Agenda Document Pack - Grampian Valuation Joint Board - 27/01/2023
Moray Council · 27 January 2023
Back to Grampian Valuation Joint Board — 27 January 2023 and its agenda
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Grampian Valuation Joint Board Friday, 27 January 2023 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 January 2023 at 09:30. BUSINESS 1. Sederunt 2. Declaration of Member's Interests 3. Minute of Meeting of 28 October 2022 5 - 8 4. External Audit - Covering Letter 9 - 40 5. Audited Annual Accounts for Year Ending 31 March 2022 41 - 122 6. Internal Audit Plan 2023-24 123 - 126 7. Bank Holiday - Coronation of His Majesty King Charles III 127 - 128 8. Governance 129 - 140 9. Electoral Registration 141 - 150 10. Valuation Roll and Council Tax Valuation List 151 - 158 11. Staff Vacancies - Recruitment and Upskilling Existing Staff 159 - 162 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 Isobel Davidson (Depute Chair) Councillor Desmond Bouse (Member) Councillor Dell Henrickson (Member) Councillor Seamus Logan (Member) Councillor Neil MacGregor (Member) Councillor Ciaran McRae (Member) Councillor Sam Payne (Member) Councillor Stephen Smith (Member) Councillor Iain Taylor (Member) Councillor Lynn Thomson (Member) Councillor Judy Whyte (Member) Councillor Marc Macrae (Member) Councillor Sonya Warren (Member) Clerk Name: Tracey Sutherland Clerk Telephone: 07971 879268 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, 28 October 2022 Council Chambers, Council Office, High Street, Elgin, IV30 1BX PRESENT Councillor Isobel Davidson, Councillor Donald Gatt, Councillor Dell Henrickson, Councillor Avril Mackenzie, Councillor Marc Macrae, Councillor Iain Taylor, Councillor Lynn Thomson, Councillor Sonya Warren, Councillor Judy Whyte SUBSTITUTES Councillor Neil Copland (for Councillor Ciaran McRae), Councillor Moray Grant (for Councillor Stephen Smith) APOLOGIES Councillor Desmond Bouse, Councillor Seamus Logan, Councillor Neil MacGregor, Councillor Ciaran McRae, Councillor Stephen Smith IN ATTENDANCE Also in attendance at the meeting were Alasdair McEachan, Head of Governance, Strategy and Performance (Moray Council), Lorraine Paisey, Treasurer to the Board, Mark Adam, Assessor and ERO, Jim Barron and Gavin Oag, Depute Assessor and ERO, Linda Smith, Principal Admin Officer and Tracey Sutherland, Committee Services Officer. 1. Chair The meeting was chaired by Councillor Donald Gatt, Moray Council. 2. Declaration of Member's Interests In terms of Standing Order 25 and the Councillor's Code of Conduct, the Board noted that there were no 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 meeting of 26 August 2022 The minute of the meeting of 26 August 2022 was submitted and approved by the Board. Item 3. Page 5
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4. Revenue Budget Monitoring Statement 1 April to 30 September 2022 A report by the Treasurer to the Board asked the Board to consider the Revenue Budget Monitoring Statement for the period 1 April to 30 September 2022 and the estimate outturn position for the year 2022/23. Following consideration the Board agreed to note: i) the Revenue Monitoring Statement for the period 1 April 2022 to 30 September 2022; and ii) the estimated outturn forecast for the year 2022/23. 5. Financial Planning for 2023-24 and Future Years A report by the Treasurer to the Board asked the Board to consider the indicative budgets that will form the three year Revenue Budget from 2023/24 onwards, and to discuss the operational issues facing the Assessor and Electoral Registration Officer (ERO) in the medium to long term. Following consideration the Board agreed to note: i) current indicative three year core budget from 2023/24 and that this will be further adjusted during the preparation of the Revenue Budget for 2023/24; ii) various scenarios which could impact on the revenue budget and the range of potential assumptions and risks; iii) operational issues facing the service; and iv) actions to be taken ahead of the budget setting meeting in January 2023. 6. Homologation - State Funeral on 19 September 2022 A report by the Assessor and ERO made the Board aware of the decision taken to close the Board's offices on Monday 19 September and award staff an additional day's leave on that day to mark the state funeral for Her Majesty Queen Elizabeth II. Following consideration the Board agreed note the content of the report and homologate the decision to close the Board's offices on 19 September 2022 and grant staff an additional day's leave to mark the state funeral for Her Majesty Queen Elizabeth II. 7. Electoral Registration A report by the Principal Admin Officer updated the Board on current developments in Electoral Registration. Following consideration the Board agreed to note the content of the report. Page 6
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8. Valuation Roll and Council Tax A report by the Depute Assessor and ERO (Aberdeen and Moray) provided an operational update on the valuation services provided by the Assessor including performance levels during the period 1 April 2022 to 17 October 2022. Following consideration the Board agreed to note the report. 9. Public Performance Report A report by the Assessor and ERO sought approval for the publication of the 2021/22 public performance report. The Assessor and ERO informed the Board that the report will be published on the Assessors website, subject to one correction at 4.3 where the Net Expenditure and the underspend figures comes from the Unaudited Accounts and those figures can only be confirmed once Audit Scotland have finished the audit of the accounts for 2021/22. Following consideration the Board agreed to note the content of the report and agreed to the publication of the Public Performance Report provided as an appendix to the report. Page 7
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102 West Port Edinburgh EH3 9DN 8 Nelson Mandela Place Glasgow G2 1BT The Green House Beechwood Business Park North Inverness IV2 3BL T: 0131 625 1500 E: info@audit-scotland.gov.uk www.audit-scotland.gov.uk Grampian Valuation Joint Board Woodhill House Westburn Road Aberdeen AB15 6GE 27 January 2023 Grampian Valuation Joint Board Audit of 2021/22 annual accounts Independent auditor's report 1. Our audit work on the 2021/22 annual accounts is now substantially complete. Subject to receipt of a revised set of annual accounts for final review, we anticipate being able to issue unqualified audit opinions in the independent auditor's report on 27 January 2023. The proposed report is attached at Appendix A. Annual audit report 2. Under International Standards on Auditing in the UK, we report specific matters arising from the audit of the financial statements to those charged with governance of a body in sufficient time to enable appropriate action. We present for the Grampian Valuation Joint Board’s consideration our draft annual report on the 2021/22 audit. Exhibit 2 sets out the issues identified in respect of the annual accounts. 3. The report also sets out conclusions from our consideration of two (financial sustainability and the appropriateness of the disclosures in the governance statement) of the four audit dimensions that frame the wider scope of public audit as set out in the Code of Audit Practice. The reasons for this reduced scope are set out in our 2021/22 Annual Audit Plan. 4. This report will be issued in final form after the annual accounts have been certified. Unadjusted misstatements 5. We also report to those charged with governance all unadjusted misstatements which we have identified during our audit, other than those of a trivial nature and request that these misstatements be corrected. There are no unadjusted misstatements to be corrected. Fraud, subsequent events and compliance with laws and regulations 6. In presenting this report to the Joint Board, we seek confirmation from those charged with governance of any instances of any actual, suspected or alleged fraud; any subsequent events that have occurred since the date of the financial statements; or material non-compliance with laws and regulations affecting the entity that should be brought to our attention. Item 4. Page 9
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Representations from the Treasurer 7. As part of the completion of our audit, we are seeking written representations from the Treasurer on aspects of the annual accounts, including the judgements and estimates made. 8. A draft letter of representation is attached at Appendix B. This should be signed and returned to us by the Treasurer with the signed annual accounts prior to the independent auditor’s report being certified. Page 10
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Appendix A: Proposed Independent Auditor’s Report Independent auditor’s report to the members of Grampian Valuation Joint Board and the Accounts Commission Reporting on the audit of the financial statements Opinion on financial statements I certify that I have audited the financial statements in the annual accounts of Grampian Valuation Joint Board for the year ended 31 March 2022 under Part VII of the Local Government (Scotland) Act 1973. The financial statements comprise the Comprehensive Income and Expenditure Statement, Movement in Reserves Statement, Balance Sheet, CashFlow Statement, and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2021/22 (the 2021/22 Code). In my opinion the accompanying financial statements: • give a true and fair view in accordance with applicable law and the 2021/22 Code of the state of affairs of the body as at 31 March 2022 and of its income and expenditure for the year then ended; • have been properly prepared in accordance with UK adopted international accounting standards, as interpreted and adapted by the 2021/22 Code; and • have been prepared in accordance with the requirements of the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003. Basis for opinion I conducted my audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Accounts Commission for Scotland. My responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of my report. I was appointed under arrangements approved by the Accounts Commission on 10 April 2017. The period of total uninterrupted appointment is six years. I am independent of the body in accordance with the ethical requirements that are relevant to my audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and I have fulfilled my other ethical responsibilities in accordance with these requirements. Non-audit services prohibited by the Ethical Standard were not provided to the body. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Page 11
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Conclusions relating to going concern basis of accounting I have concluded that the use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work I have performed, I have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the body’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from when the financial statements are authorised for issue. These conclusions are not intended to, nor do they, provide assurance on the body’s current or future financial sustainability. However, I report on the body’s arrangements for financial sustainability in a separate Annual Audit Report available from the Audit Scotland website. Risks of material misstatement I report in my Annual Audit Report the most significant assessed risks of material misstatement that I identified and my judgements thereon. Responsibilities of the Treasurer and Grampian Valuation Joint Board for the financial statements As explained more fully in the Statement of Responsibilities for the Annual Accounts, the Treasurer is responsible for the preparation of financial statements that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the Treasurer determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Treasurer is responsible for assessing the body’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless there is an intention to discontinue the body’s operations. The Grampian Valuation Joint Board is responsible for overseeing the financial reporting process. Auditor’s responsibilities for the audit of the financial statements My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. I design procedures in line with my responsibilities outlined above to detect material misstatements in respect of irregularities, including fraud. Procedures include: Page 12
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• obtaining an understanding of the applicable legal and regulatory framework and how the body is complying with that framework; • identifying which laws and regulations are significant in the context of the body; • assessing the susceptibility of the financial statements to material misstatement, including how fraud might occur; and • considering whether the audit team collectively has the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The extent to which my procedures are capable of detecting irregularities, including fraud, is affected by the inherent difficulty in detecting irregularities, the effectiveness of the body’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud are inherently more difficult to detect than irregularities that result from error as fraud may involve collusion, intentional omissions, misrepresentations, or the override of internal control. The capability of the audit to detect fraud and other irregularities depends on factors such as the skilfulness of the perpetrator, the frequency and extent of manipulation, the degree of collusion involved, the relative size of individual amounts manipulated, and the seniority of those individuals involved. A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website www.frc.org.uk/auditorsresponsibilities. This description forms part of my auditor’s report. Reporting on other requirements Opinion prescribed by the Accounts Commission on the audited part of the Remuneration Report I have audited the part of the Remuneration Report described as audited. In my opinion, the audited part of the Remuneration Report has been properly prepared in accordance with The Local Authority Accounts (Scotland) Regulations 2014. Other information The Treasurer is responsible for other information in the annual accounts. The other information comprises the Management Commentary, Annual Governance Statement, Statement of Responsibilities for the Annual Accounts and the unaudited part of the Remuneration Report. My responsibility is to read all the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If I identify such material inconsistencies or apparent material misstatements, I am required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work I have performed, I conclude that there is a material misstatement Page 13
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of this other information, I am required to report that fact. I have nothing to report in this regard. My opinion on the financial statements does not cover the other information and I do not express any form of assurance conclusion thereon except on the Management Commentary and Annual Governance Statement to the extent explicitly stated in the following opinions prescribed by the Accounts Commission. Opinions prescribed by the Accounts Commission on the Management Commentary and Annual Governance Statement In my opinion, based on the work undertaken in the course of the audit: • the information given in the Management Commentary for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with statutory guidance issued under the Local Government in Scotland Act 2003; and • the information given in the Annual Governance Statement for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Delivering Good Governance in Local Government: Framework (2016). Matters on which I am required to report by exception I am required by the Accounts Commission to report to you if, in my opinion: • adequate accounting records have not been kept; or • the financial statements and the audited part of the Remuneration Report are not in agreement with the accounting records; or • I have not received all the information and explanations I require for my audit. I have nothing to report in respect of these matters. Conclusions on wider scope responsibilities In addition to my responsibilities for the annual accounts, my conclusions on the wider scope responsibilities specified in the Code of Audit Practice, including those in respect of Best Value, are set out in my Annual Audit Report. Use of my report This report is made solely to the parties to whom it is addressed in accordance with Part VII of the Local Government (Scotland) Act 1973 and for no other purpose. In accordance with paragraph 120 of the Code of Audit Practice, I do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties. Page 14
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Maggie Bruce CA Senior Audit Manager Audit Scotland 1st Floor, Room F03 The Green House Beechwood Business Park North Inverness IV2 3BL 27 January 2023 Page 15
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Appendix B: Letter of Representation (ISA 580) Maggie Bruce Senior Audit Manager Audit Scotland 1st Floor, Room F03 The Green House Beechwood Business Park North Inverness IV2 3BL 27 January 2023 Dear Maggie Grampian Valuation Joint Board Annual Accounts 2021/22 1. This representation letter is provided about your audit of the annual accounts of Grampian Valuation Joint Board for the year ended 31 March 2022 for the purpose of expressing an opinion as to whether the financial statements give a true and fair view in accordance with the financial reporting framework, and for expressing other opinions on the management commentary, annual governance statement and remuneration report. 2. I confirm to the best of my knowledge and belief and having made appropriate enquiries of the Assessor and Electoral Registration Officer and the management team, the following representations given to you in connection with your audit of Grampian Valuation Joint Board's annual accounts for the year ended 31 March 2022. General 3. Grampian Valuation Joint Board and I have fulfilled our statutory responsibilities for the preparation of the 2021/22 annual accounts. All the accounting records, documentation and other matters which I am aware are relevant to the preparation of the annual accounts have been made available to you for the purposes of your audit. All transactions undertaken by Grampian Valuation Joint Board have been recorded in the accounting records and are properly reflected in the financial statements. 4. I confirm that the effects of uncorrected misstatements are immaterial, individually and in aggregate, to the financial statements as a whole. I am not aware of any uncorrected misstatements other than those reported by you. Financial Reporting Framework 5. The annual accounts have been prepared in accordance with the Code of Practice on Local Authority Accounting in the United Kingdom 2021/22 (2021/22 Code), and in accordance with the requirements of the Local Government (Scotland) Act 1973, the Local Government in Scotland Act 2003 and The Local Authority Accounts (Scotland) Regulations 2014. 6. In accordance with the 2014 regulations, I have ensured that the financial statements give a true and fair view of the financial position of the Grampian Valuation Joint Board at 31 March 2022 and the transactions for 2021/22. Page 16
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Accounting Policies & Estimates 7. All significant accounting policies applied are as shown in the notes to the financial statements. The accounting policies are determined by the 2021/22 Code where applicable. Where the Code does not specifically apply I have used judgement in developing and applying an accounting policy that results in information that is relevant and reliable. All accounting policies applied are appropriate to the Grampian Valuation Joint Board’s circumstances and have been consistently applied. 8. The significant assumptions used in making accounting estimates are reasonable and properly reflected in the financial statements. Judgements used in making estimates have been based on the latest available, reliable information. Estimates have been revised where there are changes in the circumstances on which the original estimate was based or as a result of new information or experience. Going Concern Basis of Accounting 9. I have assessed Grampian Valuation Joint Board's ability to continue to use the going concern basis of accounting and have concluded that it is appropriate. I am not aware of any material uncertainties that may cast significant doubt on Grampian Valuation Joint Board's ability to continue as a going concern. Assets 10. Where a rolling programme of asset valuations has been used, I have satisfied myself that the carrying amount of assets at 31 March 2022 does not differ materially from that which would be determined if a revaluation had been carried out at that date. 11. I carried out an assessment at 31 March 2022 as to whether there is any indication that an asset may be impaired and have recognised any impairment losses identified. 12. I have provided you with all information of which I am aware regarding any valuation exercises carried out after 31 March 2022. 13. There are no plans or intentions that are likely to affect the carrying value or classification of the assets recognised within the financial statements. 14. Owned assets are free from any lien, encumbrance or charge except as disclosed in the financial statements. Liabilities 15. All liabilities at 31 March 2022 of which I am aware have been recognised in the annual accounts. 16. Provisions have been recognised in the financial statements for all liabilities of uncertain timing or amount at 31 March 2022 of which I am aware where the conditions specified in the 2021/22 Code have been met. The amount recognised as a provision is the best estimate of the expenditure likely to be required to settle the obligation at 31 March 2022. Where the effect of the time value of money is material, the amount of the provision has been discounted to the present value of the expected payments. 17. Provisions recognised in previous years have been reviewed and adjusted, where appropriate, to reflect the best estimate at 31 March 2022 or to reflect material changes in the assumptions underlying the calculations of the cash flows. Page 17
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18. The accrual recognised in the financial statements for holiday untaken by 31 March 2022 has been estimated on a reasonable basis. 19. The pension assumptions made by the actuary in the IAS 19 report for Grampian Valuation Joint Board have been considered and I confirm that they are consistent with management's own view. 20. There are no plans or intentions that are likely to affect the carrying value or classification of the liabilities recognised in the financial statements. Contingent liabilities 21. There are no significant contingent liabilities arising either under formal agreement or through formal undertakings requiring disclosure in the accounts. All known contingent liabilities have been fully and properly disclosed, including any outstanding legal claims which have not been provided for under the 2021/22 Code and IAS 37. Fraud 22. I have provided you with all information in relation to: • my assessment of the risk that the financial statements may be materially misstated because of fraud • any allegations of fraud or suspected fraud affecting the financial statements • fraud or suspected fraud that I am aware of involving management, employees who have a significant role in internal control, or others that could have a material effect on the financial statements. Laws and Regulations 23. I have disclosed to you all known instances of non-compliance or suspected non- compliance with laws and regulations whose effects should be considered when preparing financial statements. Related Party Transactions 24. All material transactions with related parties have been appropriately accounted for and disclosed in the financial statements in accordance with the 2021/22 Code. I have made available to you the identity of all of the Grampian Valuation Joint Board's related parties and all the related party relationships and transactions of which I am aware. Remuneration Report 25. The Remuneration Report has been prepared in accordance with the Local Authority Accounts (Scotland) Amendment Regulations 2014, and all required information of which I am aware has been provided to you. Management Commentary 26. I confirm that the Management Commentary has been prepared in accordance with the statutory guidance and the information is consistent with the financial statements. Page 18
