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Agenda item

Consideration of 'Going Concern Status' for the Statement of Accounts for the year ended 31 March 2021

Minutes:

The Committee considered a report of the Corporate Director of Resources (Interim) regarding whether the Council should be considered as a ‘going concern’ organisation and whether the Council’s Annual Accounts should be prepared on that basis (for copy see file of Minutes).

 

Mr Rudd referred to the historical position of the net assets set out in the report, which showed that these had reduced from £230 million to £30 million - largely due to technical accounting issues relating to the Pension Fund.  He asked if this depreciated further would it lead to a negative position. In response, the Finance Manager - Revenues, Pensions and Technical Accounting explained that the net assets reduced due to an increase in the pension liability which is calculated by the Pension Fund actuary, but that the way in which the pension liability has to be funded according to statute, is different to the way in which it has to be accounted for.  The liabilities have increased this year due to the change in assumptions used by the actuary in estimating the figures for the accounts.

 

Mr Rudd suggested that a better position would be to show the reserves rather than the net assets.  The Corporate Director of Resources (Interim) provided an assurance that he had no concern about the net asset position as reported and how it had changed, with nothing in the reduction that would concern him, as the section 151 officer, in terms of judging the authority as a going concern.

 

Resolved:

(i)        That the Council should be considered as a going concern.

(ii)       That the Statement of Accounts should be prepared on that basis.

 

Supporting documents:

 

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