Report of the treasurer on the 2019/20 final accounts
Purpose of report
To report to the Council the actual expenditure and income figures for 2019/20, how these compare with the Council’s 2019/20 budget and how it leaves the Council’s finances at the end of the financial year.
Background
The final accounts for 2019/20 are attached. The report of the Council’s internal auditor is attached and it includes the statement that ‘...there are no matters of any significance that need to be brought to your attention....’.. The Council is required to approve and publish the Annual Governance Statement (which includes key figures from the final accounts) by 31st August – a little later than usual because of COVID. We have set the public inspection period to be 3rd August until 11th September. The ‘light touch’ external audit will be carried out, as last year, by Littlejohn plc.. The publication date this year for final audited accounts is 30th November (it is usually 30th September).
Comparison with original budget
In the extract from the summary revenue account below you will see, halfway down, that the ‘Total Net Expenditure’ shows as £265,654 in the Actual column compared with £244,661 in the Original Budget column. There is, therefore, an ‘overspend’ of £265,654 less £244,661 i.e. £20,993.
| Original Budget(£) | Actual (£) | |
|
1. ADMINISTRATION |
41,944 |
40,337 |
|
2. COST OF DEMOCRACY |
36,087 |
64,704 |
|
3.SERVICES TO THE PUBLIC |
15,960 |
15,730 |
|
4. MEMORIAL PARK + TOWN GARDENS |
105,248 |
109,476 |
|
5. CEMETERY |
22,886 |
22,052 |
|
6. ALLOTMENTS |
7,661 |
6,941 |
|
7. NON-RECURRING |
12,000 |
696 |
|
8. STOURPORT CIVIC CENTRE |
2,875 |
5,718 |
|
TOTAL NET EXPENDITURE |
244,661 |
265,654 |
|
9. PRECEPT ON WYRE FOREST D. C. |
-217,100 |
-217,100 |
|
10. FUNDING FROM ELECTION RESERVE |
0 |
-22,972 |
|
11. FUNDING FROM COMPUTER/VEHICLES FUND |
-8,965 |
-1,965 |
|
DEFICIT FOR YEAR |
18,596 |
23,617 |
The more significant variations, many of which (including salaries) were drawn to the attention of Finance Committee in the budget report in February as part of the revised estimates for 2019/20, are as follows:
| £000 | £000 | |
| Elections 1 | 23.2 | |
| Salaries and wages – higher than budgeted | 11.7 | |
| Civic Centre - business rates higher than budgeted | 7.0 | |
| Elections - increased contribution to fund | 5.0 | |
| 46.9 | ||
| Less | ||
| Refurbishment of war memorial – less costly than budgeted | -6.3 | |
| Disposal of cemetery waste – savings from new arrangements | -3.7 | |
| Civic Centre – rental income from offices higher than budgeted | -2.7 | |
| Postage and telephones – less than budgeted | -2.6 | |
| Parks improved service provision – budget not all used | -2.3 | |
| Wildflower meadow - contributions from councillors’ allocations2 | -2.3 | |
| Miscellaneous – budget not used + some unbudgeted income | -2.2 | |
| Grave-digging – cost less than budgeted | -1.7 | |
| Other net savings – the total of various smaller items | -2.1 | |
| 25.9 | ||
| 'Overspend' on year | 21.0 |
1 For correct accounting this item has to be shown as an overspend but really this is a technicality as it was always envisaged that there would be a cost of around £20,000 for the Town Council elections in May 2019 and that it would be met, as it has been, from the Election reserve. Sadly, a further £4,000 was required late in the financial year to pay for the by-election required in the Areley West ward.
2 These contributions were received in 2019/20 and have to be shown in 2019/20 accounts but will actually be carried forward and used in 2020/21.
Comparison of ‘actual’ with revised estimate
The revised estimate which projected a deficit for the year of £33,062 was a little pessimistic with the actual deficit being £23,617. It is suggested, however, that with gross annual spending of around £350,000 such a difference is minor and that the Council’s budget remains under control and carefully monitored.
Financial position at year-end
In the original budget, the Council had budgeted to use £18,596 but this increased in the actual year-end position to £23,617. The Council’s working balance at 31st March 2020 is, as a result, now £57,100 compared with nearly £81,000 at 31st March 2019. This maintains the Council’s strong financial position when compared to its policy of maintaining a working balance of at least £50,000 but members know that the Council will face big challenges in the years ahead including maintaining rental income from offices.
Recommendation
That the Council approve, subject to audit, the final accounts for 2019/20. This report has been prepared by Graham Shaw, Treasurer who will be pleased to respond to any questions arising.