم ںيم ﻼثم ںوہ ˝ ،فورح ےڑب اي پيٹ ويڈآ ،ےليرب ہطبار رک امرف ینابرہم وت ںيئامرف: : Treasurer to the Board, Financial Services, High Street, Elgin, IV30 1BX 01343 563125 accountancy.support@moray.gov.uk Page 100
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Contents MANAGEMENT COMMENTARY .......................................................................................... 1 STATEMENT OF RESPONSIBILITIES FOR THE ANNUAL ACCOUNTS ............................ 9 ANNUAL GOVERNANCE STATEMENT ............................................................................. 11 REMUNERATION REPORT ............................................................................................... 20 COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT FOR THE YEAR ENDED 31 MARCH 2025 ................................................................................................................. 27 MOVEMENT IN RESERVES STATEMENT FOR THE YEAR ENDED 31 MARCH 2025 .... 28 BALANCE SHEET AS AT 31 MARCH 2025 ....................................................................... 29 CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2025 ............................ 30 NOTES TO THE ACCOUNTS ............................................................................................. 31 Note 1 Accounting Policies .............................................................................................. 31 Note 2 Accounting Standards That Have Been Issued But Have Not Yet Been Adopted 33 Note 3 Critical Judgements in Applying Accounting Policies ............................................. 33 Note 4 Assumptions Made About the Future and Other Major Sources of Estimation Uncertainty ....................................................................................................................... 33 Note 5 Material Items of Income and Expenditure ........................................................... 35 Note 6 Events After The Reporting Period ....................................................................... 35 Note 7 Expenditure and Funding Analysis and Adjustments between Accounting Basis and Funding Basis under Regulations .............................................................................. 36 Note 8 Expenditure and Income Analysed by Nature ...................................................... 38 Note 9 Earmarked Portions of the General Fund ............................................................. 39 Note 10 Financing and Investment Income and Expenditure ............................................ 39 Note 11 Property, Plant and Equipment .......................................................................... 39 Note 12 Short Term Debtors ........................................................................................... 42 Note 13 Cash and Cash Equivalents ............................................................................... 42 Note 14 Short Term Creditors ......................................................................................... 43 Note 15 Other Long Term Liabilities ................................................................................ 43 Note 16 Financial Instruments ......................................................................................... 43 Note 17 Usable Reserves ................................................................................................ 44 Note 18 Unusable Reserves ............................................................................................ 45 Note 19 External Audit Costs .......................................................................................... 47 Note 20 Cashflow – Analysis of Net Deficit on the provision of services for non cash movements ...................................................................................................................... 48 Note 21 Requisition and Grant Income ............................................................................ 48 Note 22 Leases ............................................................................................................... 49 Note 23 Related Parties ................................................................................................... 49 Note 24 Defined Benefit Pension Scheme ....................................................................... 50 GLOSSARY OF TERMS ..................................................................................................... 58 Page 101
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1 MANAGEMENT COMMENTARY Strategy and objectives The Assessor & Electoral Registration Officer is responsible for the provision of valuation assessment and registration services across the Aberdeen City Council, Aberdeenshire Council and Moray Council areas. These strictly defined and regulated services are delivered by the Assessor & Electoral Registration Officer, as an independent statutory official, in partnership with the Grampian Valuation Joint Board, an independent local government body established by The Valuation Joint Boards (Scotland) Order 1995 and comprising members from each of the constituent authorities. The Board is required to appoint and resource an Assessor. The constituent authorities are required to appoint and resource an Electoral Registration Officer (ERO) and, by agreement, the Board has undertaken this responsibility on behalf of the local authorities. Costs incurred by the Board are apportioned between the councils based on the respective population of each council area. The priorities for 2024/25 were: Implement a full household canvass Publish revised registers of electors Maintain a complete and accurate Valuation Roll in terms of the Local Government (Scotland) Act 1975 Disposal of proposals and appeals under the new two-stage non-domestic proposal and appeal system Maintain a complete and accurate Council Tax Valuation List in terms of the Local Government Finance Act 1992 Monitoring regimes The Electoral Commission has a performance monitoring framework in place for EROs across the UK and statistics are provided annually to the Commission and to the Cabinet Office following the completion of the annual canvass and the publication of revised registers. Quarterly revaluation proposal and appeal resolution returns are made to the Scottish Government that in turn publishes the local and national data. Key performance indicators to monitor performance in relation to the updating of the Council Tax Valuation List and the Valuation Roll are set by the Board and are reported quarterly to the Board and annually to Scottish Government. Business model The organisation delivers the outcomes that are required by statute in a dual strand approach with the Board providing resources and oversight and the Assessor & ERO delivering the specialised independent professional services of valuation assessment and electoral registration. The organisation operates a hybrid home/office working model and has physical offices in Aberdeen, Banff and Elgin. The Assessor & ERO and his staff work closely with the other Scottish Assessors and EROs via the Scottish Assessors’ Association (SAA) to deliver a service across Page 102
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2 MANAGEMENT COMMENTARY (continued) Aberdeen City, Aberdeenshire and Moray council areas that is consistent with that being delivered across all 32 local authority areas in Scotland. The sharing of expertise and representation through the SAA is a good example of shared services across Scotland that includes a national website and data source for a wide range of stakeholders that includes citizens, business, third sector, public agencies, government and research bodies. Appeal outcome data and performance indicators measure the effectiveness of the organisation’s valuation assessment role and the Electoral Commission’s performance framework monitors the registration outcomes. The organisation met the demands placed upon it in terms of its valuation assessment and electoral registration duties during the 2024/25 financial year. Key performance indicators (KPI) The organisation’s code of corporate governance established a KPI reporting and three-year review regime. They seek to quantify the effectiveness of the organisation’s activities in relation to the Valuation Roll of non-domestic property assessments and the Valuation List of domestic property council tax band allocations. The Assessor & ERO provides performance reports at every meeting of the Board and an annual public performance report is published online at the end of every calendar year. Revised KPI targets for the three years from 2024/25 onwards were agreed by the Board at its January 2024 meeting. The KPI outcomes for 2024/25 are shown in the “Maintain a complete and accurate Valuation Roll in terms of the Local Government (Scotland) Act 1975 & Maintain a complete and accurate Council Tax Valuation List in terms of the Local Government Finance Act 1992” sections below. A review of the organisation’s priorities and operations Implement a full household canvass The 2024 canvass was delayed slightly due to the snap general election and commenced in August 2024, extending through to January 2025. It used the established method of firstly using a data matching exercise to determine the appropriate approach to be taken on a household-by-household basis. The data matching exercise compared the registration database to government records and the results returned to the registration officer. Where the results suggested that there was no change in the household composition, a canvass communication letter summarising the registration information for the household was issued and the household was invited to only respond if there were changes at the property. Where the results indicated that changes in a household composition may have taken place, a different canvass procedure followed that required a response from the household and follow- up actions by the ERO. All properties which required a personal visit were canvassed by a member of the canvass team. For the 2024 canvass we used e-communications to contact over 90,000 households, representing a saving in staff and financial resources, and a reduction in the amount of printed material issued. During the course of the 2024 canvass, a total of 332,005 canvass communications were issued by post, a slight increase compared to the 323,691 issued in 2023, and well below the numbers issued prior to the introduction of the reformed canvass model. Canvass staff made over 50,000 personal visits to households during the canvass period and over 7,000 personal contacts were made by telephone. Page 103
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3 MANAGEMENT COMMENTARY (continued) Publish revised registers of electors As a result of the snap general election and the delayed start of the annual canvass, revised registers were published on 1 February 2025 rather than in December 2024. The table below provides a summary of the last three revised registers for local government and Scottish Parliament elections. The revised registers showed a slight increase in the number of registered electors and small decrease in the number of electors with postal votes. Revised registers Number of electors Number of postal voters 1 December 2022 448,915 119,611 1 December 2023 452,084 117,065 1 February 2025 454,284 113,064 During the period from 1 December 2023 to 31 January 2025, 53,075 additions and 49,804 deletions were made to the registers. During the same period, 39,546 initial invitations to register (ITRs) were issued along with 15,625 first and second reminders and staff carried out ITR visits to 9,716 properties. Disposal of proposals and appeals following the 2023 Revaluation under the new two-stage non-domestic proposal and appeal system The two-stage process involves the ratepayer setting out the details of their challenge to the valuation roll entry made by the Assessor, including an alternative valuation. The Assessor is then required to review the challenge, the “proposal”, and either accept or reject the proposal or implement a different outcome, either by agreement or at his own discretion. Depending on the particular circumstances, the proposer may be able to appeal the decision to the Local Taxation Chamber of the First-tier Tribunal for Scotland. This new system has resulted in a reduction in the number of “appeals” received by the Assessor following a revaluation but it is still a demanding workstream for ratepayers, their representatives, and the Assessor’s staff. The disposal of proposal and appeals has been a challenging task for the valuation staff. The rigorous proposal disposal programme is currently on target although a national challenge to the methodology used in contractor’s basis valuations is ongoing and it is possible that this may only be resolved following a Tribunal hearing. Our new IT system to manage proposals and appeals has been successfully implemented and used to record and manage proposal and appeal outcomes. The administrative requirements of the new 2-stage system have proven to be particularly burdensome and time-consuming, but various templates have been created to help reduce this. Dealing with proposals and appeals has clearly impacted other workstreams during the year. Maintain a complete and accurate Valuation Roll in terms of the Local Government (Scotland) Act 1975 & Maintain a complete and accurate Council Tax Valuation List in terms of the Local Government Finance Act 1992 These two priorities use quantitative target-based performance indicators rather than qualitative measures. Achieving these targets relies partly on the timeous receipt of information from external parties, including the owners and occupiers of dwellings and non- domestic properties. The figures can therefore be misleading as an indicator of how the organisation has performed. Valuer vacancies during the year, along with Page 104
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4 MANAGEMENT COMMENTARY (continued) a rigorous proposal disposal timetable and the second audit of self-catering properties have significantly affected the organisation’s ability to meet the timescales suggested by the key performance indicators. The last 3 year’s figures are shown in the tables below. Valuation Roll – number of alterations made to Valuation Roll/time taken from effective date of alteration to Valuation Roll to date of issue of valuation notice (KPIs) Year < 3 months 3-6 months > 6 months Total Number Number % Number % Number % 2022/23 527 30.4 338 19.5 867 50.1 1,732 2023/24 915 36.0 424 16.7 1,206 47.4 2,545 2024/25 542 27.8 303 15.5 1,105 68.2 1,950 Target 65 20 15 Council Tax – number of dwellings entered into Valuation List/time taken from date of entry in Valuation List to date of issue of valuation notice (KPIs) Year < 3 months 3-6 months > 6 months Total Number Number % Number % Number % 2022/23 1,938 71.1 623 22.9 164 6.0 2,725 2023/24 1,961 64.7 507 16.7 563 18.6 3,031 2024/25 2,109 67.8 497 16.0 505 16.2 3,111 Target 94 3 3 Despite the challenges of the year, particularly the level of valuer vacancies, the organisation has still fulfilled its statutory requirements to maintain the Valuation Roll and the Valuation List. The figures in the council tax table above shows a slight positive trend in performance, but the particular circumstances and challenges of each year can still provide an additional narrative. The self-catering audit in 2024 was resource intensive and led to significant retrospective alterations to the council tax valuation list and the non-domestic valuation roll. If self-catering properties were excluded from the KPI statistics for 2024/25, the KPI figures would have been as follows; 2024/25 < 3 months 3-6 months > 6 months Total Number Number % Number % Number % Valuation Roll 542 32.7 303 18.3 812 49.0 1,657 Council Tax 2,109 75.2 497 17.7 200 7.1 2,806 Page 105
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5 MANAGEMENT COMMENTARY (continued) Future challenges The priority for the next year is, as always, to continue to fulfil our statutory duties across all three service strands: council tax, valuation for rating, and electoral registration. The Scottish Parliament’s Local Government, Housing and Planning Committee is currently holding a short inquiry on the potential for changes to the current council tax system. In addition, proposed amendments have been put forward to the Housing (Scotland) Bill, currently making its way through the Scottish Parliament, to implement a council tax revaluation no later than 1 April 2029. The organisation will need to be ready to adapt to meet the challenges any revaluation or reform might entail The Assessor and the wider management team will monitor the situation through the Scottish Assessors Association and its regular liaison with Scottish Government officials. In relation to valuation for rating, work in advance of the implementation of the next general revaluation will continue alongside the disposal of the proposals and appeals lodged following the 2023 revaluation. The level of vacancies in the valuation team will make these tasks challenging but we will continue to develop IT solutions to assist. The recruitment of suitably qualified professional staff has been a particular difficulty for the Grampian Assessor although some posts were successfully filled during 2024/25. Work to promote career opportunities in Assessors’ offices is underway at a national level but in the meantime we are still actively trying to recruit, and the vacancies remain advertised on our website. The coming year is another demanding one in relation to electoral registration. A significant exercise relating to the renewal of reserved absent votes involves contacting close to 100,000 electors before the end of January 2026. In addition, legislative changes to allow electors at devolved elections to apply online for absent votes are planned, as is a change to allow 16- year-olds to vote in reserved elections. Coupled with Scottish Parliamentary boundary changes and the planned Holyrood elections in May 2026, this will ensure that 2025/26 is another busy year on the electoral front. Advance planning and operational agility will be crucial. Principal risks and uncertainties The organisation maintains an operational and strategic risk register which is continually monitored and reviewed by the management team. The principal risks and uncertainties relate to dynamic valuation assessment and electoral registration statutory frameworks, challenges in terms of financial resources and, particularly, securing sufficient valuation expertise to deliver our services. Cyber security is an ever-present and high-profile risk and the provision of IT services by Aberdeenshire Council and the support of their IT team is a key factor in mitigating risks to the Board. Apart from the normal control measures in terms of financial and operational planning, the Assessor & ERO and the management team continue to mitigate risk and uncertainty through partnership working through the Scottish Assessors Association (SAA) and external agencies. The Assessor & ERO is Chair of the Association’s Basic Principles Committee, Secretary to the Domestic Subjects Committee, Vice-Chair of the Electoral Registration Committee and a member of the Electoral Management Board for Scotland and the UK Government’s Nations Review Group. Together with the management team’s representation on all the SAA committees, the organisation is well placed to monitor and meet the challenges of any changes to its valuation assessment and registration functions. Page 106
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6 MANAGEMENT COMMENTARY (continued) Financial Performance Revenue Expenditure The Grampian Valuation Joint Board, at its meeting on 26 January 2024, approved the 2024/25 Revenue Budget of £5.178m (2023/24 £5.210m), a decrease of 1%. The requisitions to constituent authorities were set at £5.022m (2023/24 £5.034m) with approved use of reserves of £0.156m. The core budget was set at £4.754m, with an additional £0.268m budgeted for NDR Reform. The Joint Board receive quarterly Revenue Monitoring reports during the year in order to keep the board members fully informed as to the latest position, and projected outturn. The actual net expenditure in 2024/25 was £4.167m (2023/24 £4.536m) resulting in an underspend of £1.011m for the year. The budgeted use of General Reserve of £0.156m is not required, thus giving an overall variance of £0.855m. Of this total, £0.058m was transferred to the NDR Reserve and £0.376m to an earmarked reserve for Electoral Integrity Programme (EIP) for future commitments of the government grant received in the year, while £0.001m was transferred from the General Fund Reserve to bring the balance back to the maximum permitted under the Board’s Reserves Policy. In 2024/25, the Board adopted IFRS 16 Leases, as incorporated into the 2024/25 Code of Practice on Local Authority Accounting. The primary impact of the new standard is that arrangements previously treated as operating leases must now be accounted for by recognising a right-of-use asset and a corresponding lease liability as of 1 April 2024. IFRS 16 has been applied, with the cumulative effect recognised on 1 April 2024. This means that a right-of-use asset and lease liability for the office accommodation at Woodhill House, Aberdeen has been created and is reflected in the accounts. The underspend in the service budget is due to the removal of the lease payment, which was previously recorded as a service cost. However, this change does not affect the overall surplus because the lease payment has been replaced by two separate entries: lease interest and lease principal repayments. These are now accounted for below the service line, in line with accounting standards. So while the service appears to have underspent, the cost has simply been reclassified, not removed. Factoring in IFRS16 Leases payments for Woodhill House of £0.125m the remaining balance of £0.297m is available to return to the constituent authorities. The Comprehensive Income and Expenditure Statement shows a surplus of £0.220m on the provision of services for the year. After allowing for the reversal of statutory charges for International Accounting Standard 19 Employee Benefits (IAS19) of (£0.174m), depreciation totalling (£0.146m) and IFRS 16 Leases principal £0.107m this leaves the net £0.433m to be transferred in to reserves: £0.058m to the NDR Reserve, £0.376m to the EIP Reserve and £0.001m out of the General reserve. The following table shows a summary of the figures for the main variances between budget and actual for the year to 31 March 2025. These figures are monitored and reported to the Board throughout the year, and exclude accounting adjustments related to pensions, short- term accumulating absences and depreciation. Actual under/overspends are explained in the detailed variance analysis below. Page 107
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7 MANAGEMENT COMMENTARY (continued) 2023/24 2024/25 2024/25 2024/25 Actual Budget Actual Variance £000 £000 £000 £000 3,491 Employee Costs 3,942 3,530 (412) 331 Property Costs 356 233 (123) 57 Transport Costs 50 53 3 730 Supplies and Services 784 775 (9) 69 Support Service Recharges 65 71 6 (76) Interest and Investment Income (4) (97) (93) (66) Government Grants and other Service Income (15) (398) (383) 4,536 Net (Under)/Overspend Against Budget 5,178 4,167 (1,011) Funded by: (5,034) Requisitions (5,022) (5,022) - - Approved use of Reserves (156) - 156 (498) Outturn for the year - (855) (855) - Add: IFRS 16 Lease Interest and Principal - 125 125 (498) Adjusted Outturn for the year - (730) (730) The main variances from budget during the year were: Employee Costs - Local Government pay award exceeded the 3% budget provision, but the additional cost was offset by the overall underspend in staffing. The underspend was primarily due to vacancies and part-year vacancies throughout the year, largely due to staff vacancies and ongoing challenges in recruiting suitably qualified staff. Property Costs - Accommodation Charges are underspent by £0.100m, primarily due to IFRS 16 Leases payment. - Repairs and Maintenance costs are £0.023m under budget. Supplies and Services - Postages and ER Printing costs are £0.014m under budget. - Printing and stationery costs had an underspend of £0.014m. - An overspend of £0.010m for Specialist Services, SAA Portal Contributions for 2024/25 is a large contributor to this. Interest and Investment Income - The £0.093m variance in interest income is mainly due to favourable interest rates during the year. Government Grants - £0.376m of the variance in Government Grants is for the Electoral Integrity Programme funding received which is in an earmarked reserve for use in 2025/26. Page 108
