About the Statement of Accounts

The Council is required to publish its accounts each year and the main content of the Statement of Accounts is prescribed by a Code of Practice that the Council has to follow. The 2010/11 Statement of Accounts includes the following sections:

Foreword

The purpose of the Foreword is to provide an introduction to the Statement of Accounts, an overview of the financial position of the Council and a brief commentary on some of the more significant features of the past year and plans for the near future.

Information included in the Foreword does not form part of the formal audited Statement of Accounts, and the financial information is, in some cases, prepared on the basis of the Council’s management accounts so that they relate to the Council’s budget, monitoring and performance reporting processes, which is different to the standard basis the all Council’s have to follow in the Statement of Accounts.

Statement of Responsibilities

This statement sets out the separate responsibilities that the Council and the Chief Finance Officer (the Director of Finance and Corporate Services) have in respect of the proper administration of the Council’s financial affairs and the certification by the Chief Finance Officer that the Statement of Accounts gives a true and fair view of the financial position of the Council and its income and expenditure respectively as at, and for, the year ended 31 March. It is signed and dated and this is the date at which the accounts are authorised for issue and up to which any events after the balance sheet date are reported (see Note 6 in the accounts)

The core financial statements in the Council’s accounts are:

Movement in Reserves Statement (MIRS)

This statement shows the movement in the year on all the Council’s reserves. The analysis separates ‘usable reserves’ (that can be used to fund expenditure or reduce Council Tax) and other reserves that are accounting balances that do not represent the ability to incur expenditure.

This statement also shows the ‘Surplus or deficit on the provision of services’, which is shown in detail in the next core statement (COMPREHENSIVE INCOME & EXPENDITURE STATEMENT), and adjustments made to take into account the statutory basis on which expenditure is charged to the General Fund for Council Tax purposes.

Comprehensive Income & Expenditure Statement (CI&ES)

This statement shows the cost in the year of providing services based on accounting practices that are based on IFRS and provides a consistent basis for comparison with other local authorities. This is not the basis on which the Council is required to raise Council Tax with the difference in the two bases of accounting being shown in the MIRS.

Balance Sheet

The Balance Sheet shows the value of all the Council’s assets and liabilities at the balance sheet date (31 March) and the reserves that are equal to the net assets (the assets less the liabilities).

Usable reserves are shown separately from Unusable reserves. As explained in the MIRS (see above), usable reserves represent balances that are, or will in future be available to either fund expenditure (subject to statutory restrictions) or to reduce Council Tax whereas unusable reserves cannot be used to provide services. Both usable and unusable reserves are set out in more detail in the Notes to the accounts together with explanations of unusable reserves (see Notes 23 and 24).

Cash Flow Statement

The movement in cash (and cash equivalents) over the year is shown in this statement and is analysed between cash generated or used on operating, investing and financing activities.

Notes to the Accounts

There are numerous disclosure notes relating to the Core Statements, most of which are prescribed in guidance. An index to these (and supplementary accounts) is included towards the end of the Statement of Accounts in the ‘TABLE OF NOTES’. These notes include (as Note 1) the Accounting Policies on which the accounts are prepared.

The following supplementary accounts are also included:

Collection Fund

The Council collects Council Tax on behalf of itself and the Greater London Authority, and non-domestic rates (Business Rates or NNDR) on behalf of government and is effectively acting as a collection agent. The Collection Fund is a statutory account that shows the transactions of the Council as billing authority in respect of the collection and distribution of amounts raised from tax during the year.

Pension Fund

Although the Pension Fund is administered by the Council (through the Pension Fund Committee), it is treated as a separate entity in terms of the approval and audit of its accounts. The accounts of the Pension Fund are approved by the Pension Fund Committee and included in the Pension Fund Annual Report (to be published later in the year after the conclusion of the audit of these accounts). They are also required to be included, but not consolidated in the published accounts for the Council.

The main Fund Account and Net Asset Statement are supported by disclosure notes, most of which are prescribed by recommended practice.

External Auditor’s Report

The Statement of Accounts (excluding the Foreword) is subject to statutory external and independent audit. The main findings and conclusions arising from the audit are reported to ‘those charged with governance’ on behalf of the Council, which is the Statutory Accounts Committee. The main points and the opinion of the Auditors are published in the External Auditor’s Report.

The current audit has not yet been concluded and this Statement of Accounts is therefore unaudited. It is expected that the audit will be concluded during September and the Statement of Accounts together with the External Auditor’s Report will be published before the end of September.

Other statements included that are not part of the formal Statement of Accounts (these statements are not formally audited as part of the accounts):

Annual governance statement

The Council is required to “conduct a review at least once in a year of the effectiveness of its internal control” and to approve an annual governance statement “in accordance with proper practices”. The preparation and publication of the Annual Governance Statement meets these statutory requirements.

Glossary of terms

This section provides a guide to some of the technical terms that are used in this publication.

There is also a Table of Notes that provides an index to the Notes to the Core Statements, a brief section providing guidance on accessing the Accounts in different formats and a section inviting comments and feedback on this and other publications.