Contact: Paul Carey-Kent, Deputy Treasurer, 01962 847525

1 Introduction

1.1 The Accounts and Audit Regulations 2003 require the Statement of Accounts for 2003/04 to be approved by the Authority within five months of the end of the financial year, before an audit opinion will be given.

1.2 The draft Statement is attached as the appendix, for approval. It is consistent with the figures in the Final Accounts 2003/04 also on this agenda.

1 Statement of Accounts 2003/04

1.1 The form of the Statement is prescribed by a Code of Practice which constitutes proper accounting practice as required by Section 66 of the Local Government and Housing Act 1989, the code is updated each year to take account of the changes in accounting standards.

1.2 There are two main changes for 2003/04; retirement benefits (FRS17) and Statement of Internal Control.

Retirement benefits (FRS17)

1.3 Last year additional disclosures on pensions were made as required by the new reporting standard on retirement benefits (FRS17). This year the FRS17 adjustments have been included in the statements themselves resulting in the current cost of benefits accrued being reflected in the revenue account and the net pensions liability in the balance sheet.

Statement of Internal Control

1.4 There is continuing drive within the public and private sectors to increase the quality and reporting of corporate governance. With effect from the 2003/04 Statement of Accounts all local authorities and other relevant bodies are required to produce a more broadly based `Statement of Internal Control' (SIC).

1.5 The requirement to comply is set within the Accounts and Audit Regulations 2003. However, guidance on how to comply has only recently been issued by the Chartered Institute of Public Finance and Accountancy (CIPFA). In recognition of this fact, authorities are entitled to produce an interim statement for inclusion with the 2003/04 Statement of Accounts.

1.6 The Governance Committee will receive an action plan setting out what is required during 2004/05 in order to achieve full compliance for the 2004/05 Statement of Accounts. This is likely to include areas of work which will in turn involve this Committee.

2 Synopsis of the requirements

2.1 The new Statement of Internal Control relates to the corporate governance responsibilities and so is required to be signed by the most senior employee and member (ie Chief Fire Officer and Chairman).

2.2 The Authority is required to identify the risks to achieving its objectives and ensure that controls are in place to mitigate these through the application of a risk management process. Having established the system of internal control, the Authority should put in place processes to maintain it and keep it up to date.

3 Action required

3.1 In future the Authority must comply fully with the guidance. This will involve a detailed process to:

3.2 Due to the timing of the publication of guidance, an interim statement is permitted for the 2003/04 Statement of Accounts. This needs to state what arrangements the Authority already has in place and what action the Authority will take to comply fully with the regulations.

3.3 This Authority already satisfies the majority of the requirements to comply but has not undertaken the detailed work required to identify formally all risks and provide assurance that controls are in place and working to mitigate those risks. Therefore an interim statement is proposed for the 2003/04 Statement of Accounts.

3.4 A draft interim statement is included in the draft Statement of Accounts. All headings and the content of sections one and two are taken from the guidance. The first and third paragraphs of section four are also directly taken from the guidance as recommended. The remaining content is expected to be specific to the organisation. The draft statement has been agreed by the Chief Officer, Clerk and Treasurer.

3.5 There is no guidance on how detailed the Authority-specific content should be. The draft version is intended as a starting point which members may wish to comment on.

3.6 In order to meet the short timescale the Treasurer has co-ordinated the content of the interim statement. However, further work will need to be undertaken in the current financial year in order to fully comply with the requirements. This is consistent with the plans to take forward corporate governance arrangements as approved at the Authority's meeting on 14 July.

Publishing arrangements

3.7 After final editing and the external audit certificate has been obtained the Statement will be published and copies of the document will be sent to Members.

4 European Convention Human Rights and the Human Rights Act 1998

4.1 The proposals within this report are compatible with the provisions of the European Convention on Human Rights and the Human Rights Act 1998 and considered in the light of the Race Relations (amendment) Act 2000.

Recommendation

That the Statement of Accounts 2003/04 be approved.

Section 100 D - Local Government Act 1972 - background papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

NB the list excludes:

Published works.

Documents which disclose exempt or confidential information as defined in the Act.

TITLE FILE

Fire Statement of Accounts 2003/04