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8 MANAGEMENT COMMENTARY (continued) Approved use of reserves - Due to the above variances, the approved use of reserves was not required. General Reserve In setting the 2024/25 Revenue Budget, the Treasurer clarified that the cumulative balance on the uncommitted part of the General Fund should be calculated on the budget for the Joint Board’s core costs alone and exclude budgets with a separate funding stream e.g. NDR earmarked reserve for implementation of the Barclay Review. The NDR reserve does not go by the same principles, given the nature of funding for NDR reform by the Scottish Government. The General Reserve balance at 31 March 2025 is £0.237m, with an additional £0.567m and £0.376m earmarked for the NDR reform Implementation and the Electoral Integrity Programme respectively. Going Concern The Balance Sheet at 31 March 2025 shows an excess of assets over liabilities of £1.561m (net asset of £1.200m at 31 March 2024). The North East Scotland Pension Fund is required to carry out actuarial valuations every three years. Future actuarial valuations of the North East Scotland Pension Fund will consider the appropriate employee/employer’s rate to meet the commitments of the Fund and the constituent authorities of the Board are required to fund the liabilities of the Board as they fall due. Accordingly, it has been considered appropriate to adopt a going concern basis for the preparation of these Annual Accounts. Councillor Donald Gatt Convener Mark J Adam MRICS AEA (Cert – Scotland) Assessor & Electoral Registration Officer Lorraine Paisey CA Treasurer Page 109
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9 STATEMENT OF RESPONSIBILITIES FOR THE ANNUAL ACCOUNTS The Board’s Responsibilities The Board is required to: make arrangements for the proper administration of its financial affairs and to secure that the proper officer of the Board has the responsibility for the administration of those affairs (section 95 of the Local Government (Scotland) Act 1973). In the Valuation Joint Board, that officer is the Treasurer to the Board; manage its affairs to secure economic, efficient and effective use of resources and safeguard its assets; ensure the Annual Accounts are prepared in accordance with legislation (The Local Authority Accounts (Scotland) Regulations 2014) and the Local Authority (Capital Finance and Accounting) (Scotland) (Coronavirus) Amendment Regulations 2021, and so far as is compatible with that legislation, in accordance with proper accounting practices (section 12 of the Local Government Scotland Act 2003); approve the Annual Accounts for signature. I confirm that these Annual Accounts were approved for signature by the Board at its meeting on Signed on behalf of the Grampian Valuation Joint Board Councillor Donald Gatt Convener Page 110
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10 The Treasurer’s Responsibilities The Treasurer to the Board is responsible for the preparation of the Board’s Annual Accounts in accordance with proper practices as required by legislation and as set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2024/25 (the Accounting Code). In preparing these annual accounts, the Treasurer has: selected suitable accounting policies and then applied them consistently; made judgements and estimates that were reasonable and prudent; complied with legislation; complied with the local authority Accounting Code (in so far as it is compatible with legislation); kept adequate accounting records which were up to date; taken reasonable steps for the prevention and detection of fraud and other irregularities. I certify that the financial statements give a true and fair view of the financial position of the Board at the reporting date and the transactions of the Board for the year ended 31 March 2025. Lorraine Paisey CA Treasurer Page 111
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11 ANNUAL GOVERNANCE STATEMENT Scope of responsibility The Board was established in terms of The Valuation Joint Boards (Scotland) Order 1995 and is the valuation authority for Aberdeen City Council, Aberdeenshire Council and Moray Council. The Board is responsible for the provision of valuation assessment services for local taxation purposes. Through an agreement to share services, the Board also provides electoral registration services for the same three constituent authorities. The Board is responsible for ensuring that its business is conducted in accordance with the law and proper standards. It must ensure that public money is safeguarded, properly accounted for, and used economically, efficiently and effectively. The Board is considered to be a local authority in terms of the Local Government etc. (Scotland) Act 1994 and has a duty to deliver continuous improvement as set out in the Local Government in Scotland Act 2003. In discharging this overall responsibility, the Board is responsible for putting in place proper arrangements for the governance of its affairs and facilitating the effective exercise of its valuation and registration functions. This includes arrangements for the management of risk. Responsibility for delivery - members and officers In terms of the above Order, the Board membership comprises 6 members appointed by Aberdeen City Council, 6 members appointed by Aberdeenshire Council and 3 members appointed by Moray Council. To fulfil its operational role, the Board is responsible for the appointment of an Assessor, and deputes as appropriate, in terms of section 27 of the Local Government etc. (Scotland) Act 1994. In practice the Assessor and Deputes manage the provision of valuation assessment and electoral registration services on a day-to-day basis, with the Board providing resources, a governance framework and a monitoring regime for financial and operational performance. The Assessor is also appointed as the Electoral Registration Officer (ERO) for the Board’s three constituent authorities. This too is a statutory position with the ERO and Deputes appointed in terms of section 8 of the Representation of the People Act 1983. In 2024 the Board agreed to appoint the Principal Admin Officer as a Depute Electoral Registration Officer to provide additional resilience and support to the ERO. The Board has approved and adopted a local code of corporate governance that is reviewed biennially and is available at www.grampian-vjb.gov.uk The purpose of the governance framework The governance framework comprises the systems, processes, cultures and values by which the Board is directed and controlled, and the activities used to engage with the community. It enables the Board to monitor the achievement of its strategic objectives and to consider whether those objectives have led to the delivery of appropriate, cost-effective valuation assessment and registration services. The system of internal control is a significant part of that framework and is designed to manage risk to an acceptable level, and provide reasonable, but not absolute, assurance that the statutory requirements of the Assessor and ERO are met and policies, aims and objectives can be delivered. The system of internal control is based on an ongoing process designed to identify and prioritise the risks to the achievement of the Board’s policies, aims and objectives, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically. Page 112
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12 ANNUAL GOVERNANCE STATEMENT (continued) The governance framework The key elements of the systems and processes that comprise the Board’s governance arrangements are described in terms of the seven principles of good governance defined in the framework and summarised as follows: Governance Principle 1 - behaving with integrity, demonstrating strong commitment to ethical values, and respecting the rule of law. The Board’s code of conduct provides a clear standard in terms of conduct and behaviour, as does the Board’s personnel related policies that deal with mainstreaming equalities into the fabric of the organisation, dignity of the individual, whistleblowing, special leave and personal development. These policies go beyond behavioural matters and reflect the positive approach to workforce development to the extent that career development schemes are in place across all three service strands: non-domestic property valuation assessment, domestic property valuation assessment and electoral registration. As such, career pathways are available to almost all staff. In order to avoid duplication, the Board relies on the registers of interests and gifts maintained by the relevant constituent authorities for elected members. A register of interests has been established for all employees and a register of gifts is also maintained. The Assessor & ERO and Deputes are bound by the policies of the Board and must also adhere to the professional standards regime set by the Royal Institution of Chartered Surveyors (RICS). The Management Team make fresh declarations of interest annually. Issues relating to actions taken or not taken by officials can be addressed through the organisation’s complaints handling procedure. This procedure was updated in 2021 following the revision of the national Complaints Handling Procedures (CHP) scheme by the Scottish Public Services Ombudsman. The Assessor & ERO works closely with the Electoral Commission, the Electoral Management Board for Scotland and Police Scotland. If necessary, suspected fraudulent registration or absent vote applications are referred to the Police Scotland single point of contact. Governance Principle 2 - ensuring openness and comprehensive stakeholder engagement. The Board’s decision-making processes are well established with decisions concerning finance, performance and governance being taken by the Board. Standing orders and regulations govern how decisions are made and appropriate legal, financial and other professional advice is considered as part of the decision-making process. At an operational level, stakeholder involvement falls within the domain of the Assessor & ERO. The ERO and the Principal Admin Officer attend regular meetings with other ERO colleagues and the Electoral Commission as part of an electoral registration communications and outreach network. One of the principal aims in attending these meetings is to develop best practice in how to engage with underrepresented groups, put relevant information into the consciousness of electors and to learn from the experiences of others. The introduction of Voter ID was a focus for the ERO during the year as it was required to be shown when voting in person at the 2024 general election. The online voting information page on the Board’s website continues to be updated so users can easily access information or application forms for the service or action that they require. This was particularly important again during 2024/25 due to the changes brought in by the Elections Act 2022. Page 113
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13 ANNUAL GOVERNANCE STATEMENT (continued) The Board’s performance management framework is reviewed regularly to drive continuous improvement and ensure effective monitoring of progress and outcomes against stated objectives. Reporting arrangements include regular updates to the Board, the Electoral Commission, the Electoral Management Board for Scotland, the Scottish Government, and online publication of annual performance reports. Protocols are in place to meet requests made under the Freedom of Information Act and, through the Scottish Assessors’ Association, Assessors have established procedures to improve the response standards where common requests for information are made. As part of the Equalities mainstreaming regime, progress has been made towards capturing employee and service user feedback that will inform future service design and delivery. Governance Principle 3 - defining outcomes in terms of sustainable economic, social and environmental benefits. The Board, being focussed around delivery of specialised valuation and electoral registration services has a limited role to play in the wider community planning aspects anticipated by the governance framework set out by CIPFA/Solace. The Board is therefore conscious of the need to ensure that its mode of operation and the delivery of the valuation and registration services reflect the responsibilities towards the communities in Grampian in terms of devolved service delivery models that support the sustainability of communities across the whole region and minimise natural resource demands. In terms of the two specialised services the Board delivers, they are foundation stones to local government and democracy at local, national and international levels, as they provide the means to raise local taxation and to conduct elections/referendums. Operational outcomes for these services are essentially driven by statute and it is pertinent to this governance principle to note that legislation has now been laid to reform local taxation1 and electoral registration2 and thus improve sustainability and economic and social benefits. The implementation of local taxation reform continues to be the subject of scrutiny with the Local Government, Housing and Planning Committee currently holding a short enquiry on the potential for changes to the current council tax system in Scotland. Through the work of the various committees of the Scottish Assessors Association, the Assessor and his team continue to work with other stakeholders to ensure that any changes that may be implemented at a local and national level is sustainable and effective. Electoral registration officers, through the SAA Electoral Registration Committee, were represented on various groups involved in the development and implementation of the Elections Act 2022 and Scottish EROs are now represented in the Nations Review Group which provides feedback and views on the new UK Government’s electoral reform plans. Governance Principle 4 - determining the interventions necessary to optimise the achievement of intended outcomes. As a specialised outcome-orientated organisation, our activities of producing, maintaining, and defending Valuation Rolls, Valuation Lists and Electoral Registers essentially drive the organisation’s agenda. The Board and the Assessor & ERO recognise the financial challenges they face and through established reporting arrangements ensure that Board members have full detail of resource inputs and performance outputs. Regular and detailed financial reports 1 Non-Domestic Rates (Scotland) Act 2020 (legislation.gov.uk) 2 Elections Act 2022 (legislation.gov.uk) Page 114
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14 ANNUAL GOVERNANCE STATEMENT (continued) are made available to the Board and the outcomes for the organisation that are essentially driven by statute, are monitored in terms of performance. The Management Team focus on these outcomes and work closely with internal and external colleagues to innovate and optimise them. Innovation and agility is a fundamental requirement to maintain service delivery, particularly due to changes in legislation, vacancies and the number of colleagues working on a hybrid home/office basis. Governance Principle 5 - developing the entity’s capacity, including the capability of its leadership and the individuals within it. Roles of elected members and officers are clearly defined and constructive working relationships are achieved to ensure clear relationships between the Board, the Assessor and ERO, corporate stakeholders and the public. Standing orders regulate the form and content of board meetings and the Board’s financial regulations provide a framework for financial decisions. Performance reports are reviewed at Board meetings and the Board’s key performance indicators are subject to regular periodic review. As part of its commitment to lifelong learning and to foster a personal development culture and seek to retain personnel the organisation operates an internal recruitment procedure that encourages personal development and ultimately improve leadership capacity. New employees receive induction training on arrival and in the majority of cases are able to participate in a career grade development scheme that seeks to promote personal and professional development. Surveyors, who are members of the Royal Institution of Chartered Surveyors (RICS), are subject to additional compulsory continuing professional development training that is monitored by the RICS. The organisation’s training officer is responsible for monitoring training provision and recording progress. The training officer is also responsible for identifying appropriate training opportunities. All colleagues now have access to Aberdeenshire Council’s online training platform which has greatly expanded the amount of training and personal development resources available. Two colleagues are currently undergoing the Association of Electoral Administrators Certificate in Electoral Administration which should ensure the organisation has a more qualified and knowledgeable workforce in a very specialised field. Further opportunities to study for the certificate will be offered to colleagues later in the year. Functions and roles of statutory posts including the Clerk, Treasurer and Assessor & ERO are clearly defined and the postholders work closely together to achieve the objectives of the organisation. Governance Principle 6 - managing risks and performance through robust internal control and strong public financial management. The Board’s decision-making process is well established with governance, finance and performance issues being reported at board meetings that take place in public (unless exempt under statutory provision) and the board reports are published online and made available to the media. Rules and procedures govern how decisions are made and appropriate legal, financial and other professional advice is considered as part of the decision-making process. Scrutiny is secured through internal and external audit. Page 115
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15 ANNUAL GOVERNANCE STATEMENT (continued) Decisions of the Assessor & ERO are subject to public scrutiny, scrutiny via appeal and complaint processes to the respective judicial bodies and external stakeholders that monitor performance such as the Electoral Commission and the Electoral Management Board for Scotland. In addition, the Scottish Assessors’ website at saa.gov.uk provides practice notes that provide details on how rateable values are determined and allows individual taxpayers to look up the assessment of every non-domestic and domestic property in Scotland and the valuations of an expanding range of subject types. The Board and the Assessor & ERO reported on performance to the Electoral Commission, the Scottish Government and the Scottish Information Commissioner during 2024/25. Risk management is a fundamental part of the organisation’s decision-making process and as such is a standing item on the Assessor & ERO’s management team agenda, with the Board reviewing the risk register on an annual basis. To control and mitigate against risk, the Board’s system of internal control is based on a framework of financial regulations that are revised and updated periodically and supplemented by regular management information, administrative procedures, management supervision and a code of corporate governance. Establishing and maintaining an effective system of internal control is a management function. The Board, through its consideration of reports by internal and external auditors, monitors the effectiveness of internal control procedures. Policies to combat fraud, theft, bribery and corruption are in place, not only in order to protect public finance, but also to ensure the veracity of the statutory rolls, lists and registers that the Assessor & ERO is required to provide. The Assessor and ERO has direct contact with Police Scotland at a local and national level through an allocated Single Point of Contact, the SAA and the Electoral Management Board for Scotland. IT resilience and effectiveness continued to be improved during 2024/25. Close collaboration with Aberdeenshire Council’s IT team has continued and they now have the responsibility for managing the Board’s IT infrastructure and providing IT support to users. A performance management system is in place which calls for reporting of established performance measures to the Board at quarterly intervals throughout the year. An annual Public Performance Report is also published. The Board’s governance arrangements have been developed and maintained to comply with the core functions of various good framework guidelines including Code of Practice on Managing the Risk of Fraud and Corruption, Public Sector Internal Audit Standards (incorporating the principles of the Role of the Head of Internal Audit), Audit Committees: Practical Guidance for Local Authorities and Police, etc. Strong financial management procedures are secured through the work of the Treasurer appointed in terms of s95 of the Local Government (Scotland) Act 1973. This officer provides advice to the Board and the Assessor & ERO on all financial matters and ensures the timely production and reporting of budget estimates, budget monitoring reports and annual accounts. Governance Principle 7 - implementing good practices in transparency, reporting, and audit to deliver effective accountability. Board business is conducted through an established cycle of quarterly meetings. These meetings continued to be held in hybrid form during 2024/25 with some members attending in person and others attending via a video link. Meeting dates are published in advance and reports follow a corporate style and include: the purpose of the report, information relevant to the matter under consideration, a conclusion and recommendations. Minutes of meetings are prepared by a member of Moray Council’s Committee Services team on behalf of the Clerk to Page 116
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16 ANNUAL GOVERNANCE STATEMENT (continued) the Board and are made available on Moray Council’s website with links also available via the Board’s website. Information is disseminated in many forms and targeted at different audiences for different purposes, ranging from statutory returns that follow prescribed layouts, through to media releases and presentations which may be focussed on specific groups of service users. The organisation’s website is regularly updated with news items to ensure that the Grampian community is kept up to date with pertinent information. Assurance and accountability oversight is a key role for the Board which comprises members from a variety of political backgrounds. The Board receives reports on the work of the internal auditor and the external auditor, placing particular focus on recommendations arising from audit work and on the corrective actions proposed by the officials of the Board. Review of effectiveness of governance arrangements The review of effectiveness of the governance framework including the system of internal control is pursued throughout the year by various means involving: The Board In practice, governance arrangements are monitored over the year with Board meetings taking place four times during each year. The Board consists of members from each of the three councils and from across the political spectrum and considers reports on financial and operational performance and governance matters. It also examines the annual public performance and audit reports. The management team The management team which has overall responsibility for good governance arrangements, currently comprises the Assessor & ERO, two Depute Assessors & EROs, four Assistant Assessors and the Principal Admin Officer & Depute ERO. The Assessor and ERO The Assessor & ERO has the statutory responsibility for the publication and maintenance of the Valuation Rolls, Council Tax Valuation Lists and Electoral Registers. The Assessor is essentially the chief executive for the organisation and has a wide range of financial, personnel, governance and reporting responsibilities. The Treasurer The Treasurer has statutory responsibility for the Board’s financial affairs in terms of Section 95 of the Local Government (Scotland) Act 1973. This officer provides relevant financial advice and support to the Assessor and ERO and elected members at meetings of the Board and otherwise as required. The Board’s financial management arrangements generally conform to the governance requirements of the CIPFA statement on the role of the chief financial officer, and whilst the Treasurer is not a member of the management team, she is actively involved in, and is able to influence, decision-making processes. The Treasurer is responsible for ensuring that an effective system of internal financial control is maintained. The system of internal financial control can provide only reasonable and not absolute assurance that assets are safeguarded, that transactions are authorised and properly recorded, and that material errors or irregularities are either prevented or detected within a timely period. Page 117
