Recommendation 27

Some of the RFCAs’ financial reporting has not complied with HM Treasury guidance and International Financial Reporting Standards. For example, the RFCAs’ accounts have not included a cash flow statement, nor have they correctly disclosed a defined benefit pension scheme for employees. Non-compliance with these rules has created an inconsistency in the financial reporting between the Department and the Council.43 The Council accepted responsibility and acknowledged that initially it did not have a good understanding of the Treasury’s financial reporting manual or guidance on preparing an annual report and accounts. The Council insisted, however, that the accounts have still been audited and that it knew how the money had been received and spent. The Council noted that the Department had also not picked up on the missing cash flow statements but, now that both the Department and the Council were aware of it, a cash flow statement would be included in future accounts.44