Audit Committee, 30 September 2013 Page 1
AUDIT COMMITTEE
Date: 30 September 2013
The Statement of Accounts 2012-2013
Report of the Corporate Director of Finance
Policy Board Member: Councillor Dave Ledger – Deputy Leader of the Council
Purpose of report
The purpose of this report is to provide the members of the Audit Committee with an overview of the changes made to the Draft Statement of Accounts presented in June of this year.
Recommendations
It is recommended that the members of the Audit Committee should note the changes made to the draft document and approve the Statement of Accounts 2012-2013.
Report Author: Alison Elsdon – Head of Business Support
(01670) 622168
C
Audit Committee, 30 September 2013 Page 2
BACKGROUND
1. The draft 2012-2013 Statement of Accounts was presented to the Audit Committee in June. Since then a number of minor amendments have been made to the document including changes recommended by the external auditors.
2. The key changes made to the figures are set out in Appendix A.
3. Changes made to the narrative within the accounts are set out in Appendix B.
4. Appendices C to I show the page numbers as per the Draft Statement of Accounts so that comparison is easy.
5. Appendix C shows the revised Comprehensive Income and Expenditure Account; these changes have been followed through to the segmental analysis statements at Appendices D and E; and the subjective analysis statements at Appendices F and G.
6. This in turn has resulted in changes to the Group Comprehensive Income and Expenditure Statement for both 2011-2012 and 2012-2013 shown at Appendices H and I.
7. There are some unadjusted items but both management and the external auditors agree that these are not material. The unadjusted items are documented in the ISA260 report which is an item on the agenda of this meeting.
8. There have been some minor changes to wording in the Annual Governance Statement which was approved in June.
9. The final version of the Statement of Accounts and the ISA260 will be published on the Council’s web-site once approved by this meeting.
Background papers
Draft Statement of Accounts 2012-2013.
Audit Committee, 30 September 2013 Page 3
IMPLICATIONS ARISING OUT OF THE REPORT
Policy: None
Finance and value for money: The Statement of Accounts summarise the financial performance of the Council and its subsidiaries for the financial year 2012-2013 and shows its net worth as at 31 March 2013.
Human Resources: None
Property: None
Equalities: None (Impact Assessment attached) Yes o No o N/A þ An impact assessment is not applicable as
the report does not require a key decision.
Risk Assessment: The risks within the preparation of the Statement of Accounts are well managed through the embedded processes in place.
Customer Considerations: None
Carbon Reduction: None
Consultation: Deputy Leader.
Wards: All
Summary of changes to figures within the Statement of Accounts Appendix A
Audit Committee, 30 September 2013 Page 4
Page Description Changed from £’000
Changed to
£’000
11 Comprehensive Income and Expenditure Account (CIES) Revised statement at appendix c 36 Service Areas Expenditure (2012-2013) Revised statement at appendix d 37 Service Areas Expenditure (2011-2012) Revised statement at appendix e 38 Reconciliation of Service Area income and expenditure to cost of services
in the CIES (2011-2012)
Net expenditure in service area analysis 273,420 272,048 Amounts included in analysis not included in the CEIS (15,610) (15,522) Cost of Services in CIES 349,039 347,755 39 Reconciliation to Subjective Analysis (2012-2013) Revised statement at appendix f 40 Reconciliation to Subjective Analysis (2011-2012) Revised statement at appendix g 60 Other operating expenditure (2011-2012) Parish and other precepts 5,130 5,042 Total net operating expenditure 64,721 64,333 60 Other operating expenditure (2012-2013) Losses of the disposal of non-current assets 11,998 13,086 Total net operating expenditure 17,466 18,554 61 Property, Plant and Equipment (PFI Assets) Additions 1,745 1,725 Reclassifications 0 20 66 Heritage Assets Five year summary (2011-2012) Revaluations in the period – Museum , art and artefact collection 4,601 4,600 Revaluations in the period – Public sculptures and memorials 374 375 74 Financial Instruments (2012-2013) Long term investments – fair value 101,766 118,505 78 Provisions – Redundancy costs Amounts used in 2012-2013 (260) 2,202 Additional provisions made in 2012-2013 2,202 (260) 87 Trading Operations (2012-2013) Support services recharged to expenditure of continuing operations 9,402 9,403