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17 ANNUAL GOVERNANCE STATEMENT (continued) The system of internal financial control is based on a framework of regular management information, financial regulations, administrative procedures (including segregation of duties), management supervision and a system of delegation and accountability. The system includes comprehensive budget setting and monitoring arrangements and the preparation of regular financial reports indicating actual expenditure against forecasts that are reported at each board meeting. Internal Audit Internal Audit is an assurance function that primarily provides an independent and objective opinion to the Board on the control environment comprising risk management, internal control, and governance by evaluating its effectiveness in achieving the organisation’s objectives. It objectively examines, evaluates and reports on the adequacy of the control environment as a contribution to the proper, economic, efficient and effective use of resources. Responsibility for the delivery of the Internal Audit Service is provided by the Audit and Risk Manager of the Moray Council. The Audit and Risk Manager provides the Board with independent assurance on risk management, governance and internal control in line with the Public Sector Internal Audit Standards. Internal Audit informs the effectiveness of the financial control environment as an element of the Board’s governance arrangements. At the date of writing this statement, the internal audit process has still to be completed. The Audit and Risk Manager is therefore unable to make any definitive statement on the Board’s internal financial control systems. Management are, however, unaware of any fundamental weaknesses at this time. External Agencies In addition to the various internal review processes and the financial audit referred to above, there are a number of bodies that the organisation is required to report to/submit governance arrangement for approval. The Scottish Information Commissioner collects data on requests and responses under Freedom of Information and Environmental Information legislation and will intervene where it considers enforcement action is required. The Keeper of Records reviews and approves records management arrangements and has requested that a revised plan is submitted during 2025/26. The way the organisation delivers its valuation and registration services is also subject to scrutiny by external agencies, with the valuation assessment aspect reported to the Scottish Government and subject to a case-by-case scrutiny on appeal and the Electoral Commission reviewing and reporting on the performance of the ERO. Significant governance issues Securing good governance continues to be of prime importance to elected members, senior officials of the Board and members of the management team. It is a significant task, particularly at a time when budgets remain under significant pressure and legislative changes are being considered and implemented. In the 2023/24 governance statement, the key challenges facing the organisation for 2024/25 were to: Continue to upgrade our operational capacity in terms of workforce, processes and IT systems to meet the challenges of the 3-yearly revaluation cycle and the 2 stage proposal and appeal system. Page 118
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18 ANNUAL GOVERNANCE STATEMENT (continued) Continue the work to improve our governance arrangements, progress equalities mainstreaming and performance monitoring and complete the work to widen our customer consultation framework. Continue the work to utilise the full functionality of the electoral management system and online resources to improve registration levels and engagement with electors. Continue to manage resources to ensure that the organisation meets all statutory commitments. In particular, there is still a requirement to tackle the level of vacancies in the valuation team. All operational demands were met during 2024/25 and we continued with a hybrid home/office approach to working. Recruitment of suitably qualified valuation staff has continued to be challenging although there were some successful appointments in the latter part of the year. We continue to advertise our vacancies and develop a career pathway framework with colleagues at a national level. The shift of our IT systems to Aberdeenshire Council infrastructure has been generally successful although the upgrading and migration of one system is still to be completed, and we are liaising closely with the external contractor and the software supplier to have this work finished. Our IT application to deal with the new 2-stage proposal and appeals process has been successfully used to program the disposal of proposals arising from the 2023 revaluation and we have developed templates to remove some repetitive administrative work. We will continue to monitor and develop our IT applications and processes to assist staff and other stakeholders as the need and opportunity arises. We used e-communications during the 2024 annual canvass in connection with the register of electors and, as in the previous year, this led to financial and resource savings for the Board. We intend to make use of e-communications for the 2025 canvass and in the reserved absent vote reapplication process. The 2025 equalities mainstreaming report has been completed and we are analysing the results of a staff survey that has recently been carried out. A customer feedback survey has also been implemented but it is too early to report on any findings from this. The need to vary and reschedule tasks is challenging but monitoring, management and flexibility means that the appropriate resources can be placed where they are needed to ensure that statutory commitments are met. Despite the challenges noted above, no significant governance issues have been identified. Looking ahead the key challenges for 2025/26 are: Continue to upgrade our operational capacity in terms of workforce, processes and IT systems to meet the challenges of the 3-yearly revaluation cycle, the 2 stage proposal and appeal system, and proposed legislative changes in electoral registration and council tax. Continue the work to progress equalities mainstreaming objectives and to improve registration levels and engagement with electors and other service users. Continue to manage resources to ensure that the organisation meets all statutory Page 119
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19 ANNUAL GOVERNANCE STATEMENT (continued) commitments. In particular, the continuing requirement to improve the level of vacancies in the valuation team. Concluding Remarks In our respective roles as Convener of the Board and Assessor & ERO, we are committed to good governance and recognise the contribution it makes to securing delivery of service outcomes in an effective and efficient manner. This annual governance statement summarises current governance arrangements, provides evidence of progress and affirms our commitment to ensuring that the Board’s governance framework is responsive to the dynamic and challenging environment in which we serve. During the financial year to 31 March 2025 and to the date of this statement, no significant control weaknesses or issues have arisen and no significant failures have been identified in the expected standards for good governance, risk management and control. Councillor Donald Gatt Convener Mark J Adam MRICS AEA (Cert - Scotland) Assessor & Electoral Registration Officer Page 120
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20 REMUNERATION REPORT This report has been written to provide details of the Grampian Valuation Joint Board’s remuneration arrangements for its senior councillors and senior employees. This is required under the Local Authority Accounts (Scotland) Regulations 2014. All information disclosed in the tables 1 to 6 in this Remuneration Report is audited by the external auditors, Grant Thornton UK LLP. The other sections of the Remuneration Report are reviewed by Grant Thornton UK LLP to ensure that they are consistent with the financial statements. Remuneration of Councillors, Senior Councillors, Convener and Depute Convener The remuneration of councillors is regulated by The Local Governance (Scotland) Act 2004 (Remuneration) Amendment Regulations 2024 (SSI No. 2024/24). These regulations set out the amounts a councillor may be paid for being a Convener or Depute Convener of a Joint Board. This is inclusive of any amounts payable to them as either a councillor or senior councillor of their own Local Authority. The Board consists of 15 members comprising 6 from Aberdeen City Council (including 1 current vacancy), 6 from Aberdeenshire Council and 3 from Moray Council. The local authority of which the Convener or Depute Convener is a member pays the remuneration appropriate to the member’s work with the Joint Board. Conveners receive a remuneration which, when added to their existing remuneration as a Councillor/Senior Councillor, equals 75 percent of the Leader of a “Band A” council, i.e. £26,686 per annum. The Depute Convener’s remuneration is calculated on the basis of the basic salary plus 75 percent of the difference between the basic salary and the Convener’s salary, i.e. £25,352 per annum. These rates are effective for the year ending 31 March 2025. The Board has an arrangement with each Council which remunerates the Convener and Depute Convener/s to reimburse the Council for the additional costs of that councillor arising from them being a Convener or Depute Convener of the Board. Councillor Gatt was elected as Convener of the Grampian Valuation Joint Board on 26 August 2022. From this date Councillor Gatt has received a Special Responsibility Allowance for his role as Convener and the Board reimburses Moray Council for the additional cost. Councillor Smith of Aberdeenshire Council was elected Vice Convener at the meeting on 28 June 2024. Councillor Smith already receives a Special Responsibility Allowance for duties within the Council which will be reimbursed by the Board. All other Councillors’ expenses are paid directly by the authority that they serve and will also be included in the individual authority’s remuneration report. Page 121
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21 Remuneration of Senior Councillors, Convener and Depute Convener (Table 1) Councillor Name and Responsibility Total Remuneration 2023/24 Salary, fees and allowances 2024/25 Total Remuneration 2024/25 £ £ £ Councillor Gatt Convener 4,818 5,341 5,341 Councillor Smith Depute Convener (from 28 June 2024) - 3,039 3,039 Total 4,818 8,380 8,380 No taxable expenses were paid in 2024/25 or in 2023/24. Remuneration of Councillors (Table 2) Grampian Valuation Joint Board paid the following salaries, allowances and expenses for all councillors (including senior councillors) during the year. It includes expenses met directly by the Board and expenses reimbursed to Councillors. Type of Remuneration 2023/24 2024/25 £ £ Salaries 4,818 8,380 TOTAL 4,818 8,380 Page 122
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22 Remuneration of Senior Employees The Local Authority Accounts (Scotland) Amendment Regulations 2014 require remuneration information to be disclosed for senior employees as defined below: i. A person who has responsibility for the management of a local authority to the extent that the person has power to direct or control the major activities of the authority whether solely or collectively with other persons. ii. A person who holds a post that is politically restricted by reason of section 2(1) (a), (b) or (c) of the Local Government and Housing Act 1989. iii. A person whose annual remuneration, including any annual remuneration from a local authority subsidiary body is £150,000 or more. These regulations apply equally to Joint Boards and remuneration disclosure is therefore required for the Assessor and Electoral Registration Officer (ERO) and two Depute Assessor and Depute Electoral Registration Officers who are deemed to be senior employees for the Grampian Valuation Joint Board. Details are shown on Table 3 below. The salary of senior employees is set by reference to national arrangements. The Scottish Joint Negotiating Committee (SJNC) sets the terms and conditions and pay bandings for senior employees but remuneration levels and pay scales are set locally and were last agreed by the Board on 23 January 2004. Remuneration of Senior Employees of the Board (Table 3) Name and Post Title Total Remuneration 2023/24 Salary, fees and allowances 2024/25 Taxable Expenses 2024/25 Total Remuneration 2024/25 £ £ £ Mark Adam Assessor & ERO 130,037 133,862 791 134,653 Gavin Oag Depute Assessor & ERO 102,696 105,003 742 105,745 Jim Barron Depute Assessor & ERO 93,254 95,131 776 95,907 TOTAL 325,987 333,996 2,309 336,305 The Treasurer and the Clerk to the Board do not receive remuneration from the Valuation Joint Board. The duties of the posts are covered by the post holders’ substantive posts in Moray Council. Details of their salaries are included in the remuneration report for Moray Council. Page 123
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23 Pension Benefits Pension benefits for Councillors and Local Government employees are provided through the North East Scotland Pension Fund, a Local Government Pension Scheme (LGPS). Councillors’ pension benefits are based on career average pay. For benefits earned up to 31 March 2025, the councillor’s pay for each year or part year ending 31 March (other than the pay in the final year commencing 1 April) is increased by the increase in the cost of living, as measured by the appropriate index (or indices) between the end of that year and the last day in the month in which their membership of the scheme ends. The total of the revalued pay is then divided by the year of membership to calculate the career average pay. This is the value used to calculate the pension benefits. The Board pay a contribution to the Pension Fund for the Convener and Depute Convener’s pensions if they are members of the scheme and this is based on a percentage of the cost of the Special Responsibility Allowance. Details are shown on Table 4 below. For local government employees, up until 31 March 2015 pension benefits accrued are based on final salary. This means that pension benefits are based on the final year’s pay and the number of years that person has been a member of the scheme. Benefits earned from 1 April 2015 are based on ‘career average’. The scheme’s normal retirement age for both councillors and employees is 65 for benefits up to 31 March 2015 and the State Pension Age for benefits built up after 1 April 2015. From 1 April 2009, a five-tier contribution system was introduced with contributions from scheme members being based on how much pay falls into each tier. This is designed to give more equality between the cost and benefits of scheme membership. Prior to 2009 contributions rates were set at 6% for all non-manual employees. The members’ contribution rates for 2024/25 remain at the 2009/2010 rates although the pay bandings have been adjusted. The tiers and contribution rates are shown below. Tiered Contribution Pay Rates Pensionable pay 2023-24 Rate (%) 2023/24 Pensionable pay 2024-25 Rate (%) 2024/25 On earnings up to and including £23,000 5.50% On earnings up to an including £27,000 5.50% On earnings above £23,001 and up to £28,100 7.25% On earnings above £27,001 and up to £33,000 7.25% On earnings above £28,101 and up to £38,600 8.50% On earnings above £33,001 and up to £45,300 8.50% On earnings above £38,601 and up to £51,400 9.50% On earnings above £45,301 and up to £60,400 9.50% On earnings above £51,401 12.00% On earnings above £60,401 12.00% Page 124
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24 Pension Benefits (continued) If a person works part-time, their contribution rate is worked out on the whole-time pay rate for the job, with actual contributions paid on actual pay earned. There is no automatic entitlement to a lump sum. Members may opt to give up (commute) some pension for a lump sum up to the limit set by the Finance Act 2004. Up until 31 March 2015, the accrual rate guarantees a pension based on 1/60th of the final pensionable salary and years of pensionable service. (Prior to 2009 the accrual rate guaranteed a pension based on 1/80th and a lump sum based on 3/80th of the final pensionable salary and years of pensionable service). From 1 April 2015, the accrual rate guarantees a pension of 1/49th of pensionable pay for each year. At the end of each year the benefits are revalued and increased by inflation. The value of the accrued benefits has been calculated on the basis of the age at which the person will first become entitled to receive a full pension on retirement without reduction on account of its payment at that age; without exercising any option to commute pension entitlement into a lump sum; and without any adjustment for the effects of future inflation. The pension figures shown relate to the benefits that the person has accrued as a consequence of their local government service, and not just their current appointment. Senior Councillors (Table 4) For the year to 31 March 2024 For the year to 31 March 2025 £ £ Councillor Gatt Convener 930 764 Councillor Smith Depute Convener 0 486 Total 930 1,250 In-year pension contributions The above amounts show the in-year contributions relating to the Special Responsibility Allowance shown in Table 1. Senior Employees (Table 5) The pension entitlements of Senior Employees for the year to 31 March are shown in the table below, together with the contribution made by the Board to each Senior Employees’ pension during the year. Page 125
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25 Pension Benefits (continued) For the year to 31 March 2024 For the year to 31 March 2025 As at 31 March 2025 Difference from March 2024 £ £ £ £ Mark Adam 24,911 13,506 Pension 75,603 5,833 Assessor & ERO Lump Sum 117,339 4,078 Gavin Oag 19,537 10,592 Pension 57,923 4,640 Depute Assessor & ERO Lump Sum 75,799 2,634 Jim Barron 17,721 9,594 Pension 47,048 3,877 Depute Assessor & ERO Lump Sum 62,820 2,098 Total 62,169 33,692 436,532 23,160 In-year pension contributions Accrued pension benefits All senior employees shown in the tables above are members of the North East Scotland Pension Fund. The pension figures shown relate to the benefits that the person has accrued as a consequence of their total local government service and not just their current appointment. General Disclosure by Pay Band The Regulations require information to be provided for the number of persons whose remuneration is £50,000 or more. This information is disclosed in bands of £5,000 and is shown below. General Disclosure by Pay Band (Table 6) The Table includes the remuneration of the senior employees detailed in Table 3. Page 126
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26 Pension Benefits (continued) Councillor Donald Gatt Convener Mark J Adam MRICS AEA (Cert - Scotland) Assessor & Electoral Registration Officer Page 127
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27 COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT FOR THE YEAR ENDED 31 MARCH 2025 This Statement shows the accounting cost in the year of providing services in accordance with generally accepted accounting practices. This differs from the expenditure to be funded from the requisitions raised by the Board from the three constituent Local Authorities in accordance with statute. The effect on the General Fund is shown in the Movement in Reserves Statement and Note 7 Expenditure and Funding Analysis and Adjustments between Accounting Basis and Funding Basis under Regulations. £000 £000 £000 £000 £000 £000 Expenditure Income Net Expenditure Income Net 4,556 (66) 4,490 Rating and Council Tax Valuation and Electoral Registration 4,980 (398) 4,582 4,556 (66) 4,490 Cost Of Services 4,980 (398) 4,582 (6) (76) (82) Financing and Investment Income and Expenditure 10 20 (97) (77) (4,587) Requisitions and Non-Specific Grant Income 21 (4,725) (179) (Surplus)/Deficit on Provision of Services 8 (220) 17 Deficit on revaluation of PPE 11 - 113 Remeasurement of the Net Defined Benefit Liability 24 (142) 130 Other Comprehensive (Income) and Expenditure (142) (49) Total Comprehensive (Income) and Expenditure (362) 2023/24 2024/25 Note Page 128
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28 MOVEMENT IN RESERVES STATEMENT FOR THE YEAR ENDED 31 MARCH 2025 This Statement shows the movement in the year on the different reserves held by the Board, analysed into usable reserves (those that can be applied to fund expenditure) and unusable reserves. The Statement shows how the movements in the year are broken down between gains and losses incurred in accordance with generally accepted accounting practices and the statutory adjustments required to return to the amounts chargeable against requisitions for the year. The Increase or Decrease line shows the statutory General Fund movements in the year. 2024/25 General Fund Total Usable Reserves Unusable Reserves (Note 18) Total Board Reserves £000 £000 £000 £000 Balance at 31 March 2024 747 747 453 1,200 Total Comprehensive Income and Expenditure 220 220 142 362 Adjustments to usable reserves permitted by accounting standards 5 5 (5) - Adjustments between accounting basis & funding basis under regulations (Note 7) 208 208 (208) - Increase / (Decrease) in Year 433 433 (71) 362 Balance at 31 March 2025 1,180 1,180 382 1,562 2023/24 General Fund Total Usable Reserves Unusable Reserves (Note 18) Total Board Reserves £000 £000 £000 £000 Balance at 31 March 2023 696 696 455 1,151 Total Comprehensive Income and Expenditure 179 179 (130) 49 Adjustments to usable reserves permitted by accounting standards 5 5 (5) - Adjustments between accounting basis & funding basis under regulations (Note 7) (133) (133) 133 - Increase / (Decrease) in Year 51 51 (2) 49 Balance at 31 March 2024 747 747 453 1,200 Page 129
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29 BALANCE SHEET AS AT 31 MARCH 2025 The Balance Sheet shows the value as at the Balance Sheet date of assets and liabilities recognised by the Board. The net assets of the Board (assets less liabilities) are matched by the reserves held by the Board. 31 March 2024 31 March 2025 £000 Note £000 680 Property, Plant & Equipment 11 872 680 Long Term Assets 872 38 Short Term Debtors 12 70 1,463 Cash and Cash Equivalents 13 1,709 1,501 Current Assets 1,779 (817) Short Term Creditors 14 (795) (817) Current Liabilities (795) (164) Unfunded Pension Liability 24 (176) - Other Long Term Liabilities 15 (118) (164) Long Term Liabilities (294) 1,200 Net Assets 1,562 Usable reserves 17 238 General Fund 237 509 Earmarked NDR Reform Reserve 567 - Earmarked Electoral Integrity Programme 376 747 Total 1,180 Unusable Reserves 18 220 Revaluation Reserve 215 459 Capital Adjustment Account 426 (164) Pensions Reserve (176) (62) Employee Statutory Adjustment Account (83) 453 Total 382 1,200 Total Reserves 1,562 The notes on Pages 31 to 57 form part of the Financial Statements. Lorraine Paisey CA Treasurer Page 130