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Corporate Governance 27. I confirm that the Grampian Valuation Joint Board has undertaken a review of the system of internal control during 2021/22 to establish the extent to which it complies with proper practices set out in the Delivering Good Governance in Local Government: Framework 2016. I have disclosed to you all deficiencies in internal control identified from this review or of which I am otherwise aware. 28. I confirm that the Annual Governance Statement has been prepared in accordance with the Delivering Good Governance in Local Government: Framework 2016 and the information is consistent with the financial statements. There have been no changes in the corporate governance arrangements or issues identified, since 31 March 2022, which require to be reflected. Events Subsequent to the Date of the Balance Sheet 29. All events subsequent to 31 March 2022 for which the 2021/22 Code requires adjustment or disclosure have been adjusted or disclosed. Yours sincerely Lorraine Paisey Treasurer Page 19
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Prepared for Grampian Valuation Joint Board and the Controller of Audit January 2023 Grampian Valuation Joint Board DRAFT 2021/22 Annual Audit Report Item 4. Page 21
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Grampian Valuation Joint Board DRAFT 2021/22 Annual Audit Report | 2 Contents Key messages 3 Introduction 4 Part 1. Audit of 2021/22 annual accounts 7 Part 2. Financial sustainability and annual governance statement 12 Appendix 1. Action plan 2021/22 16 Appendix 2. National reports and briefing papers 18 Page 22
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Key messages | 3 Key messages Audit of 2021/22 annual accounts 1 The Joint Board’s financial statements give a true and fair view and were properly prepared in accordance with the financial reporting framework. 2 The management commentary, annual governance statement and the audited part of the remuneration report were all consistent with the financial statements and were properly prepared in accordance with the applicable requirements. Financial sustainability and annual governance statement disclosures 3 The Joint Board underspent its 2021/22 budget by £0.728 million. The majority of this will be returned to constituent authorities (£0.479 million) with the remainder (£0.249 million) added to reserves. 4 Earmarked reserves have been used to balance the 2022/23 budget for NDR reform costs. 5 Disclosures in the Annual Governance Statement are consistent with the financial statements and the statement has been prepared in accordance with the relevant statutory guidance. Page 23
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Introduction | 4 Introduction 1. This report summarises the findings from our 2021/22 audit of Grampian Valuation Joint Board (the Joint Board). 2. The scope of our audit was set out in our 2021/22 Annual Audit Plan presented to the August meeting of the Joint Board. This report comprises the findings from: • our audit of the Joint Board’s annual accounts • consideration of financial sustainability and the appropriateness of the disclosures in the annual governance statement. 3. The global coronavirus pandemic has had a considerable impact on the Joint Board during 2021/22. We did not identify any significant audit risks related to the pandemic for 2021/22. Adding value through the audit 4. We add value to the Joint Board through the audit by: • identifying and providing insight on significant risks, and making clear and relevant recommendations • sharing intelligence and good practice through our national reports (Appendix 2) and good practice guides • providing clear conclusions on the appropriateness of the disclosures in the annual governance statement and financial sustainability. 5. We aim to help Joint Board promote improved standards of governance, better management and decision making and more effective use of resources. Responsibilities and reporting 6. The Joint Board has primary responsibility for ensuring the proper financial stewardship of public funds. This includes preparing annual accounts that are in accordance with proper accounting practices. The Joint Board is also responsible for compliance with legislation putting arrangements in place for governance, propriety and regularity that enable it to successfully deliver its objectives. 7. Our responsibilities as independent auditor appointed by the Accounts Commission are established by the Local Government in Scotland Act 1973, the Code of Audit Practice 2016 and supplementary guidance and International Standards on Auditing in the UK. Local government bodies have a responsibility to have arrangements in place to demonstrate Best Value in how they conduct their activities. Our audit work on Joint Board’s Best Value arrangements is focussed on its use of resources to secure financial sustainability. Page 24
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Introduction | 5 8. As public sector auditors we give independent opinions on the annual accounts. The wider scope of public audit also requires auditors to conclude on the appropriateness of the organisation’s arrangements for financial management, financial sustainability, governance and transparency, and value for money unless the auditor judges that it is not appropriate due to the body’s size, nature, and audit risks. 9. As in previous years, and as reported in our 2021/22 Annual Audit Plan, we have applied the small body provisions of the Code of Audit Practice to the Joint Board’s 2021/22 audit. This is due to the small volume and lack of complexity of the Joint Board’s financial transactions. Further details of the respective responsibilities of management and the auditor can be found in the Code of Audit Practice and supplementary guidance. 10. This report raises matters from our audit. The weaknesses or risks identified are only those which have come to our attention during our normal audit work and may not be all that exist. Communicating these does not absolve management from its responsibility to address the issues we raise and to maintain adequate systems of control. 11. Our annual audit report contains an agreed action plan at Appendix 1 setting out specific recommendations, responsible officers, and dates for implementation. It also includes outstanding actions from last year and progress against these. Auditor independence 12. Auditors appointed by the Accounts Commission must comply with the Code of Audit Practice and relevant supporting guidance. When auditing the financial statements auditors must comply with professional standards issued by the Financial Reporting Council and those of the professional accountancy bodies. 13. We can confirm that we comply with the Financial Reporting Council’s Ethical Standard. We have not undertaken any non-audit related services and the 2021/22 audit fee of £7,820 as set out in our 2021/22 Annual Audit Plan, remains unchanged. We are not aware of any relationships that could compromise our objectivity and independence. 14. This report is addressed to both the Joint Board and the Controller of Audit and will be published on Audit Scotland's website www.audit-scotland.gov.uk in due course. Audit appointment from 2022/23 15. External auditors are usually appointed for a five-year term either from Audit Scotland’s Audit Services Group or a private firm of accountants. The current appointment round was due to end in 2020/21 but this was extended for a year so that 2021/22 is the last year of the current appointment round. 16. The procurement process for the new round of audit appointments was completed in May 2022. From financial year 2022/23 Grant Thornton will be the appointed auditor for Grampian Valuation Joint Board. We are working closely with the new auditors to ensure a well-managed transition. Page 25
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Introduction | 6 17. We would like to thank elected members, the Assessor and Electoral Registration Officer, the Treasurer and all staff involved in supporting the audit process for their co-operation and assistance over the last six years. Page 26
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Part 1. Audit of 2021/22 annual accounts | 7 Part 1. Audit of 2021/22 annual accounts The principal means of accounting for the stewardship of resources and performance Main judgements The Joint Board’s financial statements give a true and fair view and were properly prepared in accordance with the financial reporting framework. The management commentary, annual governance statement and the audited part of the remuneration report were all consistent with the financial statements and properly prepared in accordance with the applicable requirements. Our audit opinions on the annual accounts are unmodified 18. The annual accounts for the year ended 31 March 2022 were approved by the board on 27 January 2022. As reported in the independent auditor’s report: • the financial statements give a true and fair view and were properly prepared in accordance with the financial reporting framework • the management commentary, annual governance statement and audited part of the remuneration report were all consistent with the financial statements and properly prepared in accordance with the applicable requirements • we have nothing to report in respect of those matters which we are required by the Accounts Commission to report by exception. The annual accounts were submitted for audit in line with our agreed timetable, but completion of the audit was delayed due to delays in completing prior year audits 19. The unaudited annual accounts were received in line with our agreed audit timetable on 30 June 2022. The working papers provided with the unaudited accounts were generally of a good standard and finance staff provided support to the audit team during the audit. 20. The audited accounts were approved by the Joint Board meeting on 27 January 2023. As noted in our Annual Audit Plan, Audit Scotland prioritised the NHS, agency, and council audits for 2021/22 and this, together with delays in completing the 2020/21 audits, impacted on the time taken to complete the Joint Board audit. Page 27
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Part 1. Audit of 2021/22 annual accounts | 8 Overall materiality is £95,000 21. Our initial assessment of materiality was carried out during the planning phase of the audit. This was reviewed on receipt of the unaudited annual accounts and is summarised in Exhibit 1. Exhibit 1 Materiality values Materiality level Amount Overall materiality £95,000 Performance materiality £71,000 Reporting threshold £5,000 Source: Audit Scotland We have one significant finding to report on the annual accounts 22. International Standard on Auditing (UK) 260 requires us to communicate significant findings from the audit to those charged with governance, including our view about the qualitative aspects of the body’s accounting practices. We have one significant finding to report (refer to Exhibit 2 for details). Exhibit 2 Significant findings from the audit of the financial statements Issue Resolution 1. Accounting for short-term accumulating paid absences Finance Circular 2/2018 withdrew the statutory adjustment for the flexitime and time off in lieu elements of the accrual for untaken leave at the year end with effect from 1 April 2021. The unaudited accounts had included these in the amount charged against the Employee Statutory Adjustment Account. As a result, the Employee Statutory Adjustment Account was understated, and the General Fund balance was overstated by £24,000. Expenditure charged to the General Fund requires to be funded by the constituent authorities and so the amount to be returned to them was reduced by £24,000. The audited accounts were amended to correct this misstatement. Source: Audit Scotland Page 28
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Part 1. Audit of 2021/22 annual accounts | 9 The misstatement was less than our performance materiality threshold and so we did not need to revise our audit approach 23. Audit testing identified only one misstatement of £24,000 (refer to Exhibit 2 above). As this is below our performance materiality threshold, there was no impact on our audit approach. There are no unadjusted misstatements to report to those charged with governance 24. It is our responsibility to request that all misstatements, other than those below the reporting threshold, are corrected, although the final decision on making the correction lies with those charged with governance considering advice from senior officers and materiality. Management have adjusted all identified misstatements above our reporting threshold and so there are no unadjusted errors to report. We have obtained assurance over the significant risks identified in our Annual Audit Plan 25. Exhibit 3 sets out the significant risks of material misstatement to the financial statements we identified in our 2021/22 Annual Audit Plan. It summarises the further audit procedures we performed during the year to obtain assurances over these risks and the conclusions from the work completed. Exhibit 3 Significant risks from the audit of the financial statements Audit risk Assurance procedure Results and conclusions 1. Risk of material misstatement due to fraud caused by the management override of controls ISA 240 requires that audit work is planned to consider the risk of fraud, which is presumed to be a significant risk in any audit. This includes consideration of the risk of management override of controls to change the position disclosed in the financial statements. Made inquiries of individuals involved in the financial reporting about inappropriate or unusual activity relating to journals and other adjustments. Tested journals at year-end and post-closing entries focusing on significant risk areas. Considered the need to test journal entries and other adjustments during the period. Evaluated significant transactions outside the normal course of business. Assessed any changes to the methods and underlying assumptions used to prepare Results & Significant Judgements: Controls over journal entry processing lack authorisation procedures and we increased our sampling as a result. Officers involved in financial reporting processes did not identify any unusual activity. Audit testing of journal entries at the year-end post-closing and throughout the year did not identify any errors or inappropriate journals. Methodologies and assumptions employed by management in preparing accounting estimates did not significantly vary from the Page 29
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Part 1. Audit of 2021/22 annual accounts | 10 Audit risk Assurance procedure Results and conclusions accounting estimates compared to the prior year. Tested income and expenditure transactions around the year-end to confirm they were accounted in the correct year. Tested accruals and prepayments focusing on significant risk areas. prior year and were consistently applied. Audit testing of income and expenditure transactions confirmed they had been accounted for in the correct financial year. Our testing of accruals and prepayments did not identify any errors and there were no significant transactions outside the normal course of business. Conclusion: No issues were identified that indicate management override of controls. 2. Estimation in the valuation of land and buildings The Joint Board held land and buildings with a NBV of £0.7 million at 31 March 2021. Land and buildings are revalued every five years. There is a significant degree of subjectivity in the measurement and valuation of land and buildings. Valuations are based on specialist and management assumptions and changes in these can result in material changes to valuations. A full valuation exercise was completed during 2018/19. The Joint Board has not applied indexation in intervening years. There is a risk that the carrying amount of assets differs materially from the current value at the end of the reporting period. Tested reconciliation between financial ledger and property asset register. Reviewed management’s assessment of the current value of assets that had not been revalued at 31 March 2022 and compared to their carrying amounts in the accounts. Considered evidence used by management to support their assessment including the definition of materiality used. Results & Significant Judgements: The non-current asset note in the financial statements was agreed to the property asset register with no errors identified. Management did not provide an assessment of the current value of assets that had not been revalued at 31 March 2022, nor the definition of materiality used as part of the working papers provided to audit. Following a number of audit queries and a meeting with the valuer, the evidence provided by the valuer to support his assessment of the current value of these assets is considered reasonable. Conclusion: the carrying amount of non-current assets in the audited financial statements does not differ materially from their current value at the end of the reporting period. Page 30
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Part 1. Audit of 2021/22 annual accounts | 11 Audit risk Assurance procedure Results and conclusions Recommendation 1 Other areas of audit focus 26. We identified in our 2021/22 Annual Audit Plan areas where we considered there to be other risks of material misstatement to the financial statements. Based on our assessment of the likelihood and magnitude of the risk, we did not consider these to represent significant risks. The areas of specific audit focus were: • Valuation of the present value of promised retirement benefits and the Joint Board’s share of the pension asset/liability of North East Scotland Pension Fund. 27. We considered the reasonableness of actuarial estimates on material elements of the valuation using PwC LLP to review actuarial assumptions across Scottish LGPS, the accuracy of information provided to the actuary by Moray Council on behalf of the Joint Board, and assurances from the auditor of North East Scotland Pension Fund. There are no matters which we need to bring to your attention. There were no objections raised to the annual accounts 28. The Local Authority Accounts (Scotland) Regulations 2014 require each local government body to publish a public notice on its website that includes details of the period for inspecting and objecting to the accounts. This must remain on the website throughout the inspection period. There were no objections to the Joint Board’s 2021/22 annual accounts. Good progress was made on prior year recommendations 29. The Joint Board has made good progress in implementing our prior year audit recommendations. Two of the three actions carried forward from prior years have been fully implemented and one is no longer required. Page 31
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Part 2. Financial sustainability and annual governance statement | 12 Part 2. Financial sustainability and annual governance statement Financial sustainability looks forward to the medium and longer term to consider whether the body is planning effectively to continue to deliver its services. Main judgements The Joint Board underspent its 2021/22 budget by £0.728 million. The majority of this will be returned to constituent authorities (£0.479 million) with the remainder (£0.249 million) added to reserves. Earmarked reserves have been used to balance the 2022/23 budget for NDR reform costs. Disclosures in the Annual Governance Statement are consistent with the financial statements and the statement has been prepared in accordance with the relevant statutory guidance. The 2021/22 budget was underspent by £0.819 million 30. The Joint Board’s net operating expenditure in 2021/22 was £4.114 million compared to budgeted net expenditure of £4.933 million, an underspend of £0.819 million. The majority of this underspend relates to vacant posts (£0.627 million) and ICT costs (£0.171 million). Additional government grant (£0.187 million) was received during the year and this was used to fund additional costs associated with electoral registration (employee costs (£40,000) and others service expenses (postage (£139,000) and IT costs (£7,000)). 31. Exhibit 4 summarises performance against budget in 2021/22. Page 32
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Part 2. Financial sustainability and annual governance statement | 13 Exhibit 4 Performance against budget 2021/22 Budget £’000 Actual £’000 Variance £’000 Employee costs 3,737 3,110 (627) Other service expenses (including capital financed from current revenue (CFCR)) 1,152 1,150 (2) Support service recharges 59 62 3 Interest and investment income (2) (8) (6) Government grants and other service income (13) (200) (187) Net (under)/overspend against budget 4,933 4,114 (819) Funded by: Requisitions (4,842) (4,842) - Approved use of Reserves (91) - 91 2021/22 Outturn - (728) (728) 32. The net operating expenditure (£4.114 million) differs from the net cost of services disclosed in the comprehensive income and expenditure statement of £4.560 million by £0.446 million. This is because reports prepared for the Joint Board’s monitoring purposes are prepared on a different basis from the accounting policies used to prepare the financial statements. 33. Note 7 to the accounts reconciles the figures in the budget outturn report to the figures in the comprehensive income and expenditure statement (note: £8,000 of interest income is included in the Other Income and Expenditure line in Note 7 but offset against net expenditure in the budget monitoring reports). Note 7 shows that the majority of the difference is due to the cost of retirement benefits which are based on cash flows in the budget monitoring reports, but on the current service costs of benefits accrued in the year within the accounts. 34. IAS 19 (Retirement Benefits) calculations depend on a number of complex judgements and assumptions which are updated each year. As at 31 March 2022, the actuary has calculated that the Joint Board’s future pension commitments exceeds its share of assets in the North East Scotland Pension Fund by £0.503 million. This pension liability will be made good by increased contributions over the remaining working lives of the employees, as assessed by the scheme’s actuary. Page 33
