Archived decisions
Hampshire County Council | |||
Executive Member - Recreation and Heritage |
Item 3 | ||
17 July 2003 |
|||
Final Accounts 2002/03 | |||
Report of the County Treasurer and Director of Recreation and Heritage | |||
Contact: Bevis Ingram, ext 7508
1 Summary
1.1 The following decisions are sought:
i) That the final accounts for the Recreation and Heritage Service be approved.
ii) That the Cabinet be requested to approve the carry forward of 50% of the underspendings amounting to a net £9,000 as set out in paragraph 1.4.
2 Reasons
2.1 Financial regulations require final revenue and capital accounts be prepared and reported to the Cabinet. The County Council's policy is that 100% of overspendings should be carried forward into the following year's budget and 50% of underspendings.
3 Other options considered and rejected - not applicable
4 Conflicts of interest declared by the decision maker or a member or officer consulted - not applicable
5 Dispensation granted by the Standards Committee - not applicable
6 Reason(s) for the matter being dealt with if urgent - not applicable
Approved by: (signature) Date: (date of decision)
Councillor J Waddington
Hampshire County Council | |||
Executive Member - Recreation and Heritage |
Item 3 | ||
17 July 2003 |
|||
Policy Review Committee - Recreation and Heritage | |||
10 July 2003 | |||
Final Accounts 2002/03 | |||
Report of the County Treasurer and Director of Recreation and Heritage | |||
Contact: Bevis Ingram, ext 7508
1 Introduction
6.1 This report summarises the Recreation and Heritage service's spending in 2002/03.
6.2 It recommends that the final accounts for 2002/03 be approved and that 50% of the underspend of £18,000 be carried forward to be added to the 2003/04 budget. The cumulative overspend of £344,000 on Milestones has been underwritten from balances with the expectation of a further contribution of £115,000 from Basingstoke and Deane Borough Council in 2003/04.
6.3 Overall there is a net underspending of £18,000 (0.1%) against the 2002/03 revenue cash limit of £26.3m.
6.4 The variations are:
£'000 | |
Museums and Archives |
-14 |
Library and Information Services |
-6 |
Arts, Sport and Community |
-1 |
Policy Development Fund |
-14 |
Director and Business development |
+17 |
Total |
-18 |
Note: Milestones' revised budget was £318,000. The actual was £182,000 primarily because it includes a provision for a contribution from Basingstoke and Deane Borough Council towards the accumulated deficit which was not included in the revised budget. The revised budget has been adjusted downwards to reflect the improved position.
6.5 The County Council's policy is that 100% of overspendings should be, or 50% of underspendings may be, carried forward into the following year's budget.
6.6 Milestones made a deficit of £324,000 in 2001/02. The original budget for 2002/03 required this deficit to be recovered in full but it became clear during
the year that this would prove impossible and a further deficit of £156,000 was forecast for 2002/03. As a result the revised budget for Milestones was set at £318,000 which was £480,000 above the cash limit. The trading account for the Museum has been presented to the Joint Management Committee. This report concentrates on dealing with the figure in the County Council's accounts. The figures for Milestones in Appendix 3 reflect this rather than the trading position.
6.7 The trading outturn position was a deficit for the year of £135,000 leaving a cumulative deficit of £459,000. The portfolio holder at Basingstoke and Deane Borough Council has agreed to meet £115,000 now and provision for this has been made in the final accounts. This leaves a cumulative deficit of £344,000 underwritten from the County Council's balances. It is expected that Basingstoke will contribute a further £115,000 in 2003/04; thus the deficit would eventually be shared equally between the two partners
6.8 The small remaining net underspending of £18,000 is spread across all the services. It is normal policy for only 50% of such underspendings to be carried forward and it is recommended that £9,000 is carried forward and added to the Policy Fund.
6.9 On capital, schemes to the value of £450,000 started in the year and schemes to the value of £565,000 have been approved by the Cabinet to be carried forward to 2002/03.
6.10 In total, this amounts to £57,000 less than the approved cash limit for the capital programme.
6.11 Further details on the main differences between the actual revenue expenditure and the revised budget for cash limited expenditure are given in Part A below while details of revenue expenditure which is not included in the cash limit are contained in the appendices at the end of the report. The results of the trading units are reported in Part B. Part C deals with capital schemes. Part D explains the basis of the financial control assurance statement included as Appendix 8.
