Audit and Risk Com­mit­tee Paper 1

24 Novem­ber 2023

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For decision

Title: ²⁰²²⁄₂₃ Final Accounts

Pre­pared by: Louise Allen

Pur­pose

To present and seek approv­al to the annu­al report and accounts for ²⁰²²⁄₂₃ pri­or to their being sub­mit­ted to Audit Scot­land for final certification.

Recom­mend­a­tions

The Audit and Risk Com­mit­tee is asked to:

a) Approve the annu­al report and accounts pri­or to sub­mis­sion to Maz­ars and Audit Scot­land for final certification.

Over­view

1. Maz­ars, the Authority’s extern­al aud­it­ors, are expec­ted to give an unqual­i­fied audit opin­ion on the ²⁰²²⁄₂₃ fin­an­cial statements.

2. The Audit & Risk Committee’s role and respons­ib­il­it­ies as regards the pro­cess of pre­par­ing the annu­al report and accounts are set out in the Scot­tish Pub­lic Fin­ance Manu­al. The Audit & Risk Com­mit­tee is in place to provide assur­ance on risk man­age­ment, gov­ernance and intern­al con­trol and to act as a source of inde­pend­ent advice on these mat­ters to the Account­able Officer and Board. The Committee’s role as regards the accounts is to sup­port the Account­able Officer with regard to their per­son­al respons­ib­il­it­ies for issues of risk, con­trol and gov­ernance through a pro­cess of con­struct­ive challenge.

3. The Com­mit­tee has pre­vi­ously con­sidered its exer­cise of this role for the ²⁰²²⁄₂₃ fin­an­cial year in con­sid­er­a­tion and approv­al of the Gov­ernance State­ment now included in the final accounts document.

Review of the annu­al report and accounts

1. Pre­par­a­tion of fin­an­cial state­ments requires man­age­ment to make sig­ni­fic­ant judge­ments and estim­ates. I draw the Committee’s atten­tion to page 89 of the annu­al report and accounts, where there is inform­a­tion on pro­vi­sion­ing for costs that may be irre­cov­er­able from fund­ing provided from the LEAD­ER rur­al devel­op­ment pro­gramme. The account­ing treat­ment applied is con­sist­ent with that used in pre­vi­ous years. There are no oth­er sig­ni­fic­ant judge­ments or estim­ates to bring to the Committee’s attention.

2. The State­ment of Fin­an­cial Pos­i­tion at 31 March 2022 (pri­or year) has been restated to reflect a change in account­ing treat­ment relat­ing to third-party bonds and developers’ gains. As the value of funds held is now mater­i­al, they have been treated as third-party assets at 31 March 2023 and excluded from the Authority’s fin­an­cial state­ments. This is because neither the Author­ity nor Scot­tish Gov­ern­ment has the right to apply the cash. Pre­vi­ously, these amounts were included in the Authority’s cash bal­ance, but as the funds do not belong to the Author­ity, the cash bal­ance was matched by the recog­ni­tion of a liab­il­ity to third-parties. Con­sequently, it has been neces­sary to mir­ror the new treat­ment in the fig­ures for the pre­vi­ous fin­an­cial year, by restat­ing the val­ues of ​‘Cash and cash equi­val­ents’ and ​‘Trade and oth­er pay­ables’. The out­turn for the pre­vi­ous fin­an­cial year is unaltered, with the only changes being a reduc­tion on both cash and pay­ables in the State­ment of Fin­an­cial Position.

3. We adop­ted IFRS 16: Leases from 1^st April 2022, in accord­ance with legis­lat­ive require­ments. The stand­ard removes the dis­tinc­tion between oper­at­ing and fin­ance leases, and requires that less­ees recog­nise a ​‘Right of Use’ (RoU) asset in the state­ment of fin­an­cial per­form­ance, togeth­er with a liab­il­ity for future lease pay­ments. Details of these RoU assets are shown in note 10 the accounts. They com­prise: the Grant­own office build­ing, the Bal­later office, fleet vehicles and office printers/​copiers. Interest on lease agree­ments is charged to the State­ment of Com­pre­hens­ive Net Expendit­ure, and the RoU assets will be depre­ci­ated over the life of the lease. This change in account­ing treat­ment has no effect on the Authority’s cash flows. Spe­cif­ic allow­ance is provided, and ring-fenced, to cov­er these trans­ac­tions in our grant-in-aid settlement.

4. The Park Authority’s per­form­ance for the year is shown in the State­ment of Com­pre­hens­ive Net Expendit­ure on page 78 of the annu­al report and accounts. The Authority’s fin­an­cial pos­i­tion on 31 March 2023 is described in the State­ment of Fin­an­cial Pos­i­tion (page 79). Cash move­ments dur­ing the year are reflec­ted in the State­ment of Cash Flows (page 80). The Author­ity applied funds provided through grant-in-aid to the pur­poses inten­ded and to meet the aims of the oper­a­tion­al plan. Pro­ject fund­ing was sim­il­arly dis­posed of in accord­ance with the plans approved by fun­ders. Over­all, fund­ing through grant-in-aid was £1.671m high­er than in the pre­vi­ous year. There was an under­spend of £0.25m on Peat­land Res­tor­a­tion, although tar­gets for Ha of res­tor­a­tion were met. Oth­er­wise, the Author­ity met its tar­get to break-even.

5. High­lights of the Authority’s oper­a­tion­al activ­ity dur­ing the year are provided in sec­tion 1.7 of the annu­al report (pages 23 to 30).

Con­clu­sion

1. The Audit & Risk Com­mit­tee is reques­ted, fol­low­ing fur­ther dis­cus­sion of the annu­al report and accounts now presen­ted, and in the con­text of any input from the aud­it­ors, to approve the accounts for sig­na­ture by the Chief Exec­ut­ive, who is also the Account­able Officer.

Louise Allen

louiseallen@​cairngorms.​co.​uk

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