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Part 2. Financial sustainability and annual governance statement | 14 Reserves increased by £0.249 million with £0.479 million to be returned to constituent authorities 35. The Joint Board maintains a General Fund balance to support medium-term financial planning and to address any unforeseen costs. In the absence of a more specific regulation for Valuation Joint Boards in respect of the carry forward limits on the General Fund, members agreed, in February 2022, that a maximum of 3% of the core costs budget should be added to the uncommitted general fund balance in any one year as long as the cumulative uncommitted balance does not exceed 5% of the core costs budget in that year. 36. In addition, the Joint Board agreed to earmark any underspends on the budget for Non-Domestic Rates reform as an additional part of the General Fund. During 2021/22, the NDR reform budget was underspent by £0.265 million, the majority of which was due to staff vacancies, and all of this was added to the earmarked reserve. 37. The remainder of the underspend (less the budgeted use of reserves) (£0.463 million) will be returned to constituent authorities together with an additional £16,000 to reduce the uncommitted General Fund balance to the reserves policy maximum. Earmarked reserves have been used to balance the 2022/23 budget 38. The Joint Board approved its 2022/23 budget in February 2022. The budget paper splits the budget between core costs (£4.481 million), and NDR reform costs (£0.415 million) which are funded by the Scottish Government through the local government settlement to constituent authorities. Members agreed to fund £0.147 million of the NDR reform budget from earmarked reserves with the remainder (£4.749 million) to be funded by constituent authorities. 39. Overall, the 2022/23 budget decreased by £37,000 (0.8%) due to a decrease in the budget for NDR reform (£0.129 million (24%)) offset by an increase in the budget for core costs of £0.092 million (2.1%). 40. The latest budget monitoring report, as at 30 September 2022, estimates that the 2022/23 budget will be underspent by £0.443 million (9%). The majority of this projected underspend relates to employee costs (£0.276 million) and IT maintenance and support (£0.107 million). Annual governance statement disclosures are appropriate 41. Our review of the Annual Governance Statement within the annual accounts assessed the assurances provided to the Treasurer regarding the adequacy and effectiveness of the Joint Board's system of internal control which operated in the financial year. As in previous years, the Treasurer has placed reliance on the Audit and Risk Manager’s opinion that ‘reasonable assurance can be placed on the adequacy and effectiveness of the system of internal financial control established within the Assessor’s Service.’ Page 34
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Part 2. Financial sustainability and annual governance statement | 15 42. The Annual Governance Statement sets out the key challenges facing the Joint Board in 2022/23. These include continuing to upgrade operational capacity in order to meet the challenges of moving to a 3-year revaluation cycle and implementing the new two stage proposal and appeal process, and the changes required by the Elections Act 2022. 43. We concluded that the disclosures included in the Annual Governance Statement are consistent with the financial statements and comply with the guidance issued by Scottish Ministers. 44. In previous years we have reported delays in reviewing the Joint Board’s key governance policies. These delays continued during 2022 due to staff vacancies and the impact of the pandemic and in August 2022 the Joint Board agreed a revised timetable for review of these policies. National performance audit reports 45. Audit Scotland carries out a national performance audit programme on behalf of the Accounts Commission and the Auditor General for Scotland. Appendix 2 highlights a number of reports published in 2021/22. Page 35
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Appendix 1. Action plan 2021/22 | 16 Appendix 1. Action plan 2021/22 2021/22 recommendations Issue/risk Recommendation Agreed management action/timing 1. Estimation in the valuation of land and buildings The Joint Board revalues its land and buildings every five years. In the intervening years, the Accounting Code of Practice requires that management consider whether the carrying amount of assets included in the financial statements differs materially from that which would be determined using the current value at the end of the reporting period. We requested this assessment from management but initially were only provided with an assertion that there was no material difference. Risk: the carrying amount of assets differs materially from the current value at the end of the reporting period Management should provide a working paper that demonstrates that the carrying value of non-current assets not revalued in the year does not differ materially from the current value of the assets at the reporting date. This working paper should include the evidence used to reach this conclusion, the definition of materiality used and consider the impact of reversing any accumulated depreciation on the carrying value of these non-current assets. Exhibit 3, no. 2 Agree to provide an explanation of the process used to review the carrying value and evidence for the conclusion reached. Responsible officer: Treasurer Agreed date: 30 April 2023 Outstanding prior year recommendations Issue/risk Recommendation Agreed management action/timing 2. Reserves Policy Audit testing identified that the amount transferred to the General Fund was based on The Joint Board should revisit its reserve policy to ensure it clearly sets out the basis for calculating the maximum cumulative balance to be held Complete The Joint Board’s reserves policy was clarified in the budget report considered by Page 36
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Appendix 1. Action plan 2021/22 | 17 Issue/risk Recommendation Agreed management action/timing requisitions and not budget as set out in the Joint Board’s reserve policy. The reserves policy was agreed before the introduction of a separate budget for NDR reform or use of reserves to fund annual budgets. As a result, there is a lack of clarity as to how the cumulative balance on the uncommitted part of the General Fund should be calculated. Risk: the General Fund balance is overstated in the annual accounts. for emergencies and unforeseen circumstances the Joint Board in February 2022. 3. Cyber Security Organisations are increasingly threatened by cyber-attacks as evidenced by recent incidents affecting public bodies. The Joint Board’s Cyber Essentials Plus accreditation lapsed in August 2020. Risk: key systems are not resilient enough to deal with a cyber-attack The Joint Board should reapply for Cyber Essentials Plus accreditation as soon as practicable No longer required The Joint Board’s IT applications and services are in the process of being migrated to Aberdeenshire Council’s environment and, due to the integration and constant infrastructure changes, an application for Cyber Essentials Plus accreditation on behalf of the Joint Board is no longer considered appropriate. 4. Management Commentary The management commentary included in the unaudited annual accounts required amendment before we could conclude that it met the requirements of the Code. Risk: there is a risk that the Joint Board fails to communicate effectively with its stakeholders The Joint Board should review the content and presentation of its 2020/21 management commentary against Audit Scotland’s good practice guide. Complete The content and presentation of the 2021/22 management commentary was consistent with the financial statements and included clearer explanations of variances against budget and a separate section on the General Reserve policy. Page 37
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Appendix 2. National reports and briefing papers | 18 Appendix 2. National reports and briefing papers May Local government in Scotland Overview 2021 June Covid 19: Personal protective equipment July Community justice: Sustainable alternatives to custody September Covid 19: Vaccination programme January Planning for skills Social care briefing February NHS in Scotland 2021 March Local government in Scotland: Financial Overview 20/21 Drug and alcohol: An update Scotland’s economy: Supporting businesses through the Covid 19 pandemic Page 38
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Appendix 2. National reports and briefing papers | 19 Grampian Valuation Joint Board DRAFT DRAFT 2021/22 Annual Audit Report Audit Scotland’s published material is available for download on the website in a number of formats. For information on our accessibility principles, please visit: www.audit-scotland.gov.uk/accessibility Audit Scotland, 4th Floor, 102 West Port, Edinburgh EH3 9DN T: 0131 625 1500 E: info@audit-scotland.gov.uk www.audit-scotland.gov.uk AS.4.0 Page 39
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REPORT TO: GRAMPIAN VALUATION JOINT BOARD ON 27 JANUARY 2023 SUBJECT: AUDITED ANNUAL ACCOUNTS FOR YEAR ENDING 31 MARCH 2022 BY: TREASURER TO THE BOARD 1. REASON FOR REPORT 1.1 To submit the audited Annual Accounts for the financial year ending 31 March 2022 to the Board for consideration and approval. 2 RECOMMENDATION 2.1 It is recommended that the Board: (a) approves that the Annual Accounts are signed, having regard to the Annual Report from the External Auditor considered earlier at this meeting; (b) notes the variance of £728,000 for 2021/22; and (c) if the Annual Accounts are approved for signing, agrees that £479,000 is returned to constituent authorities leaving a balance on the General Fund of £219,000, and an earmarked reserve for Non Domestic Rates Reform of £408,000. 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 Board meets to consider and approve for signature the audited Annual Accounts and, following the signing of the Annual ITEM: PAGE: 1 Item 5. Page 41
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Accounts, provides appropriately signed statements to the External Auditor, Audit Scotland. 3.3 A copy of the audited Annual Accounts for 2021/22 are appended to this report as APPENDIX 1. Amendments totalling £24,000 have been made to the unaudited accounts that were reported to the Board on 26 August 2022, which has altered the surplus and, therefore, amount to be returned to the constituent authorities. 3.4 The Auditor’s draft Report to the Board and the Controller of Audit is the subject of a separate report to this meeting. The report confirms that there are no unadjusted misstatements in the accounts to report to those charged with governance. The Independent Auditor’s report gives an unqualified opinion, which means that the financial statements give a true and fair view of the Board’s financial position for 2021/22. 3.5 With a total underspend of £0.819m, there was no requirement to utilise the budgeted £0.091m from reserves thus giving an overall variance of £0.728m. Of this total, £0.265m was transferred to the NDR Reserve for future commitments, while £0.016m was transferred out of the General Fund Reserve to bring the balance back to the maximum permitted under the Board’s Reserves Policy. The remaining balance of £0.479m is available to return to the constituent authorities. 3.6 The surplus to be returned to the constituent authorities is in proportion to the percentage of requisitions for 2021/22 and is as follows: 2021/22 Proposed Surplus Refund to Authorities % £ Aberdeen City Council 39.04 187,001 Aberdeenshire Council 44.60 213,634 Moray Council 16.36 78,365 Total 100.00 479,000 4 CONCLUSION 4.1 The Board generated a surplus of £819,000 in 2021/22. If the Annual Accounts are approved, £479,000 will be returned to constituent authorities leaving a balance on the General Fund of £219,000 and the earmarked NDR Reform Reserve of £408,000. Author of Report: Susan Souter, Senior Accountant Background papers: Held within Accountancy Section, Moray Council Date: 16 January 2023 Page 42
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APPENDIX 1 AUDITED ACCOUNTS ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022 GRAMPIAN VALUATION JOINT BOARD Item 5. Page 43
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APPENDIX 1 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 لبق نم تامولعم لىإ ةجاح ي ف متنك اذإ نوكتو ةغلب وأ ويدوأ ةناوطسأ ،يا ربلا لثم فلتخم لكش لىعوأ ةفلتخم نوكت نأ مط ب لاصّتلإا ءاجّرلاف ةظيلغ فورح لامعتساب 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: ای نابز رگید یسک ےس لسنوک ےروم وک پآرگاتروص راکرد تامولعم ںیم لاثم ںوہ ˝ ،فورح ےڑب ای پیٹ ویڈآ ،ےلیرب ہطبار رک امرف ینابرہم وت ںیئامرف: : Treasurer to the Board, Financial Services, High Street, Elgin, IV30 1BX 01343 563125 accountancy.support@moray.gov.uk Page 45
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APPENDIX 1 Contents MANAGEMENT COMMENTARY .......................................................................................... 1 STATEMENT OF RESPONSIBILITIES FOR THE ANNUAL ACCOUNTS .......................... 12 ANNUAL GOVERNANCE STATEMENT ............................................................................. 14 REMUNERATION REPORT ............................................................................................... 24 COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT ..................................... 32 MOVEMENT IN RESERVES STATEMENT ........................................................................ 34 BALANCE SHEET .............................................................................................................. 36 CASH FLOW STATEMENT ................................................................................................ 38 NOTES TO THE ACCOUNTS ............................................................................................. 40 Note 1 Accounting Policies .............................................................................................. 40 Note 2 Accounting Standards That Have Been Issued But Have Not Yet Been Adopted 42 Note 3 Critical Judgements in Applying Accounting Policies ............................................. 42 Note 4 Assumptions Made About the Future and Other Major Sources of Estimation Uncertainty ....................................................................................................................... 42 Note 5 Material Items of Income and Expenditure ........................................................... 43 Note 6 Events After The Reporting Period ....................................................................... 43 Note 7 Expenditure and Funding Analysis and Adjustments between Accounting Basis and Funding Basis under Regulations .............................................................................. 44 Note 8 Expenditure and Income Analysed by Nature ...................................................... 47 Note 9 Earmarked Portions of the General Fund ............................................................. 47 Note 10 Financing and Investment Income and Expenditure ............................................ 48 Note 11 Property, Plant and Equipment .......................................................................... 48 Note 12 Short Term Debtors ........................................................................................... 51 Note 13 Cash and Cash Equivalents ............................................................................... 51 Note 14 Short Term Creditors ......................................................................................... 51 Note 15 Financial Instruments ......................................................................................... 52 Note 16 Usable Reserves ................................................................................................ 53 Note 17 Unusable Reserves ............................................................................................ 53 Note 18 External Audit Costs .......................................................................................... 57 Note 19 Cashflow ............................................................................................................ 57 Note 20 Requisition and Grant Income ............................................................................ 58 Note 21 Leases ............................................................................................................... 58 Note 22 Related Parties .................................................................................................. 59 Note 23 Defined Benefit Pension Scheme ....................................................................... 60 Glossary of Terms ............................................................................................................... 68 Independent Auditor's Report..………………………………………………………………….…70 Page 47
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Grampian Valuation Joint Board Annual Accounts 2021/22 1 MANAGEMENT COMMENTARY Strategy and objectives The Assessor & Electoral Registration Officer is charged with the provision of valuation assessment and registration services across Aberdeen City Council, Aberdeenshire Council and Moray Council areas. These strictly defined and regulated services are delivered by the Assessor & Electoral Registration Officer, the responsible independent statutory official, in partnership with the Grampian Valuation Joint Board, an independent local government body which was established by The Valuation Joint Boards (Scotland) Order 1995, and is comprised of members from each of the constituent authorities. The Board is required to appoint and resource the 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. The priorities for 2021/22 were: • Implement a full household canvass using the reformed canvass model; • Publish revised registers by 1 December 2021; • Prepare for the local government elections scheduled for 5 May 2022; • Maximise Valuation Roll appeal resolution and dispose of all Revaluation appeals by the revised statutory deadline of 31 December 2021; • 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; • Continue to develop IT systems and procedures to deliver the non-domestic rates reform changes that include more frequent revaluations, greater transparency and improved information gathering powers; • Improve IT service provision and capacity by working more closely with one of the constituent authorities. Monitoring regimes The Electoral Commission has a performance monitoring framework in place for EROs across the UK and requires quantitative and qualitative performance returns. The Cabinet Office in its capacity as lead department for the implementation of individual electoral registration and canvass reform across the UK also required performance returns from EROs during 2021/22. Quarterly revaluation appeal resolution returns are made to the Scottish Government that in turn publishes the local and national data1. 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. In discussion with the Electoral Commission, the Electoral Registration Committee of the Scottish Assessors Association are finalising a set of key performance indicators in relation 1 https://www.gov.scot/publications/non-domestic-rates-revaluation-appeals/ Page 48
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Grampian Valuation Joint Board Annual Accounts 2021/22 2 MANAGEMENT COMMENTARY (continued) to electoral registration activities and these will be reported on annually from 1 December 2022 onwards. 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 registration. The organisation normally operates out of offices in Aberdeen, Banff and Elgin but, as in 2020/21, operational activity has been mainly home-based with limited office-based activities being undertaken, largely in Aberdeen, due to the pandemic-related restrictions. 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 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 unique 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. Despite the continued closure of operational offices due to the pandemic and the move to a working-from-home operational model, the organisation met all the demands placed upon it in terms of valuation assessment and registration during 2021/22. The pandemic continued to impact on the organisation’s planned activities for the year, although to a lesser degree when compared with 2020/21. Working practices to allow services to be maintained whilst working from home continued to be developed and refined. As an organisation which previously handled information largely in paper format, the change to a hybrid model where less paper is being handled within the office has been a challenge. However, this has produced benefits in terms of staff time and costs. As the year progressed and restrictions continued to ease, the inspection and survey of properties and door-to-door visits in connection with electoral registration activities began to increase. The continued risks and uncertainties that prevailed during the year 2021/22 have again been amongst the most challenging this organisation has had to address. A fair review of the business In terms of our priorities: Implement a full household canvass using the reformed canvass model Under the reformed canvass model, the 2021 canvass again used data to determine the appropriate approach to be taken on a household-by-household basis. A data matching exercise was carried out where the registration database was compared 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 Page 49
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Grampian Valuation Joint Board Annual Accounts 2021/22 3 MANAGEMENT COMMENTARY (continued) followed that required a response from the household and follow-up actions by the ERO. Although it was not possible to carry out door-to-door visits for the 2020 canvass, door-to-door visits resumed for the 2021 canvass and all properties which required a personal visit were canvassed by a member of the canvass team. For the 2021 canvass, a total of 341,409 canvass communications were issued, compared to 387,768 canvass communications in 2020 and 482,539 canvass forms and reminders in 2019. This trend, and the associated savings, highlights one of the principal benefits of the reformed canvass model. Publish revised registers by 1 December 2021 Revised registers were published on 1 December 2021 and the table below provides a summary of the last three revised registers for local government and Scottish Parliament elections. Revised registers Number of electors Number of postal voters 1 February 2020 445,690 91,070 1 December 2020 448,331 88,494 1 December 2021 448,607 119,213 During the period from 1 December 2020 to 30 November 2021, 54,958 additions and 55,274 deletions were made to the registers. During the same period, 37,097 initial invitations to register were issued along with 31,984 first and second reminders. Prepare for the local government elections scheduled for 5 May 2022 This was the second set of major elections to take place in Scotland during the pandemic. Unlike the Scottish Parliamentary elections (SPE) in 2021, no extra funding was made available, although any unused sums from the 2021 SPE funding was permitted to be retained and used for registration related activities in 2021/22. For the 2021 SPE, a Household Notification Letter (HNL) was issued to all households in Scotland by local electoral registration officers (EROs). The letter detailed the eligible electors at the property and indicated if they were a postal voter. The purpose of this letter was to encourage citizens to take early action where they required to register to vote and/or register to vote by post. Using the funding which remained from the SPE, this HNL exercise was repeated in January 2022 with the aim of encouraging citizens to take early action and hopefully spread activity over a longer, more manageable period, rather than close to the registration deadlines. Given the high uptake of postal votes at the SPE, indications were that there would not be a similar upsurge in postal voting for the local government elections and that we could manage any influx of applications from our core admin team, supplemented by other existing staff if required. Therefore, in contrast to the 2021 SPE, no additional temporary staff were employed. With the exception of a small team based permanently in the Aberdeen office for mail and welfare reasons, the majority of the election related work in 2022 has been carried out remotely by staff working from home although the office-based presence has been increased at critical points in the election cycle when required. The dedicated voter information on the Board’s website has continued to be developed and, as in 2020/21, there was a facility for electors to request the issue of pre-populated absent vote application forms. Issuing the forms with the elector’s details pre-populated allowed them to be processed quicker and more easily when they were returned, saving valuable staff time and resources. During the period from 1 February to 12 April 2022, over 3,800 forms were requested. Page 50
