Verbatim from the report to be discussed by the Audit and Governance Committees

17 November 2016, 2.30 pm, Knowle

“The Council currently has no summarised monitoring document which shows the value of all s106 contributions outstanding at any one point, with the trigger which would lead the contribution to be payable and, if the contribution is liable to be paid, the current status of the collection process. In addition to this the Council does not currently have the information in a format which is consistent with s106 contribution triggers so it cannot determine if triggers have been met.

From our understanding there is no challenge or enforcement of the developers’ legal obligation to provide the Council with details of the number of dwellings constructed, sold and occupied, instead only information on completions is supplied. In addition this information should be received quarterly but our testing suggests that it is received on an ad hoc and untimely basis. This means that there is a risk that the Council has inaccurate information on which to track outstanding s106 contribution monies.

It has been found that at present there is a gap in the understanding of the financial and accounting implications of a contribution trigger being met within Planning, due to an oversight in communication between Finance and Planning over the treatment. When contributions become virtually certain to be received, but are not invoiced for practical or commercial reasons, they should be recognised as accrued income.

At current however, given this gap in understanding in the planning team, the Council’s Finance team only accounts for s106 contributions when the cash has been received or an invoice has been raised. This has led to the financial accounts having an incomplete accrued income balance on the Statement of Financial Position.”

Click to access item-12-management-of-s106-contributions-report.pdf