Summary of changes to figures within the Statement of Accounts Appendix A
Audit Committee, 30 September 2013 Page 5
Page Description Changed from £’000
Changed to
£’000
88 Officers Remuneration Corporate Director of Children’s Services – Paul Moffat - Salary 127,199 126,533 Corporate Director of Finance – Steven Mason – Benefits in kind 17,305 18,799 130 General Government Grants (2011-2012) Local Services Support Grant (1,372) 0 142 Housing Revenue Account (2012-2013) Depreciation and impairment of fixed assets (3,170) (4,258) Loss on disposal of non-current assets 0 1,088 Change in fair value of investment properties 144 0 Amortisation of premiums 368 0 Amortisation of discounts (201) 0 Capital grants and contributions receivable (787) (787) Interest payable and similar charges 3,979 4,347 Interest and investment income 218 (275) 142 Housing Revenue Account (2011-2012) Movement in the allowance for bad debt (not specified by the code) 69 (42) Dwelling rents (gross) (24,487) (24,376) Change in fair value of investment properties (271) 0 Amortisation of premiums 381 0 Amortisation of discounts (201) 0 Capital grants and contributions receivable (100) (100) Interest payable and similar charges 2,747 3,128 Interest and investment income (219) (691) 149 Collection Fund (2012-2013) Council Tax receivable (142,461) (142,460) Total income (235,834) (235,833) Write off uncollectable amounts 1,331 1,332 Total expenditure 237,835 237,836 Movement on fund balance 2,001 2,003 Closing fund balance (966) (964) 162 Group Comprehensive Income and Expenditure Statement (2012-2013) Revised statement at appendix h 163 Group Comprehensive Income and Expenditure Statement (2012-2013) Revised statement at appendix i 165 Group Balance Sheet (2012-2013) Short term debtors 61,941 62,432 Current assets 287,364 287,855 Short term creditors (52,922) (53,483) Current liabilities (162,768) (163,259)
Summary of changes to figures within the Statement of Accounts Appendix A
Audit Committee, 30 September 2013 Page 6
Page Description Changed from £’000
Changed to
£’000
173 Group Short Term Debtors (2012-2013) Other entities and individuals 34,146 31,637 Total short term debtors 61,941 62,432 174 Group Short Term Creditors (2012-2013) Other entities and individuals (42,245) (42,736) Total short term creditors (52,992) (53,483) 189 Taxation and Non-Specific Grant Income (2011-2012) Council Only - Non ring fenced government grants (36,698) (35,326) Group - Non ring fenced government grants (36,698) (35,326 Council Only – Total financing and investment income and expenditure (350,055) (348,683) Group – Total financing and investment income and expenditure (350,044) (348,672)
Summary of narrative changes within the Statement of Accounts Appendix B
Audit Committee, 30 September 2013 Page 7
Page Area Change
6 Note 4 - Capital expenditure Further explanation added around REFCUS and prior year capitalisation direction
6 Note 6 – Treasury Management Total debt rate/return changed from 8.05% (sum) to 3.28%
(average) 94 Note 40 – Grant Income Local Services Support Grant for 2011-2012 moved from ‘Credited
to taxation and nonspecific grant income’ to ‘Grants credited to services – revenue’.
124 Note 50 – Credit Risk Maximum period of investment � amended for UK clearing
banks/building societies 101 Note 42 – Capital
expenditure/Financing Removed wording ‘re Icelandic Impairments’ from the Reversal of capitalisation (REFCUS) line
122 Note 48 – Contingent Liabilities
(MMI) Wording regarding Scheme of arrangement changed to say that this was triggered in November 2012.
202 Pension Fund Note 15 – Fund
value and proportions 2012-2013 values changed for Morgan Stanley (private equity) from 4.9% to 5.1% and from £44.87m to £46.31m.
2012-2013 values changed for BlackRock from 2.4% to 2.2% and £20.10m to £21.54m.