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Grampian Valuation Joint Board Annual Accounts 2021/22 4 MANAGEMENT COMMENTARY (continued) Maximise Valuation Roll appeal resolution The pandemic seriously interrupted the independent Valuation Appeal Committees’ appeal hearing and disposal programmes across Scotland and the Scottish Government extended the appeal disposal deadline to 31 December 2021 to cater for these unique circumstances. The number of appeals which required to be disposed of in Grampian was particularly challenging, even taking the extended deadline into account. However, the valuation team rose to the challenge and the loss of rateable value continued to be amongst the lowest in Scotland. Discussions and negotiations continued throughout 2021/22 with the result that all the Revaluation 2017 appeals lodged in Grampian were disposed of by the statutory deadline of 31 December 2021 except for one appeal which is the subject of a procedural hearing to the Valuation Appeal Committee and 149 appeals which have been referred to the Lands Tribunal for Scotland. A summary of the Revaluation 2017 appeals is shown in the table below. Number Percentage Appeals lodged 11,291 100.000% Appeals disposed of 11,141 98.671% Appeals referred to Lands Tribunal for Scotland 149 1.320% Appeals subject of a procedural hearing to the Valuation Appeal Committee 1 0.009% Comprehensive data relating to the disposal of Revaluation appeals across Scotland can be found on the Scottish Government website2. Limited progress has been made in Grampian, and across the whole of Scotland, in relation to the thousands of “material change of circumstances” appeals that were lodged from 2020 onwards due to the effects of the pandemic on property values. The Scottish Government made an Order in autumn 2021 which specified that when calculating the rateable value of any properties on the 2017 Valuation Roll, no account could be taken of any matter arising on or after 1 April 2021 that is directly or indirectly attributable to coronavirus. However, this Order could not be applied retrospectively, and a Bill is currently going through the Scottish Parliament which would extend this rule back to 2 April 2020, the date on which the Scottish Government amended the definition of material change circumstances to exclude changes in economic circumstances. Although the deadline for disposal of appeals lodged from 1 January 2020 onwards has been extended to 31 December 2023, Valuation Appeal Committee hearings have been scheduled from summer 2022 through to the end of 2022. This will prove challenging for the valuation team whilst they carry out tasks in connection with Revaluation 2023. 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 and as such the indicators can be misleading as achieving the targets relies partly on the timeous receipt of information from the owners and occupiers of dwellings and non-domestic properties. Pandemic related restrictions continued to have an impact on 2 Non-domestic rates revaluation appeals statistics - gov.scot (www.gov.scot) Page 51
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Grampian Valuation Joint Board Annual Accounts 2021/22 5 MANAGEMENT COMMENTARY (continued) the organisation’s ability to meet the timescales suggested by the key performance indicators but there has been an improvement from 2020/21 as well as an increase in volume of both alterations to the non-domestic Valuation Roll and the number of dwellings added to the Council Tax Valuation List. 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 Year < 3 months 3-6 months > 6 months Total Number Number % Number % Number % 2019/20 1,176 59.3 358 18.0 450 22.7 1,984 2020/21 425 29.7 278 19.4 727 50.8 1,430 2021/22 663 39.4 380 22.6 640 38.0 1,683 Target 65* 20* 15* * Target for years 2019/20 & 2020/21 was 70%, 15% & 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 Year < 3 months 3-6 months > 6 months Total Number Number % Number % Number % 2019/20 3,089 89.9 231 6.7 117 3.4 3,437 2020/21 1,357 61.4 408 18.4 447 20.2 2,212 2021/22 2,465 83.2 344 11.6 155 5.2 2,964 Target 94 3 3 The organisation saw several retirements during 2021/22, including three at management team level. Although recruitment has been partially successful, there are still several unfilled posts within the valuation team, and this has also had an impact on the ability of the organisation to meet the KPI targets. Despite these difficulties, the organisation has performed exceptionally well in fulfilling its statutory requirements to maintain the Valuation Roll and List and it is a testimony to the hard work and dedication of colleagues that the current level of update to the Valuation Roll and Council Tax Valuation List has been achieved. Continue to develop IT systems and procedures to deliver the non-domestic rates reform changes that include more frequent revaluations, greater transparency and improved information gathering powers Work on this continued throughout 2021/22 and is still in progress at a local level and at a national level through work on the Scottish Assessor’s Portal at saa.gov.uk. One of the significant pieces of work completed during the year has allowed the improved information gathering powers to be exercised in the form of Assessor Information Notices (AINs). As of 31 March 2022, in excess of 20,000 AINs had been issued for various property types across Grampian. An internal Revaluation Working group comprising experienced valuation practitioners meets regularly to consider the various challenges which lie ahead of the Page 52
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Grampian Valuation Joint Board Annual Accounts 2021/22 6 MANAGEMENT COMMENTARY (continued) Revaluation which takes effect from 1 April 2023. Improve IT service provision and capacity by working more closely with one of the constituent authorities Discussions with Aberdeenshire Council continued throughout 2021/22 and a Service Level Agreement is now in place whereby Aberdeenshire Council’s IT section now manage the Board’s IT infrastructure and provide day-to-day IT support to staff. Additional integration of services is currently being explored and undertaken, all with the aim of providing savings to the Board whilst providing a more comprehensive, robust and resilient service to users. Future developments The priority for the next year is to continue to fulfil our statutory duties across all three service strands: council tax, valuation for rating, and electoral registration. In relation to council tax, the current Scottish Government has council tax reform as one of its key priorities although there is no concrete timescale for it. It is planned that a citizen’s assembly will be set up to consider the way forward and the situation will be monitored by the Assessor through the Scottish Assessors Association and its Domestic Subjects Committee of which he is currently the Secretary. In addition, restrictions imposed by the pandemic hindered progress in the disposal of council tax appeals. However, a timetable of hearings of the Valuation Appeal Committees has now been established for the 2022 calendar year. In relation to valuation for rating, the organisation faces several challenges. The general revaluation of all non-domestic subjects is effective from 1 April 2023 and work is ongoing to ensure that draft values are prepared for publication by 30 November 2022 and final values by March 2023. This task is challenging due to the fact that valuations are to be based on the levels of value that prevailed one year prior to the revaluation date (the “tone”) rather than two years prior at previous revaluations. This means that the “tone” for the 2023 Revaluation is 1 April 2022 and therefore information must be ingathered and analysed in a shorter timeframe than previously. The current level of vacancies in the valuation team makes this task more acutely challenging. The difficulties of recruiting suitably qualified professional staff are not unique to the Grampian Assessor and is being experienced by colleagues in other Assessors’ offices and across the public sector more widely. The transfer of the work of the independent valuation appeal committees to a new chamber in the Scottish Courts and Tribunal Service will now take place with effect from 1 January 2023. This move brings with it a change to the appeal procedures in relation to non-domestic valuations. Although the terms of the legislation have still to be finalised, it is already known that system and procedural changes will be required to deal with the two-stage proposal and appeal process which will replace the existing appeal procedures. In relation to electoral registration, the Elections Act which received Royal Assent in April 2022 brings with it several changes which will impact on the work of the organisation, including the requirement for voter identification in relation to UK elections and the removal of the restriction on British citizens who have been resident overseas for more than 15 consecutive years from voting in UK elections. The repeal of the Fixed Term Parliaments Act in March 2022 adds more uncertainty and complexity to the date of a future UK general election, particularly when considered alongside the ongoing review of UK Parliament constituencies by the Boundary Commission. These legislative changes indicates that operational agility and planning will be the key to the success of the implementation and delivery of these developments. Page 53
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Grampian Valuation Joint Board Annual Accounts 2021/22 7 MANAGEMENT COMMENTARY (continued) In relation to governance, the retirement of several members of the management team during 2021 and the continuing impact of the pandemic meant that progress was challenging during 2021/22 as it had been in 2020/21. However, with a new management team in place and the lifting of the majority of the pandemic related restrictions, we anticipate that the opportunities for updating and modernising our governance arrangements to streamline and improve efficiency across the organisation whilst maximising our effectiveness in terms of costs and service delivery will continue. 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. KPI targets for the three years from 2021/22 onwards were agreed by the Board at its June 2021 meeting. The Electoral Commission’s performance framework for electoral registration officers focuses on both qualitative and quantitative performance monitoring. As mentioned earlier, the Electoral Registration Committee of the Scottish Assessors Association is finalising a set of key performance indicators in relation to electoral registration activities, and these will be reported on annually from 1 December 2022 onwards. 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 a dynamic valuation assessment and registration statutory framework, challenges in terms of financial resources and, particularly, securing sufficient expertise to deliver our services. The effect of the global pandemic continues to present challenges to the operational activities and remains a major influence on all decision making within the organisation. Apart from the normal control measures in terms of financial and operational planning, the Assessor & ERO and the management team seek to mitigate risk and uncertainty through partnership working through the Scottish Assessors Association (SAA) and external agencies. The Assessor & ERO is Secretary to the SAA Electoral Registration and Domestic Subjects committees and has been offered a place on the Electoral Management Board for Scotland. These roles will assist the organisation to meet the challenges of any developments in relation to the valuation assessment and registration functions of the organisation and also with the identification of risks and the work required to minimise uncertainties in what remains an extremely unpredictable and challenging public sector environment. Page 54
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Grampian Valuation Joint Board Annual Accounts 2021/22 8 MANAGEMENT COMMENTARY (continued) Financial Performance Revenue Expenditure The Grampian Valuation Joint Board, at its meeting on 5 February 2021, approved the 2021/22 Revenue Budget of £4.933m (2020/21 £4.833m), an increase of 2.0%. The requisitions to constituent authorities were set at £4.842m (2020/21 £4.703m) with approved use of reserves of £0.091m. The core budget was set at £4.389m, with an additional £0.544m 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 2021/22 was £4.114m (2020/21 £3.979m) resulting in an underspend of £0.819m for the year. The budgeted use of General Reserve of £0.091m is not required, thus giving an overall variance of £0.728m. Of this total, £0.265m was transferred to the NDR Reserve for future commitments, while £0.016m was transferred out of the General Fund Reserve to bring the balance back to the maximum permitted under the Board’s Reserves Policy. This balance of £0.479m is available to return to the constituent authorities. The Comprehensive Income and Expenditure Statement shows a deficit of £0.185m on the provision of services for the year. After allowing for the reversal of statutory charges for International Accounting Standard 19 (IAS19) of £0.416m, CFCR of £0.016m and depreciation totalling £0.034m, this leaves the £0.016m transferred out of the General Fund and £0.265m to the NDR Reserve. The following table shows a summary of the figures for the main variances between budget and actual for the year to 31 March 2022. 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. 2020/21 2021/22 2021/22 2021/22 Actual Budget Actual Variance £000 £000 £000 £000 3,053 Employee Benefit Expenses 3,737 3,110 (627) 1,243 Other Service Expenses (including capital financed from current revenue (CFCR)) 1,152 1,150 (2) 63 Support Service Recharges 59 62 3 (1) Interest and Investment Income (2) (8) (6) (379) Government Grants and other Service Income (13) (200) (187) 3,979 Net (Under)/Overspend Against Budget 4,933 4,114 (819) Funded by: (4,703) Requisitions (4,842) (4,842) - - Approved use of Reserves (91) - 91 (724) 2021/22 Outturn - (728) (728) Page 55
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Grampian Valuation Joint Board Annual Accounts 2021/22 9 MANAGEMENT COMMENTARY (continued) The main variances from budget during the year were: - £0.627m underspend for Employee costs, largely due to staff vacancies and difficulties experienced in recruiting suitably qualified staff. - There is a small overall variance on other service expenses, but within this heading there are both over and underspends, detailed below. - The move to a new office suite within Woodhill House was delayed. The current rental and service charges continue until the relocation takes place, resulting in a £0.062m overspend. However, within property costs there was reduced expenditure on heating, lighting and cleaning costs of office accommodation as staff continue to work from home since lockdown. - There was an overspend on postages of £0.152m due to the issue of mail in advance of the Scottish Parliament Election (SPE) in May 2021, which included household notification letters and letters to all 16 and 17 year olds encouraging them to register to vote. This expenditure was funded by government grant for the expected increase in postal vote applications in the run up to the SPE in May 2021. - An underspend on ICT of £0.161m is due to slippage in NDR planned spend on support costs and equipment. - Valuation Appeals costs were underspent by £0.02m - The £0.187m variance in income is mainly due to government grants received in excess of budget expectation. There is corresponding expenditure in employee costs of £40,000 and other service expenses (postages £139,000 and ICT £7,000) totalling the grant amount which are referred to above. - Of the £0.265m underspend related to NDR reforms, £0.209m is within the employee costs, £0.146m on other expenditure, and without the budgeted use of the earmarked reserve of £0.091m, this gives the underspend of £0.265m. General Reserve In setting the 2021/22 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 2022 is £0.219m with an additional £0.408m earmarked for the NDR reform Implementation. Going Concern The Balance Sheet at 31 March 2022 shows an excess of assets over liabilities of £0.739m (net asset of £0.998m at 31 March 2021). 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. Page 56
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Grampian Valuation Joint Board Annual Accounts 2021/22 10 MANAGEMENT COMMENTARY (continued) Councillor Donald Gatt Convener Mark J Adam MRICS AEA (Cert – Scotland) Assessor & Electoral Registration Officer Lorraine Paisey CA Treasurer Page 57
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Grampian Valuation Joint Board Annual Accounts 2021/22 11 Page 58
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Grampian Valuation Joint Board Annual Accounts 2021/22 12 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 59
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Grampian Valuation Joint Board Annual Accounts 2021/22 13 STATEMENT OF RESPONSIBILITIES FOR THE ANNUAL ACCOUNTS (continued) 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 2021/22 (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 2022. Lorraine Paisey CA Treasurer Page 60
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Grampian Valuation Joint Board Annual Accounts 2021/22 14 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. 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 & 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 61
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Grampian Valuation Joint Board Annual Accounts 2021/22 15 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). 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 organisation maintained its commitment to combating fraud during the year by assisting with the National Fraud Initiative. The Assessor & ERO also works closely with the Electoral Commission, the Electoral Management Board 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 engagement work following the 2017 revaluation has continued with the focus being on appeal resolution and Non-Domestic Rating (NDR) reform. The Assessor & ERO’s engagement strategy has been to maintain a high level of accessibility and visibility in the public domain. Significant changes in the information gathering regime took place during 2020/21 and a major project to ingather information in preparation for the 2023 revaluation got underway in 2021/22. As of 31 March 2022, in excess of 20,000 requests for information had been issued to proprietors, tenants and occupiers of property within the Grampian area. Page 62
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Grampian Valuation Joint Board Annual Accounts 2021/22 16 ANNUAL GOVERNANCE STATEMENT (continued) In a similar exercise to that carried out prior to the Scottish Parliament Election in 2021, Household Notification Letters (HNLs) were issued to all households in the Grampian area prior to the local government elections in May 2022. This encouraged citizens to register to vote and/or apply to vote by post should they wish to. The online voting information page on the Board’s website which was established in 2020/21 continues to be developed so users can easily access information or application forms for the service or action that they require. This has continued to be a well-used service and in a 10- week period leading up to the local government elections in May 2022, around 4,000 requests for assistance were made using this facility. An initial venture into the realm of social media was established in 2021/22 with the creation of a Twitter account for the electoral registration service. This account is still in its infancy but it is intended to be developed to provide local electoral registration content to social media users. 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, the Cabinet Office, 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 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 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 taxation3 and electoral registration4 and thus improve sustainability and economic and social benefits. The pandemic and the organisation’s response to it continued to be a focus for all stakeholders during 2021/22. The implementation of local taxation reforms has continued to be the subject of scrutiny during the last year and, through the work of the various committees of the Scottish 3 Non-Domestic Rates (Scotland) Act 2020 (legislation.gov.uk) 4 Elections Act 2022 Stages - Parliamentary Bills - UK Parliament Page 63
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Grampian Valuation Joint Board Annual Accounts 2021/22 17 ANNUAL GOVERNANCE STATEMENT (continued) Assessors Association, the Assessor and his team have continued to work with other stakeholders to ensure that the new system is implemented at a local and national level and is sustainable and effective. Work in connection with the new information gathering powers continued throughout 2021/22 and procedures are now in place to ensure that a comprehensive and robust information gathering regime is in place ahead of the revaluation of non-domestic properties effective from 1 April 2023. After a period of significant legislative changes to address social and democratic inequalities, including the introduction of individual electoral registration in 2014, the enfranchisement of 16 and 17 year olds in Scotland in 2016, major reforms to the annual canvass in 2020 and the widening of the franchise in Scotland to include prisoners and non-European Union (EU) and non-Commonwealth foreign nationals during 20205, electoral registration during 2021/22 was relatively settled. However, electoral registration officers, through the SAA Electoral Registration Committee, were represented on various groups involved in the development of procedures in connection with what is now the Elections Act 2022. 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 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 to innovate and optimise them. Innovation and agility continued to be key requirements to maintain service delivery during 2021/22, particularly as the majority of colleagues remained working from home. Innovation and agility will remain key requirements during 2022/23 and beyond as NDR reforms continue to be implemented. 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 & 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 made at each board meeting 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 5 Scottish Elections (Franchise and Representation) Act 2020 (legislation.gov.uk) Page 64