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30 CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2025 The Cash Flow statement shows the changes in cash and cash equivalents of the Board during the financial year. The statement shows how the Board generates and uses cash and cash equivalents by classifying cash flows as operating, investing and financing activities. The amount of net cash flows arising from operating activities is a key indicator of the extent to which the operations of the Board are funded by way of requisition and grant income or from the recipients of services provided by the Board. Investing activities represent the extent to which cash outflows have been made for resources which are intended to contribute to the Board’s future service delivery, i.e. assets. 31/03/2024 31/03/2025 £000 £000 179 Net surplus/(deficit) on the provision of services 220 79 Adjust net deficit on the provision of services for non cash movements (Note 20) 133 258 Net cash flows from Operating Activities 353 - Financing Activities (107) 258 Net increase/(decrease) in cash and cash equivalents 246 1,205 Cash and cash equivalents at the beginning of the financial year 1,463 1,463 Cash and cash equivalents at the end of the financial year 1,709 Page 131
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31 NOTES TO THE ACCOUNTS Note 1 Accounting Policies 1 General Principles The Annual Accounts summarise the Board’s transactions for the 2024/25 financial year and its position at the year ended 31 March 2025. The Board is required to prepare Annual Accounts under the Local Authority Accounts (Scotland) Regulations 2014, which section 12 of the Local Government in Scotland Act 2003 requires to be prepared in accordance with proper accounting practices. These practices primarily comprise the Code of Practice on Local Authority Accounting in the United Kingdom 2024/25 and the Service Reporting Code of Practice 2024/25, supported by International Financial Reporting Standards (IFRS) and statutory guidance issued under section 12 of the 2003 Act. The principal accounting policies have been applied consistently throughout the year. The accounting convention adopted in the Annual Accounts is principally historical cost, modified by the revaluation of property, plant and equipment. 2 Accruals of Income and Expenditure Income and expenditure are accounted for in the year in which they take place, not simply when cash payments are made or received. Where income and expenditure has been recognised but cash has not been received or paid, a debtor or creditor for the relevant amount is recorded in the balance sheet. Where the debts may not be settled, the balance of debtors is written down and a charge made to revenue for the income that might not be collected. 3 Charges to Revenue for Non-Current Assets The service is charged with the following amounts to record the cost of holding non-current assets during the year: Depreciation attributable to the assets used by the relevant service. Revaluation and impairment losses on assets used by the service where there are no accumulated gains in the Revaluation Reserve against which the losses can be written off. 4 Requisitions and Contributions Requisitions and contributions relating to capital and revenue expenditure are accounted for on an accruals basis and recognised immediately in the Comprehensive Income and Expenditure Statement as income, except to the extent that the grant or contribution has a condition(s) (as opposed to restrictions) that the Board has not satisfied. 5 Cash and Cash Equivalents The Board uses Moray Council’s bank account for financial transactions and the balance is invested in the Council’s Loans Fund. This balance is repayable on demand and therefore treated as a cash equivalent and is included in the Balance Sheet at amortised cost, which equates to the actual cash value at 31 March 2025. Interest is received from Moray Council on the balance held. Page 132
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32 Note 1 (continued) 6 Benefits Payable During Employment Short-term employee benefits are those due to be settled within 12 months of the year-end. They include such benefits as wages and salaries, paid annual leave and paid sick leave for current employees and are recognised as an expense for services in the year in which employees render service to the Board. An accrual is made for the cost of holiday entitlements earned by employees but not taken before the year-end which employees can carry forward into the next financial year. 7 Termination Benefits Termination benefits are amounts payable as a result of a decision by the Board to terminate an officer’s employment before the normal retirement date or an officer’s decision to accept voluntary redundancy in exchange for those benefits and are charged on an accruals basis in the Comprehensive Income and Expenditure Statement at the earlier of when the Board can no longer withdraw the offer of those benefits or when the Board recognises costs for a restructuring. 8 Going Concern The Annual Accounts have been prepared on a going concern basis. As at 31 March 2025, the Balance Sheet of the Board shows a net asset position of £1.593m. 9 Overheads and Support Services The costs of overheads and support services are charged to those that benefit from the supply or service in accordance with the costing principles of the CIPFA Service Reporting Code of Practice (SeRCOP). The total absorption costing principle is used – the full cost of overheads and support services are shared between users in proportion to the benefits received. 10 Value Added Tax VAT is included in the Comprehensive Income and Expenditure Statement only to the extent that it is irrecoverable. The net amount due to or from HM Revenue and Customs in respect of VAT is included as part of debtors or creditors. 11 Reserves The Board sets aside specific amounts as reserves for future policy purposes. Reserves are created by appropriating amounts out of the General Fund Balance in the Movement in Reserves Statement. When expenditure to be financed from a reserve is incurred, it is charged to the appropriate service in that year to score against the Surplus or Deficit on the Provision of Services in the Comprehensive Income and Expenditure Statement. The reserve is then appropriated back into the General Fund Balance in the Movement in Reserves Statement so that there is no net charge against requisitions for the expenditure. Certain reserves are kept to manage the accounting processes for non-current assets, retirement and employee benefits and do not represent usable resources for the Board. 12 Leases In 2024/25, the Board adopted IFRS 16 Leases, as incorporated into the 2024/25 Code of Practice on Local Authority Accounting. The primary impact of the new standard is that arrangements previously treated as operating leases—where leased vehicles, plant, equipment, property, and land were not recognised on the balance sheet—must now be accounted for by recognising a right-of-use asset and a corresponding lease liability as of 1 April 2024. Leases for low-value items (under £6,000) and those expiring on or before 31 Page 133
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33 March 2025 are excluded from these requirements. IFRS 16 has been applied retrospectively, with the cumulative effect recognised on 1 April 2024. This means that right-of-use assets and lease liabilities have been calculated as if IFRS 16 had always been in effect, but are recognised in 2024/25 without restating prior year figures. Note 2 Accounting Standards That Have Been Issued But Have Not Yet Been Adopted The Code requires the Council to identify any accounting standards that have been issued but have yet to be adopted and could have a material impact on the accounts. At the balance sheet date, the following new standards and amendments to existing standards have been published but not yet adopted by The Code: IAS 21 The Effects of Changes in Foreign Exchange Rate (Lack of Exchangeability) IFRS17 Insurance Contracts The above amendments are not anticipated to have a material impact on the information provided in the financial statements. Note 3 Critical Judgements in Applying Accounting Policies In applying the accounting policies set out in Note 1, the Treasurer has had to make certain judgements about complex transactions or those involving uncertainty about future events. The critical judgements made in the Annual Accounts are: Assets held at current value are revalued on a five-year basis as set out in the accounting policy for Property, Plant and Equipment. Moray Council’s Asset Manager (Commercial Property), who undertakes valuations on behalf on the Board and is a qualified RICS valuer, asserts that the carrying amount does not materially differ from that which would be determined using current value. In between valuations, a review is conducted to ensure carrying value does not differ from current value. Note 4 Assumptions Made About the Future and Other Major Sources of Estimation Uncertainty The Annual Accounts contains estimated figures that are based on assumptions made by the Board about the future or that are otherwise uncertain. Estimates are made taking into account historical experience, current trends and other relevant factors. However, because balances cannot be determined with certainty, actual results could be materially different from the assumptions and estimates. The items in the Board's Balance Sheet at 31 March 2025 for which there is significant risk of material adjustment in the forthcoming financial year are as follows: Page 134
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34 Note 4 (continued) Item Uncertainties Effect if Actual Results Differ From Assumptions Property, Plant and Equipment (£0.627m) Assets are depreciated over useful lives that are dependent on assumptions about the level of repairs and maintenance that will be incurred in relation to individual buildings. The current economic climate makes it uncertain that the Council will be able to sustain its current spending on repairs and maintenance, bringing into doubt the useful lives assigned to assets Assets held at fair value are revalued on a five year rolling basis by a professionally qualified Royal Institution of Chartered Surveyors (RICS) valuer, Additional valuations are carried out on an ad hoc basis outwith the rolling programme arrangements where it is deemed necessary. The valuer also assess assets not formally revalued for material movements and indexation is applied where applicable. If the useful life of assets is reduced, depreciation increases and the carrying amount of the asset falls. It is estimated that the annual depreciation charge for buildings would increase by £0.004m for every year that useful lives had to be reduced. The estimated effect of a 1% change in the rate used for valuations would be a change up or down of £0.006m. Pension Liability (£0.176m) Estimation of the net liability to pay pensions depends on a number of complex judgements relating to the discount rate used, the rate at which salaries are projected to increase, changes in retirement ages, mortality rates and expected returns on pension fund assets. The effects on the net pension liability of changes in individual assumptions can be measured and are detailed in Note 24. Page 135
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35 Note 5 Material Items of Income and Expenditure Where material items of income and expenditure are not disclosed on the face of the Comprehensive Income and Expenditure Statement, the Code requires that the nature and amount of these items are disclosed in a note to the accounts. The following items are regarded as material: 2023/24 2024/25 Nature £000 £000 Grant income from the Scottish Government 53 376 Barclay Implementation Funding (included in requisitions) 268 268 Grant income from the Scottish Government was received to provide for the introduction of the Electoral Integrity Programme (EIP) from May 2023 across the UK. The EIP falls under the new Elections Act 2022 which contains measures such as introducing the requirement to show ID at polling stations, improving the accessibility of elections to make it easier for people with disabilities to vote, and bringing in changes to postal and proxy voting. Unspent funding in 2024/25 will be put to the earmarked reserve and used in 2025/26. The Barclay Implementation Funding was paid to the three local authorities, Aberdeen City Council, Aberdeenshire Council, and Moray Council and requisitioned in full by the Board, to implement the recommendations from the Barclay review of Non Domestic Rates. Unspent Barclay Funding in 2024/25 will be put to the earmarked reserve and used in future years. Note 6 Events After The Reporting Period The unaudited Annual Accounts were issued on 27 June 2025. Events taking place after this date are not reflected in the financial statements or notes. Where events taking place before this date provided information about conditions existing at 31 March 2025, the figures in the financial statements and notes have been adjusted in all material respects to reflect the impact of this information. Page 136
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36 Note 7 Expenditure and Funding Analysis and Adjustments between Accounting Basis and Funding Basis under Regulations The Expenditure and Funding Analysis shows how annual expenditure is used and funded from resources (requisitions and government grants) by the Board in comparison with those resources consumed by the Board in accordance with generally accepted accounting practices. It also shows how this expenditure is allocated for decision making. Income and Expenditure accounted for under generally accepted accounting practices is presented more fully in the Comprehensive Income and Expenditure Statement. Net Expenditure chargeable to General Fund £000 Adjustments between Funding and Accounting Basis £000 Adjustments to usable reserves permitted by accounting standards Net Expenditure in the Comprehensive Income and Expenditure Statement £000 Net Expenditure chargeable to General Fund £000 Adjustments between Funding and Accounting Basis £000 Adjustments to usable reserves permitted by accounting standards Net Expenditure in the Comprehensive Income and Expenditure Statement £000 4,612 (127) 5 4,490 Rating and CT valuation & Electoral Registration 4,264 313 5 4,582 4,612 (127) 5 4,490 Net Cost of Services 4,264 313 5 4,582 (4,663) (6) - (4,669) Other Income and Expenditure (4,697) (105) - (4,802) (51) (133) 5 (179) (Surplus) or Deficit (433) 208 5 (220) (696) Opening Balance (747) (51) (Surplus) or Deficit (433) (747) Closing Balance (1,180) 31 March 2025 31 March 2024 RESTATED Page 137
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37 Note 7 (continued) Adjustments between the Funding and Accounting Basis 2024/25 Adjustment for Capital Purposes £000 Net Change for pensions adjustments £000 Other Differences £000 Total £000 Rating and CT valuation & Electoral Registration 141 152 20 313 Net Cost of Services 141 152 20 313 Other Income and Expenditure - 2 (107) (105) Difference between the General Fund Deficit and the Comprehensive Income and Expenditure Statement Deficit 141 154 (87) 208 2023/24 Adjustment for Capital Purposes £000 Net Change for pensions adjustments £000 Other Differences £000 Total £000 Rating and CT valuation & Electoral Registration (5) (73) (49) (127) Net Cost of Services (5) (73) (49) (127) Other Income and Expenditure - (6) - (6) Difference between the General Fund Deficit and the Comprehensive Income and Expenditure Statement Deficit (5) (79) (49) (133) Page 138
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38 Note 7 (continued) a) Adjustments for Capital Purposes This column adds in depreciation and impairment and revaluation gains and losses in the services line. b) Net Change for the Pensions Adjustments This column reflects the removal of pension contributions and the addition of IAS 19 Employee Benefits pension related income and expenditure. For the service this reflects the removal of the employer pension contributions made by the Board as allowed by statute and the replacement with current service costs and past service costs. c) Other Differences This column adjusts for differences between the amounts debited/credited to the Comprehensive Income and Expenditure Statement and amounts payable/receivable recognised under statute. For the service this reconciles the impact of accruals for accumulating compensated absences e.g. holiday pay as required by IAS19 Employee Benefits, to the salaries actually payable in the financial year in accordance with statute. Note 8 Expenditure and Income Analysed by Nature The Board’s expenditure and income is analysed as follows: Expenditure and Income 2023/24 2024/25 £000 £000 Rating, Council Tax Valuation and Electoral Registration Rating, Council Tax Valuation and Electoral Registration Employee benefit expenses 3,370 3,702 Other service expenses 1,118 1,061 Support service recharges 69 71 Depreciation, amortisation and impairment (1) 146 Interest payments - 18 Total Expenditure 4,556 4,998 Requisitions (4,588) (4,725) Government grants and other service income (66) (398) Interest and investment income (76) (97) Pensions Net Interest (6) 2 Total Income (4,735) (5,218) (Surplus)/Deficit on the provision of services (179) (220) Page 139
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39 Note 9 Earmarked Portions of the General Fund Portions of the General Fund are earmarked for specific purposes as described below. Underspends or overspends against budget for these activities are transferred in or out of the earmarked funds at the year end. General Services NDR Reform Electoral Integrity Programme Total £000 £000 £000 £000 Balance at 31 March 2024 238 509 - 747 Increase/(Decrease) 2024/25 (1) 58 376 433 Balance at 31 March 2025 237 567 376 1,180 NDR Reform The purpose of this fund is to ring-fence funding received from constituent authorities to implement reforms from the Barclay Report which followed a review into the non-domestic rates system in Scotland. The Non-Domestic Rates (Scotland) Bill took effect from 1 April 2020. Note 10 Financing and Investment Income and Expenditure 2023/24 2024/25 £000 £000 Pensions interest cost/(gain) and expected return on pensions assets (6) 2 Interest receivable and similar income (76) (97) Interest on Right of Use Asset lease liability - 18 (82) (77) Note 11 Property, Plant and Equipment Recognition All expenditure on the acquisition, creation, enhancement or replacement of an asset or part of an asset is capitalised, providing the asset yields benefit for more than one year to the Board and the services it provides and the cost can be reliably measured. Where a component is replaced or restored, the carrying amount of the old component is derecognised and the new component reflected in the carrying amount. Measurement New assets are measured at cost. Cost includes the original purchase of the asset and the costs attributable to bringing the assets to its working condition for its intended use. Page 140
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40 Note 11 (continued) Assets are measured at current value which is Existing Use Value for Land and Buildings and Depreciated Historic Cost for Equipment and Furniture which is used as a proxy for current value. Derecognition The carrying amount of an item of property, plant and equipment is derecognised when an asset is disposed of or when no future economic benefits or service potential are expected from its use. The value of the asset in the Balance Sheet and any receipt is written to the Comprehensive Income and Expenditure Statement as part of the gain or loss on disposal. The gain or loss on disposal is not a charge against Requisitions, as the cost of non current assets is fully provided for under separate arrangements for Capital Financing. The carrying amount of the non current asset disposal is transferred to the Capital Adjustment Account and the disposal proceeds transferred to the Capital Fund and reported in the Movement in Reserves Statement. Depreciation Depreciation is provided for on all items of property, plant and equipment with a finite useful life by the systematic allocation of their depreciable amount over their useful lives. An exception is made for land where it can be demonstrated that it has an unlimited useful life. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. Depreciation is calculated using the straight-line method. In the year of acquisition, a full year’s depreciation is provided for on all assets. In the year of disposal, no depreciation is charged. The following useful lives and depreciation rates have been used in the calculation of depreciation:- Other Land & Buildings - 35-60 years, land is not depreciated Vehicles, Plant, Furniture & Equipment – 5-10 years Impairment Assets are assessed at each year end as to whether there is any indication that an asset may be impaired. Where indications exist and any possible differences are estimated to be material, the recoverable amount of the asset is estimated and, where this is less than the carrying amount of the asset, an impairment loss is recognised. Where an impairment loss is reversed subsequently, the reversal is credited to the Comprehensive Income and Expenditure Statement, up to the amount of the original loss, adjusted for depreciation that would have been charged if the loss had not been recognised. Revaluations The Board carries out a rolling programme that ensures that all Property, Plant and Equipment required to be measured at current or fair value is revalued at least every five years, with an annual assessment to ensure the carrying value within the financial statements is materially accurate. The last revaluation of Land and Buildings was done with effect from 31 March Page 141
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41 Note 11 (continued) 2024 and the next revaluation is scheduled during 2028/29. All valuations were carried out by Moray Council’s Asset Manager (Commercial Property) in accordance with the methodologies and bases for estimation set out in the professional standards of the Royal Institution of Chartered Surveyors. Valuations of vehicles, plant, furniture and equipment are based on depreciated historic cost as a proxy for current values. 2024/25 Other Land and Buildings Vehicles, Plant, Furniture & Equipment Right of Use Assets Total Property, Plant and Equipment £000 £000 £000 £000 Cost or valuation At 1 April 2024 627 355 - 982 Additions - - - - Recognition of Right of Use Asset - - 338 338 Revaluation decreases recognised in the Revaluation Reserve - - - - Revaluation increases recognised in the Provision of Services - - - - At 31 March 2025 627 355 338 1,320 Accumulated Depreciation and Impairment At 1 April 2024 - 302 - 302 Depreciation charge 14 20 112 146 Depreciation written out to the Revaluation Reserve - - - - Depreciation written out to the Provision of Services - - - - at 31 March 2025 14 322 112 448 Net Book Value at 31 March 2024 627 53 - 680 at 31 March 2025 613 33 226 872 Page 142
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42 Note 11 (continued) 2023/24 Other Land and Buildings Vehicles, Plant, Furniture & Equipment Right of Use Assets Total Property, Plant and Equipment £000 £000 £000 £000 Cost or valuation At 1 April 2023 696 355 - 1,051 Additions - - - - Revaluation decreases recognised in the Revaluation Reserve (77) - - (77) Revaluation increases recognised in the Provision of Services 8 - - 8 At 31 March 2024 627 355 - 982 Accumulated Depreciation and Impairment At 1 April 2023 72 283 - 355 Depreciation charge 14 19 - 33 Depreciation written out to the Revaluation Reserve (60) - - (60) Depreciation written out to the Provision of Services (26) - - (26) at 31 March 2024 - 302 - 302 Net Book Value at 31 March 2023 624 72 - 696 at 31 March 2024 627 53 - 680 Note 12 Short Term Debtors 2023/24 2024/25 £000 £000 Prepayments 38 70 38 70 Note 13 Cash and Cash Equivalents 2023/24 2024/25 £000 £000 Temporary Investment in the Moray Council Loans Fund 1,463 1,709 Page 143