202 Pension Fund Note 16 –
Significant Holdings Value of UK Equity Index Fund holdings changed from £108.41m (11.9%) to £108.14m (11.8%).
Value of Over Five Year Index-Linked Gilts Fund changed from £73.25m to £73.00m.
203 Pension Fund Note 17 –
Additional Voluntary Contributions
Aggregate value of AVC investments with Prudential changed from £1.83m to £1.85m.
205 Pension Fund Note 21 –
Outstanding Commitments Morgan Stanley Private Markets III – Capital payments changed from $46.04m to $45.64m, outstanding commitment changed from $3.96m (£2.61m) to $4.36m (£2.87m).
Global Infrastructure Partners II-C – Capital payments changed from $12.18m to $8.75m, outstanding commitments changed from $30.82 (£20.30m) to $34.25 (£22.55m).
Outstanding capital commitments total changed from £32.42m to £34.93m.
207 Pension Fund Note 23 – Risk
(Liquidity Risk) Total of the Fund’s holdings with Legal & General (£612.59m) included along with a sentence regarding net withdrawals from dealings with members and the maximum withdrawal in a single year.
Notes to the Financial Statements Appendix C
2012-2013 Statement of Accounts Page 11
Note Gross
Expenditure
Gross
Income
Net
Expenditure
Gross
Expenditure
Gross
Income
Net
Expenditure
£’000 £’000 £’000 £’000 £’000 £’000
Central Services to the Public 7,771 (2,795) 4,976 8,035 (3,017) 5,018
Cultural and Related Services 20,518 (4,471) 16,047 22,935 (3,137) 19,798
Environmental and Regulatory Services 49,311 (13,337) 35,974 47,644 (12,897) 34,747
Planning Services 19,049 (4,854) 14,195 10,882 (3,467) 7,415
Fire and Rescue Services 23,298 (3,264) 20,034 17,338 (2,731) 14,607
Education and Children’s Services 350,141 (252,122) 98,019 289,563 (233,386) 56,177
Highways and Transport Services 40,423 (9,983) 30,440 40,959 (10,225) 30,734
Local Authority Housing (HRA) 31,164 (25,879) 5,285 9,768 (28,118) (18,350)
Local Authority Housing (HRA) - Settlement Payment to Government for HRASelf-
financing 10,254 - 10,254 - - -
Other Housing Services 112,897 (107,809) 5,088 116,702 (112,829) 3,873
Adult Social Care 156,108 (69,910) 86,198 131,919 (46,357) 85,562
Exceptional Costs of Equal Pay 9 6,937 - 6,937 (14,441) - (14,441)
Corporate and Democratic Core 10,917 (375) 10,542 13,479 (462) 13,017
Non Distributed Costs 3,793 (27) 3,766 4,795 (46) 4,749
Cost of Services 842,581 (494,826) 347,755 699,578 (456,672) 242,906
Other Operating Expenditure 13 73,146 (8,513) 64,633 40,642 (22,088) 18,554
Financing and Investment Income and Expenditure 14 47,421 (17,564) 29,857 62,598 (20,008) 42,590
Taxation and Non-Specific Grant Income 15 - (348,683) (348,683) - (322,648) (322,648)
(Surplus) or Deficit on Provision of Services 963,148 (869,586) 93,562 802,818 (821,416) (18,598)
(Surplus) or Deficit on Revaluation of Non Current Assets (16,307) 1,069
(Surplus) or Deficit on Revaluation of Available for Sale Financial Assets - (13,104)
Actuarial (Gains)/Losses on Pension Assets/Liabilities 47 117,160 63,480
Other Comprehensive Income and Expenditure 100,853 51,445
Total Comprehensive Income and Expenditure 194,415 32,847
2011-2012 2012-2013
Notes to the Financial Statements Appendix D
2012-2013 Statement of Accounts Page 36
The income and expenditure of the Council’s principal Service Areas recorded in the budget reports for the year is as follows:
Income and Expenditure
2012-2013
Adult Services Children’s
Services
Finance Fire and
Rescue
HRA Local
Services
Public Health
and Public
Protection
Transformation Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Fees, Charges and Other Service Income (38,660) (39,253) (17,468) (1,402) (28,079) (43,847) (6,167) (57,655) (232,531)
Interest and Investment Income (12) (38) (7,887) - (420) - - - (8,357)
Government Grants (9,173) (208,990) (111,505) (1,793) (38) (6,220) (202) (483) (338,404)