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Grampian Valuation Joint Board Annual Accounts 2021/22 18 ANNUAL GOVERNANCE STATEMENT (continued) 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. During 2021/22, the organisation put forward its largest single cohort of candidates for the Association of Electoral Administrators Certificate in Electoral Administration, a welcome development which will ensure the organisation has a more qualified and knowledgeable workforce in what is a very specialised field. 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. 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 SAA website 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 increasing number of different subject types. The Board and the Assessor & ERO reported on performance to the Electoral Commission, the Cabinet Office, the Scottish Government and the Scottish Information Commissioner during 2021/22. 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 & ERO works closely with Police Page 65
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Grampian Valuation Joint Board Annual Accounts 2021/22 19 ANNUAL GOVERNANCE STATEMENT (continued) Scotland at a local and national level. IT resilience and effectiveness were strengthened during 2021/22 with Aberdeenshire Council’s IT section taking responsibility for managing the Board’s IT infrastructure and providing IT support to users. Further integration in this regard is planned for 2022/23. 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 were all held online during 2021/22. Meeting dates are published in advance. 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 and 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 Page 66
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Grampian Valuation Joint Board Annual Accounts 2021/22 20 ANNUAL GOVERNANCE STATEMENT (continued) 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, three Assistant Assessors and the Principal Admin Officer. The management team has now reverted to meeting on a quarterly basis. • The Assessor & ERO The Assessor & ERO has the statutory responsibility for the Valuation Rolls, 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 & 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. 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. The Internal Audit Manager is accountable on a day-to-day basis to the Treasurer and to the Board. Internal Audit operates in accordance with Public Sector Internal Audit Standards and in line with the requirements of the Standards is subject to periodic external inspection. Page 67
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Grampian Valuation Joint Board Annual Accounts 2021/22 21 ANNUAL GOVERNANCE STATEMENT (continued) Internal audit and the subsequent report by the external auditors in their annual audit letter and in other reports, informs the effectiveness of the financial control environment as an element of the Board’s governance arrangements. No fundamental control weaknesses were reported during the period covered by this statement. It is the opinion of the Internal Audit Manager that reasonable assurance can be placed on the Board’s internal financial control systems in place for the year ended 31 March 2022. • 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. 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 and Electoral Management Board reviewing and reporting on the performance of the ERO. This organisation has possibly one of the largest service communities in the Grampian area providing registration services to over 448,000 citizens, and property valuation assessments for over 320,000 properties. Such a wide and comprehensive reach throughout the Grampian region also provides a barometer for the success or otherwise of the organisation’s service delivery. 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 are under significant pressure and major changes such as NDR and electoral reform are being implemented. In the 2020/21 governance statement, the key challenges facing the organisation for 2021/22 were to: • Continue to meet all operational demands whilst not compromising employee or public safety during the Covid-19 pandemic. • Continue to upgrade our operational capacity in terms of workforce, processes and IT systems to meet the challenges of moving to a 3-yearly revaluation cycle for Revaluation 2023. • Maintain the drive to improve and streamline our governance arrangements, progress equalities mainstreaming and performance monitoring and complete the work to widen our existing customer consultation framework. • Continue in the work to maximise the effectiveness of the new electoral registration system in order to capitalise upon information sources and build upon the groundwork of the 2020/21 online landing page to streamline voter contact and engagement. • Continue to manage the resourcing required to ensure that this organisation meets all Page 68
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Grampian Valuation Joint Board Annual Accounts 2021/22 22 • ANNUAL GOVERNANCE STATEMENT (continued) statutory commitments. The requirement to meet all operational demands whilst not compromising employee or public safety during the second year of the Covid-19 pandemic proved challenging. The workforce continued to be largely home-based and the development of plans to move back into offices during 2021 had to be reconsidered in light of government guidance. In contrast to some public sector bodies’ responses to the pandemic, the organisation continued to offer a full range of communication options to service users during normal business hours, including telephone, email and post and continued to deliver services across all areas of operational activity. Site visits and door-to-door canvass activities resumed during 2021/22 with appropriate risk assessments and mitigation in place. Workforce recruitment proved successful for administrative and technical posts during 2021/22 but despite multiple rounds of advertising, recruitment of suitably qualified valuation staff has been less so. Development of IT systems has continued as has the adaptation of working practices to meet the challenges of working from home. Lessons learned from this will inform future process changes and IT developments. Work to improve and streamline governance arrangements, progress mainstreaming and performance monitoring and widen the customer consultation framework continued to be slow. The availability of HR resources remained at a reduced level and continued to have an impact on the refresh of governance policies. Progress has however been made in the latter stages of 2021/22 and will continue during 2022/23 and beyond. Progress to optimise the new electoral registration system was not as significant as hoped but we are now in a better position to investigate and assess the benefit of additional information sources during 2022/23. The organisation continued to face challenges during 2021/22 but has learned from the experiences of the challenges from 2020/21, including the delivery of registration services ahead of the local government elections in May 2022 while staff remained home-based. Although challenging, non-domestic appeal disposal by the revised deadline 31 December 2021 was successful and preparation work for the 2023 Revaluation is well underway. The variation and rescheduling of the demands on the organisation do challenge resource management but close monitoring, management and reporting along with a degree of flexibility ensured that appropriate resourcing was in place and that all commitments were met. COVID-19 The Covid-19 pandemic impacted the way we delivered our business-as-usual services during 2021/22, and this continues into 2022/23. The desire to keep staff and customers safe during this period, while at the same time delivering our statutory services and adhering to government guidance, was at the forefront of the decisions that we made. The logistics of this meant that significant changes in how and where we delivered our services had to be considered and implemented. As we emerge from the pandemic, like other public sector organisations, we aim to maintain our resilience to the challenges arising from it and ensure that the organisation and our people are in the best possible shape going forward. Looking ahead the key challenges for 2022/23 are: • Continue to meet all operational demands whilst not compromising employee or public safety as we exit the Covid-19 pandemic. Page 69
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Grampian Valuation Joint Board Annual Accounts 2021/22 23 ANNUAL GOVERNANCE STATEMENT (continued) • Continue to upgrade our operational capacity in terms of workforce, processes and IT systems to meet the challenges of moving to a 3-yearly revaluation cycle. • Upgrade systems and working practices to deal with the new 2 stage proposal and appeal system which comes into force on 1 January 2023. • Maintain the drive to improve and streamline our governance arrangements, progress equalities mainstreaming and performance monitoring and complete the work to widen our existing customer consultation framework. • Continue the work to maximise the effectiveness of the electoral registration system in order to capitalise upon information sources and to enhance and develop the online voting information pages of our website to streamline voter contact and engagement. • Manage the resources that will be required to manage the changes brought in by the Elections Act 2022. • Continue to manage the resourcing required to ensure that this organisation meets all statutory commitments. 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. Councillor Donald Gatt Convener Mark J Adam MRICS AEA (Cert - Scotland) Assessor & Electoral Registration Officer Page 70
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Grampian Valuation Joint Board Annual Accounts 2021/22 24 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) Amendment Regulations 2014. All information disclosed in the tables 1 to 6 in this Remuneration Report is audited by the external auditors, Audit Scotland. The other sections of the Remuneration Report are reviewed by Audit Scotland 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 and Severance Payments) Amendment Regulations 2018. 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, 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. £23,257 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. £22,095 per annum. These rates are effective for the year ending 31 March 2022. 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 Leadbitter was Convener of the Grampian Valuation Joint Board during the year. He received a Special Responsibility Allowance from Moray Council. This allowance is paid for in full by Moray Council and will be included in their remuneration report. Consequently no additional award is due for undertaking duties for the Valuation Board. Councillor Cormie was Depute Convener. The Board pays a Special Responsibility Allowance to the Depute Convener of the Board. Details of his salary are included in the remuneration report for Aberdeen City Council. 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 71
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Grampian Valuation Joint Board Annual Accounts 2021/22 25 Remuneration of Senior Councillors, Convener and Depute Convener (Table 1) Councillor Name and Responsibility Total Remuneration 2020/21 Salary, fees and allowances Total Remuneration 2021/22 £ £ £ Councillor Cormie Depute Convener 3,350 3,491 3,491 Total 3,350 3,491 3,491 No taxable expenses were paid in 2021/22 or in 2020/21. 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 2020/21 2021/22 £ £ Salaries 3,350 3,491 TOTAL 3,350 3,491 Page 72
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Grampian Valuation Joint Board Annual Accounts 2021/22 26 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 2020/21 Salary, fees and allowances 2021/22 Taxable Expenses 2021/22 Total Remuneration 2021/22 £ £ £ £ Mark Adam Depute Assessor & ERO (until 31/5/21) Assessor & ERO (from 1/6/21) 82,504 122,264 822 123,086 Ian Milton Assessor & ERO (left 31/5/21) 116,066 19,209 137 19,346 Gavin Oag Depute Assessor & ERO 91,061 104,062 822 104,884 Jim Barron Depute Assessor & ERO (from 1/10/21) - 41,353 411 41,764 TOTAL 289,631 286,888 2,192 289,080 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 73
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Grampian Valuation Joint Board Annual Accounts 2021/22 27 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 2022, 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. The Scottish Public Pension Authority issued a table for the amended 2021/22 employee contribution rates, to be used from 1st April 2020, using the member’s actual take home pay as at 1st April 2020. Prior to this, from 1 April 2009, a five tier contribution system was used, 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. 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. A LGPS member’s contribution depends upon his or her full time equivalent pay. The tables of rates for 2020/21 and 2021/22 are shown below. Page 74
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Grampian Valuation Joint Board Annual Accounts 2021/22 28 Pension Benefits (continued) Tiered Contribution Pay Rates Whole time pay 2020-21 Contribution rate 2020/21 Whole time pay 2021-22 Contribution rate 2021/22 On earnings up to and including £22,852 5.50% On earnings up to and including £22,955 5.50% On earnings above £22,853 and up to £29,683 Between 5.6% - 6.0% On earnings above £22,956 and up to £29,857 Between 5.6% - 6.0% On earnings above £29,684 and up to £37,262 Between 6.1% - 6.5% On earnings above £29,858 and up to £37,474 Between 6.1% - 6.5% On earnings above £37,263 and up to £52,567 Between 6.6% - 7.5% On earnings above £37,475 and up to £52,876 Between 6.6% - 7.5% On earnings above £52,568 and up to £59,221 Between 7.6% - 8.0% On earnings above £52,877 and up to £59,569 Between 7.6% - 8.0% On earnings above £59,222 and up to £79,296 Between 8.1% - 9.0% On earnings above £59,570 and up to £79,762 Between 8.1% - 9.0% On earnings above £79,297 and up to £119,961 Between 9.1% - 10.0% On earnings above £79,763 and up to £120,666 Between 9.1% - 10.0% On earnings above £119,962 10.1% and over On earnings above £120,667 10.1% and over 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. Page 75
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Grampian Valuation Joint Board Annual Accounts 2021/22 29 Pension Benefits (continued) Senior Councillors (Table 4) For the year to 31 March 2021 For the year to 31 March 2022 £ £ Councillor Cormie Depute Convener 647 625 Total 647 625 In-year pension contributions The above amounts show the in-year contributions relating to the Special Responsibility Allowance shown in Table 1. The total pension benefits relating to Councillor Cormie are detailed in the remuneration report of Aberdeen City Council. 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. For the year to 31 March 2021 For the year to 31 March 2022 As at 31 March 2022 Difference from March 2021 £ £ £ £ Mark Adam Pension 55,773 13,920 Depute Assessor & ERO (until 31/3/21) Assessor & ERO (from 1/6/21) Lump Sum 96,791 25,240 Ian Milton Pension 61,498 392 Assessor & ERO (left 31/5/21) Lump Sum 106,666 - Gavin Oag Pension 44,218 2,530 Depute Assessor & ERO Lump Sum 65,707 578 Jim Barron Pension 31,997 5,468 Depute Assessor & ERO (from 1/10/21) Lump Sum 47,433 7,623 Total 39,608 29,268 357,519 16,591 - 7,981 21,330 In-year pension contributions Accrued pension benefits 3,703 17,584 15,737 22,217 17,391 Page 76
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Grampian Valuation Joint Board Annual Accounts 2021/22 30 Pension Benefits (continued) 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. Remuneration Band 2020-21 2021-22 £50,000 - £54,999 8 5 £55,000 - £59,999 1 1 £60,000 - £64,999 3 1 £70,000 - £74,999 - 1 £80,000 - £84,999 1 - £90,000 - £94,999 1 - £100,000 - £104,999 - 1 £115,000 - £119,999 1 - £120,000 - £124,999 - 1 15 10 Number of Employees Councillor Donald Gatt Convener Mark J Adam MRICS AEA (Cert - Scotland) Assessor & Electoral Registration Officer Page 77
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Grampian Valuation Joint Board Annual Accounts 2021/22 32 COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT FOR THE YEAR ENDED 31 MARCH 2022 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 4,598 (379) 4,219 Rating and Council Tax Valuation and Electoral Registration 4,760 (200) 4,560 4,598 (379) 4,219 Cost Of Services 4,760 (200) 4,560 96 (1) 95 Financing and Investment Income and Expenditure 10 - (12) (12) (4,042) Requisitions and Non-Specific Grant Income 20 (4,363) 272 Deficit/(Surplus) on Provision of Services 8 185 (4,603) Remeasurement of the Net Defined Benefit Liability 23 49 (4,603) Other Comprehensive (Income) and Expenditure 49 (4,331) Total Comprehensive (Income) and Expenditure 234 2020/21 2021/22 Note Page 79
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Grampian Valuation Joint Board Annual Accounts 2021/22 34 MOVEMENT IN RESERVES STATEMENT FOR THE YEAR ENDED 31 MARCH 2022 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. 2020/21 General Fund Total Usable Reserves Unusable Reserves (Note 16) Total Board Reserves £000 £000 £000 £000 Balance at 31 March 2020 314 314 (3,647) (3,333) Total Comprehensive Income and Expenditure (272) (272) 4,603 4,331 Adjustments to usable reserves permitted by accounting standards 5 5 (5) - Adjustments between accounting basis & funding basis under regulations (Note 7) 331 331 (331) - Increase / (Decrease) in Year 64 64 4,267 4,331 Balance at 31 March 2021 378 378 620 998 2021/22 General Fund Total Usable Reserves Unusable Reserves (Note 17) Total Board Reserves £000 £000 £000 £000 Balance at 31 March 2021 378 378 620 998 Total Comprehensive Income and Expenditure (185) (185) (49) (234) Adjustments to usable reserves permitted by accounting standards 5 5 (5) - Adjustments between accounting basis & funding basis under regulations (Note 7) 429 429 (429) - Increase / (Decrease) in Year 249 249 (483) (234) Balance at 31 March 2022 627 627 137 764 Page 81
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Grampian Valuation Joint Board Annual Accounts 2021/22 36 BALANCE SHEET AS AT 31 MARCH 2022 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 2021 31 March 2022 £000 Note £000 748 Property, Plant & Equipment 11 730 8 Other Long Term Assets 23 - 756 Long Term Assets 730 39 Short Term Debtors 12 90 1,367 Cash and Cash Equivalents 13 1,380 1,406 Current Assets 1,470 (1,164) Short Term Creditors 14 (933) (1,164) Current Liabilities (933) - Other Long Term Liabilities 23 (503) - Long Term Liabilities (503) 998 Net Assets/(Liabilities) 764 Usable reserves 16 378 General Fund 627 378 Total 627 Unusable Reserves 17 252 Revaluation Reserve 247 495 Capital Adjustment Account 482 8 Pensions Reserve (503) (135) Employee Statutory Adjustment Account (89) 620 Total 137 998 Total Reserves 764 The notes on Pages 39 to 66 form part of the Financial Statements. The Unaudited Annual Accounts were issued on 17 June 2022 and the audited Annual Accounts were authorised for issue on 27 January 2023 by Lorraine Paisey, Treasurer. Any events that would affect the Balance Sheet at 31 March 2022 have been considered up to this date. Lorraine Paisey CA Treasurer Page 83
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Grampian Valuation Joint Board Annual Accounts 2021/22 38 CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2022 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 March 2021 31 March 2022 £000 £000 (272) Net surplus/(deficit) on the provision of services (185) 1,036 Adjust net deficit on the provision of services for non cash movements (Note 19) 214 764 Net cash flows from Operating Activities 29 (48) Investing Activities (16) 716 Net increase/(decrease) in cash and cash equivalents 13 651 Cash and cash equivalents at the beginning of the financial year 1,367 1,367 Cash and cash equivalents at the end of the financial year 1,380 Page 85
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Grampian Valuation Joint Board Annual Accounts 2021/22 40 NOTES TO THE ACCOUNTS Note 1 Accounting Policies 1 General Principles The Annual Accounts summarise the Board’s transactions for the 2021/22 financial year and its position at the year-end of 31 March 2022. The Board is required to prepare Annual Accounts by 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 2021/22 and the Service Reporting Code of Practice 2021/22, 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 2022. Page 87
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Grampian Valuation Joint Board Annual Accounts 2021/22 41 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 Pension Fund overall liability demonstrates the Board’s commitment to pay retirement benefits in the long term. As a consequence there is a significant impact on the net worth of the Board as recorded on the Balance Sheet, which shows a net liability. Statutory arrangements for the funding of the deficit mean that the financial position of the Board remains assured. On the basis of this funding arrangement, the Board considers it appropriate that the Annual Accounts should follow the going concern basis of accounting. 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. Page 88
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Grampian Valuation Joint Board Annual Accounts 2021/22 42 Note 2 Accounting Standards That Have Been Issued But Have Not Yet Been Adopted The Code requires the Board to identify any accounting standards that have been issued but have yet to be adopted and could have a material impact on the accounts. This applies to the adoption of the following new or amended standards within the 2021/22 Code: • Annual Improvements to IFRS Standards 2018-2020. The annual IFRS improvement programme notes 4 changed standards: • IFRS 1 First time adoption • IAS 37 Onerous Contracts • IFRS 16 Leases • IAS 41 Agriculture The Code requires implementation from 1 April 2022 and there is, therefore, no impact on the 2021/22 Financial Statements. 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 Estates Manager, 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. 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 2022 for which there is significant risk of material adjustment in the forthcoming financial year are as follows: Page 89
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Grampian Valuation Joint Board Annual Accounts 2021/22 43 Note 4 (continued) Item Uncertainties Effect if Actual Results Differ From Assumptions Pension Liability 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 pensions liability of changes in individual assumptions can be measured and are detailed in Note 23. 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: 2020/21 2021/22 Nature £000 £000 Grant income from the UK Government for Individual Electoral Registration (IER) 232 - Grant income from the Scottish Government 134 186 Barclay Implementation Funding (included in requisitions) 117 453 Grant income from the Scottish Government was used in 2021/22 for preparing for the Local Government elections in May 2022. The Barclay Implementation Funding was paid to the three local authorities, and requisitioned in full by the Board, to implement the recommendations from the Barclay review of Non Domestic Rates. Unspent Barclay Funding in 2021/22 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 17 June 2022 and the audited Annual Accounts were authorised for issue on 27 January 2023 by Lorraine Paisey, Treasurer. 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 2022, the figures in the financial statements and notes have been adjusted in all material respects to reflect the impact of this information. Page 90
