Agenda item

Report of the Chamberlain. (To follow)

The Committee considered a report of the Chamberlain which provided the Committee with the Audited 2014/15 City Fund and Pension Fund Financial Statements for approval. The Committee was advised that the Financial Statements had been considered by the Audit and Risk Management Committee the previous day and a resolution from that Committee had been put around the room.

The Chamberlain advised that there was one significant outstanding issue with the accounts, which many Members had been advised of through the briefing meetings the previous week. The Chamberlain explained that this issue was the accounting treatment for the proceeds from long leasehold disposals. This specifically applied to the sale of 2 Fann Street, but would also be applicable to all similar transactions. The Chamberlain advised that the Corporation currently considered all income from these transactions as capital receipts, but the auditor had advised that they believed that an element of these transactions was a lease of land and therefore this element of the receipt should be treated as deferred income. This would then be released as revenue on an annual basis over the lengths of the leases.

The Committee was advised that if the auditor’s opinion prevailed, this would have an impact on the long leasehold sales which the Corporation had made to meet its £200m contribution to Crossrail. This impact was estimated to be in the region of a maximum of £30m, although the Committee was assured that sufficient money would be available to make the contribution. It was also noted that if revenue reserves were required to be used to meet the balance of the Crossrail contribution, these reserves could not be replenished in the future from capital receipts, as this was not permitted under Local Government finance rules.

RESOLVED – That the Committee:

a)    notes the resolution from the Audit and Risk Management Committee;

b)    delegates to the Town Clerk, in consultation with the Chairman and Deputy Chairman, approval of any material changes to the financial statements required before the signing of the audit opinion by Deloitte - which is expected to be by the end of August or early September.

c)    Subject to the satisfactory completion of a) above, delegates to the Town Clerk, in consultation with the Chairman and Deputy Chairman, approval of the City Fund and Pension Funds Financial Statements for the year ended 31 March 2015.