Total Income (47,845) (248,281) (136,860) (3,195) (28,537) (50,067) (6,369) (58,138) (579,292)
Employee Expenses 32,827 176,781 20,899 13,421 128 31,377 5,544 15,265 296,242
Other Service Expenses 101,672 97,117 109,833 4,192 13,024 70,930 4,791 42,501 444,060
Support Service Recharges 3,933 13,778 7,784 1,219 1,030 10,795 1,952 11,652 52,143
Interest Payments - 3 21,630 - 4,347 - - - 25,980
Precepts and Levies - - 6,169 - - - - - 6,169
Total Expenditure 138,432 287,679 166,315 18,832 18,529 113,102 12,287 69,418 824,594
Net Expenditure 90,587 39,398 29,455 15,637 (10,008) 63,035 5,918 11,280 245,302
Notes to the Financial Statements Appendix E
2012-2013 Statement of Accounts Page 37
Income and Expenditure
2011-2012
Adult
Services
Children’s
Services
Finance Fire and
Rescue
HRA Local
Services
Public
Health and
Public
Protection
Regeneration T ransformation Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Fees, Charges and Other Service Income (62,874) (44,944) (17,220) (1,459) (26,149) (69,392) (6,957) (2,045) (29,497) (260,537)
Interest and Investment Income - - (3,590) - (420) - - - - (4,010)
Government Grants (9,507) (224,024) (105,947) (2,244) - (3,869) (654) (265) (14) (346,524)
Total Income (72,381) (268,968) (126,757) (3,703) (26,569) (73,261) (7,611) (2,310) (29,511) (611,071)
Employee Expenses 32,237 203,435 20,784 13,540 120 44,749 5,287 2,695 24,128 346,975
Other Service Expenses 130,546 102,778 101,878 4,184 15,082 80,348 5,001 8,732 22,599 471,148
Support Service Recharges 3,928 12,611 6,664 1,188 1,013 11,917 2,268 629 3,928 44,146
Interest Payments - - 12,681 - 3,127 - - - - 15,808
Precepts and Levies - - 5,042 - - - - - - 5,042
Total Expenditure 166,711 318,824 147,049 18,912 19,342 137,014 12,556 12,056 50,655 883,119
Net Expenditure 94,330 49,856 20,292 15,209 (7,227) 63,753 4,945 9,746 21,144 272,048
Notes to the Financial Statements Appendix F
2012-2013 Statement of Accounts Page 39
Reconciliation to Subjective Analysis
This reconciliation shows how the figures in the analysis of Service Area income and expenditure relate to a subjective analysis of the
Surplus or Deficit on the Provision of Services included in the Comprehensive Income and Expenditure Statement.
2012-2013 Service
Area
Analysis
Services
and
Support
Services
not in
Analysis
Amounts not
reported to
managment
for decision
making
Amounts
not
included in
CIES
Allocation
of
Recharges
Cost of
Services
Corporate
Amounts
Total
£‘000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Fees, charges & other service income (232,531) 61,898 (5,450) (89) 57,715 (118,457) (11,461) (129,918)
Interest and investment income (8,357) - - 8,357 - - (8,357) (8,357)
Income from council tax - - - - - - (156,530) (156,530)
Government grants and contributions (338,404) 188 - - - (338,216) (166,308) (504,524)
Gain or loss on Disposal of Non-Current Assets - - - - - (22,088) (22,088)
Total Income (579,292) 62,086 (5,450) 8,268 57,715 (456,673) (364,744) (821,417)
Employee expenses 296,242 (26,458) (5,460) - - 264,324 41,992 306,316
Other service expenses 444,060 (24,858) - (1,174) (57,715) 360,313 (24,459) 335,854
Support Service recharges 52,143 (11,031) - - - 41,112 11,031 52,143
Depreciation, revaluation,amortisation and impairment - (9,142) 42,972 - - 33,830 7,487 41,317
Interest Payments 25,980 - - (25,980) - - 25,980 25,980
Precepts & Levies 6,169 - - (6,169) - - 6,169 6,169
Payments to Housing Capital Receipts Pool - - - - - - 954 954
Gain or loss on Disposal of Non-Current Assets - - - - - - 34,086 34,086
Total Expenditure 824,594 (71,489) 37,512 (33,323) (57,715) 699,579 103,240 802,819
(Surplus) or deficit on the provision of services 245,302 (9,403) 32,062 (25,055) - 242,906 (261,504) (18,598)
The approach to internal recharging adopted by the Council means that the cost of support services has been fully removed in the ‘Other
Service Expenses’ line.