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Grampian Valuation Joint Board Annual Accounts 2021/22 44 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 £000 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 £000 Net Expenditure in the Comprehensive Income and Expenditure Statement £000 3,979 235 5 4,219 Rating and CT valuation & Electoral Registration 4,122 433 5 4,560 3,979 235 5 4,219 Net Cost of Services 4,122 433 5 4,560 (4,043) 96 - (3,947) Other Income and Expenditure (4,371) (4) - (4,375) (64) 331 5 272 (Surplus) or Deficit (249) 429 5 185 (314) Opening Balance (378) (64) (Surplus) or Deficit (249) (378) Closing Balance (627) 31 March 202231 March 2021 Page 91
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Grampian Valuation Joint Board Annual Accounts 2021/22 45 Note 7 (continued) Adjustments between the Funding and Accounting Basis 2020/21 Adjustment for Capital Purposes £000 Net Change for Pensions Adjustments £000 Other Differences £000 Total Adjustments £000 Rating and CT valuation & Electoral Registration (23) 222 36 235 Net Cost of Services (23) 222 36 235 Other Income and Expenditure - 96 - 96 Difference between the General Fund Deficit and the Comprehensive Income and Expenditure Statement (Surplus) or Deficit (23) 318 36 331 2021/22 Adjustment for Capital Purposes £000 Net Change for Pensions Adjustments £000 Other Differences £000 Total Adjustments £000 Rating and CT valuation & Electoral Registration 13 466 (46) 433 Net Cost of Services 13 466 (46) 433 Other Income and Expenditure - (4) - (4) Difference between the General Fund Deficit and the Comprehensive Income and Expenditure Statement (Surplus) or Deficit 13 462 (46) 429 Page 92
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Grampian Valuation Joint Board Annual Accounts 2021/22 46 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. Page 93
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Grampian Valuation Joint Board Annual Accounts 2021/22 47 Note 8 Expenditure and Income Analysed by Nature The Board’s expenditure and income is analysed as follows: Expenditure and Income 2020/21 2021/22 £000 £000 Rating, Council Tax Valuation and Electoral Registration Rating, Council Tax Valuation and Electoral Registration Employee benefit expenses 3,311 3,530 Other service expenses 1,194 1,134 Support service recharges 63 62 Depreciation, amortisation and impairment 30 34 Interest payments 96 - Total Expenditure 4,694 4,760 Requisitions (4,042) (4,363) Government grants and other service income (379) (200) Interest and investment income (1) (12) Total Income (4,422) (4,575) (Surplus) or deficit on the provision of services 272 185 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 Total £000 £000 £000 Balance at 31 March 2021 235 143 378 Increase/(Decrease) 2021/22 (16) 265 249 Balance at 31 March 2022 219 408 627 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. Page 94
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Grampian Valuation Joint Board Annual Accounts 2021/22 48 Note 10 Financing and Investment Income and Expenditure 2020/21 2021/22 £000 £000 Pensions interest cost/(gain) and expected return on pensions assets 96 (4) Interest receivable and similar income (1) (8) 95 (12) 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. 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. Page 95
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Grampian Valuation Joint Board Annual Accounts 2021/22 49 Note 11 (continued) 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 - 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 valuation programme that ensures that all Property, Plant and Equipment required to be measured at current value is revalued at least every five years. The last revaluation of Land and Buildings was done with effect from 1 April 2018 and the next revaluation is scheduled during 2023/24. All valuations were 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. Valuations of vehicles, plant, furniture and equipment are based on depreciated historic cost as a proxy for current values. Page 96
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Grampian Valuation Joint Board Annual Accounts 2021/22 50 Note 11 (continued) Other Land and Buildings Vehicles, Plant, Furniture & Equipment Total Property, Plant and Equipment £000 £000 £000 Cost or valuation At 1 April 2020 696 290 986 Additions - 49 49 At 31 March 2021 696 339 1,035 Accumulated Depreciation and Impairment At 1 April 2020 28 228 256 Depreciation charge 15 16 31 at 31 March 2021 43 244 287 Net Book Value at 31 March 2020 668 62 730 at 31 March 2021 653 95 748 Cost or valuation At 1 April 2021 696 339 1,035 Additions - 16 16 At 31 March 2022 696 355 1,051 Accumulated Depreciation and Impairment At 1 April 2021 43 244 287 Depreciation charge 15 19 34 at 31 March 2022 58 263 321 Net Book Value at 31 March 2021 653 95 748 at 31 March 2022 638 92 730 Page 97
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Grampian Valuation Joint Board Annual Accounts 2021/22 51 Note 12 Short Term Debtors 2020/21 2021/22 £000 £000 Prepayments 39 90 39 90 Note 13 Cash and Cash Equivalents 2020/21 2021/22 £000 £000 Temporary Investment in the Moray Council Loans Fund 1,367 1,380 Note 14 Short Term Creditors 2020/21 2021/22 £000 £000 Trade Payables 221 228 Other Payables 943 705 1,164 933 Page 98
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Grampian Valuation Joint Board Annual Accounts 2021/22 52 Note 15 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: • 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. Financial Instruments – Balances The financial liabilities disclosed in the Balance Sheet are analysed across the following categories: 2020/21 2021/22 £000 £000 Short Term Creditors - Amortised Cost 630 319 The financial assets disclosed in the Balance Sheet are analysed across the following categories: 2020/21 2021/22 £000 £000 Temporary Investment in the Moray Council Loans Fund 1,367 1,380 Page 99
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Grampian Valuation Joint Board Annual Accounts 2021/22 53 Note 16 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. 2020/21 2021/22 Usable Reserves £000 £000 General Fund 235 219 Earmarked NDR Reform Reserve 143 408 378 627 Note 17 Unusable Reserves 2020/21 2021/22 £000 £000 Revaluation Reserve 252 247 Employee Statutory Adjustment Account (135) (89) Capital Adjustment Account 495 482 Pension Reserve 8 (503) 620 137 Page 100
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Grampian Valuation Joint Board Annual Accounts 2021/22 54 Note 17 (continued) 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. 2020/21 2021/22 £000 £000 Balance at 1 April 257 252 Revaluations Difference between fair value depreciation and historical cost depreciation (5) (5) Balance at 31 March 252 247 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. 2020/21 2021/22 £000 £000 Balance at 1 April (99) (135) Settlement or cancellation of accrual made at the end of the preceding year 99 135 Amounts accrued at the end of the current year (135) (89) Balance at 31 March (135) (89) Page 101
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Grampian Valuation Joint Board Annual Accounts 2021/22 55 Note 17 (continued) 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. 2020/21 2021/22 £000 £000 Balance at 1 April 472 495 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 (25) (29) Capital financing in the year: Use of government grant to finance new capital expenditure 29 - Capital Expenditure charged against the General Fund 19 16 Balance 31 March 495 482 Page 102
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Grampian Valuation Joint Board Annual Accounts 2021/22 56 Note 17 (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. 2020/21 2021/22 £000 £000 Balance at 1 April (4,277) 8 Remeasurements of the net defined benefit liability/asset 4,603 (49) 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 (774) (928) Employer's pensions contributions and direct payments to pensioners payable in the year 456 466 Balance at 31 March 8 (503) Page 103
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Grampian Valuation Joint Board Annual Accounts 2021/22 57 Note 18 External Audit Costs The agreed external audit fee for 2021/22 was £0.008m for work undertaken in accordance with the Code of Audit Practice (2020/21 £0.008m). Note 19 Cashflow – Analysis of Net Deficit on the provision of services for non cash movements 2020/21 2021/22 £000 £000 Depreciation/Impairment charges (30) (34) Pension Liability (318) (462) Increase/(Decrease) in Debtors - 51 Decrease/(Increase) in Creditors (688) 231 (1,036) (214) Page 104
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Grampian Valuation Joint Board Annual Accounts 2021/22 58 Note 20 Requisition and Grant Income The Board credited the following requisitions to the Comprehensive Income and Expenditure Statement. The requisitions are based on population. 2020/21 2021/22 £000 £000 Credited to Requisitions and Non Specific Grant Income: Requisition from Aberdeen City Council 1,831 1,890 Requisition from Aberdeenshire Council 2,104 2,160 Requisition from Moray Council 768 792 4,703 4,842 Returned to constituent authorities: Aberdeen City Council (161) (187) Aberdeenshire Council (185) (214) Moray Council (68) (78) (414) (479) Returned to Scottish Government (NDR) (247) - Total Requisition & Grant Income 4,042 4,363 Note 21 Leases Operating Leases – Board as Lessee Operating lease payments are reflected in the Cost of Services heading in the Comprehensive Income and Expenditure Statement, as the rentals become payable. The Board does not have any finance leases. The Board pays Aberdeenshire Council for the rental of their offices within Woodhill House under the terms of an operating lease. The amount paid under these terms in 2021/22 was £0.125m (£0.125m in 20/21). The future minimum lease payments due under non-cancellable leases in future years are: Page 105
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Grampian Valuation Joint Board Annual Accounts 2021/22 59 Note 21 (continued) 2020/21 2021/22 £000 £000 Not later than one year 125 125 Later than one year and not later than five years 500 500 More than five years 125 - 750 625 Note 22 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 20. The Board also made payments to the constituent authorities in the normal course of business. The amounts are detailed below: 2020/21 2021/22 £000 £000 Aberdeen City Council 78 78 Aberdeenshire Council 208 323 Moray Council 90 91 Aberdeen City Council 162 187 Aberdeenshire Council 194 215 Moray Council 144 155 The amounts owed to the constituent authorities for requisitions and normal business activities at 31 March were: 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 106
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Grampian Valuation Joint Board Annual Accounts 2021/22 60 Note 23 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 pensions liabilities and cash has to be generated to meet actual pension payments as they eventually fall due. 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 107
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Grampian Valuation Joint Board Annual Accounts 2021/22 61 Note 23 (continued) COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT 2020/21 2021/22 £000 £000 Cost of Services: Past Service Cost - 83 Current Service Cost and administration expenses 678 849 Financing and Investment Income and Expenditure: Net Interest Expense 96 (4) Total Post Employment Benefit Charged to the Surplus or Deficit on the Provision of Services 774 928 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 (8,457) 173 Remeasurements (liabilities) 3,854 (124) Total Post Employment Benefit Charged to the Comprehensive Income and Expenditure Statement. (4,603) 49 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 774 928 Actual amount charged against requisitions for pensions in the year 456 466 Page 108
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Grampian Valuation Joint Board Annual Accounts 2021/22 62 Note 23 (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 2021 31 March 2022 £000 £000 Present value of the defined benefit obligation (40,846) (41,103) Fair value of plan assets 40,854 40,600 Net (liability)/asset arising from defined benefit obligation 8 (503) Page 109
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Grampian Valuation Joint Board Annual Accounts 2021/22 63 Note 23 (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: 2021 2022 £000 £000 1 April (36,369) (40,846) Current Service Cost (669) (840) Interest on pension liabilities (861) (844) Remeasurements: Experience gain/(loss) 1,657 (80) Gain/(Loss) on financial assumptions (5,611) 0 Gain/(Loss) on demographic assumptions 100 204 Contributions by scheme participants (157) (155) Benefits Paid 1,064 1,541 Past Service Cost 0 (83) 31 March (40,846) (41,103) 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: 2021 2022 £000 £000 1 April 32,092 40,854 Interest on plan assets 765 848 Remeasurements (assets) 8,457 (173) Administration expenses (9) (9) Employer Contributions 456 466 Contributions by scheme participants 157 155 Benefits Paid (1,064) (1,541) 31 March 40,854 40,600 Page 110
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Grampian Valuation Joint Board Annual Accounts 2021/22 64 Note 23 (continued) The Board’s share of the Pension Fund’s assets is: Quoted Prices in Active Markets Prices not Quoted in Active Markets 31 March 2021 Totals £000 £000 £000 U.K. Equities 10,383 - 10,383 Overseas Equities 13,780 - 13,780 U.K Government Bonds 1,635 - 1,635 Other Government Bonds 417 - 417 Other U.K. Bonds 20 - 20 Other non U.K. Bonds 364 - 364 Property - 2,325 2,325 Private Equity - 2,169 2,169 Private Debt - 985 985 Private Equity Infrastructure - 797 797 Infrastructure Pooled fund 756 - 756 Private Equity Real Estate - 519 519 Multi Asset Credit - 3,089 3,089 Diversified Growth Funds - 2,410 2,410 Cash Instruments - 1,205 1,205 Total Assets 27,355 13,499 40,854 31 March 2022 £000 £000 £000 U.K. Equities 8,741 - 8,741 Overseas Equities 15,603 - 15,603 U.K Government Bonds 3,329 - 3,329 Other Government Bonds - - - Other U.K. Bonds - - - Other non U.K. Bonds - - - Property - 2,647 2,647 Private Equity - 2,513 2,513 Private Debt - 958 958 Private Equity Infrastructure - 747 747 Infrastructure Pooled fund 702 - 702 Private Equity Real Estate - 512 512 Multi Asset Credit - 3,650 3,650 Diversified Growth Funds - - - Cash Instruments - 1,198 1,198 Total Assets 28,375 12,225 40,600 Page 111
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Grampian Valuation Joint Board Annual Accounts 2021/22 65 Note 23 (continued) Basis for Estimating Assets and Liabilities The most recent valuation was carried out as at 31 March 2020 and has been updated by Mercer Limited, independent actuaries to the North East Scotland Pension Fund, in order to assess the liabilities of the Fund as at 31 March 2022. 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 2021 31 March 2022 Financial assumptions: Discount rate 2.10% 2.80% Rate of increase in salaries 4.20% 4.90% Rate of increase in pensions 2.80% 3.50% Rate of CPI inflation 2.70% 3.40% Mortality assumptions: Longevity at 65 for current pensioners: Men 21.5 21.5 Women 24.2 24.2 Longevity at 65 for future pensioners: Men 23.1 23.0 Women 26.3 26.3 Sensitivity Analysis The estimation of the defined benefit obligations is sensitive to the actuarial assumptions set out in the table above. The sensitivity analyses below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period, and assume for each change that the assumption analysed changes while all the other assumptions remain constant. The assumption in longevity, for example, assumes that life expectancy increases or decreases for men and women. In practice, this is unlikely to occur, and changes of the assumptions may be interrelated. The estimations in the sensitivity analysis have followed the accounting policies for the scheme, i.e. on an actuarial basis using the projected unit credit method. The methods and types of assumptions used in preparing the sensitivity analysis below did not change from those used in the previous period. The effects of a 0.1% increase/decrease in the rate for discounting scheme liabilities, the rate of inflation, and the rate of increase in salaries, a 1 year increase/decrease in life expectancy, and a +/-1% change in the 2021/22 investment returns, are shown in the table below: Page 112
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Grampian Valuation Joint Board Annual Accounts 2021/22 66 Note 23 (continued) Sensitivity Analysis as at 31 March 2022 Central Sensitivity 1 Sensitivity 2 Sensitivity 3 Sensitivity 4 Sensitivity 5 + 0.1% p.a. discount rate + 0.1% p.a. inflation + 0.1% p.a. pay growth 1 year increase in life expectancy +1% change in 2021/22 investment returns -1% change in 2021/22 investment returns £000s £000s £000s £000s £000s £000s £000s Liabilities 41,103 40,461 41,755 41,206 42,350 41,103 41,103 Assets (40,600) (40,600) (40,600) (40,600) (40,600) (41,001) (40,199) Fund Deficit/(Surplus) 503 (139) 1,155 606 1,750 102 904 Page 113
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Grampian Valuation Joint Board Annual Accounts 2021/22 67 Note 23 (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 2020 and the results indicate that overall the assets represented 107% 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 2022, with March 2021 in brackets were: equities, including alternatives 82.3% (85.4%), bonds 8.2% (6.0%), property 6.5% (5.7%) and cash 3.0% (2.9%). 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 2020 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 24 years and have maintained an employer contribution rate requirement of 19.3% 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 2023 to determine a funding level and set the rates for 2024/25 onwards. The projected employer contributions expected to be made to the Local Government Pension Scheme in the year to 31 March 2023 is £0.466m. The weighted average duration of the liabilities for scheme members at the 31 March 2022 valuation is 16 years. Page 114
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Grampian Valuation Joint Board Annual Accounts 2021/22 68 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 115
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Grampian Valuation Joint Board Annual Accounts 2021/22 69 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 116
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Grampian Valuation Joint Board Annual Accounts 2021/22 70 Independent Auditor’s Report Independent auditor’s report to the members of Grampian Valuation Joint Board and the Accounts Commission Reporting on the audit of the financial statements Opinion on financial statements I certify that I have audited the financial statements in the annual accounts of Grampian Valuation Joint Board for the year ended 31 March 2022 under Part VII of the Local Government (Scotland) Act 1973. The financial statements comprise the Comprehensive Income and Expenditure Statement, Movement in Reserves Statement, Balance Sheet, Cash Flow Statement, and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2021/22 (the 2021/22 Code). In my opinion the accompanying financial statements: • give a true and fair view in accordance with applicable law and the 2021/22 Code of the state of affairs of the body as at 31 March 2022 and of its income and expenditure for the year then ended; • have been properly prepared in accordance with UK adopted international accounting standards, as interpreted and adapted by the 2021/22 Code; and • have been prepared in accordance with the requirements of the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003. Basis for opinion I conducted my audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Accounts Commission for Scotland. My responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of my report. I was appointed under arrangements approved by the Accounts Commission on 10 April 2017. The period of total uninterrupted appointment is six years. I am independent of the body in accordance with the ethical requirements that are relevant to my audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and I have fulfilled my other ethical responsibilities in accordance with these requirements. Non-audit services prohibited by the Ethical Standard were not provided to the body. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Page 117
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Grampian Valuation Joint Board Annual Accounts 2021/22 71 Conclusions relating to going concern basis of accounting I have concluded that the use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work I have performed, I have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the body’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from when the financial statements are authorised for issue. These conclusions are not intended to, nor do they, provide assurance on the body’s current or future financial sustainability. However, I report on the body’s arrangements for financial sustainability in a separate Annual Audit Report available from the Audit Scotland website. Risks of material misstatement I report in my Annual Audit Report the most significant assessed risks of material misstatement that I identified and my judgements thereon. Responsibilities of the Treasurer and Grampian Valuation Joint Board for the financial statements As explained more fully in the Statement of Responsibilities for the Annual Accounts, the Treasurer is responsible for the preparation of financial statements that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the Treasurer determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Treasurer is responsible for assessing the body’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless there is an intention to discontinue the body’s operations. The Grampian Valuation Joint Board is responsible for overseeing the financial reporting process. Auditor’s responsibilities for the audit of the financial statements My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of users taken on the basis of these financial statements. Page 118