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43 Note 14 Short Term Creditors 2023/24 2024/25 £000 £000 Trade Payables 164 156 Other Payables ^ 653 526 Right of Use Asset - 113 Total 817 795 ^ Other Payables Central Government Bodies 68 74 Short Term Employee Absences 82 112 Other Local Authorities 503 340 Other Payables 653 526 Note 15 Other Long Term Liabilities 2023/24 2024/25 £000 £000 Right of Use Asset - (118) Total - (118) Note 16 Financial Instruments Classifications A financial instrument is a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another. Non-exchange transactions, such as those relating to taxes and government grants, do not give rise to financial instruments. Financial Liabilities A financial liability is an obligation to transfer economic benefits controlled by the Board and can be represented by a contractual obligation to deliver cash or financial assets or an obligation to exchange financial assets and liabilities with another entity that is potentially unfavourable to the Board. The majority of the Board's financial liabilities held during the year are measured at amortised cost and comprised: Creditors for requisitions due to be returned to constituent authorities Trade payables for goods and services received Financial Assets A financial asset is a right to future economic benefits controlled by the Board that is represented by cash, equity instruments or a contractual right to receive cash or other financial assets or a right to exchange financial assets and liabilities with another entity that is potentially favourable to the Board. The financial assets held by the Board during the year are accounted for under the following classification: Page 144
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44 Amortised cost (where cash flows are solely payments of principal and interest and the business model is to collect those cash flows) comprising: temporary investment in the Moray Council Loans Fund trade receivables for goods and services provided Financial assets held at amortised cost are shown net of a loss allowance reflecting the statistical likelihood that the borrower or debtor will be unable to meet their contractual commitments to the Board. Fair Value For all categories of financial assets and liabilities held by the Board, there was no difference between the carrying value and the fair value at the Balance Sheet date and all are in Level 2 of the fair value hierarchy. Financial Instruments – Balances The financial liabilities disclosed in the Balance Sheet are analysed across the following categories: 2023/24 2024/25 £000 £000 Short Term Creditors - Amortised Cost 164 269 Trade Payables 164 269 Other Payables 653 526 Total 817 795 Tax Creditors included above (124) (117) Requisition Creditors included above (447) (297) Short Term Employee Absences included above (82) (112) Total Other Payables (653) (526) Total Financial Liabilities Current Creditors 164 269 The financial assets disclosed in the Balance Sheet are analysed across the following categories: 2023/24 2024/25 £000 £000 Temporary Investment in the Moray Council Loans Fund 1,463 1,709 Note 17 Usable Reserves General Fund The creation of a General Fund was introduced to provide the Assessor with some flexibility to investigate any spend-to-save projects which would require one-off expenditure in order to deliver future budget savings. The reserve also acts as a contingency for any unexpected costs in future years. Details of the earmarked reserve can be found in Note 9. Page 145
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45 2023/24 2024/25 Usable Reserves £000 £000 General Fund 238 237 Earmarked NDR Reform Reserve 509 567 Earmarked Electoral Integrity Programme - 376 747 1,180 Note 18 Unusable Reserves 2023/24 2024/25 £000 £000 Revaluation Reserve 220 215 Capital Adjustment Account 459 426 Pension Reserve (164) (176) Employee Statutory Adjustment Account (62) (83) 453 382 Revaluation Reserve The Revaluation Reserve contains gains made by the Board arising from increases in the value of its Property, Plant and Equipment. The reserve contains only revaluation gains accumulated since 1 April 2007, the date that the Reserve was created. Accumulated gains arising before that date are consolidated into the balance on the Capital Adjustment Account. 2023/24 2024/25 £000 £000 Balance at 1 April 242 220 Revaluations (17) - Difference between fair value depreciation and historical cost depreciation (5) (5) Balance at 31 March 220 215 Page 146
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46 Note 18 (continued) Employee Statutory Adjustment Account The Employee Statutory Adjustment Account absorbs the differences that would otherwise arise on the General Fund Balance from accruing for compensated absences earned but not taken in the year, e.g. annual leave entitlement carried forward at 31 March. Statutory arrangements require that the impact on the General Fund Balance is neutralised by transfers to or from the Account. 2023/24 2024/25 £000 £000 Balance at 1 April (110) (62) Settlement or cancellation of accrual made at the end of the preceding year 110 - Amounts accrued at the end of the current year (62) (21) Balance at 31 March (62) (83) Capital Adjustment Account The Capital Adjustment Account absorbs the timing differences arising from the different arrangements for accounting for the consumption of non-current assets and for financing the acquisition, construction or enhancement of those assets under statutory provisions. The Account also contains revaluation gains accumulated on Property, Plant and Equipment before 1 April 2007, the date that the Revaluation Reserve was created to hold such gains. 2023/24 2024/25 £000 £000 Balance at 1 April 453 459 Reversal of items relating to capital expenditure debited or credited to the Comprehensive Income and Expenditure Statement Charges for depreciation and impairment of non- current assets 6 (29) Adjustment for depreciation of Right of Use asset - (112) Adjustment for Principal Repayment of the IFRS16 Lease Liability - 108 Balance 31 March 459 426 Page 147
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47 Note 18 (continued) Pensions Reserve The Pensions Reserve absorbs the timing differences arising from the different arrangements for accounting for post-employment benefits and for funding benefits in accordance with statutory provisions. The Board accounts for post-employment benefits in the Comprehensive Income and Expenditure Statement as the benefits are earned by employees accruing years of service, updating the liabilities recognised to reflect inflation, changing assumptions and investment returns on any resources set aside to meet the costs. However, statutory arrangements require benefits earned to be financed as the Board makes employer's contributions to pension funds or eventually pays any pensions for which it is directly responsible. The debit balance on the Pensions Reserve therefore shows a shortfall in the benefits earned by past and current employees and the resources the Board has set aside to meet them. The statutory arrangements will ensure that funding will have been set aside by the time the benefits come to be paid. Balance at 1 April (130) (164) Remeasurements of the net defined benefit (liability)/asset (113) 142 Reversal of items relating to retirement benefits debited or credited to the Surplus or Deficit on the Provision of Services in the Comprehensive Income and Expenditure Statement (458) (462) Employer's pensions contributions and direct payments to pensioners payable in the year 537 308 Balance at 31 March (164) (176) Note 19 External Audit Costs The agreed external audit fee for 2024/25 was £0.011m for work undertaken in accordance with the Code of Audit Practice (2023/24 £0.013m). Page 148
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48 Note 20 Cashflow – Analysis of Net Deficit on the provision of services for non cash movements 2023/24 2024/25 £000 £000 Depreciation/Impairment charges 1 (146) Pension Liability 79 (154) Increase/(Decrease) in Debtors (47) 32 Decrease in Revenue Creditors (112) 135 (79) (133) Note 21 Requisition and Grant Income The Board credited the following requisitions to the Comprehensive Income and Expenditure Statement. The requisitions are based on population. 2023/24 2024/25 £000 £000 Credited to Requisitions and Non Specific Grant Income: Requisition from Aberdeen City Council (1,952) (1,947) Requisition from Aberdeenshire Council (2,255) (2,249) Requisition from Moray Council (827) (826) Total (5,034) (5,022) Returned to constituent authorities: Aberdeen City Council 173 114 Aberdeenshire Council 200 134 Moray Council 74 49 Total 447 297 Total Requisition and Grant Income (4,587) (4,725) Page 149
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49 Note 22 Leases Board as Lessee The Board has adopted IFRS16 Leases from 1 April 2024. The Board pays Aberdeenshire Council for the rental of their offices within Woodhill House, previously under the terms of an operating lease. The amount paid in 2024/25 was £0.0125m (£0.125m in 2023/24). Under IFRS16 where a lease contains a “right of use asset” they are now recognised on the balance sheet as a right of use assets with corresponding lease liabilities. The lease rentals comprise principal and interest elements. The principal element is applied to reduce the outstanding obligation and the interest element is charged to revenue on a straight line basis over the terms of the lease. Note 23 Related Parties The Board is required to disclose material transactions with related parties - bodies or individuals that have the potential to control or influence the Board or to be controlled or influenced by the Board. Disclosure of these transactions allows readers to assess the extent to which the Board might have been constrained in its ability to operate independently or might have secured the ability to limit another party's ability to bargain freely with the Board. Constituent Authorities The constituent authorities have the potential to control or influence the Board as they provide the majority of the Board's funding. Details are shown in Note 21. The Board also made payments to the constituent authorities in the normal course of business. The amounts are detailed below. 2023/24 2024/25 £000 £000 Aberdeen City Council 61 65 Aberdeenshire Council 192 342 Moray Council 115 124 The amounts owed to the constituent authorities for requisitions and normal business activities at 31 March were: Aberdeen City Council 173 114 Aberdeenshire Council 207 138 Moray Council 160 139 Members Members of the Board have direct control over the Board's financial and operating policies. The total of members' allowances paid is shown in the Remuneration Report. There were no other material transactions with members other than the allowances shown in the Remuneration Report. Page 150
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50 Note 24 Defined Benefit Pension Scheme Participation in Pension Scheme As part of the terms and conditions of employment of its officers, the Board makes contributions towards the cost of post-employment benefits. Although these benefits will not actually be payable until the employees retire, the Board has a commitment to make the payments for those benefits and must disclose them at the time that employees earn their future entitlement. The Board participates in the North East Scotland Pension Fund (NESPF), a Local Government Pension Scheme, which is administered by Aberdeen City Council. Up until 31 March 2015 pension benefits accrued are based on final salary. This means that pension benefits are based on the final year's pay and the number of years that person has been a member of the scheme. Benefits earned from 1 April 2015 are based on career average salary. The Scheme is a funded defined benefit scheme, meaning that the Board and employees pay contributions into a fund, calculated at a level intended to balance the pension liabilities with investment assets over a period of time. There are also arrangements in place for the award of discretionary post-retirement benefits upon early retirement. This is an unfunded defined benefit arrangement under which liabilities are recognised when awards are made. However, there are no investment assets built up to meet these pension liabilities and cash has to be generated to meet actual pension payments as they eventually fall due. Page 151
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51 Note 24 (continued) The North East Scotland Pension Fund is operated under the regulatory framework for the Local Government Pension Scheme and the governance of the scheme is the responsibility of the Pensions Committee. The Committee is comprised of nine elected members of Aberdeen City Council. Policy is determined in accordance with the Pensions Fund Regulations. Following the introduction of The Local Government Pension Scheme (Governance) (Scotland) Regulations 2015, the Pension Fund took the opportunity to review its governance arrangements. To comply with these regulations, the Pension Fund implemented a Pension Board with representation from Unions and Employers from the 1 April 2015. With the introduction of the Pension Board, the Joint Investment Advisory Committee was disbanded. The principal risks to the scheme are the longevity assumptions, statutory changes to the scheme, changes to inflation, bond yields and the performance of the investments held by the scheme. These are mitigated to a certain extent by the statutory requirements to charge the General Fund the amounts required by statute as described in the accounting policy note. Transactions relating to Post-employment Benefits In relation to the North East Scotland Pension Fund, the Board recognises the cost of retirement benefits in the reported cost of services when they are earned by employees, rather than when the benefits are eventually paid as pensions. However, the charge required to be made against requisitions is based on the cash payable in the year, so the real cost of post- employment/retirement benefits is reversed out in the Movement in Reserves Statement. The following transactions have been made in the Comprehensive Income and Expenditure Statement and Movement in Reserves Statement during the year: Page 152
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52 Note 24 (continued) COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT 2023/24 2024/25 £000 £000 Cost of Services: Past Service Cost 0 0 Current Service Cost and administration expenses 464 460 Financing and Investment Income and Expenditure: Net Interest Expense (6) 2 Total Post Employment Benefit Charged to the Surplus or Deficit on the Provision of Services 458 462 Other Post Employment Benefit Charged to the Comprehensive Income and Expenditure Statement. Remeasurement of the Net Defined Benefit Liability comprising: Expected return on pension fund assets (412) 375 Actuarial (gain)/loss on financial assumptions 665 (3,625) Effect of Asset Ceiling (140) 3,108 Total Post Employment Benefit Charged to the Comprehensive Income and Expenditure Statement. 113 (142) MOVEMENT IN RESERVES STATEMENT Reversal of net charges made to the Surplus or Deficit for the Provision of Services for post employment benefits in accordance with the Code 458 462 Actual amount charged against requisitions for pensions in the year 537 308 Page 153
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53 Note 24 (continued) Pensions Assets and Liabilities Recognised in the Balance Sheet The change in the net pensions asset is analysed into the following components: Current Service Cost: The increase in liabilities as a result of years of service earned this year. Net Interest on the Net Defined Benefit Liability: The change during the year in the net defined benefit liability that arises from the passage of time – charged to the Financing and Investment Income and Expenditure line of the Comprehensive Income and Expenditure Statement. It is the difference between the interest (increase) in the value of the liabilities as the benefits are one year closer to being paid and the interest on pension assets based on assets held at the start of the year. The calculation is based on the discount rate in force at the beginning of the year. Remeasurements: This comprises the Return on Plan Assets (excluding amounts included in the Net Interest on the Net Defined Benefit Liability) and Actuarial Gains and Losses which are changes in the net pensions liability that arise because events have not coincided with assumptions made at the last actuarial valuation or because the actuaries have updated their assumptions – charged to the Pensions Reserve as Other Comprehensive Income and Expenditure. Contributions Paid to the Pension Fund: Cash paid as employer’s contributions to the pension fund in settlement of liabilities; not accounted for as an expense. The amount included in the Balance Sheet arising from the Board’s obligation in respect of its defined benefit plan is as follows: 31 March 2024 31 March 2025 £000 £000 Present value of the funded defined benefit obligation (29,337) (26,550) Present value of the unfunded defined benefit obligation (164) (176) Total present value of the defined benefit obligation (29,501) (26,726) Fair value of plan assets 40,081 40,928 IFRIC 14 Asset Ceiling Adjustment (10,744) (14,378) Net liability arising from defined benefit obligation (164) (176) The Board has applied the asset ceiling test as prescribed by IFRIC 14 which limits the measurement of the defined benefit asset to the ‘present value of economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan.’ The pension asset can be recognised as the lower of the net pension asset or the present value of any economic benefits available. The Board’s actuaries undertook this assessment and the asset value in the accounts has reduced as the present value of the benefits available were lower than the pension asset. The net liability arising from the unfunded defined benefit obligation remains as there is no right to offset this. Page 154
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54 Note 24 (continued) The reconciliation of the Board’s share of the present value of the North East Scotland Pension Fund’s defined benefit liability is as follows: 31 March 2024 31 March 2025 £000 £000 1 April (28,165) (29,501) Current Service Cost (453) (460) Interest on pension liabilities (1,353) (1,421) Remeasurements: Experience loss (1,016) 391 Gain on financial assumptions 0 3,582 Gain on demographic assumptions 351 (348) Contributions by scheme participants (174) (154) Benefits Paid 1,309 1,185 Past Service Cost 0 0 31 March (29,501) (26,726) The reconciliation of the movements in the Board’s share of the fair value of the North East Pension Fund’s assets is as follows: 31 March 2024 31 March 2025 £000 £000 1 April 38,411 40,081 Interest on plan assets 1,867 1,945 Remeasurements (assets) 412 (375) Administration expenses (11) 0 Employer Contributions 537 308 Contributions by scheme participants 174 154 Benefits Paid (1,309) (1,185) 31 March 40,081 40,928 Page 155
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55 Note 24 (continued) The Board’s share of the Pension Fund’s assets is: Fair Value of Plan Assets % Fair Value of Plan Assets % 2023/24 2024/25 £000 £000 Equity Securities: Consumer - - Manufacturing - - Energy and Utilities - - Financial Institutions - - Health and Care - - Information Technology - - Other 23,188.0 58% 22,535.4 55% Debt Securities: Corporate Bonds (investment) - - Corporate Bonds (non-investment) - - UK Government 2,236.0 6% 2,597.1 6% Other - 559.7 1% Private Equity: All - 2,884.9 7% Real Estate: UK Property 2,483.0 6% 2,750.8 7% Overseas Property - 165.1 1% Investment Funds and Unit Trusts: Equities - - Bonds - 4,400.4 11% Hedge Funds - - Commodities - - Infrastructure 621.0 1% 3,327.1 8% Other 10,468.0 26% - Derivatives: Inflation - - Interest Rate - - Foreign Exchange - - Other - 786.5 2% Cash and Cash Equivalents: All 1,085.0 3% 921.0 2% Total Assets 40,081.0 40,928.0 Page 156
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56 Note 24 (continued) Basis for Estimating Assets and Liabilities The most recent valuation was carried out as at 31 March 2024 and has been updated by Hymans Robertson LLP, independent actuaries to the North East Scotland Pension Fund, in order to assess the liabilities of the Fund as at 31 March 2025. Liabilities have been assessed on an actuarial basis using the projected unit credit method, an estimate of the pensions that will be payable in future years dependent on assumptions about mortality rates, salary levels etc. The principal assumptions used by the actuary have been: 31 March 2024 31 March 2025 Financial assumptions: Discount rate 4.90% 5.80% Rate of increase in salaries 4.20% 4.30% Rate of increase in pensions 2.80% 2.80% Rate of CPI inflation 2.70% 2.80% Mortality assumptions: Longevity at 65 for current pensioners: Men 20.7 20.9 Women 23.0 23.3 Longevity at 65 for future pensioners: Men 22.0 22.2 Women 24.8 25.1 Sensitivity Analysis The estimation of the defined benefit obligations is sensitive to the actuarial assumptions set out in the table above. The sensitivity analysis below has been determined based on reasonable possible changes of the assumptions occurring at the end of the reporting period and assumes for each change that the assumption analysed changes while all the other assumptions remain constant. The sensitivities regarding the principal assumptions used to measure the scheme obligations are set out below. Change in assumptions at 31 March 2025: Approximate % increase to Employer Approximate Monetary Amount (£000) 0.1% decrease in Real Discount Rate 2% 425 1 year increase in member life expectancy 4% 1,069 0.1% increase in the Salary Increase Rate 0% 50 0.1% increase in the Pension Increase Rate 1% 386 Page 157
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57 Note 24 (continued) Funding Strategy Statement (FSS) The FSS sets out how the administering authority balances the potentially conflicting aims of affordability of contributions, transparency of process, stability of employers’ contributions, and prudence in the funding basis. The Pension Committee’s long-term funding objective is to achieve and maintain assets equal to 100% of projected accrued liabilities, assessed on an ongoing basis. The current actuarial valuation of the Fund is effective as at 31 March 2023 and the results indicate that overall the assets represented 128% of projected accrued liabilities at the valuation date. Investments that would most closely match the pension liabilities would be gilts, predominantly index- linked, reflecting the nature of the Fund’s liabilities. However, the Fund invests in other assets, in the expectation that these will provide higher returns albeit without any guarantee that higher returns will be achieved over any particular year. The benefit of higher investment return is that, over the long term, a higher level of funding should achieve lower employer contribution rates. However the additional investment returns from growth assets come with a price: greater volatility relative to the liabilities thus introducing risk. There is a trade-off between the benefits of additional investment return from greater exposure to growth assets and the greater predictability from having greater exposure to liability matching assets. The asset proportions of the Fund at 31 March 2025, with March 2024 in brackets were: equity securities 55% (58%), debt securities 7% (6%), private equity 7% (0%), real estate 8% (6%), investment funds and unit trusts 19% (27%), derivatives 2% (0%) and cash/cash equivalents 2% (3%). This is based on the Board’s proportion of assets held as supplied by the actuary, rather than the proportions held by the fund as a whole. Impact on the Board’s Cash Flows While the Fund’s main objective is to ensure solvency of the NESPF they also aim to keep employers' contributions at as constant a rate as possible. Following the 2023 valuation the Pensions Committee has agreed a strategy with the scheme's actuary to achieve a funding level of 100% over an average surplus spread period of 15 years and have maintained an employer contribution rate requirement of 10.1% for local authorities across the scheme. During the valuation process employer rates are set for a period of three years with the next triennial valuation due as at 31 March 2026 to determine a funding level and set the rates for 2027/28 onwards. The projected employer contributions expected to be made to the Local Government Pension Scheme in the year to 31 March 2026 is £0.285m. The weighted average duration of the liabilities for scheme members at the 31 March 2023 valuation is 15 years. Page 158
