Policy paper

The User Preparer Advisory Group: Meeting minutes

Updated 6 January 2021

25th September 2020

Virtual 1pm – 3.30pm

UPAG 2

Meeting minutes

Attendees:

Andrew Buchanan, Chair & Independent member

Andrew Firth, BEIS

Alex McNeil, Department for Transport

Alex Metcalfe, ACCA

Rachel Bleetman, ACCA

Alison Ring, ICAEW

Henning Diederichs, ICAEW

Andy Carter, HM Revenue and Customs

Sudesh Chander, HM Treasury

Matthew Rowe, HM Treasury

Joshua Rushbrooke, HM Treasury

Ed Hammond, HM Treasury

Debbie Paterson, Healthcare Financial Management Association

Gavin Freeguard, Institute for Government

Sarah Sheen, CIPFA

Helen Creeke, The National Archives

Silvia Pazzi, Academic

David Heald, Academic

Ekaterina Svetlova, Academic

Marcus Wilton, House of Commons

Additional Invitees:

Joshua Rushbrooke

Matthew Rowe

Sudesh Chander

Alex Metcalfe

Ekaterina Svetlova

Lindsey Stephenson

Silvia Pazzi

Time	Item	Presenter	Associated Paper
13:00	Welcome and minutes from the last meeting	Andrew Buchanan, Chair	UPAG 2 (1)
13:05	ACCA Report	Alex Metcalfe Ekaterina Svetlova, Lindsey Stephenson, Silvia Pazzi	UPAG 2 (2)
13:45	HMT Update	Matthew Rowe and Sudesh Chander
14:15	Terms of reference	Matthew Rowe	UPAG 2 (3)
14:25	Best practice examples report	Joshua Rushbrooke	UPAG 2 (4)
14:45	Transparency rating of departmental ARAs	Gavin Freeguard
15:05	Scrutiny Unit Reviewing of Accounts	Marcus Wilton
15:25	AOB	Andrew Buchanan, Chair

Minutes

Agenda 1 - Welcome and minutes from the last meeting

1.The Chair welcomed the group and thanked them for taking the time to dial into the meeting.

2.The group began by discussing the minutes of the last meeting. The group raised some minor comments on paragraph 34 and 37 questioning if these actions had been completed, HMT outlined that they would be on the approval of the minutes from the last meeting. The group approved the minutes of the last meeting.

Agenda 2- ACCA report

3.The Chair introduced the group to Alex Metcalfe who gave some background to the research project that investigated user trust within public financial reporting. Alex handed over to Silvia and Ekaterina to outline the findings of their research.

4.Silvia and Ekaterina presented slides on the preliminary findings of the report. First taking the group through the purpose of the report including their aim of evaluating the level of user trust within government financial reporting and what can be done to improve it. They then outlined the methodology of the report which included analysis of the current financial reporting landscape, analysis of the work carried out by HMT and even interviewing experts in government financial reporting.

5.Discussion moved on to then presenting examples of best practice within financial reporting including the “Infobase” model currently adopted by the Canadian government alongside some examples from the government financial reporting review before finally suggesting incremental steps for improvement within the public sector financial reporting landscape.

6.Silvia, Ekaterina and Alex then opened the discussion up to the group for questions and discussion.

7.The group questioned if the research had considered the local level with a focus on how local actors might use national information as well as if the suggested improvements to transparency had considered the potential reputational risks. Silvia and Ekaterina expressed a desire to speak to local actors and recognised the reputational risk that arises as part of increased risk reporting.

8.The group discussed the need for upskilling the users of financial reports as well as recognising the value in the current format. The group also recognised the need to consider the preparers of this information particularly in a time when there are so many other challenges. The group also discussed the physical and technological limitations that play a part in carrying out any improvements to financial reporting and how a balance needs to be struck between increasing reporting and the streamlining of reports to avoid undue pressure on preparers.

9.The group thanked the presenters for taking their time to present the findings of their research. ACCA welcomed the groups thanks and flagged that they were hosting an annual event and that should any of the group like to be involved to contact them.

Agenda 3 - HMT update

10.The group received an update from HMT on work carried out since the last UPAG meeting. This included publishing of a report of best practice examples from government annual reports and accounts and the publishing of a thematic review on IFRS 9 & 15.