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Grampian Valuation Joint Board Annual Accounts 2021/22 72 Irregularities, including fraud, are instances of non-compliance with laws and regulations. I design procedures in line with my responsibilities outlined above to detect material misstatements in respect of irregularities, including fraud. Procedures include: • obtaining an understanding of the applicable legal and regulatory framework and how the body is complying with that framework; • identifying which laws and regulations are significant in the context of the body; • assessing the susceptibility of the financial statements to material misstatement, including how fraud might occur; and • considering whether the audit team collectively has the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The extent to which my procedures are capable of detecting irregularities, including fraud, is affected by the inherent difficulty in detecting irregularities, the effectiveness of the body’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud are inherently more difficult to detect than irregularities that result from error as fraud may involve collusion, intentional omissions, misrepresentations, or the override of internal control. The capability of the audit to detect fraud and other irregularities depends on factors such as the skilfulness of the perpetrator, the frequency and extent of manipulation, the degree of collusion involved, the relative size of individual amounts manipulated, and the seniority of those individuals involved. A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website www.frc.org.uk/auditorsresponsibilities. This description forms part of my auditor’s report. Reporting on other requirements Opinion prescribed by the Accounts Commission on the audited part of the Remuneration Report I have audited the part of the Remuneration Report described as audited. In my opinion, the audited part of the Remuneration Report has been properly prepared in accordance with The Local Authority Accounts (Scotland) Regulations 2014. Other information The Treasurer is responsible for other information in the annual accounts. The other information comprises the Management Commentary, Annual Governance Statement, Statement of Responsibilities for the Annual Accounts and the unaudited part of the Remuneration Report. Page 119
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Grampian Valuation Joint Board Annual Accounts 2021/22 73 My responsibility is to read all the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If I identify such material inconsistencies or apparent material misstatements, I am required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard. My opinion on the financial statements does not cover the other information and I do not express any form of assurance conclusion thereon except on the Management Commentary and Annual Governance Statement to the extent explicitly stated in the following opinions prescribed by the Accounts Commission. Opinions prescribed by the Accounts Commission on the Management Commentary and Annual Governance Statement In my opinion, based on the work undertaken in the course of the audit: • the information given in the Management Commentary for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with statutory guidance issued under the Local Government in Scotland Act 2003; and • the information given in the Annual Governance Statement for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Delivering Good Governance in Local Government: Framework (2016). Matters on which I am required to report by exception I am required by the Accounts Commission to report to you if, in my opinion: • adequate accounting records have not been kept; or • the financial statements and the audited part of the Remuneration Report are not in agreement with the accounting records; or • I have not received all the information and explanations I require for my audit. I have nothing to report in respect of these matters. Conclusions on wider scope responsibilities In addition to my responsibilities for the annual accounts, my conclusions on the wider scope responsibilities specified in the Code of Audit Practice, including those in respect of Best Value, are set out in my Annual Audit Report. Page 120
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Grampian Valuation Joint Board Annual Accounts 2021/22 74 Use of my report This report is made solely to the parties to whom it is addressed in accordance with Part VII of the Local Government (Scotland) Act 1973 and for no other purpose. In accordance with paragraph 120 of the Code of Audit Practice, I do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties. Maggie Bruce CA Senior Audit Manager Audit Scotland 1st Floor, Room F03 The Green House Beechwood Business Park North Inverness IV2 3BL 27 January 2023 Page 121
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Grampian Valuation Joint Board Annual Accounts 2021/22 75 Page 122
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REPORT TO: GRAMPIAN VALUATION JOINT BOARD ON 27 JANUARY 2023 SUBJECT: INTERNAL AUDIT PLAN FOR 2023/24 BY: INTERNAL AUDITOR 1. REASON FOR REPORT 1.1 This report advises the Board of the planned internal audit coverage of the Assessor’s Service for the financial year ending 31st of March 2023. 2. RECOMMENDATION 2.1 That the Board considers and notes the proposed internal audit coverage. 3. BACKGROUND 3.1 In terms of the Public Sector Internal Audit Standards applicable to local government and joint boards, an internal audit plan is a requirement for each financial year. The plan takes account of risk and is presented to the Board to enable it to consider and comment on the proposed audit coverage. 3.2 It is recognised that whilst the Assessor’s Service is subject to considerable operational challenges as a consequence of service demands, the costs of the service do not change materially from year to year, with funding predominantly met by requisition from the constituent authorities. The main expenditure continues to relate to staffing costs with other outlays covering annually recurring items including office rentals and service charges, ICT infrastructure and licencing, and postage outlays. 3.3 Additionally, as in prior years, the main financial systems of the Assessor’s Service mirror 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 Service. This mitigates the risks associated with the audit and influences the nature and extent of audit work required. Item 6. Page 123
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3.4 It is recognised there will be particular workload pressures for the Service due to the non-domestic rates reform resulting from the Barclay Review. As such, the timing of the audit will be flexible and responsive to changing circumstances. The impact of the pandemic has also resulted in changes in the working practices of the Service, with officers working from home. The Internal Audit Section has adapted and greater use has been made of electronic methods of communication. However, sometimes this has proved challenging and may slow the pace of an audit. 3.5 Notwithstanding the impacts outlined above, it is anticipated that the audit work proposed will provide the Assessor and the Treasurer with a ‘complete’ opinion on the adequacy and effectiveness of the internal control systems and procedures without any need for ‘a limitation of scope’ in the audit coverage. A ‘limitation of scope’ arises where Internal Audit is unable to draw on sufficient assurances to issue a ‘complete’ audit opinion in accordance with the Public Sector Internal Audit Standards. This opinion will inform the assurance statement relative to governance matters the Assessor prepares for inclusion with the Board’s annual accounts. 3.6 In this context, it is expected that the work to be undertaken by Internal Audit in relation to the Service’s activities will involve: • Seeking confirmation that the Assessor continues to monitor and evaluate the principal risks facing his Service; • Analytical review of staff payroll costs and non pay expenditure for the current and prior years and review of any material variances, including assessment of procurement issues where applicable; • Verification of other sources of income to include government contributions in support of service delivery and developments; • Confirmation of the controls relative to collection and submission of changes to the valuation rolls and council tax lists to the constituent Authorities; • Review of the draft annual governance statement to ensure compliance with published best practice guidance; • Follow up of any prior year audit recommendations. 3.7 Completion of this work will provide the necessary coverage for internal audit purposes. The work is carried out independently of the external auditor for different but complementary purposes. 4. CONSULTATIONS 4.1 The Assessor has been consulted in the preparation of this report. 5. CONCLUSION 5.1 Audit planning allows management to inform the audit activity to be undertaken and assists the internal audit team to schedule its work. 5.2 This report provides members of the Board with details of the proposed internal audit coverage which will be undertaken to provide independent assurance on the adequacy and effectiveness of the Service’s control environment. Page 124
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Author of Report: Dafydd Lewis, Audit and Risk Manager Background Papers: Internal Audit files Ref:DL/GVJB/270123 Page 125
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REPORT TO: GRAMPIAN VALUATION JOINT BOARD ON 27 JANUARY 2023 SUBJECT: BANK HOLIDAY – CORONATION OF HIS MAJESTY KING CHARLES III BY: THE ASSESSOR AND ERO 1. REASON FOR REPORT 1.1 To advise the Board of the position in relation to the additional bank holiday. 2. RECOMMENDATION 2.1 It is recommended that the Board note the content of this report and agree to designate Monday 8 May 2023 as an additional public holiday for employees and close the Board’s offices on this date. 3. BACKGROUND 3.1 The UK and Scottish Governments have announced that there will be an additional bank holiday on Monday 8 May 2023 to mark the coronation of His Majesty King Charles III. 4. CURRENT POSITION 4.1 The existing contractual rights of Board employees allow for 7 fixed public holidays per annum where the Board’s offices are closed. Employees are also entitled to a further 5 public holidays that correspond with local holidays and other bank holidays, and the Board’s offices remain open on these days. These are designated “floating days” and added to the employee’s annual leave entitlement. Whilst there is no automatic entitlement to the additional bank holiday, the Board has previously granted employees the holidays that were announced to celebrate Her Majesty Queen Elizabeth II’s Jubilee celebrations in 2002, 2012 and 2022. 4.2 There would be no critical operational considerations or financial penalties incurred in awarding employees with an additional public holiday and closing offices on Monday 8 May 2023. This date is not a deadline in the electoral register statutory update timetable and there are no valuation appeal hearings scheduled for this day. 4.3 At the date of writing this report, I have been unable to establish the formal decisions of the 3 constituent councils in relation to this matter. Item 7. Page 127
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5. CONCLUSION 5.1 Designating Monday 8 May 2023 as an additional public holiday for all employees and closing the Board’s offices on this date would have a positive impact on staff morale and would fall immediately after another particularly demanding period of activity in connection with the general revaluation of non-domestic properties. Such a measure would reward employees who are being asked to deliver continuous improvements in services within a particularly challenging environment. Granting the additional public holiday and closing the Board’s offices would not give rise to any financial or critical operational considerations for the Assessor & ERO or the Board. Author of Report: Mark J Adam, Assessor & ERO Page 128
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REPORT TO: GRAMPIAN VALUATION JOINT BOARD ON 27 JANUARY 2023 SUBJECT: GOVERNANCE BY: THE ASSESSOR & ERO 1. REASON FOR REPORT 1.1 To update the Board on the review of the Board’s Scheme of Delegation and Code of Corporate Governance. 2. RECOMMENDATION 2.1 It is recommended that the Board note the content of the report and approve the changes to the Scheme of Delegation and Code of Corporate Governance. 3. BACKGROUND 3.1 The Board’s governance documents are subject to regular review to ensure that they remain up-to-date in terms of legislative requirements, good practice and operational relevance. 3.2 Moray Council’s Internal Audit team provide the Board with an independent view of internal systems and procedures. 4. CURRENT POSITION 4.1 The current governance documents do not formally recognise the role and independence of the Audit and Risk Manager. 4.2 The changes to the Scheme of Delegation (APPENDIX 1) and Code of Corporate Governance (APPENDIX 2) are also being recommended in order to comply with the Public Sector Internal Audit Standards (PSIAS) which requires the Auditor to report in their own name. This is fundamentally a point of independence and the need for the opinion of the Auditor to be independent of management and to evidence this in the reporting structure. In accordance with PSIAS, the Auditor should be entitled to “sign off” their own committee reports. Item 8. Page 129
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5. CONCLUSION 5.1 The changes are relatively minor in content but are intended to provide the Board with a more transparent view of the Audit & Risk Manager’s role in the Board’s governance arrangements. 5.2 The Clerk to the Board, the Treasurer, Moray Council’s Head of Governance, Strategy and Performance and Moray Council’s Audit & Risk Manager have all been consulted in relation to the proposed changes. 5.3 It is therefore recommended that the Board adopt the proposed changes to the two documents. Author of Report: Mark Adam, Assessor & ERO Page 130
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APPENDIX 1 Grampian Valuation Joint Board Scheme of delegation to officers Version Date Status By 1 25 August 2017 Approved GVJB 2 7 February 2020 Approved GVJB 3 GVJB Item 8. Page 131
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2 1. Introduction 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. 2. Clerk The following matters are delegated to the Clerk: 2.1 Meetings and proceedings of the Board (s.43 Local Government (Scotland) Act 1973) 2.2 Circulating reports and agendas, supplying papers to the press and, where necessary, providing summaries of minutes (s.50B(2); 50B(7)(c) and 50C(2) Local Government (Scotland) Act 1973) 2.3 Complying with the Local Government (Access to Information) Act 1985 (s. 50A Local Government (Scotland) Act 1973) 2.4 Deciding on members’ rights of access to Board documents which disclose ‘exempt information’ in terms of the Local Government (Access to Information) Act 1985 (s.50(F)(2) Local Government (Scotland) Act 1973) 2.5 Acting as ‘proper officer’ to prepare and maintain a list of politically restricted posts (s.2 of the Local Government and Housing Act 1989) 2.6 Accepting tenders in accordance with the Board’s financial regulations 2.7 On the recommendation of the Assessor and in consultation with the Convener and Depute Convener, approving early retirements on the grounds of ill-health, 2.8 Approving attendance of Members at conferences/seminars in Great Britain where there is insufficient time for the invitation to be considered by the Board prior to the conference/seminar being held, subject to availability of funds and a report for information being submitted to the next available meeting of the Board. Page 132
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3 2.9 Signing documents on behalf of the Board, including binding missives. 2.10 Advising the Assessor on matters related to governance, legal action and procedure in relation to the Board. 3. Treasurer 3.1 The Treasurer is the ‘proper officer’ for the Board’s financial affairs in terms of Section 95 of the Local Government (Scotland) Act 1973. The following matters are delegated to the Treasurer: 3.2 Providing financial advice and support to the Clerk, the Assessor & ERO and members. 3.3 Discharging the obligations outlined in the Board's Financial Regulations, including the exercise of delegated powers. 3.4 Effecting suitable insurance cover. 4. Assessor and Electoral Registration Officer The Assessor and ERO has a statutory responsibility to maintain the Valuation Roll, Valuation List and Electoral Register. The following matters are delegated to the Assessor & ERO 4.1 Discharging the obligations outlined in the Board's financial regulations, including the exercise of delegated powers. 4.2 Management of stocks and equipment. 4.3 Daily administration of property, including maintenance of property and contracts, subject to the Board’s standing orders and financial regulations. 4.4 Authorising employees’ attendance at meetings, training courses, seminars conferences and other developmental activities including Scottish Assessors Association meetings and meetings of other relevant professional bodies, provided that expenditure is within the approved budget and the location is within Great Britain or Ireland. 4.5 Recruitment and appointment of permanent and temporary staff and authorising minor changes in the staff structures or gradings, provided these can be contained within approved budgets. Page 133
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4 4.6 Administering all personnel, in accordance with agreed Board policies and national requirements such as Equalities Mainstreaming. In these matters, the Assessor will be guided by the advice of the Head of Human Resources, ICT & Organisational Development for Moray Council. 4.7 Conducting disciplinary proceedings in respect of employees within the general terms of employment law and the specific provisions of the Board's disciplinary procedure. 4.8 Implementing national circulars where these contain no element of discretion. 4.9 Management of Board records held on the Assessor & ERO’s operational sites in accordance with the Public Records (Scotland) Act 2011. 4.10 Dealing with requests for information made to the Board under the Freedom of Information legislation where the information is held by the Assessor & ERO. 4.11 Initiating, entering into, defending and withdrawing from legal proceedings concerning the Board in consultation with the Clerk. This may include engaging private legal advisors and counsel. 4.12 If an urgent decision or action is required on a matter which falls out with the delegation contained within this Scheme, and the decision or action cannot wait until the next meeting of the Board, then the Assessor may take such decision or action as is required provided: • the consent of the Treasurer, Convener and Depute Convener is obtained; and • the matter is reported to the next meeting of the Board for homologation. 5. Other officials Advice is provided to the Clerk, Treasurer, and Assessor & ERO by Moray Council’s Head of Governance, Strategy & Performance and Head of HR, ICT & Organisational Development. Moray Council’s Audit and Risk Manager provides the Board with an independent assurance on risk management, governance and internal control in line with the Public Sector Internal Audit Standards. Page 134
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APPENDIX 2 Grampian Valuation Joint Board Code of Corporate Governance Author Assessor & ERO Approved by Approval Date 2023 Review frequency 3 yearly Item 8. Page 135
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Page 1 of 4 1 Introduction 1.1 The purpose of the organisation, comprising the Grampian Valuation Joint Board and the Assessor & ERO appointed by the Board, is to deliver lands valuation (non-domestic rates and council tax band allocation) and electoral registration services to the Grampian area. 1.2 The purpose of a code of corporate governance is to ensure that resources are directed in accordance with agreed policy and priorities, which in the case of this organisation are statute driven; that there is sound and inclusive decision-making; and that there is clear accountability for the use of the resources in order to achieve desired outcomes for stakeholders 2 The Organisation’s Mission 2.1 The mission is to provide equitable, customer focussed, high quality and professional lands valuation and electoral registration services for all its stakeholders. 3 The Organisation’s Objectives 3.1 In order to fulfil the mission we will - • Ensure our services are delivered in accordance with the law • Plan development and delivery of services in accordance with the principles of Best Value • Monitor and report performance levels to stakeholders • Integrate equalities issues within all aspects of our services • Ensure good governance in all aspects of our services • Seek to build on achievements to date 4 Scope 4.1 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. 4.2 Through an agreement to share services, the Board also provides electoral registration services for the same three constituent authorities. 4.3 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. 4.4 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. 4.5 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. Page 136
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Page 2 of 4 5 Delivery – members and officers 5.1 Board membership comprises 6 members appointed by Aberdeen City Council, 6 members appointed by Aberdeenshire Council and 3 members appointed by Moray Council. 5.2 The Board appointed a Convener, Depute Convener, Clerk and Treasurer. The role of the Clerk is to ensure the proper conduct of the board’s business and that of the Treasurer is to ensure that the Board operates effective financial information and control systems and complies with all financial regulatory requirements. Moray Council’s Audit and Risk Manager provides the Board with an independent assurance on risk management, governance and internal control in line with the Public Sector Internal Audit Standards. 5.3 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 lands valuation assessment services on a day-to-day basis, with the Board providing resources, a governance framework and a monitoring regime for financial and operational performance. 5.4 The Local Government (Qualifications of Assessors) (Scotland) Order 1995 requires the Assessor and deputes to be qualified chartered surveyors. The Lands Valuation Acts and the Local Government Finance Act 1992 require that these senior officials exercise their assessment duties wholly independently of the valuation authority or government, thus providing the taxpayer and wider citizenship along with local and central government with confidence in the integrity of the assessment basis, which is subject to the scrutiny of the local valuation appeal committees (from April 2023 the functions of Valuation Appeal Committees will be transferred to the First-tier Tribunal for Scotland), the Lands Tribunal for Scotland and the Lands Valuation Appeal Court. 5.5 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. As in the case of the Assessor, the ERO is an independent statutory official and as such is personally liable for the registration service provided. The ERO’s decisions are subject to the scrutiny of the Sheriff and the Registration Appeal Court, and ultimately the Supreme and European Courts. 5.6 The organisation has adopted the CIPFA/SOLACE “Delivering Good Governance in Local Government” Framework that was published in 2016. This framework defines the principles for good governance in a broader local government context that can be used to compare and test local arrangements. 5.7 The seven principles of good governance are – 1. Behaving with integrity, demonstrating strong commitment to ethical values and respecting the rule of law. 2. Ensuring openness and comprehensive stakeholder engagement. 3. Defining outcomes on terms of sustainable economic, social and environmental benefits. 4. Determining interventions necessary to optimise achievement of intended outcomes. 5. Developing the entity’s capacity, including the capability of its leadership and individuals within it. 6. Managing risks and performance through robust internal control and strong public financial management. Page 137
