Archived decisions
AT A MEETING of the FINANCIAL AFFAIRS PANEL of the HAMPSHIRE POLICE AUTHORITY held in the First Floor Meeting Room, Staple Gardens, Winchester on Tuesday 15 July, 2003.
PRESENT:
Councillor A. Collett (Chairman); Mrs. R. Atkinson; Mrs L. Cawsey, JP; Mr R.J. Gully; Councillor S.A. Hayes.
Also present: Mr. J. Pittam (Treasurer); Mr. M. Coombes (Director of Finance); Ms. K. Huck, (PA to Director of Finance); Chief Supt. G. Stogdon (Corporate Services) and Miss S. Jackson (Clerk's Office).
279 DECLARATIONS OF INTEREST
Members were mindful that, where they believed they had a personal or personal prejudicial interest in any matter to be considered at the meeting, they should, normally at the time of the debate, declare their interest and, having regard to the circumstances described in paragraphs 9, 10, 11 and 12 of the Police Authority's Code of Conduct, consider whether to leave the meeting whilst the matter was discussed.
280 APOLOGIES
Apologies were received from Councillors J. Fazackarley and P. Heath.
281 MINUTES
The Minutes of the meeting of the Panel held on 30 May, 2003 were confirmed as a correct record and signed by the Chairman subject to the substitution of the words "The Treasurer" with the words "The Panel" on the first line of paragraph 6 of Minute 265 - Audit Commission Audit Plan 2002/03 - 2003/04.
Matters arising:-
Minute 265 - Audit Committee Audit Plan 2002/03 - 2003/04
The Treasurer was pleased to report that the Audit Commission had appeared to accept the Authority's technical arguments with regards to the accounting treatment of the pension liability situation and that, therefore, the Authority could continue to operate a pensions reserve rather than make a specific provision. He had yet to receive confirmation of this in writing.
The Director of Finance reported that he had received confirmation from the Audit Committee that the Police Standards Unit would now be paying the audit fee on work undertaken in relation to activity based costing which would reduce the audit fee reported at the last meeting by £7,000.
The Treasurer indicated that a report to the next meeting of the Panel on medium term projections would look at the Council Tax forecast for next year and re-visit the manner in which the Authority would need to conduct consultation around this issue in order to inform the public at a much earlier stage of any likely increases. He also informed the Panel that he hoped the minimum level of grant increase for next year would be known before November which would help when providing budget estimates for that year.
Minute 269 - Police Overtime
The Director of Finance reported that a response was still awaited from the Police Negotiating Board in relation to the concerns of the Association of Chief Police Officers in relation to externally funded overtime.
Minute 270 - Activity Based Costing
The Vice-Chairman drew attention to a recent letter from the external auditors which notified the Force of a "green" assessment in the area of activity based costing and she asked for the thanks of the Panel to be recorded to the Director of Finance, the Head of Corporate Services and their staff for achieving this favourable recognition.
Minute 275 - Project Laser-Automatic Number Plate Recognition
The Panel agreed that there should be a year end review of this project in order to examine the funding of this initiative.
Minute 278 - Police Headquarters Accommodation Project
The Panel noted that a detailed report on the issue of security had yet to be submitted to the Members' Estate Working Group pending the consideration of the various options available.
282 OUTTURN REPORT FOR 2002/03
The Panel considered a report of the Chief Constable and the Treasurer (Item 4 in the Minute Book) which set out the position on the revenue and capital accounts for the last financial year and compared actual expenditure with the adjusted revised budget. Members noted that the accounts were subject to audit by the Audit Commission and that the formal Statement of Accounts would be presented to the Panel at its meeting in September.
