Agenda item

The Interim Financial Services Manager (s151 Officer) presented the Mid-Year Review Report which had been prepared in compliance with CIPFA’s Code of Practice, and covered the following:

·        A review of the Treasury Management Strategy.

·        The Council’s capital expenditure (prudential indicators).

The Interim Financial Services Manager (s151 Officer) responded to questions, a summary of which is set out below.

Councillor Ryves referred to section 4.2.1 of the report and commented that the figures quoted in the right hand column did not appear to be correct.  The Chair commented that the error appeared to follow through the tables set out in the report.  The Interim Financial Services Manager (s151 Officer) apologised for the error and undertook to email the correct figures to the Committee. 

Clarification was sought on the exempt schemes set out in 4.2.1 of the report.  The Group Accountant explained that the exempt schemes contained sensitive commercial information and therefore could not be published in the Capital Programme.  The Chair commented that a line for exempt schemes and an explanation was required as to why it was not included in the capital programme.  The Group Accountant explained that when the Capital Programme was presented to Cabinet, it was presented in two sections – projects in the capital programme and the exempt schemes were presented separately.

In response to a question as to where KLIC was detailed in the report, the Interim Financial Services Manager (s151 Officer) explained that KLIC had not been included in the report because the loan to KLIC was not a treasury management investment and so was not covered in this report.

In response to a question on PFI schemes, the Interim Financial Services Manager (s151 Officer) confirmed that the council did not have any PFI schemes.

Following questions relating to external debt/borrowing set out on page 31, and how the borrowing figures linked together, the Interim Financial Services Manager (s151 Officer) provided an overview of the borough council’s debt and referred the Committee to Appendix 3 which set out the Council’s borrowing portfolio as at 30 September 2019.

The Chair referred to Appendices 2 and 3 and commented that the details requested on the date loans were taken out, repayment had not been included and added that it would be useful to have the tables set out in the same format as the Annual Treasury Report.  The Interim Financial Services Manager (s151 Officer) undertook to include the information requested in future reports.

The Chair drew the Committee’s attention to section 4.3.1 and the Council’s borrowing requirement in 2019/20 being £16,373 to fund the capital programme.  In response, the Interim Financial Services Manager (s151 Officer) explained that external borrowing would not necessarily be required and that internal borrowing could be an option dependent upon the Council’s cash flow position and that other options may be used e.g. if capital receipts were received they could be used to fund projects.  It was highlighted that if some projects were rephased then this would have an impact on the funding.

The Chair suggested that in order for Members to understand the Council’s cash flow and the difference between revenue, capital expenditure and income that cash flow be the subject of a future training session for the Committee, which was agreed by those present.

In response to the format of the report specifically 6.1 and page 42 being difficult to understand and whether a simpler and more logical way could be used to report the information.   The Interim Financial Services Manager (s151 Officer) explained that this was a standard template from the Treasury Management Advisors which would ensure that reporting complied with the requirements of the Code of Practice on Treasury Management and that the Council had used it and adapted it accordingly.

The Chair explained that not all new Councillors had a full understanding of what was within the Terms of Reference of the Audit Committee and referred to the Annual Strategy Statement and commented that it appeared that some information was missing and explained that advice was therefore required.  The Chair undertook to discuss with the Interim Financial Service Manager (s151 Officer).

The Chair thanked the Interim Financial Services Manager (s151 Officer) for attending and presenting the report.

RESOLVED:  The Audit Committee reviewed and noted the report and the treasury activity and recommend that Cabinet note the report.