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58 GLOSSARY OF TERMS EXPENDITURE Employee Benefit Expenses Includes direct and indirect employee expenses. Direct expenses include salaries and overtime, employer’s national insurance and superannuation contributions. Indirect employee expenses include relocation cost, interview expenses, training and staff advertising. Other Service Expenses Includes rent, rates, repairs and maintenance and premises-related expenditure at the area offices in Banff, Elgin and Woodhill House headquarters. all costs associated with the hire or use of transport, including staff travel allowances and public transport and the cost of purchasing equipment, furniture and materials used in the operation or administration of the service, including printing and stationery, canvass expenses and valuation appeal panel costs. Support Services This is a charge from Moray Council for services that support the Board in its provision of services to the public. These include Legal Services, Financial Services, Internal Audit and Human Resources. Depreciation Depreciation is a charge to the Comprehensive Income and Expenditure Statement, reflecting the decline in value of assets as a result of their usage or ageing. Impairment Impairment is a charge to the Comprehensive Income and Expenditure Statement, reflecting that the recoverable amount of an asset is less than its carrying amount. INCOME Requisitions Funding received from the constituent authorities for which the Board provides a service. Page 159
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59 GLOSSARY OF TERMS (continued) OTHER TERMS CIPFA The Chartered Institute of Public Finance and Accountancy LASAAC Local Authority (Scotland) Accounts Advisory Committee IFRS International Financial Reporting Standard The Code The Code of Practice on Local Authority Accounting in the United Kingdom SeRCOP Service Reporting Code of Practice Fair Value IFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. an exit price). When measuring fair value, an entity uses the assumptions that market participants would use when pricing the asset or liability under current market conditions, including assumptions about risk. Current Value For operational land and buildings, current value is the amount that would be paid for the asset in its existing use. Economic Cost The total cost of performing an activity or following a decision or course of action. Page 160
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REPORT TO: GRAMPIAN VALUATION JOINT BOARD ON 27 JUNE 2025 SUBJECT: REVENUE BUDGET MONITORING STATEMENT FOR THE PERIOD 1 APRIL TO 31 MAY 2025 BY: TREASURER TO THE BOARD 1. REASON FOR REPORT 1.1 To consider the Revenue Budget Monitoring Statement for the period 1 April to 31 May 2025. 2 RECOMMENDATION 2.1 It is recommended that the Board considers the Revenue Monitoring Statement to 31 May 2025. 3. CURRENT POSITION 3.1 At its meeting on 31 January 2025, the Board agreed the Revenue Budget for 2025/26 (paragraph 8 of the Minute refers) be set at £5,699,000 and approved the requisitions to constituent authorities of £5,399,000, with £300,000 being funded from the earmarked Electoral Reform reserve. 3.2 APPENDIX 1 shows the monitoring position to 31 May 2025 against the budget. It gives details of the 2025/26 Revenue Budget, actual expenditure to date and the variance of expenditure against budget to date. 3.3 Total net expenditure at 31 May 2025 is £871,000 which is an underspend against budget to date of £110,000. 3.4 There are currently 8 vacancies and recruitment is actively being carried out. Year to Date Variances 3.5 Employee costs are currently underspent by £52,000 compared to the budget. This variance is primarily due to unfilled vacancies within the staffing establishment, as previously noted in paragraph 3.4. Item 6. Page 161
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3.6 There is a £19,000 underspend in property costs of £19,000, mainly attributed to Woodhill House. This includes an underspend of £9,000 on Non Domestic Rates and a further £9,000 due to the timing of the service charge budget. 3.7 A small overspend of £2,000 to date has been recorded for Transport Costs. 3.8 Budgets within Supplies and Services are underspent in total by £41,000 to date, with the main variances in Postages and ICT Maintenance; with a significant underspend of £101,000 and an overspend of £52,000 respectively. Following discussions with the Assessor it has been confirned that these variances are largely due to the timing of expenditure. A review of the budget phasing will be undertaken to ensure that future reporting more accurately reflects the timing of actual costs. 3.9 Support charges are processed at 31 March as part of the year end closedown. 3.10 There are no other significant variances to report at this early stage in the year Earmarked Reserves 3.11 In 2024/25, government funding was allocated to Valuation Joint Boards to support the introduction of the Electoral Integrity Programme (EIP), in line with the requirements of the Elections Act 2022. Key changes introduced under the programme include mandatory voter ID at polling stations, enhanced accessibility for voters with disabilities, and reforms to postal and proxy voting processes. A one-off increase in postage costs of £300,000 is expected in 2025/26, with draft valuation notices to be sent out in November and March. The expenditure will be covered by the earmarked reserve created at the end of the 2024/25 financial year using unspent grant funds. 4. CONCLUSION 4.1 The total net expenditure as at 31 May 2025 is £871,000 giving an underspend against budget to date of £110,000. 4.2 The Assessor and his Senior Management Team closely monitor and control budgets in order to keep within agreed levels and generate savings wherever possible throughout the year. 4.3 A detailed revenue monitoring and estimated outturn statement will be reported at the Board meeting in October 2025. Author of Report: Aaron Cory, Trainee Accountant Background papers: Held within Accountancy Section, Moray Council Date: 10 June 2025 Page 162
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APPENDIX 1 GRAMPIAN VALUATION JOINT BOARD REVENUE MONITORING STATEMENT FOR PERIOD 1 APRIL TO 31 MAY 2025 Line 2025-26 2025-26 Actual Variance No. Total Budget Budget to Date 31-May-25 31-May-25 £'000 £'000 £'000 £'000 Employee Costs 1 Salaries 3,308 551 495 56 2 National Insurance 353 59 65 (6) 3 Superannuation 331 55 50 5 4 Additional Pensions 26 4 2 2 5 Other Employee Costs 7 1 5 (4) 6 Training 34 - 1 (1) Total Employee Costs 4,059 670 618 52 Property Costs 7 Accommodation Charges 350 159 143 16 8 Repairs and Maintenance 20 1 - 1 9 Energy Costs 16 3 1 2 10 Cleaning 5 1 1 - Total Property Costs 391 164 145 19 Transport Costs 11 Staff Travel and Subsistence 50 8 10 (2) Total Transport Costs 50 8 10 (2) Page 163
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Supplies & Services 12 Equipment, Furniture & Materials 10 - - - 13 PPE 1 - - - 14 Reference Books 16 3 9 (6) 15 Printing & Stationery 10 - 4 (4) 16 Postages & ER Printing 781 130 29 101 17 Telephones 2 - 4 (4) 18 Advertising 1 - - - 19 IT Maintenance & Support 254 - 52 (52) 20 Valuation Appeals 30 - - - 21 Members' Allowances 4 - - - 22 Fees, Charges & Subs 9 - - - 23 Specialist Services 30 5 - 5 24 Conference Fees & Subsistence 3 - - - 25 Other Supplies & Services 4 1 - 1 Total Supplies & Services 1,155 139 98 41 Support Services 25 Lead Authority Charge 65 - - - Total Support Services 65 - - - Gross Expenditure 5,720 981 871 110 Income 26 Sales and Other Income (17) - - - 27 Interest on Revenue balances (4) - - - 28 Government Grant Income - - - - Total Income (21) - - - Page 164
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29 Net Expenditure 5,699 981 871 110 Funded from Reserves 30 NDR Reform - - - - 31 Electoral Reform (300) - - - Total Funded from Reserves (300) - - - 32 Requisitions (5,399) (909) (909) - 33 (Surplus)/Deficit for Year - 72 (38) 110 Page 165
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REPORT TO: Grampian Valuation Joint Board on 27 June 2025 SUBJECT: Risk Management BY: Assessor & ERO 1. Reason for Report 1.1 To report to the Board on risk management. 2. Recommendation 2.1 The Board note the risk register and the plans for future reviews. 3. Background 3.1 The Board’s Code of Corporate Governance requires the identification and prioritisation of risks to the organisation’s aims and objectives; the evaluation of the risks being realised and the resultant impact and finally the management of risks. 3.2 The Risk Register is subject to ongoing review with reports submitted to the Board on an annual basis. 3.3 Apart from ongoing reviews by individual risk owners, the Management Team has an overall role in reviewing the register. 4. Current Position 4.1 The strategic risk register that is provided as an appendix was formally reviewed by the Management Team on 10 June 2025 and reflects the position as at that date. No new risks were identified at that meeting. 4.2 A summary of the risk status is provided in the table below. Risk Rating 2019 2020 2021 2022 2023 2024 2025 High 3 4 2 2 2 2 0 Moderate 3 3 2 1 0 1 2 Low 5 5 7 7 8 8 8 Tolerable 12 12 13 14 14 14 15 Obsolete 9 9 9 9 9 9 9 Total number of live risks 23 24 24 24 24 25 25 Item 7. Page 167
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4.3 “High” level risks 4.3.1 The number of “High” level risks has reduced to zero since the last report to the Board. 4.3.2 Risk 1g (Environmental controls for IT Server accommodation inadequate) has been reported to the Board previously and mitigation in terms of monitoring has continued. Due to the changes in working practices and the migration of IT services to Aberdeenshire Council no temperature alerts have been received for a number of years. The load on these servers is minimal and heat generation is low. As advised previously, the requirement for this equipment will disappear completely following the migration of our Oracle servers to Aberdeenshire Council infrastructure. Although Banff remains the Board’s disaster recovery site, the data replicated to these servers has been largely moved to the cloud or is currently being replicated to Aberdeenshire servers. Risk 1g now has a revised rating of “Tolerable”. 4.3.3 Risk 6a (Inadequate numbers of trained/skilled staff to fulfil statutory functions) has been reduced to a rating of “Moderate”, reflecting the recent successes in the recruitment of surveying personnel. Although we do not have a full complement within the valuation team, the likelihood of this risk occurring has reduced and the revised risk rating reflects this. 4.4 “Moderate” level risks 4.4.1 See 4.3.3 above. 4.5 “Tolerable” level risks 4.5.1 See 4.3.2 above. 4.6 “Low” level risks 4.6.1 There have been no changes to the number of risks with a “Low” rating. 5. Conclusion 5.1 The identification, evaluation, and management of risk are ongoing processes that remain a central focus for both the Management Team and the organisation as a whole. The evolving risk profile reflects the complex challenges commonly encountered by public sector bodies, as well as the organisation’s strategy to deal with those challenges. The risk register is a valuable tool, offering stakeholders a clear assessment of the organisation’s capacity to sustain operational effectiveness. 5.2 The risk owners and members of the Management Team actively review the risks and controls and seek to identify and assess additional risks that may impact the organisation. Future risk review meetings have been scheduled. Author of Report: Mark Adam, Assessor & ERO Page 168
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GRAMPIAN ASSESSOR ERO RISK REGISTER APPENDIX Risk Description Worst Case Outcome Scenario Likelihood of actual occurrence Impact if exposure occurs Gross Score Initial Risk Rating Current Controls Quality & Effectiveness of Controls Net Score Revised Risk Rating Risk Owner Action Proposed Review Date Review Cycle (score 1 - 5) (score 1- 5) (L x I) Good x 0.5 OK x 0.8 Poor x 1.5 Current Risks 1. SAFEGUARDING PEOPLE & PROPERTY 1a Workforce Health & Safety exposure in a varied, sometimes hazardous environment; lone working, seasonal climate, violence & aggression Staff injury, assault; low morale, stress; sickness absence; litigation and insurance claim; backlogs and overtime cost; bad publicity; criminal prosecution 4 3 12 MOD Risk Assessment Programme - Technical + Office + Field activities; Recognised reporting protocols; Issue of Personal Protective Equipment, where appropriate; External advice on control measures; Employee induction. Call in/out procedures documented. Lone working devices in use. Regular contact with staff working remotely and escalation to counselling services via Moray Council. good 6 TOL GMO Regular audit of PPE . Risk assessments to be reviewed. Lone working policy to be drafted. 01/12/2025 6 monthly 1b Fraudulent activity by employee (Valuation Roll, Council Tax and Electoral Registration) Adverse publicity; Elected Member concern; senior staff reprimand; systems replacement; internal inquiry uses valuable resource. Removal of IER Accreditation. 3 3 9 LOW Audit staff records; Staff training/awareness e.g. conflict of interest; Stringent checks on Valuation Roll and Valuation List amendments. ER postal vote number threshold check in place. ER duplicate name check procedure in place. Disclosure Scotland checks carried out on existing staff and new employees. Data Protection training forms part of mandatory training for all staff and is reviewed regularly.Register of interests for all staff maintained. good 4.5 TOL MJA Access to ER/VR/CT is based on operational requirements and reviewed as required. Review Disclosure status of existing staff 01/12/2025 6 monthly 1c Fraudulent activity by employee (Financial) Misappropriation of funds; adverse publicity; Elected Member concern; senior staff reprimand; systems replacement; internal inquiry uses valuable resource 2 2 4 TOL Financial procedures reviewed; Staff training/awareness; External check by Finance staff + internal and externalaudit reconciliations. Purchase card transaction logging and approval system good 2 TOL MJA LHS MJA & LHS to continue close liaison with Treasurer and Accountancy team. 01/09/2025 3 monthly 1f Elgin office accommodation may be unfit for current demands of service. Concern regarding DDA. Health & Safety of staff compromised; poor security; inadequate storage; failure to comply with legislation e.g. DDA; poor image, operational inefficiency; morale damage 4 2 8 LOW Service responsiveness to assessed risks. ok 6.4 TOL MJA Alternative options currently being considered as part of a wider review of estate requirements by Moray Council. Current method of file storage to be reviewed. 01/12/2025 6 monthly 1g Environmental controls for IT Server accommodation inadequate IT outages due to inadequate environmental controls 3 2 6 TOL Mechanical ventilation installed, remote monitoring and alerts. Very little data now held on these servers and therefore little load which causes heat. ok 4.8 TOL MJA Continue to monitor conditions. Server equipment in Banff will not be required once migration to Aberdeenshire IT is complete. 01/09/2025 3 monthly Risk Management - Appendix 1 Page 169
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GRAMPIAN ASSESSOR ERO RISK REGISTER APPENDIX Risk Description Worst Case Outcome Scenario Likelihood of actual occurrence Impact if exposure occurs Gross Score Initial Risk Rating Current Controls Quality & Effectiveness of Controls Net Score Revised Risk Rating Risk Owner Action Proposed Review Date Review Cycle (score 1 - 5) (score 1- 5) (L x I) Good x 0.5 OK x 0.8 Poor x 1.5 2. QUALITY, SECURITY, INTEGRITY & COMMUNICATION OF INFORMATION 2a Inadequate engagement with the Board on Governance matters in general and risk management in particular Adverse audit report; failure to achieve service improvements; No overall organisational recognition of strategic direction 2 3 6 TOL Financial and operational performance information reported to the Board at all meetings. The Board review the operational performance thresholds periodically. Risk analysis is presented to the Board annually. good 3 TOL MJA Monitor risk. 01/12/2025 Annually 2b The service is heavily reliant upon ICT systems; loss or serious interruption of data or service e.g. fire, hacking, virus, patching, employee misuse - intentional or accidental Loss of data and essential records; disclosure of confidential records; cost of recovering systems and data reinstatement; loss of data integrity; Elected Member concern; Partner councils' concern; adverse publicity. Increased issue of ransomware. 3 4 12 MOD Rigid protocols for data back-up; Disaster Recovery Server; Data share with councils; IT Systems managed or monitored by Aberdeenshire IT Team. good 6 TOL MJA Staff training and testing required to raise awareness and reduce risk from ransomware. SLA with Aberdeenshire Council for management of all GVJB IT systems in place. Only Oracle servers and SAN to be migrated. Migration of systems to hosted cloud being implemented/considered. 01/09/2025 3 monthly 2c Inadequate corporate policy documents Errors and omissions; avoidable accidents and loss; employee dispute and claims; adverse audit report; fraud; low morale; breach of legislation; inability to change or improve; failure to meet Corporate Governance obligations 4 2 8 LOW HR and governance policies review programme in place. IT policy documents reviewed to comply with PSN requirements. Records Management Plan approved by Keeper. MT to monitor policies and HR to progress review programme. ok 6.4 TOL MT Policy review programme to continue, to include Lone Working. Work on revised record management plan underway. 01/09/2025 3 monthly 2d Inadequate procedure documents Errors and omissions; avoidable accidents and loss; employee dispute and claims; adverse audit report; fraud; low morale; breach of legislation; inability to change or improve; failure to meet Corporate Governance obligations 4 2 8 LOW IT, CT and VR manuals and procedures constantly reviewed. ok 6.4 TOL MJA GMO JAB LHS Work practices under constant review. CT & VR Manuals reviewed and updated as required. 01/12/2025 6 monthly Risk Management - Appendix 1 Page 170
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GRAMPIAN ASSESSOR ERO RISK REGISTER APPENDIX Risk Description Worst Case Outcome Scenario Likelihood of actual occurrence Impact if exposure occurs Gross Score Initial Risk Rating Current Controls Quality & Effectiveness of Controls Net Score Revised Risk Rating Risk Owner Action Proposed Review Date Review Cycle (score 1 - 5) (score 1- 5) (L x I) Good x 0.5 OK x 0.8 Poor x 1.5 3.SPECIFIC BUSINESS RISKS 3a Referencing & Records Management of our Valuation Roll, Council Tax and Electoral Registration data may be inefficient Regular duplication of work; confusion in use of multiple references for same property 4 2 8 LOW Staff training & advice ok 6.4 TOL JAB File naming convention being reviewed as part of othe review of records management plan. Digitalisation of some property records has been undertaken. Migration of files to Sharepoint underway. 01/09/2025 3 monthly 4.SPECIFIC GOVERNANCE RISKS 4a Data protection There is an unauthorised release of information. 4 3 12 MOD Working with colleagues on SAA Governance Committee. FoI group formed at SAA. GDPR training forms part of Mandatory training for all staff. Privacy notices have been updated. DPO has been appointed. Suppliers contracts include data processing agreements. Data breach procedure and log in place. ok 9.6 LOW JAB Working with SAA Governance Committee and stakeholders on data agreements. 01/12/2025 6 monthly 5. BUSINESS PLANNING & MANAGEMENT 5d We may be required to carry out a Council Tax revaluation Inadequate staff resource - competencies and number - inability to recruit; media management; member agendas; quality or deadline slip in ongoing service; public resistance and volume of appeals; increased staff costs. 4 4 16 HIGH Records are not up to date other than in cases of properties sold with outstanding alterations or with no outstanding alterations. Discussions between SAA & SG will be required regarding funding. ok 12.8 MOD MT Regular reviews of current situation based on advice from SAA 01/09/2025 3 monthly 5e A strategic shift in the taxation ethos GVJB may cease to exist; function may be contracted, regionalised; staff redundancies; low morale, staff required to run down existing systems whilst preparing for replacement procedures; Errors, loss of data 3 4 12 MOD Largely a political issue outwith specific control of the organisation. The organisation is represented in the relevant devolved taxation bodies through the SAA and contributes to the overall SAA Project Plan. Non- domestic taxation position is now settled with NDR reforms implemented but see also Risk 5d. OK 9.6 LOW MJA Monitor situation which might be subject to policy changes. 01/09/2025 3 monthly 5f Inadequate funding Essential equipment and systems upgrade/replacement placed on hold; inability to recruit, retrain or develop staff; poor morale; service improvement opportunities lost; staff leakage 3 4 12 MOD Board can requisition at their required level. We currently have cross discipline working practices in place. Reserves available for unanticipated spend. good 6 TOL MJA Monitor performance closely for early detection of service degradation. Keep staff informed and involved, encourage innovation and flexible working. Monthly Monthly 5g Board fails to make adequate requistions 100% service failure due to lack of funds resulting in default on property and equipment rentals, insurances, software licencing and salaries. 3 4 12 MOD Budget scenarios presented to Board prior to budget setting meeting. Ongoing advice of Board Officers. ok 9.6 LOW MJA Board Officers to liaise with constituent authorities to seek to ensure that Board requisitions are made timeously. 01/09/2025 3 monthly 5h Inadequate business continuity planning Inability to maintain or restore essential business functions within required timescale. Failure to meet statutory deadline; audit censure, intervention; dispute with partner councils; Member concern, adverse publicity; loss of records; financial penalties; waste of time and essential resource through inability to control crisis situation 3 5 15 MOD Business Continuity/Contingencies Plan approved and implemented. Breach notification procedure in place. good 7.5 LOW MJA Contingencies plan under review as part of migration to Aberdeenshire IT. 01/09/2025 3 monthly Risk Management - Appendix 1 Page 171