Notes to the Financial Statements Appendix G
2012-2013 Statement of Accounts Page 40
2011-2012 Service Area
Analysis
Services and
Support
Services not
in Analysis
Amounts not
reported to
managment
for decision
making
Amounts not
included in
CIES
Allocation of
Recharges
Cost of
Services
Corporate
Amounts
Total
£‘000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Fees, charges & other service income (260,537) 58,068 8,343 1,310 43,963 (148,853) (13,004) (161,857)
Interest and investment income (4,010) - - 4,010 - - (4,010) (4,010)
Income from council tax - - - - - - (154,854) (154,854)
Government grants and contributions (346,524) 551 - - - (345,973) (194,379) (540,352)
Gain or loss on Disposal of Non-Current Assets - - - - - - (8,513) (8,513)
Total Income (611,071) 58,619 8,343 5,320 43,963 (494,826) (374,760) (869,586)
Employee expenses 346,975 (28,135) (25,313) - - 293,527 45,005 338,532
Other service expenses 471,148 (19,953) - 8 (43,963) 407,240 (26,428) 380,812
Support Service recharges 44,146 (7,644) - - - 36,502 7,644 44,146
Depreciation, revaluation,amortisation and impairment - (1,017) 107,412 - - 106,395 5,914 112,309
Interest Payments 15,808 - - (15,808) - - 15,808 15,808
Precepts & Levies 5,042 - - (5,042) - - 5,042 5,042
Payments to Housing Capital Receipts Pool - - - - - - 520 520
Gain or loss on Disposal of Non-Current Assets - (1,083) - - - (1,083) 67,062 65,979
Total Expenditure 883,119 (57,832) 82,099 (20,842) (43,963) 842,581 120,567 963,148
(Surplus) or deficit on the provision of services 272,048 787 90,442 (15,522) - 347,755 (254,193) 93,562
The approach to internal recharging adopted by the Council means that the cost of support services has been fully removed in the ‘Other
Service Expenses’ line.
Group Comprehensive Income and Expenditure Statement Appendix H for the year ended 31 March 2013
2012-2013 Statement of Accounts Page 162
Note Gross
Expenditure
Gross
Income
Net
Expenditure
Gross
Expenditure
Gross
Income
Net
Expenditure
£’000 £’000 £’000 £’000 £’000 £’000
8,035 (3,017) 5,018 8,035 (3,017) 5,018
22,935 (3,137) 19,798 22,935 (796) 22,139
47,644 (12,897) 34,747 49,497 (14,547) 34,950
10,882 (3,467) 7,415 10,882 (3,467) 7,415
17,338 (2,731) 14,607 17,338 (2,731) 14,607
289,563 (233,386) 56,177 289,563 (233,386) 56,177
40,959 (10,225) 30,734 40,959 (10,225) 30,734
9,768 (28,118) (18,350) 11,286 (30,310) (19,024)
- - - - - -
116,702 (112,829) 3,873 118,084 (115,530) 2,554
131,919 (46,357) 85,562 131,919 (46,357) 85,562
(14,441) - (14,441) (14,441) - (14,441)
13,479 (462) 13,017 13,479 (462) 13,017
4,795 (46) 4,749 4,795 (46) 4,749
699,578 (456,672) 242,906 704,331 (460,874) 243,457
40,642 (22,088) 18,554 40,642 (22,088) 18,554
18 62,598 (20,008) 42,590 62,664 (19,985) 42,679
19 - (322,648) (322,648) - (322,323) (322,323)
802,818 (821,416) (18,598) 807,637 (825,270) (17,633)
- -
(18,598) (17,633)
1,069 (1,699)
(13,104) (13,104)
63,480 63,460
51,445 48,657
32,847 31,024
Other Comprehensive Income and Expenditure
Total Comprehensive Income and Expenditure