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Page 3 of 4 7. Implementing good practices in transparency, reporting and audit to deliver effective accountability. 5.8 In the case of a Valuation Joint Board it is necessary to contextualise the framework given that the functions of the Assessor and Electoral Registration Officer (ERO) are wholly statutory in character and do not involve the wide ranging duties, discretions and community planning and partnership options that are a part of the comprehensive business of a local authority delivering a full range of council services. 5.9 Responsibility for lands valuation assessment and electoral registration duties are placed directly on the Assessor & ERO by the Scottish and Westminster parliaments. Implementation of these duties requires to be apolitical in character, subject always to the right of parliaments to vary the regime from time to time. The statutory determinations of the Assessor & ERO are subject to appeal to tribunals and courts rather than to the Board. The oversight role of the Board is therefore primarily administrative in character. 6 Governance framework 6.1 The governance framework comprises the systems, processes, cultures and values by which the Board and service delivery 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 lands valuation assessment and registration services. 6.2 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 • GVJB Financial Regulations • GVJB Equalities Mainstreaming These principal documents set out the local arrangements for governance and operation of the organisation. These principal documents are supported by a wide range of supplementary policies and procedures that include complaints handling, confidential reporting (whistleblowing), equalities outcomes, records management, personal development and health & safety. 6.3 Annual reporting will be made and published for – • Compliance with the code and how the organisation’s effectiveness has been monitored along with planned changes in a governance statement included within the Annual Accounts (reported to the Board in August). • Operational performance using the performance measures set nationally in addition to those agreed by the Board (reported to the Board in November). 6.4 The code itself will also be subject to review from time to time to ensure it reflects any changes in statutory or other guidance and continues to support the effective delivery of services. 6.5 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 & ERO are met 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 mission, objectives and policies to evaluate the likelihood of those risks being realised and the impact should they be realised; and to manage them efficiently, effectively and economically. An opinion on the Page 138
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Page 4 of 4 system of internal control is provided annually by the internal auditor for the Board through an internal audit process conducted in line with Public Sector Internal Audit Standards. 7 Summary 7.1 The organisation’s code of corporate governance identifies a structure of local policies and procedures that seek to ensure resources are directed effectively to achieve stakeholder desired outcomes. It is tested against the seven governance principles set out in the CIPFA governance framework. Progress towards achieving the governance principles is reported annually. Page 139
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REPORT TO: GRAMPIAN VALUATION JOINT BOARD ON 27 JANUARY 2023 SUBJECT: ELECTORAL REGISTRATION BY: 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 annual canvass concluded on 30 November 2022 and revised registers were published on 1 December 2022. 3.2 Support to the Moray Council election team at the Buckie by-election was concluded and we are now assisting the Aberdeen City Council election team in delivery of the Dyce/Bucksburn/Danestone by-election. 3.3 The Elections Act 2022 - The Voter Authority Certificate application process is now available. 3.4 A major upgrade to our Electoral Management system including new Eros elections and Voter Authority Certificate register checking functionality has taken place. 3.5 Work is continuing at the Boundary Commission for Scotland and Boundaries Scotland on constituency boundary changes. 3.6 The annual signature refresh has commenced 4. ELECTORAL REGISTRATION UPDATE Annual Canvass 2022 4.1 The annual canvass concluded on 30 November 2022, with all the required follow up activity being completed prior to that date. Item 9. Page 141
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4.2 Over 56,000 personal contacts were made with households in Route 2 properties – i.e. properties where there may have been changes in occupancy. Of these contacts 4,115 were made using the telephone canvass module. 4.3 In the latter stages of the canvass training on the tablet canvassing app took place and the tablets were used by the 3 full time Electoral Registration Assistants and by 2 of the temporary canvassers. The new faclility was very well received by the staff with the instant mapping of properties providing a great time saving in the planning phase and in route finding, being particularly helpful in rural areas. We will be aiming to increase the number of tablets next year and beyond. 4.4 Our overall response rate for Route 2 properties reached 62.2%. This is an increase of 2% on the 2021 level. While this may appear to be a modest figure, our 2021 response level was the second highest relative to all other Valuation Joint Board and single authority council ERO services in Scotland. 4.5 Revised registers were published on 1 December 2022 and promptly 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 and to process sales to organisations who are entitled to purchase the full register, principally credit reference agencies and the Scottish Courts and Tribunals service. 4.6 Printing of paper copies of the register for distribution to local and national libraries is currently in progress. 4.7 Statistical reports were prepared and submitted to the Electoral Commission and National Records of Scotland. The following table summarises the last three revised registers of local government and Scottish Parliamentary electors along with postal voters. Revised registers 1 December 2020 1 December 2021 1 December 2022 Number of electors 448,331 448,607 448,915 Number of postal voters 88,494 119,213 119,611 We also observed an increase in both Parliamentary and local government attainers. Local Government by-election – Moray Ward 3 Buckie 4.8 This election took place on 3 November 2022 and our office was staffed throughout the hours of the poll – 7am to 10pm. 4.9 One emergency proxy appointment was approved on the basis of work related reasons, prior to polling day. Page 142
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Local Government by-election – Aberdeen City 1 Dyce/Bucksburn/Danestone 4.10 Preparations are underway in respect of the by-election to be held on 23 February 2023. 4.11 Set up of the election on our Electoral Management System (EMS) took place immediately following a major system upgrade. Data for the initial issue of poll cards was passed to the Aberdeen City Council elections team on 17 January with these cards due to be issued on 24 January. 4.12 The main statutory deadlines in relation to applications to register and for postal and proxy voting at this by-election are: Application to register to vote Midnight Tuesday 7 February 2023 Application to vote by post, change 5pm Wednesday 8 February 2023 or cancel an absent vote Application to vote by proxy 5pm Wednesday 15 February 2023 The Elections Act 2022 4.13 The first of the statutory instruments in relation to The Elections Act 2022 which have effect in Scotland have now been made, they are: Voter identification The Voter Identification Regulations 2022 which came into force on 16 January 2023. Accessibility The Assistance with Voting for Persons with Disabilities (Amendments) Regulations 2022 which came into force on 7 December 2022. 4.14 The application service for Voter Authority Certificates, including the ERO Portal for processing of applications, went live on Monday 16 January. The digital team at DHLUC will continue to develop and refine the site, introducing additional features over time. 4.15 As at 19 January 2023 we had received one application in Grampian. 4.16 The Business Change Team at DHLUC have delivered various training and drop in sessions in December 2022 and January 2023 in order to provide support to local authorities with the introduction and operation of the service. These have been attended by members of our senior admin team and used to develop training sessions for our core admin staff. 4.17 The Electoral Commission launched their public awareness campaign on 9 December 2022 and this is focussed on authorities in England who are running elections in May 2023. 4.18 Samples of the VAC are included with this report as Appendices 1 and 2. Page 143
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4.19 Further provisions to be introduced by the Act will take effect at various points throughout 2022. New Elections Module and VAC functionality 4.20 Immediately on return from the Christmas break we started work on a major upgrade to the Eros Electoral Management System, working with Aberdeenshire Council IT staff and outside contractors at Incremental Group. 4.21 This upgrade includes: • a major redesign of the layout of Eros • wideranging changes and improvements to the funcitionality for setting up and running elections • the introduction of the register checking functionality for VAC applications 4.22 Following the completion of post installation tasks, key staff tested the functionality of the system before quickly moving on to adding the forthcoming by-election to the system and working through the steps to produce initial poll card data for upload to the Aberdeen City Council election team. 4.23 With regard to the elections functionality, initial impressions are good with the set up processes being greatly simplified and run times for storing and extracting data being much reduced. 4.24 Subsequently all core staff have had their new access set up and they have now undertaken familiarisation with the new look system. Constituency Boundary changes 4.25 The Boundary Commission for Scotland continues to make progress with the 2023 Review of UK Parliament Constituencies. The 4 week consultation period on the revised proposals closed on 5 December 2022. Final recommendations will be submitted before 1 July 2023. 4.26 Boundaries Scotland have commenced the second review of Scottish Parliament boundaries. Provisional proposals are expected in Spring 2023. Annual Signature Refresh 4.27 Absent voters are required to provide a refresh to their signature every 5 years (pending changes relative to Parliamentary electors to be introduced by the Elections Act 2022). 4.28 The annual signature refresh commenced on 11 January 2023 with the issue of 10,482 initial letters. Reminders will be issued in early February and where no response is received within the period of 6 weeks from the issue of the initial notice, we are obliged to cancel the absent vote. Cancellation notices will be issued to these non-responding electors along with a further application form which they can complete should they wish to reapply. Page 144
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5. Conclusion 5.1 Another busy year concluded with successful delivery of another major set of elections, the annual canvass and a by-election, thanks to the hard work of both core and temporary staff. 5.2 Although there are no major elections planned for the coming year, the service faces the challenges of implementing all of the new provisions of the Elections Act as well as applying Parliamentary boundary changes prior to the next UK Parliamentary election. Author of Report: Linda H Smith, Principal Administrative Officer Page 145
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Temporary Voter Authority Certificate Name Albert Brian Sample Issued by the Electoral Registration Officer appointed by Hartlepool Borough Council Date of issue Valid on 16/01/2023 16/01/2033 Electoral Registration Officer’s signature Certificate number DEZPJJX3AZY1ZA9DR001 This certificate can only be used by the named person. For more information, contact your local electoral registration office. Item 9. Page 147
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Elector’s Document Electoral number Date of issue Certificate number Only the holder of this Elector’s Document can use it. If you have found this document, please dispose of it securely. 123456789 16/01/2023 DEZPJJX3AZY1ZA9DR001 00000001 Item 9. Page 149
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REPORT TO: GRAMPIAN VALUATION JOINT BOARD ON 27 JANUARY 2023 SUBJECT: VALUATION ROLL AND COUNCIL TAX VALUATION LIST BY: THE DEPUTE ASSESSOR AND ERO (ABERDEEN AND MORAY) 1. REASON FOR REPORT 1.1 To provide an operational update on the valuation services provided by the Assessor including performance levels during the period 1 April 2022 to 17 January 2023. 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 performance thresholds for the performance indicators that have been agreed between the Scottish Government and the Scottish Assessors Association were reviewed by the Board in June 2021. 4. VALUATION ROLL Revaluation 2017 Appeals 4.1 The current position is that 11,204 revaluation appeals representing 99.2% of the total of 11,291 appeals have been resolved. Of the remaining 87 appeals, 86 sit with the Lands Tribunal for Scotland for disposal without limit of time and the one remaining appeal involves an outstanding procedural matter in the hands of the Valuation Appeal Committee. Running Roll Appeals 4.2 Around 9,500 of the 17,300 appeals last reported remain outstanding, the vast majority of which are material change of circumstances (MCC) appeals arising from the Covid-19 pandemic. Item 10. Page 151
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Such appeals have been invalidated by the Non-Domestic Rates (Coronavirus) (Scotland) Act 2022 and the numbers are reducing quickly as agents intimate formal withdrawals. Any remaining appeals will be dealt with during this calendar year by the Scottish Courts and Tribunals Service (SCTS) that will replace Valuation Appeal Committees from 1 April 2023. Revaluation 2023 4.3 As advised at the last meeting of the Board, 2022/23 is an extremely demanding year for the valuation service with a requirement to carry out a general revaluation of all 30,000 non-domestic subjects in Grampian. The draft 2023 revaluation rolls were published on 30 November 2022, at which time Draft Valuation Notices were issued to all proprietors, tenants and occupiers shown in those rolls. For the bulk classes of subject, recipients were provided with a link to the Scottish Assessors’ Association website where they can view a list of rented properties that informed the valuation of their own property. Our staff are in the process of handling a significant number of written and telephone enquiries arising from the publication of the draft values and work continues to refine the draft valuations with a view to publishing the final revaluation rolls on 15 March 2023. Running roll updates 4.4 Appendix 1 provides performance for running roll updates to the Valuation Roll during the period from 1 April 2022 to 17 January 2023 and the previous two years. Performance remains below the target threshold and this is no doubt reflective of the ongoing level of valuer vacancies, which is covered in detail in a separate report, together with the demands of the 2023 Revaluation, which has been the priority task for both valuation and technical staff since the beginning of this financial year. Valuation and technical staff and are currently engaged in running roll update and the knock-on effect of those updates on the final 2023 revaluation rolls. As some of this work was delayed by the requirement to publish the draft revaluation rolls there is the likelihood of a further negative impact on the 31 March year end performance figures. 5. COUNCIL TAX VALUATION LIST Updates to the List 5.1 Appendix 2 provides performance information for updates to the Council Tax Valuation List during the period from 1 April 2022 to 17 January 2023 and the previous two years. The percentage of updates achieved within the 3 month performance threshold remains below target for a normal year and again reflects the challenges of working with high valuer vacancy levels and the requirements of the 2023 Revaluation. Page 152
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Proposals and Appeals 5.2 A backlog of outstanding Council Tax proposals arising from the pandemic continues to be tackled and Valuation Appeal Committee hearings have been scheduled for February and March across all our divisions in order to dispose of as many unresolved appeals as possible prior to the transfer of any outstanding appeals to the SCTS on 1 April 2023. 6. CONCLUSION 6.1 The valuation service continues to face significant challenges, particularly having regard to the level of valuer vacancies and the new and tighter Revaluation timescale. Nevertheless, the valuation service has performed reasonably well in regard to maintenance of both the Roll and the List. Author of Report: Gavin M Oag Depute Assessor & ERO Page 153
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Appendix 1 Valuation Roll Performance Indicators as at 17 January 2023 Time period 2022/2023 (part year) 2021/2022 2020/2021 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 % 392 52.55% 65.0% 181 24.26% 20.0% 173 23.19% 15.0% 663 39.39% 65.0% 380 22.58% 20.0% 640 38.03% 15.0% 425 29.72% 70.0% 278 19.44% 15.0% 727 50.84% 15.0% Number of amendments 746 1,683 1,430 Total number of entries At 1 April 30,326 29,950 29,714 Total Rateable Value At 1 April £1,002M £1,021M £1,020M Item 10. Page 155
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Appendix 2 Council Tax Valuation List Performance Indicators as at 17 January 2023 Time Period 2022/2023 (part year) 2021/2022 2020/2021 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 % 1,416 73.10% 94.0% 419 21.63% 3.0% 102 5.27% 3.0% 2,465 83.16% 94.0% 344 11.61% 3.0% 155 5.23% 3.0% 1,357 61.35% 94.0% 408 18.44% 3.0% 447 20.21% 3.0% Number of New Entries Added The Actual number of new dwellings added to the Valuation List during the year. 1,937 2,964 2,212 Total Number of Entries The actual number of properties shown in the Valuation List as at 1 April annually. 300,067 297,597 295,690 Adjusted to Band “D” Equivalent Original ratios 298,616 295,659 293,546 2017 ratios 314,462 311,265 308,992 Item 10. Page 157
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REPORT TO: GRAMPIAN VALUATION JOINT BOARD ON 27 JANUARY 2023 SUBJECT: STAFF VACANCIES, RECRUITMENT & UPSKILLING EXISTING STAFF BY: THE DEPUTE ASSESSOR AND ERO (ABERDEENSHIRE) 1. REASON FOR REPORT 1.1 To report on the current level of staff vacancies, attempts to recruit staff and potential avenues to upskill existing staff to fill vacancies in the Valuation Section. 2. RECOMMENDATION 2.1 It is recommended that the Board consider and note the contents of this report. 3. BACKGROUND 3.1 At the Board meeting on 28 October 2022, it was requested that a report be presented at this meeting detailing the current level of vacancies across our organisation, the steps taken to try to fill these vacancies and, in light of the difficulties encountered so far in recruiting staff in certain posts, what actions could be considered to try to fill these posts. 4. CURRENT VACANCIES 4.1 The Board currently has 16 vacant posts; Section Number of vacancies IT 1 Secretarial 2 Clerical 3 Valuation 10 The IT post is currently unfilled and unadvertised pending a review of the organisation’s IT requirements. Item 11. Page 159
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The Secretarial posts are unfilled and unadvertised following the reprofiling of one of the posts and pending the outcome of a job evaluation exercise being carried out by Moray Council’s Human Resources Section. The Clerical posts are in the process of being advertised. The Valuation posts have been the subject of multiple rounds of advertising, continue to be advertised on our website and are of the most concern from an operational standpoint. During October, in the lead up to the publication of the Draft Valuation Roll, 11 members of the valuation staff carried out over 400 hours of paid overtime work. These figures do not include the extra hours of work carried out by the Assessor and Deputes as they are not entitled to any additional financial payments or time in lieu. 4.2 As illustrated in the Valuation Roll and Council Tax report, the staffing situation has clearly had an impact on the key performance indicators (KPI), as the focus of the valuation staff had to be on the publication of the Draft Valuation Roll at the end of November and preparing for the publication of the final Roll in March. 4.3 In addition to the impact on organisational KPIs there is a potential for burnout and stress related issues amongst the staff who are handling the statutory duties involved with the 2023 Revaluation, non-domestic appeals, day-to-day Valuation Roll maintenance and enquiries, maintenance of the Council Tax Valuation List and the increased number of proposals and enquiries that have been experienced in recent years. 4.4 We are acutely aware that these pressures may impact our staff and that this could further deplete the number of staff available to carry out our statutory functions, either through stress related illnesses, or by staff leaving the organisation. 4.5 The welfare of our staff is vital. We are therefore engaging with our staff on a one-to-one basis to determine whether there are problems emerging from the workloads and deadlines we face. We actively adjust duties, if we can, to try to mitigate any issues and encourage staff to use the “Time for Talking” employee assistance service, which includes general advice and information, a 24hr helpline and counselling services, should they feel they require help. 5. ACTION BEING TAKEN 5.1 The assistance of Moray Council HR has been requested in order to find ways to address the current staffing situation and a further meeting between the Assessor and Moray Council HR is planned for the coming weeks. 5.2 Some potential actions that are being discussed/explored are; a) A review and refresh of information for applicants and the positioning of jobs/careers with the Board b) Promotion of the benefits of working for the Board Page 160
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c) Investigation of ways to promote flexibility and further exploring the suitability for remote and flexible working, including looking into options around paid accommodation/travel for specific number of trips to the area per month d) Targeted recruitment advertising via social media e) Graduate apprenticeships. An initial approach has been made to all staff informing them of the existence of this route to career progression and inviting initial expressions of interest. f) Liaison with local schools, colleges and universities regarding future requirements g) Development of succession planning at senior levels of the organisation and where specific skill sets are critical to posts h) Gathering of information of salary levels in comparable jobs/organisations to determine if recruitment difficulties are due to disparity in salary 6. CONCLUSION 6.1 The work with Moray Council HR is still at an early stage and it is recommended that we continue with this course of action for the time being and report back to the Board as discussions and actions progress. Author of Report: James A Barron Depute Assessor & ERO Page 161
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