The Treasurer introduced the report and indicated that, whilst the overall position was not unexpected, it had been complicated due to transfers between reserves, the accrual of compensatory grant as required by the Audit Commission, the situation with regard to police pensions, and the accrual of police overtime. He drew attention to the overall position which would require taking a net of £1.42m from balances although the majority of this related to compensatory grant. He also highlighted the position with police pensions which had been drawn up on the basis of 132 retirements during the year although the actual number had been 147. The additional cost of the lump sums was £0.943m and it was proposed that this amount should be taken from the Pensions Reserve. It was noted that, although the Authority had approved the inclusion in the 2003/04 budget of a contribution of £400,000 to the Pensions Reserve which would bring the balance up to just over £1m, the size of this reserve was now of concern and a contribution in 2002/03 of £555,000 was proposed to maintain a more adequate balance. In addition, the overall position would be reviewed as part of the Medium Term Projection report to be brought to the Panel in September.
The Treasurer then commented on the position on the General Reserve at 31 March 2003 and reminded Members that £1.77m would be added in 2003/04, giving a balance of £3.8m. Again, this position would be reviewed as part of the Medium Term Projection.
He then explained that an accounting error had recently been discovered whilst preparing the accrual of police overtime for 2002/03 which required a prior year adjustment to 2001/02 accounts to charge the correct level of overtime in that year and to ensure that the 2003/04 budget was not overcharged for police overtime. He explained that this had had the effect of reducing the balance on the General Reserve by the size of the accrual which was £1.01m and that the balance of the General Reserve would therefore reduce from £2m to £1m at 31 March 2003. This would increase back up to £2.8m at 1 April 2003 with the addition of the budgeted contribution of £1.77m in 2003/04. The Panel noted that the 2003/04 budgeted contribution to reserves of £1.77m provided an opportunity when continued into 2004/05 to reinstate the general reserve (and also the level of the pension reserve) to compensate fully for the prior year adjustment. This meant that the level of overall reserves was now lower than anticipated during 2003/04 but slippage on the capital programme and increased value of capital receipts achieved in 2002/03 provided higher capital balances that anticipated. It was considered that these should more than compensate for any unexpected demand on reserves which might otherwise lead to pressure in 2003/04. In this respect, the Treasurer drew attention to Appendix 5 to the report which referred to movement in the general and earmarked reserves in 2002/03 and projected movements on general and pension reserves in 2003/04 and 2004/05. It also attached as an Annex, a protocol for reserves.
The Director of Finance then drew attention to Appendix 2 to the report (Notes to Revenue Outturn in Appendix 1) and indicated that the bottom line was not much different from that reported at the last meeting. He also referred to the carry forward in respect of devolved budgets where undertakings had already been given that any balance on the devolved budgets (calculated according to the protocol previously approved by the Panel) for the Southampton, Portsmouth and North East Hampshire Basic Command Units would be available for those BCUs to use in the current year. He also drew attention to the projected underspend of £4.0m on the capital programme which largely reflected the revised timetabling of the work undertaken by the Estates Management Board and fully reported to the Estates Working Group. Members noted that work would be undertaken to re-phase the capital programme to pick up these timing changes and that a revised capital programme would be included in the Medium Term Projection report to reflect the carry forwards from 2002/03 and any other required amendments.
Members then asked questions on aspects of the report and, in respect of devolved budget balances, noted that the remaining BCUs should have fully devolved budgets by April 2004. In this respect, and taking into account possible effects of the new Resource Allocation Formula on staffing budgets for individual BCUs, the Director of Finance indicated that, from a purely financial viewpoint, it would be preferable for any staffing changes resulting from the formula to occur at the start of the financial year although any that occurred part way through a year would have a pro rata effect on the devolved budget concerned.
Members were pleased to note that the actual outturn for capital receipts of £3.04m was above the estimated figure for 2002/03 of £2.0m which would compensate for the prior year adjustment for the accrual of overtime.
RESOLVED:
(a) That the position on the revenue and capital outturn for 2002/03 be noted.
(b) That the contribution from the Pensions Reserve in 2002/03 for additional lump sums of £943,115 be approved.
(c) That a contribution of £555,000 be approved to top up the Pensions Reserve from the net overall position for 2002/03, in order to provide an adequate balance for 2003/04.