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GRAMPIAN ASSESSOR ERO RISK REGISTER APPENDIX Risk Description Worst Case Outcome Scenario Likelihood of actual occurrence Impact if exposure occurs Gross Score Initial Risk Rating Current Controls Quality & Effectiveness of Controls Net Score Revised Risk Rating Risk Owner Action Proposed Review Date Review Cycle (score 1 - 5) (score 1- 5) (L x I) Good x 0.5 OK x 0.8 Poor x 1.5 5i Introduction of Registration policy changes Degradation of Register completeness and accuracy. Failure of election processes. 5 3 15 MOD Risk and issues register in place. Active voter engagement strategy in place. Active monitoring of legislative progress. SAA ERC, Scottish Government and MHCLG working with EMS supplier to specify and test required system amendments good 7.5 LOW LHS Risk and issues register reviewed by Senior Admin & Management Team. Continue to seek to strengthen degree of engagement with Cabinet Office/MHCLG, IER DS and Scottish Government. Monthly Monthly 6. SERVICE, PROCESS & DELIVERY 6a Inadequate numbers of trained / skilled staff to fulfil statutory functions Failure to meet statutory deadline; errors, omissions; stress, sickness absence; resignation; audit censure; public, media concern 3 5 15 MOD Our internal recruitment policy and RICS training scheme assists retention/recruitment of trained staff. Individual training plans for graduates/trainee valuers prepared and maintained. Absence Management Policy applied across all offices and staff groups. Regular monitoring of staff welfare by supervisors.Graduate apprenticeships offered to existing staff. AEA Foundation Course manual now available. ok 12 MOD GMO Arrange external opportunities for experience. Widen training across disciplines. Training plan for all new members of staff. Consider school leaver apprenticeships. 01/09/2025 3 monthly 6b Inadequate staff development Inability to retain staff 3 3 9 LOW Staff survey issued and results analysed for more focussed follow-up ok 7.2 LOW JAB Review SRDS provisions in place in comparable organisations and Councils 01/12/2025 6 monthly 6c Over-reliance upon a small number of key Information Technology & Systems specialists. Backlogs, error and omission; stress; inability to recruit, unattractive prospect; staff leakage, insurance claims; quality deficit, deadlines missed; low morale; inability to plan and schedule 3 5 15 MOD Advance planning - with the exception of snap elections, demands are programmed. Outsourcing of services with Service Level Agreements in place. Electoral registration system outsourced to increase long-term resilience. Arrangement in place with Aberdeenshire IT to manage/host IT systems. good 7.5 LOW MJA Consider additional third party supported packages. 01/12/2025 6 monthly 6d Inconsistency of approach to tasks due to geographical spread of offices and different councils involved Imbalance in standards and levels of performance arising out of the differing "capabilities" of our constituent councils; friction with partner councils; audit censure; loss of flexibility 5 2 10 LOW Operational manuals provide guidance on procudures. good 5 TOL JAB GMO Review of current procedures to be carried out. At a national level the SAA Action Plan includes an issues log. Local issues log maintained & influenced by changes in legislation and practice. 01/09/2025 6 monthly Risk Management - Appendix 1 Page 172
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GRAMPIAN ASSESSOR ERO RISK REGISTER APPENDIX Risk Description Worst Case Outcome Scenario Likelihood of actual occurrence Impact if exposure occurs Gross Score Initial Risk Rating Current Controls Quality & Effectiveness of Controls Net Score Revised Risk Rating Risk Owner Action Proposed Review Date Review Cycle (score 1 - 5) (score 1- 5) (L x I) Good x 0.5 OK x 0.8 Poor x 1.5 6e Failure of external contractor at crucial point in service cycle. (ER) Missed deadline; contractual dispute; GVJB blamed for contractor failure; additional expense; re-tendering exercise; audit censure; media comment; friction with partner councils; 3 4 12 MOD Revised procurement procedures implemented and supported by Moray Council Procurement team with appropriate SLA/contracts in place. Canvass Risk Register maintained. Additional infrastructure has been procured to increase resilience in-house. good 6 TOL LHS Regular monitoring.EMS contract extended for 5 year period with possible joint working with partner councils later in 2025. 01/12/2025 6 monthly 6f Failure of external contractor at crucial point in service cycle. (IT) Missed deadline; contractual dispute; GVJB blamed for contractor failure; additional expense; re-tendering exercise; audit censure; media comment; friction with partner councils; 3 4 12 MOD Revised procurement procedures implemented and supported by dedicated members of Moray Council Procurement team. Requirement for contingency planning by contractors. Backup network in place. GVJB systems now managed by Aberdeenshire IT good 6 TOL MJA Regular monitoring and quarterly meeting with Aberdeenshire IT. Move of GVJB IT systems to Aberdeenshire's environment almost complete with only Oracle servers and SAN remaining within GVJB environment. 01/09/2025 3 monthly 6h Out of hours working for statutory events Staff not available to process last minute registration or absent vote applications or to carry out valuation related tasks for revaluation. 3 3 9 LOW Overtime payments or time off in lieu is granted for authorised out of hours working. Employment contracts reflect requirement for out-of-hours availability. good 4.5 TOL MJA Sufficient advance notice to staff if out of hours working required. 01/12/2025 6 monthly 6i Industrial action by Employees Reduced capability 3 3 9 LOW Local Level - liaison with union reps. National level - negotiations & dialogue via Moray Council HR colleagues. ok 7.2 LOW MJA Active monitoring 01/12/2025 6 monthly Risk Management - Appendix 1 Page 173
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GRAMPIAN ASSESSOR ERO RISK REGISTER APPENDIX Risk Description Worst Case Outcome Scenario Likelihood of actual occurrence Impact if exposure occurs Gross Score Initial Risk Rating Current Controls Quality & Effectiveness of Controls Net Score Revised Risk Rating Risk Owner Action Proposed Review Date Review Cycle (score 1 - 5) (score 1- 5) (L x I) Good x 0.5 OK x 0.8 Poor x 1.5 Notes Key MT Management Team Likelihood & Impact of each incident are first multiplied to provide an initial score. CT Council Tax BR Brian Rogan Both Likelihood & Impact are measured on a scale of 1 = Low, 5 = High. ER Electoral Registration GMO Gavin Oag KPI Key Performance Indicator JAB Jim Barron The initial assessment is a consideration of the risks without regard to any controls IT Information Technology KJF Keith Fordyce or procedures that may be in place. This provides a gross score which is an indication of the SAA Scottish Assessors Association LHS Linda Smith potential scale of any problems. IT IS ESSENTIAL THAT GROSS SCORE IS NOT BENEFICIALLY VR Valuation Roll MJA Mark Adam INFLUENCED BY CONSIDERATION OF EXISTING OR INTENDED CONTROLS. RS Rob Strang SJD Steve Dunbar The manager or group then review the CONTROLS that are or should be in place to reduce the various exposures (with reality testing as appropriate) and adjust the gross score by weighting factors (good = 0.5, OK = 0.8, poor = 1.5) to provide a net risk score. Net risk scores are graded - TOLERABLE = < 6.5; LOW = 6.5 up to 10; MODERATE = > 10 up to 15; HIGH = > 15 Any risks still assessed as HIGH or MODERATE should be programmed for corrective action. This should be agreed with the risk owner who should assign responsibility for taking action and the appropriate timescales. e.g. High = commence within 4 weeks; Moderate = commence within 4 months; Low = commence if resource available; Tolerable = No action Risk Management - Appendix 1 Page 174
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GRAMPIAN ASSESSOR ERO RISK REGISTER APPENDIX Risk Description Worst Case Outcome Scenario Likelihood of actual occurrence Impact if exposure occurs Gross Score Initial Risk Rating Current Controls Quality & Effectiveness of Controls Net Score Revised Risk Rating Risk Owner Action Proposed Review Date Review Cycle (score 1 - 5) (score 1- 5) (L x I) Good x 0.5 OK x 0.8 Poor x 1.5 Risk Matrix - Likelihood Risk Matrix - Impact Likelihood Description 5 Almost certain Will undoubtedly happen, possibly frequently Over 90% Annual Imminent/near miss 4 Likely Will probably happen, but not a persistent issue Up to 90% 3 year Has happened in the past 3 Possible May happen occasionally Up to 65% 10 year Has happened elsewhere 2 Unlikely Not expected to happen, but is possible Up to 20% 25 year Not known in this activity 1 Remote Very unlikely this will ever happen Less than 5% 100 year Force majeure Impact Score Description Impact on Service Objectives Financial Impact Impact on People Duration of Impact Impact on Reputation 5 Catastrophic Unable to function, inability to fulfil obligations Severe financial loss (> £) Death In excess of 2 years (days) to recover pre event position Highly damaging, severe loss of public confidence 4 Major Significant impact on sevice provision Major financial loss Extensive injury, major permanent harm Between 1 year - 2 years (days) to recover pre event position Major adverse publicity, major loss of confidence 3 Moderate Service objectives partially achievable Significant financial loss Medical treatment required, semi permanent harm up to 1 year Between 6 months to 1 year (½ to 1 day) to recover pre event position Some adverse publicity, legal implications 2 Minor Minor impact on service objectives Moderate financial loss First aid treatment, non permanent harm up to 1 month 2 to 6 months (hours) to recover Some public embarrassment, no damage to reputation 1 Negligible Minimal impact, no service disruption Minimal financial loss (< £) No obvious harm/injury Minimal - up to 2 months (hours) to recover No interest to the press, internal only Risk Management - Appendix 1 Page 175
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REPORT TO: Grampian Valuation Joint Board on 27 June 2025 SUBJECT: Complaints handling performance BY: Assessor & ERO 1. Reason for Report 1.1 To report on complaints handling performance. 2. Recommendation 2.1 It is recommended that the Board consider the complaints handling performance. 3. Background 3.1 Whilst we endeavour to provide a professional and customer facing service, it is inevitable, due to the nature of our work, that not everyone we deal with will be satisfied and that complaints will, on occasion, be received. It is important that we realise that these complaints are valuable and, when handled well, can provide a low cost and important source of feedback and learning for the organisation. This will drive improvement and restore a positive relationship with service users who may feel let down by what they considered to be poor standards of service. 3.2 2024/25 is the ninth year of operation of the revised Complaints Handling Procedure. The procedure follows the Scottish Public Services Ombudsman’s (SPSO) model complaints handling procedure and comprises three stages: - • Stage 1 - frontline resolution • Stage 2 - investigation where stage 1 is not capable of resolving the issue • Stage 3 - referral to the SPSO where service failure or maladministration has not been identified at Stage 2 and the issue remains unresolved 3.3 Local authorities are required to assess complaints handling performance to provide assurance in relation to their performance, to facilitate continuous improvement and to assist in benchmarking between local authorities. 4. Current position 4.1 The SPSO’s Complaints Standards Authority (CSA) developed a series of performance indicators. The format for reporting these indicators was amended from 2022/23 onwards by the CSA and this year’s report is the third to reflect the revised style and amended indicators. Item 8. Page 177
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4.2 Complaints performance 4.2.1 Previously reported complaints performance 2019/20 to 2021/22 for comparison Indicator 2019/20 2020/21 2021/22 % No. % No. % No. Total number of complaints 16 5 11 Total number of complaints/1000 population 0.03 0.01 0.02 Complaints closed at Stage 1 100% 16 80% 4 73% 8 Complaints closed at Stage 2 0 20% 1 27% 3 Resolution outcome Complaints upheld at Stage 1 44% 7 0 18% 2 Complaints partially upheld at Stage 1 12% 2 0 0 Complaints not upheld at Stage 1 44% 7 80% 4 55% 6 Complaints upheld at Stage 2 0 0 9% 1 Complaints partially upheld at Stage 2 0 0 18% 2 Complaints not upheld at Stage 2 0 20% 1 0 Resolution time Average time for a full response at Stage 1 2 days 6 days 6 days Complaints resolved at Stage 1 against SPSO target 5 days 100% 16 50% 2 50% 4 Complaints extended at Stage 1 beyond SPSO target 5 days 0 50% 2 50% 4 Average time for a full response at Stage 2 - 10 days 14 days Complaints resolved at Stage 2 against SPSO target 20 days 0 100% 1 100% 3 Complaints extended at Stage 2 beyond SPSO target 20 days 0 0 0 Page 178
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4.2.2 Revised complaints performance statistics format 2024/25 Indicator 2022/23 2023/24 2024/25 Total Number of Complaints 4 5 9 Indicator 1: Complaints Received per 1000 of population 0.007 0.009 0.015 Indicator 2: Closed complaints The number of complaints closed at Stage 1 as a percentage of all complaints 75.00% 40.00% 44.00% The number of complaints closed at Stage 2 as a percentage of all complaints 25.00% 60.00% 56.00% The number of complaints closed at Stage 2 after escalation as a percentage of all complaints 0.00% 20.00% 22.00% Indicator 3: Complaints upheld, partially upheld and not upheld The number of complaints upheld at Stage 1 as % of all complaints closed at Stage 1 0.00% 0.00% 75.00% The number of complaints not upheld at Stage 1 as a percentage of all complaints closed at Stage 1 66.67% 0.00% 0.00% The number of complaints partially upheld at Stage 1 as a percentage of all complaints closed at Stage 1 33.33% 100.00% 25.00% The number of complaints upheld at Stage 2 as % of all complaints closed at Stage 2 0.00% 0.00% 0.00% The number of complaints not upheld at Stage 2 as a percentage of all complaints closed at Stage 2 100.00% 33.33% 40.00% The number of complaints partially upheld at Stage 2 as a percentage of all complaints closed at Stage 2 0.00% 0.00% 60.00% The number of escalated complaints upheld at Stage 2 as % of all escalated complaints closed at Stage 2 N/A 66.66% 0.00% The number of escalated complaints not upheld at Stage 2 as a percentage of all escalated complaints closed at Stage 2 N/A 100.00% 0.00% The number of escalated complaints partially upheld at Stage 2 as a percentage of all escalated complaints closed at Stage 2 N/A 0.00% 100.00% Indicator 4: Average time in working days for a full response to complaints at each stage Average time in working days to respond to complaints at Stage 1 3 1 2 Average time in working days to respond to complaints at Stage 2 20 19 4 Average time in working days to respond to complaints after escalation N/A 9 2 Indicator 5: Percentage of complaints at each stage which were closed in full within the set timescales of 5 and 20 working days The number of complaints closed at Stage 1 within 5 working days as % of total number of Stage 1 complaints 66.67% 66.67% 100.00% The number of complaints closed at Stage 2 within 20 working days as % of total number of Stage 2 complaints 100.00% 100.00% 100.00% The number of escalated complaints within 20 working days as % of total number of Stage 1 complaints N/A 100.00% 100.00% Indicator 6: Number of cases where an extension was authorised The number of complaints closed at Stage 1 one where extension was authorised, as % all complaints at Stage 1 33.33% N/A N/A The number of complaints closed at Stage 2 where extension was authorised, as % all complaints at Stage 2 N/A N/A N/A Page 179
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Indicator 7: Customer satisfaction The organisation continues to have a significant level of contact with stakeholders in the Grampian area and beyond, with more than 385,000 canvass communications issued for around 455,000 electors. In addition, more than 3,100 new dwellings were added to the Valuation List and just under 2,000 updates to the Valuation Roll being made relative to non- domestic properties. As reported last year, following the 2023 Revaluation of Non-Domestic subjects and the publication of the 2023 Valuation Roll, more than 2,500 proposals to alter the Valuation Roll were received. These proposals represented the first stage in the two-stage appeal process that was introduced on 1 April 2023. This is one of a number of different appeal mechanisms relating to the statutory functions undertaken by the Assessor and Electoral Registration Officer. Representations under these mechanisms cannot, and should not, be recorded as complaints. Although there has been an increase in the number of complaints received relative to previous years, the volume of complaints remains very low with only nine formal complaints having been received. This suggests a relatively high level of customer satisfaction from stakeholders of our services. The time taken to resolve complaints is extremely low, with all complaints concluded well within the timescales set by the Scottish Public Services Ombudsman. Indicator 8: Learning from complaints A review of the nine complaints recorded for 2024/25 show a fairly even spread over our various services. This review has not identified any maladministration, or any significant failure in service delivery. Despite the fact that three complaints were upheld and a further four were partially upheld, these were on very minor issues, though important to the complainant. With the overall number of complaints continuing to be so low, no meaningful analysis of these figures is possible. However, feedback from all complaints over time, including those that have not been upheld, is used by the Management Team to improve communications and processes. 5. Conclusion 5.1 In its ninth year of implementation, the revised complaints handling procedure has continued to enable stakeholders and frontline staff to resolve issues within exceptionally short timeframes. 5.2 Due to the low number of complaints in 2024/25 a definitive comparison of resolution times with previous years is not really possible. However, as reported above, resolution times have been short and well within the targets set by the SPSO. Author of Report: James A Barron Depute Assessor & ERO Page 180
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REPORT TO: Grampian Valuation Joint Board on 27 June 2025 SUBJECT: Valuation Roll & Council Tax Valuation List BY: Depute Assessor & ERO (Aberdeen & Moray) 1. Reason for Report 1.1 To provide an operational update on the valuation services provided by the Assessor including the performance levels achieved during 2024/25. 2. Recommendation 2.1 It is recommended that the Board note the report. 3. Background 3.1 The Board’s Code of Corporate Governance sets out a framework of performance measurement and evaluation. This framework identifies a number of quantitative service-related performance indicators. 3.2 The current thresholds for the performance indicators that have been agreed between the Scottish Government and the Scottish Assessors Association were reviewed by the Board in January 2024. 4. Valuation Roll 4.1 Appeals 4.1.1 Revaluation 2017 appeals Twelve revaluation appeals remain outstanding with the Upper Tribunal for Scotland. 4.1.2 Revaluation 2017 Running Roll appeals Eight running roll appeals remain outstanding with the Upper Tribunal for Scotland. 4.1.3 Revaluation 2023 proposals The disposal of the 2,456 Revaluation 2023 proposals that were received last year is progressing well, with around 95% now resolved. The last date for their disposal is 30 September 2025. The conversion rate from proposals made to the Assessor to appeals lodged with the First-tier Tribunal (Local Taxation Chamber) in this new two stage process has increased but remains relatively low at 6.2% of proposals dealt with. Item 9. Page 181
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4.1.4 Revaluation 2023 appeals The First-tier Tribunal commenced the citation of Revaluation 2023 appeals at the start of the year with hearings set all the way through to the end of 2025. At this stage, 17 of the 142 appeals received to date have been resolved. 4.2 Running roll updates Appendix 1 provides performance information for running roll updates to the Valuation Roll during the period from 1 April 2024 to 31 March 2025 and the previous two years. In the report to the 31 January 2025 meeting of the Board, a number of reasons were provided to explain the level of performance for the part year to 15 January 2025, one of those reasons being the onerous self-catering unit review imposed by new legislation. Whilst I had speculated in the report to the 28 June 2024 meeting of the Board that “this task will become less onerous going forward as operators become familiar with the demands that the new legislation places on them”, a further change to the legislation that came into effect for the purposes of the second annual audit has actually made the task more, not less, onerous. Assessors are now required to delete self-catering units (SCUs) from the Valuation Roll where no response to the audit is received within 56 days and addressing the resulting correspondence and concerns has proven to be a particularly time-intensive undertaking. The almost inevitable decline in performance figures that occurs as a result of changes processed in the final quarter of each financial year was exacerbated last year as a result of the exercise described above. Whilst staff did well to process 840 of an annual total of 1950 Valuation Roll amendments in the final two and a half months of the financial year, the fact that around 300 of those changes related to the backdated deletion of SCUs has resulted in a further fall in the KPI percentages in the first two timeframes. 4.3 Revaluation 2026 The service has issued Assessor Information Notices in order to ingather rental and other information required for the 2026 Revaluation, the valuation tone date for which is 1 April 2025. The resulting evidence is now in the process of being analysed with a view to the publication of draft values for all subjects by 30 November 2025, with finalised figures due by 15 March 2026. 5. Council Tax Valuation List 5.1 Updates to the List Appendix 2 provides performance information for updates to the Council Tax Valuation List. The SCUs deleted from the Valuation Roll as a result of failing the second annual audit were required to be entered in the Council Tax Valuation List from the same effective date that they were deleted from the Valuation Roll with the result that there is a corresponding fall in the Council Tax KPI percentages for the first two timeframes. Page 182
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5.2 Proposals and Appeals There are currently over 200 live Council Tax proposals and appeals, the majority of which were lodged in recent weeks as a result of the SCU exercise described in detail above. In the first case on this matter to be heard by the First-tier Tribunal (Local Taxation Chamber), a decision has been published which found that the Assessor for Lothian was correct to remove the property from the Valuation Roll and add it to the Council Tax Valuation List due to the failure of the operator to provide evidence within 56 days (the appellant accepted that they had received the request, but did not respond timeously). In a further case, the decision for which has just been published, the appellant challenged the entry in the Council Tax Valuation List on the basis that the audit request had not been received. As the Scottish Borders Assessor had proven that the audit request had been posted and the appellant could not prove that it was not received, their case was dismissed. 6. Conclusion 6.1 The KPIs in both taxation systems have been largely affected by the SCU audit process. The audit remains an active topic of discussion at a national level, with ongoing dialogue involving trade organisations, Scottish Government officials, and Assessors. Depending on the result of these discussions, KPI thresholds may require to be reconsidered going forward. Author of Report: Gavin M Oag Depute Assessor & ERO Page 183
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Appendix 1 Valuation Roll Performance Indicators as at 31 March 2025 Time period 2024/2025 2023/2024 2022/2023 Amendments within time periods The number of amendments made to the valuation roll during the year as a result of material change of circumstances, error corrections and new subjects. The time period is the period between the effective date of the amendment and the date the corresponding Valuation Notice is issued. 0 - 3 Months % Threshold % 3 - 6 Months % Threshold % Over 6 Months % Threshold % 542 27.79% 65.00% 303 15.54% 20.00% 1,105 56.67% 15.00% 915 35.92% 65.00% 426 16.73% 20.00% 1,206 47.35% 15.00% 527 30.41% 65.00% 338 19.50% 20.00% 868 50.09% 15.00% Number of amendments 1,950 2,547 1,733 Total number of entries At 1 April 30,167 30,296 30,326 Total Rateable Value At 1 April £937M £934M £1,002M Page 185