11.HMT informed the group that the focus of the FRAB March 2020 meeting and an extraordinary FRAB meeting in April 2020 discussed means to support departments during the pandemic and approved the deferral of IFRS 16 and options for reducing reporting requirements. As a result, HMT extended the administrative deadline for the publication and laying of the accounts and reduced the reporting requirements facing departments. Broad guidance on the financial reporting implications of Covid-19 and EU Exit was also provided.

12.HMT also explained how a large focus of their work had been helping departments and ALBs with year-end issues, many of which had emerged as a result of Covid-19. Common issues included going concern, expected credit losses and valuations and HMT had worked closely with cross government groups such as RASIG and TACOE as well as the NAO.

13.HMT also updated the group on the progress being made by departments in laying their accounts. HMT explained that around half of government accounts had been laid before the summer recess and that HMT is continuing to work closely with remaining departments to support them with their accounts laying.

14.The group thanked HMT for their update and the work they had undertaken to support departments during this time. The group asked if there had been any thought about potential changes in dates and requirements for the 2020-21 accounts. HMT explained that they are currently considering the options for next year and are aware of the issues facing departments. HMT explained that the administrative deadline for laying accounts is set by HMT and that next year’s timelines will be considered carefully.

15.HMT gave a further update on the work ongoing around the FReM review and actions from the consultation in 2019. HMT outlined that they have been have considered each point raised individually when revising the FReM. HMT outlined some other areas they have been giving consideration to including strengthening the reporting on diversity in annual reports and accounts.

16.The group thanked HMT for their update and broadly supported the proposed changes.

17.The group also discussed the potential increase for fraud due to the unprecedented nature of the current times and level of government funding being quickly issued. HMT explained the role of the Complex Grants Advisory Panel and how fraud risk assessments would have been prepared for all grant funding, and that the responsibilities of the Accounting Officers had not changed.

Agenda 4 - Terms of Reference

18.HMT circulated an updated terms of reference document prior to the meeting including the changes suggested at the last meeting.

19.The board discussed the changes made and approved the terms of reference subject to making some minor editorial changes.

Agenda 5 - Best practice examples report

20.HMT circulated the Government Financial Reporting Review Best Practice Examples Report 2018-19 prior to the meeting and gave a short overview of the process behind the creation of the document and its aims. HMT encouraged members of the group to suggest examples of best practice in annual reports and accounts to feed into the next iteration.

21.The group agreed that the document was useful and agreed with HMT’s request for members of the group to bring examples of best practice to the next UPAG meeting.

22.The group also discussed the potential to improve the documents usability by making it more accessible. HMT agreed to discuss this offline.

Agenda 6 - IFG transparency rating of departmental ARA’s

1.The group was given an update from Gavin Freeguard on the work undertaken as part of the Institute for Government’s Whitehall Monitor Report, with a focus on the rating of departmental ARA’s against the recommendations of the Government Financial Reporting (GFR) Review.

2.The group was presented with the findings of the Whitehall monitor report as well as informed as to how the Institute used a RAG rating system to rank the reports from various departments.

3.It was explained to the group that not all the recommendations within the GFR Review are examined by the Whitehall Monitor report. The group discussed the need for being transparent in how conclusions are reached. Gavin agreed and explained that it had considered publishing the information that formed the basis of their conclusions.

4.The group thanked Gavin for the update and looked forward to seeing the next iteration of the report.

Agenda 7 - Scrutiny Unit review of accounts

5.The group received an update from the Parliamentary Scrutiny Unit on the interaction with select committees and the use of government annual reports and accounts. The group was updated on how the Scrutiny Unit turns annual reports into briefs for ministers and how this is the main way that minister’s access and understand the information within ARA’s.

6.The group was also updated on the types of information used, with ministers often focusing on overall trend of spend rather than the in-year figure. The group was informed that ministers appreciate breakdown of staff costs by policy area where possible.

7.The group discussed the Scrutiny Unit’s use of NAO reports and the potential to provide training on financial reporting. The group also discussed the variation in the Scrutiny Unit’s role based on the Chair of the committee’s different needs.

8.The group thanked the Scrutiny Unit for taking the time to explain its work to the group.

Agenda 8 - AOB

9.The board agreed to meet again in January 2021 and then try to mirror the timetable of the FRAB for the rest of the year.