Corporate and Democratic Core
Non Distributed costs
Cost Of Services
Other Operating Expenditure
Financing and Investment Income and Expenditure
Group (Surplus)/Deficit
(Surplus) or Deficit on Revaluation of Property, Plant & Equipment Assets
(Surplus) or Deficit on Revaluation of Available for Sale Finincial Instruments
Central Services to the Public
Culture and related Services
Actuarial (Gains)/Losses on Pension Assets/Liabilities
Council Only Group
Taxation and Non-Specific Grant Incomes
Deficit on Provision of Services
Tax Expenses of Associates
Local Authority Housing (HRA)
Local Authority Housing (HRA)-Settlement Payment to Government for HRA self financing
Other Housing Services
Adult Social Care
Exceptional costs of Equal Pay
Environmental and Regulatory Services
Planning Services
Fire and Rescue Services
Education and children's Services
Highways and Transport Services
2012-2013 Group
Group Comprehensive Income and Expenditure Statement Appendix I for the year ended 31 March 2012
2012-2013 Statement of Accounts Page 163
Note Gross
Expenditure
Gross
Income
Net
Expenditure
Gross
Expenditure
Gross
Income
Net
Expenditure
£’000 £’000 £’000 £’000 £’000 £’000
7,771 (2,795) 4,976 7,771 (2,795) 4,976
20,518 (4,471) 16,047 20,518 (1,990) 18,528
49,311 (13,337) 35,974 49,773 (13,739) 36,034
19,049 (4,854) 14,195 19,049 (4,854) 14,195
23,298 (3,264) 20,034 23,298 (3,264) 20,034
350,141 (252,122) 98,019 350,141 (252,122) 98,019
40,423 (9,983) 30,440 40,423 (9,983) 30,440
31,164 (25,879) 5,285 30,776 (27,563) 3,213
10,254 - 10,254 10,254 - 10,254
112,897 (107,809) 5,088 115,584 (110,322) 5,262
156,108 (69,910) 86,198 156,108 (69,911) 86,197
6,937 - 6,937 6,937 - 6,937
10,917 (375) 10,542 10,917 (375) 10,542
3,793 (27) 3,766 3,793 (27) 3,766
842,581 (494,826) 347,755 845,342 (496,945) 348,397
73,146 (8,513) 64,633 73,147 (8,513) 64,634
18 47,421 (17,564) 29,857 47,502 (17,585) 29,917
19 - (348,683) (348,683) - (348,672) (348,672)
963,148 (869,586) 93,562 965,991 (871,715) 94,276
- -
93,562 94,276
(16,307) (12,882)
117,160 119,730
100,853 106,848
194,415 201,124
Council Only Group2011-2012 Group
Other Comprehensive Income and Expenditure
Other Housing Services
Adult Social Care
Exceptional costs of Equal Pay
Corporate and Democratic Core
Non Distributed costs
Cost Of Services
Other Operating Expenditure
Financing and Investment Income and Expenditure
Taxation and Non-Specific Grant Incomes
Total Comprehensive Income and Expenditure
Central Services to the Public
Culture and related Services
Environmental and Regulatory Services
Deficit on Provision of Services
Tax Expenses of Associates
Group (Surplus)/Deficit
(Surplus) or Deficit on Revaluation of Property, Plant & Equipment Assets
Actuarial (Gains)/Losses on Pension Assets/Liabilities
Planning Services
Fire and Rescue Services
Education and children's Services
Highways and Transport Services
Local Authority Housing (HRA)
Local Authority Housing (HRA)-Settlement Payment to Government for HRA self financing