(d) That the prior year adjustment of £1.01m to accrue police overtime for 2001/02 be approved, and the balance on the general reserve be adjusted accordingly as set out in Appendix 5.
(e) That the overall movements in reserves and the protocol for each reserve be approved as set out in Appendix 5.
283 TREASURY MANAGEMENT
The Panel considered the annual report of the Treasurer (Item 5 in the Minute Book) on the exercise of the Authority's treasury function.
RESOLVED:
That the exercise of treasury management in 2002/03 be approved.
284 ANNUAL INTERNAL AUDIT OPINION 2002/03
The Panel considered a report of the Treasurer (Item 6 in the Minute Book) which outlined the levels of assurance provided by the Internal Audit work completed during the year.
The Treasurer indicated that, for 2002/03 the Code of Practice on Local Authority Accounting in the UK would require him to sign a statement on the system of internal financial control as a note to the published accounts. To enable him to do this, the Chief Internal Auditor was required to provide an independent opinion on the adequacy and effectiveness of the system of internal financial control operating across the Authority. This assurance would be included in the published annual accounts and was attached at Appendix A to the report.
Members asked that the next Internal Audit report should include further information on the audit opinion definitions and an indication of further improvements that would be needed in order to move from an overall rating of "effective" to a rating of "good".
RESOLVED:
(a) That the level of assurance on the control framework, based on audit testing, within Hampshire Police Authority be noted.
(b) That the main risks identified during the year be noted.
282 POLICE AUTHORITY'S BUDGET - OUTTURN REPORT FOR 2002/03
The Panel considered a report of the Treasurer and the Clerk (Item 7 in the Minute Book) which set out the financial performance of the budget for servicing the Police Authority for the year to 31 March 2003. Members noted that final figures would be included in the formal Statement of Accounts which would be submitted to the Panel at its meeting in September.
RESOLVED:
That the outturn report for the Police Authority's budget 2002/03 be noted.
283 SINGLE TENDER AND EXCEPTIONS REPORT QUARTER (APRIL 2003-JUNE 2003)
The Panel considered a report of the Chief Constable (Item 8 in the Minute Book) on contracts awarded compliant with Standing Orders on Contracts 2.8 Single Tender Applications and Exceptions. The report provided information on single tender contracts awarded for the period 1 April to 30 June 2003.
RESOLVED:
That the report be noted.
284 ANNUAL PROCUREMENT REPORT
The Panel considered a report of the Chief Constable (Item 9 in the Minute Book) on the first annual statement covering outturn on the financial year 2002/03 and scheduled work for 2003/04 of the procurement function. The report aimed to offer both a reflection on the main business activities of the Constabulary in the preceding year, as well as highlighting key actions or significant procurement activities for the current year.
The Director of Finance explained that the aim during 2003/04 was to identify and pursue potential improvements and efficiency gains and that a review and revision to the existing procurement strategy would be an important task in the current financial year to ensure the Authority/Constabulary had a clear strategic approach to procurement over the next five years.
Members thanked the Director of Finance for an informative report and supported the formation of a "User Group Forum" in support of devolved financial accountability and the promotion of budget holders' contribution to the development and monitoring of procurement arrangements.
RESOLVED:
That the report be noted.
285 EXCLUSION OF THE PRESS AND PUBLIC
RESOLVED:
That, by virtue of Paragraphs 9 and 11 of Part I of Schedule 12A of the Local Government Act 1972, the press and public be excluded from the meeting.
286 REPLACEMENT OF CRIME AND INTELLIGENCE SYSTEMS (PROJECT OBERON) - UPDATE REPORT
The Panel considered a confidential report of the Chief Constable (Item 11 in the Minute Book) which provided Members with a formal update in relation to Project Oberon.
The Panel noted that the offer referred to at the last meeting of the Police Authority from the supplier of the current Crime and Intelligence System had now been received in writing on terms yet to be determined.
RESOLVED:
That the report be noted.
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