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Appendix 2 Council Tax Valuation List Performance Indicators as at 31 March 2025 Time Period 2024/2025 2023/2024 2022/2023 New Entries within Time Periods The time period is the period between the effective date of the amendment and the date the corresponding Banding Notice is issued. 0 - 3 Months % Threshold % 3 - 6 Months % Threshold % Over 6 Months % Threshold % 2,109 67.79% 94.00% 497 15.98% 3.00% 505 16.23% 3.00% 1,961 64.70% 94.00% 507 16.73% 3.00% 563 18.57% 3.00% 1,938 71.12% 94.00% 623 22.86% 3.00% 164 6.02% 3.00% Number of New Entries Added The actual number of new dwellings added to the Valuation List during the year. 3,111 3,031 2,725 Total Number of Entries The actual number of properties shown in the Valuation List as at 1 April annually. 305,005 302,364 300,067 Adjusted to Band “D” Equivalent Original ratios 304,325 301,317 298,616 2017 ratios 320,614 317,377 314,462 Number of proposals accepted 32 72 12 Page 187
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REPORT TO: Grampian Valuation Joint Board on 27 June 2025 SUBJECT: Electoral Registration BY: The Principal Admin Officer 1. Reason for Report 1.1 To update the Board on current developments in electoral registration. 2. Recommendation 2.1 It is recommended that the Board consider and note the content of this report. 3. Background 3.1 The 2024 annual canvass concluded in January 2025 and revised registers were published on 1 February 2025. 3.2 Preparations for the 2025 canvass are in progress. 3.3 We have commenced the write out to reserved postal voters whose entitlement will expire on 31 January 2026. 3.4 Scottish Parliamentary boundary changes order has been laid in parliament. 4. Electoral Registration Update 4.1 Annual Canvass 2024 4.2 The annual canvass concluded in late January 2025, with all the required follow up activity being completed prior to publication of revised registers on 1 February 2025. 4.3 The overall response rate from unmatched properties was slightly reduced compared to previous years and fell slightly below 60%. This reduction in response level was also seen across all VJB and single authority council Electoral Registration Officers in Scotland. Despite this reduction we had one of the best response rates when compared to all other Electoral Registration services in Scotland. 4.4 Numbers of additions to and deletions from the register during the canvass period were also lower than is typical. These reductions, along with the lower Item 10 Page 189
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overall response level, followed significantly increased engagement and levels of response around the time of the general election. This aligns with the accepted fact that registration continues to be event driven despite all our efforts to drive registration throughout the year and during the canvass period. 4.5 Revised registers were published on 1 February 2025 and distributed to those individuals and organisations who are entitled to receive them “on publication”. Further work was then carried out to distribute “on request” copies. The usual requests to purchase the register made by credit reference agencies were processed. 4.6 For many years the task of printing the registers for distribution to local and national libriaries has been carried out on site in Woodhill House by staff originally employed by Aberdeenshire Council and latterly by Xerox UK Ltd. Following the closure of the print facility in the basement of Woodhill House a new print provider had to be identified and, following consideration of a number of proposals form local and national companies the task was awarded to a local firm based in Aberdeen. 4.7 A summary of the register compared to previous years is shown below Revised registers 1 December 2022 1 December 2023 1 February 2025 Number of electors 448,915 452,084 454,284 Number of postal voters 119,691 117,258 113,064 4.8 Annual Canvass 2025 4.9 Planning and preparation for the 2025 canvass is in progress. We will revert to our usual timetable with the initial issue of canvass communications in early August and all canvass activities concluding by 30 November prior to publication of registers on 1 December 2025. 4.10 The upload of our database for the compulsory national data match will take place on 17 June with results expected within a few days. We will then carry out local data matching with the aim of reducing the number of properties which require follow up action. 4.11 E-communications will be issued in early July to matched properties which meet the criteria. Where a response is received confirming that there are no changes in the household, this will remove the requirement to issue a paper communication. 4.12 Initial letters to unmatched properties will then be issued in the first week of August, with letters to matched properties following in the second and third weeks of August. 4.13 Follow up action with further letters issued by post and personal contact by door- to-door canvassers, and telephone canvass where the canvass rules permit, will then take place from early September until it is concluded on or before 30 November. We will also send reminders by ecommunication in order to further reduce the need for paper communications and the accompanying high costs. Page 190
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4.14 Reserved postal voters renewal write-out 4.15 As reported in January 2025, electors who hold a reserved postal vote are now required to reapply before their postal vote expires, with the maximum duration being 3 years. 4.16 EROs are required to communicate with electors to remind them of the requirement to make a new application if they wish to continue to vote by post at reserved elections and we are in the process of engaging with around 100,000 electors whose postal votes are due to expire on 31 January 2026. 4.17 Work was carried out in April and May to maximise the number of emails addresses held in our Electoral Management System and since commencing in late May we have sent in excess of 44,000 emails to postal voters across Grampian. These communications advised electors that they could make their application online, but that a paper application form would be sent if they are unable to complete the online process. 4.18 Where no email address is held, arrangements have been made for paper application forms to be sent to electors. These will be issued to electors in Aberdeen City and Moray on 16 June and to electors in Aberdeenshire on 23 June. Where an email has previously been sent and no new application has been made, a paper application form will be issued in early July. 4.19 The scale of this write out presents considerable challenges in terms of staff resourcing to field additional contacts by telephone and email along with the task of bulk mail handling, scanning and processing of applications. The write out has been timed in order for this surge of work to be largely completed before the issue of our canvass communications which will also be followed by a significant increase in customer contacts and processing tasks. 4.20 Online absent vote applications at devolved elections and convergence of absent voting rules 4.21 The Absent Voting (Elections in Scotland and Wales) Bill was introduced to the UK parliament on 16 October 2024. This bill seeks to realign the absent voting rules across reserved and devolved polls and introduces the option for devolved applications to be made online. 4.22 The bill includes a requirement for the Scottish Government to lodge a Legislative Consent Memorandum with the Scottish Parliament. Progress of the bill to date has been slow, with first reading in the Commons on 17 January and committee stage on 11 June. Officials from the Scottish Government and UK government are working to take this legislation forward with the aim of online absent vote applications (OAVA) being open to electors at Scottish Government and local elections from December 2025 onwards. 4.23 With the requirement for regulations to be brought forward for both the online absent voting facility and the convergence of the absent voting rules, the timing of this latest raft of changes is uncertain. Significant updating of the Electoral Management System (EMS) and the roll out of a number of system upgrades will be required. What is certain is that these changes will bring fresh challenges to administrators and the potential for further confusion for voters. Prompt roll Page 191
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Author of Report: Linda H Smith, Principal Administrative Officer out of new procedures, guidance and training will be crucial to allow our teams to provide accurate advise to electors. 4.24 Scottish Parliamentary Boundary Changes Boundaries Scotland submitted their final report in late April. An order was laid before parliament on 22 May and timing for completion of the parliamentary process is uncertain. 4.25 Changes across Grampian are not extensive, but will require liaison with the relevant constituent authorities and a project plan to be drawn up in order for the changes to be implemented on our EMS. 5.0 Conclusion 5.1 The tempo in electoral services remains high and we are committed to putting the voter first in a challenging and constantly changing environment where rules have diverged only to coverge again within a relatively short space of time. 5.2 On the positive side, the provision of an online absent vote application service for all elections is definitely a move in the right direction and in the interests of both voters and administrators. Page 192
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REPORT TO: Grampian Valuation Joint Board on 27 June 2025 SUBJECT: Staff Vacancies, Recruitment & Upskilling Existing Staff BY: The Depute Assessor & ERO (Aberdeenshire) 1. Reason for Report 1.1 To update the Board on the current level of staff vacancies, recruitment and the upskilling of existing staff. 2. Recommendation 2.1 It is recommended that the Board consider and note the contents of this report. 3. Background 3.1 At the January 2023 meeting of the Board, it was requested that the Board be updated at each meeting on the level of vacancies and the steps being taken to improve the situation. 4. Current Vacancies 4.1 There are currently eight vacant posts: Section Establishment (FTE) Vacancies (FTE) Previously Currently Clerical 29 1 1 IT 3 1 1 Management 3 0 0 Secretarial 3 0 0 Technical 13 2 2 Valuation 30 4 4 Total 81 8 8 Item 11. Page 193
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5. Recruitment 5.1 The experienced Chartered Surveyor previously reported as having been recruited to the Valuer Post in Elgin, started work there in March. 5.2 Following the appointment of an internal candidate to fill the vacant Administrative Officer post, an Administrative Assistant post was advertised and filled internally, leaving a Clerical Officer post vacant. This post was advertised on Monday 9 June and several applications have already been received. 5.3 We still have a number of vacant Valuer and Technical Assistant posts within our structure and are maintaining our efforts to fill these vacancies. 6. Action Being Taken 6.1 One of the two employees enrolled on the Graduate Apprenticeship course at Napier University is about to complete year three and the other is about to complete year two. Both have received formal praise from the university for their course work. 6.2 Working together with other Assessors we are developing the training framework for our Graduate Trainee Valuers and an internal programme of formal training and development sessions has been organised to assist them with successfully completing the Royal Institution of Chartered Surveyors (RICS) Assessment of Professional Competence. Three trainees are going forward with the RICS Assessment of Professional Competence in Autumn 2025, with a further three in Spring 2026. 6.3 The Scottish Assessor’s Association is collating information which will allow Assessors to showcase career paths and development opportunities in Assessors’ offices and serve as method to attract high quality graduates who may be comparing the development opportunities of potential employers before applying for or accepting a post. 6.4 The IT vacancy will be reviewed following the completion of the work to move to Aberdeenshire IT infrastructure, which is now nearing completion. We are still advertising the remaining valuation vacancies through our own website and will continue to review timing for future adverts for these posts in RICS Recruit and myjobscotland. 7. Conclusion 7.1 Current staffing levels and recent recruitment successes are encouraging. We continue to pursue initiatives to enhance the organisation’s profile as an employer of choice. 7.2 Efforts are ongoing to identify further opportunities for collaborative working on recruitment matters at a national level, with the aim of achieving a more joined-up approach to the recruitment and retention of staff. Author of Report: James A Barron Depute Assessor & ERO Page 194
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REPORT TO: Grampian Valuation Joint Board on 27 June 2025 SUBJECT: Governance BY: Assessor & ERO 1. Reason for Report 1.1 To update the Board on a report submitted to the Scottish Parliament on the number of Assessors and availability of resources. 2. Recommendation 2.1 The Board note the content of the report and appendix and the requirement to report on a three-yearly basis. 3. Background 3.1 Section 24 of the Non-Domestic Rates (Scotland) Act 2020 requires valuation joint boards established by an order under section 27(7) of the Local Government etc. (Scotland) Act 1994, and valuation authorities, from whom functions have not been delegated to such a board by virtue of section 27(8) of that Act, to prepare a report on: a) The number of assessors and depute assessors appointed by the board or authority holding office on 1 April in that year. b) Whether that number is sufficient for the proper exercise of the functions of those assessors and depute assessors in relation to non-domestic rates c) Whether the board or authority has sufficient resources for the proper exercise of its functions in relation to non-domestic rates d) Such other matters relating to non-domestic rates as the board or authority considers appropriate 3.2 The report must be laid before the Scottish Parliament by 31 May in the reporting year. A “reporting year” means 2025 and each third year thereafter. 4. Current Position 4.1 The report shown in Appendix 1 was prepared on behalf of the Board by the Assessor and reviewed by the Treasurer, Convener and Depute Convener. 4.2 The report was laid before Parliament by the Convener. Item 12. Page 195
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4.3 Much of the content of the report is already known to the Board, having been included in previous Board reports and in reports for this meeting. 5. Conclusion 5.1 The report makes the Scottish Parliament aware of the challenges faced by the Board and its employees and hopefully also provides a useful summary for Board members. Author of Report: Mark Adam, Assessor & ERO Page 196
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Duty to Report to the Scottish Parliament on the number of Assessors and availability of resources - Grampian Valuation Joint Board - GVJB/2025/01 Background Section 24 of the Non-Domestic Rates (Scotland) Act 2020 requires valuation joint boards established by an order under section 27(7) of the Local Government etc. (Scotland) Act 1994, and valuation authorities, from whom functions have not been delegated to such a board by virtue of section 27(8) of that Act, to prepare a report on: a) The number of assessors and depute assessors appointed by the board or authority holding office on 1 April in that year. b) Whether that number is sufficient for the proper exercise of the functions of those assessors and depute assessors in relation to non-domestic rates c) Whether the board or authority has sufficient resources for the proper exercise of its functions in relation to non-domestic rates d) Such other matters relating to non-domestic rates as the board or authority considers appropriate The report must be laid before the Scottish Parliament by 31 May in the reporting year. A “reporting year” means 2025 and each third year thereafter. This report is submitted by Grampian Valuation Joint Board and the responses to each of the above points are shown below. The number of assessors and depute assessors appointed by the board or authority holding office on 1 April in that year. At 1 April 2025, Grampian Valuation Joint Board had appointed one assessor and two statutory depute assessors, each under section 27(2) of the Local Government etc. (Scotland) Act 1994. Whether that number is sufficient for the proper exercise of the functions of those assessors and depute assessors in relation to non-domestic rates The number of assessors and depute assessors appointed by the Grampian Valuation Joint Board is considered to be sufficient at this time. Despite multiple rounds of recruitment advertising, the authority has experienced considerable challenges in recruiting suitably qualified chartered surveyors below depute assessor level and this has resulted in a number of valuer posts remaining unfilled over an extended period. This has placed a substantial, unwelcome and ultimately unsustainable burden on the existing valuation team, hindering the organisation’s ability to meet agreed performance targets and to consistently deliver the high standard of service to customers that it strives to uphold. Although some graduate trainees have been employed to help fill this gap in resources, Graduate trainee valuers normally require at least 2 years’ practical experience in the workplace before they can attain chartered status. Their lack of experience in key areas, combined with the necessity for more experienced colleagues to provide the continuous on-the-job training that is required, has introduced additional pressures on the existing valuation team. This diversion of time and resources, although necessary, not only exacerbates the workload of an already busy valuation team but also risks diminishing overall efficiency and productivity. Page 197
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The two-stage proposal and appeal process which came into force on 1 April 2023 represented a significant procedural change for valuation staff. The limited number of suitably qualified valuation staff, together with the amount of change which has been involved, has made the transition particularly challenging. The administrative processes involved when dealing with proposals and appeals has also been more onerous than anticipated. Whether the board or authority has sufficient resources for the proper exercise of its functions in relation to non-domestic rates In order to implement the Barclay Review recommendations1 accepted by Scottish Government2, funding requests for the financial years 2019/20 through to 2025/26 were submitted to the Scottish Government by assessors. The funding allocation from the Scottish Government to assessors is normally specifically referenced in Local Government Finance circulars to Chief Executives and Directors of Finance of Local Authorities and the Chief Executive of the Convention of Scottish Local Authorities (COSLA). It is also referenced in Scottish Government updates to the Settlement and Distribution Group. It is recognised that the resource requirements for assessors, due to the legislative changes resulting from the Barclay Review, are recurring in nature. The process for identifying Barclay Review implementation funding was agreed by COSLA leaders in 2019 and has been reaffirmed each year since then. Decisions on funding for future years is dependent on the Fiscal Framework. Financial certainty for assessors is required beyond 2025/26. To meet legislative changes resulting from the Barclay Review, assessors have amended staffing levels and other resource requirements. Certainty of the long-term funding position for assessors is required as it is not clear how assessors funding beyond 2025/26 will be identified within the grant settlement. There is a risk to the continued successful delivery of the Barclay reforms without the necessary funding of assessors. Barclay Review funding while welcome, only represents a small proportion of overall Assessor budgets and core budgets have continued to be funded via the Local Government Settlement and are therefore subject to the same constraints. The duty to report to the Scottish Parliament is triennial. Given that budget allocations are currently confined to a single financial year, any assurance regarding the sufficiency of resources must necessarily be limited to the 2025/26 period. To enable strategic planning and sustained delivery of outcomes, a more flexible multi-year funding framework should perhaps be explored. The additional workload involved in the annual audit of self-catering units, which was introduced from the 2022/23 financial year, has proven to be more significant and demanding than first anticipated. Without legislative changes or additional resources to support the administration of this annual process, there is a risk that the successful delivery of accurate 3-yearly non-domestic revaluations may be impacted. 1 https://www.gov.scot/publications/report-barclay-review-non-domestic-rates/ 2 https://www.gov.scot/publications/barclay-review-of-non-domestic-tax-rates-implementation-plan/ Page 198
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Such other matters relating to non-domestic rates as the board or authority considers appropriate Consultations regarding further changes to the current non-domestic rating system place further uncertainty and risk on the whole process and consequently on Assessors’ staff. Future certainty, at an early stage, would be welcomed. The Scottish Assessors Portal https://www.saa.gov.uk/ has been in existence since 2004 and provides a single resource for customers from every assessors’ area to access information on non-domestic rating and Council Tax, including rateable values and Council Tax bands from across the whole of Scotland. It is also relied upon by Scottish Government statisticians and other organisations. In the 20 years since the Portal’s inception, the site has been constantly developed and improved by assessors to include online forms, valuations, improved resilience and data security. After 20 years the Portal is nearing its end of life. The cost of any replacement project would be significant and could not be met from assessors’ current budgets. Reform of the Council Tax valuation system is a constant uncertainty for assessors and their staff. Representatives from the Scottish Assessors’ Association attended a Local Government, Housing and Planning Committee evidence session on possible Council Tax reform in February 2025 and they have also met with Scottish Government officials on the topic. The uncertainty over the future direction of Council Tax makes future planning difficult for assessors, particularly as they now deliver three yearly non- domestic revaluations with a one-year tone (valuation) date. Early notice of any policy intent will be vital in ensuring assessors are suitably resourced and funded and can make the necessary workforce changes to deliver their statutory functions. The First-tier Tribunal Local Taxation Chamber has only recently begun citing appeal hearings for cases arising out of the 2023 Revaluation. It is important that the Local Taxation Chamber is adequately resourced to allow Revaluation appeals to be scheduled and heard within a suitable timeframe after receipt and, where possible, well before the next Revaluation comes into force. The pressure on valuation teams to prepare and attend appeal hearings should not be underestimated, particularly when multiple hearings are scheduled close together, and especially in a year of revaluation. Page 199
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