Agenda item

(To follow)

The Committee considered a report of the Chamberlain detailing the consolidated financial statement for City’s Estate, for the year ending 31 March 2025, and the audit findings report. This item was received as a late submission. 

The report author introduced the two late items and advised that he would present items 9 and 10 together due to their similarities. Members were informed that the reports had already been considered by the Finance Committee earlier in November and approved for the necessary delegations to sign, subject to review and approval by the Audit and Risk Management Committee. If Members were content to approve the recommendations, the required signings could proceed. It was highlighted that the key messages from the Finance Committee regarding the City’s Estate accounts were to note the overall reduction on the net asset position, which reflected the scale of investment across major programmes and the need to dispose of assets to fund them. Overall, it was conveyed that the reports demonstrated progress.

The Committee discussed the decline in net assets of the City’s Estate. The Chamberlain explained that the asset base was being drawn down to fund investment in operational property, which was acceptable during periods of growth but required careful management. She acknowledged that the current level of drawdown was unsustainable and reflected a significant catch-up period following years of underinvestment in operational property.

Auditors from Crowe summarised their findings for Members, noting that the Audit was nearly completed. 

Management Accounts:

The Auditors addressed concerns regarding management accounts and recommended that the City Corporation adopt a process for routinely producing them. This recommendation was raised previously and aimed to strengthen top-level controls and provide formal oversight throughout the year.

The Chamberlain confirmed that monthly accounts were provided to all committees and boards, with reports including any internal control weaknesses and audit recommendations but that a year earlier, the team had been operating under capacity and special arrangements had been made for quarterly reporting. However, she reiterated that this was not considered business as usual and emphasised the expectation of monthly reporting going forward.

A discussion took place regarding the length of time taken to address the management accounts issue originally raised two years earlier. The Finance Director explained that the delay was due to operational capacity and a backlog of accounts for the City Fund. Officers also reassured Members that the Corporation does already produce quarterly reporting to Committee and was reporting monthly to Chief Officers.

RESOLVED – That Members,

• Recommend approval of the 2024-25 City’s Estate Financial statements, and the financial statements of each of the 9 consolidated charities.
• Requested management accounts were provided at every Committee meeting.