7 Part A - Revenue expenditure under the service's control
7.1 Revenue expenditure under the service's direct control is subject to a cash limit. For 2002/03 the adjusted amount is £26,164,000 as set out in Appendix 1.
7.2 The final outturn was £18,000 less than the cash limit. The overall position is analysed in Appendices 2 and 3. Appendix 4 includes a more detailed statement of variations from the revised budget.
7.3 This is a small variation compared with the outturns achieved in recent years as set out in the following table:
Variations from Revised Budget | ||
£'000 |
% | |
1999/2000 |
-103 |
-0.4 |
2000/01 |
+27 |
+0.1 |
2001/02 |
+593 |
+2.4 |
2002/03 |
-18 |
-0.1 |
The most significant elements within the total net underspending are explained in the following paragraphs.
Museums and Archives (-£14,000)
7.4 Reduced spending on acquisitions (-£14,000).
Library and Information Services (-£6,000)
7.5 The underspending was achieved through higher income arising from increased video/music rentals (-£70,000) offset by higher costs of the Peoples Network programme (+£64,000).
Countryside (Nil)
7.6 Extra spending on site maintenance (+£66,000) and supplies and services (+£158,000) met from extra income (£248,000).
Policy Development Fund (-£14,000)
7.7 Planned underspend to meet additional spending on Director and Business development (-£14,000).
Director and Business development (+£17,000)
7.8 Higher set up costs of new department (+£17,000).
8 Part B - Trading Units
8.1 Details of the financial performance of Arts Marketing Hampshire are set out in Appendix 5.
9 Part C - Capital expenditure 2002/03
9.1 The outturn for 2002/03 is set out below with details of the total resources and details of the individual schemes started in the year appearing in Appendix 7.
£'000 | |
Total resources |
1,072 |
Value of schemes started in 2002/03 |
-450 |
Value of schemes carried forward to 2003/04 |
-565 |
Undercommitment against the cash limit |
57 |
9.2 The total starts limit for 2002/03 amounted to £1,072,000 and schemes to the value of £450,000 were started during the year. These included computerisation and security and minor works at various libraries, countryside improvements, rights of way improvements and grant to the Winchester Theatre Royal.
9.3 Schemes with a total value of £565,000 are to be carried forward to start in 2003/04. These and the reason for their delay are set out in Appendix 7.
10 Part D - Departmental assurance statement
10.1 A statement of internal financial control will be included in the 2002/03 statement of accounts. As part of the process of enabling the County Treasurer to form a view on the effectiveness of internal financial control the Chief Internal Auditor has produced an independent assurance statement on the adequacy of the system of internal control in each department. Appendix 8 contains the statement relating to the Recreation and Heritage service and concludes that the Recreation and Heritage Department has an effective framework of control which provides reasonable assurance regarding the effective, efficient and economic achievement of the department's objectives. The overall opinion on the County Council's internal financial control arrangements will be reported to the Standards Committee.
Recommendations
That:
1 The final accounts for 2002/03 be approved.
2 That the Cabinet be requested to approve:
iii) The carry forward of 50% underspendings amounting to a net £9,000 as set out in paragraph 1.4.
Section 100 D - Local Government Act 1972 - background papers
The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.
NB the list excludes:
1. Published works.
2. Documents which disclose exempt or confidential information as defined in the Act.
TITLE FILE
Summaries of Actual Spending 2002/03
Appendix |
Contents |
1 |
Construction of the cash limit |
2 |
Summary of revenue expenditure |
3 |
Analysis of cash limited revenue expenditure over services |
4 |
Major variations in cash limited expenditure |
5 |
Trading Units - summarised accounts 2002/03 |
6 |
Revenue expenditure 2002/03 not included in the cash limit |
7 |
Capital expenditure 2002/03 |
8 |
Departmental assurance statement |
Appendix 1
Recreation and Heritage Service
Revenue Expenditure 2002/03
Construction of cash limit
1 |
Revenue expenditure under the service's direct control was subject to a cash limit set by the Cabinet of £26,203,000. Business rates are an exception because the level of business rates on the County Council's own properties could not be determined precisely when the revenue budget was set. As a result of revaluations actual expenditure on rates is £33,000 higher than was provided for in the revised budget and the cash limit has been adjusted accordingly. | |
2 |
During the year, part of the lump sum provisions in the capital programme were allocated to minor schemes of a revenue nature. Under the Code of Practice on Local Authority Accounting the expenditure on these schemes is required to be accounted for in the revenue account. The revenue budget has been increased by £63,000 to cover this expenditure by a transfer from the County Council's overall budget for revenue contributions to capital. The individual schemes will still, however, continue to be controlled through the capital programme. | |
3 |
Further adjustments to the cash limit have also been made in respect of sustainability projects, £1,000. The Milestones adjustment of -£136,000 represents the reduced requirement from £480,000 to £344,000 for cabinet to underwrite the deficit for the first two years of operation. | |
4 |
The adjustments referred to above are incorporated in the table below which summarises the position for the service in the year: | |
£'000 | ||
Revised budget for 2002/03 |
26,203 | |
Increase for the higher level of business rates payable |
+33 | |
Revenue schemes |
+63 | |
Milestones |
-136 | |
Sustainability projects |
+1 | |
Amended cash limit |
26,164 | |
Net expenditure |
26,146 | |
Net underspending against service's controllable expenditure |
-18 | |
Appendix 2
Recreation and Heritage Service
Revenue Expenditure 2002/03
Summary of Revenue Expenditure
(1) |
(2) |
(3) | |||
Adjusted Revised Estimate |
Actual 2002/03 |
Variation (Col 2-Col 1) | |||
£'000 |
£'000 |
£'000 |
% | ||
Cash limited expenditure |
26,164 |
26,146 |
-18 |
-0.1 | |
Trading units transferred (to)/from reserve account |
|||||
- |
Arts Marketing Hampshire |
1 |
+2 |
+1 |
- |
- |
Historical publications |
- |
+5 |
+5 |
- |
Capital Charges |
6,323 |
6323 |
- |
- | |
Other expenditure which is controlled centrally by Policy and Resources |
|||||
- |
Repair and maintenance of buildings |
1,281 |
1,111 |
-170 |
-13.3 |
- |
Central support services |
1,003 |
978 |
-25 |
-2.5 |
Less: |
|||||
Expenditure controlled by this service recharged to Policy and Resources: |
|||||
- |
Corporate and democratic core |
-115 |
-115 |
- |
- |
- |
Unapportionable overheads |
-251 |
-205 |
+46 |
+18.3 |
Total Net Expenditure |
34,406 |
34,245 |
-161 |
-0.5 | |
Reconciliation with total net expenditure in the budget book: |
|||||
Net expenditure, per page B67 |
34,790 |
||||
of the budget book |
|||||
Adjustments |
|||||
- |
Increase for business rates |
+33 |
|||
- |
Increase for revenue schemes |
+63 |
|||
- |
Decrease for Milestones |
-136 |
|||
- |
Increase for sustainability projects |
+1 |
|||
- |
Decrease for capital charges |
-345 |
|||
Total |
34,406 |
||||
Appendix 3
Recreation and Heritage Service
Revenue Expenditure 2002/03
Analysis of cash limited expenditure over services
(1) |
(2) |
(3) | |
Adjusted Revised Estimate |
Actual 2002/03 |
Variation (Col 2 - Col 1) | |
£'000 |
£'000 |
£'000 | |
Cash limited expenditure |
|||
Museums and Archives |
3,138 |
3,124 |
-14 |
Milestones |
182 |
182 |
- |
Libraries and Information |
14,356 |
14,350 |
-6 |
Countryside |
3,824 |
3,824 |
- |
Arts, Sports and Community |
3,700 |
3,699 |
-1 |
Calshot |
241 |
241 |
- |
Policy Development Fund |
486 |
472 |
-14 |
Director and Business Development |
237 |
254 |
+17 |
Net cash limited expenditure |
26,164 |
26,146 |
-18 |
Appendix 4
Recreation and Heritage Service
Revenue Expenditure 2002/03
Major variations in cash limited expenditure - underspending £18,000
Budget Heading |
Variation |
Adjusted Revised Budget |
Reason |
£'000 |
£'000 |
||
Museums and Archives |
|||
Acquisitions |
-13 |
42 |
Reduced spending on acquisitions |
Libraries and Information Service |
|||
Supplies and services |
+64 |
3,730 |
Higher than anticipated costs arising from the People's Network programme |
Fees and charges |
-70 |
-1,649 |
Higher income particularly from the extension of video/DVD lending service to more libraries |
Countryside |
|||
Premises related expenditure |
+66 |
427 |
Additional spending particularly on site maintenance met from increased income |
Other hired and contracted services |
+158 |
197 |
Extra spending across sites met from increased income |
Income |
-248 |
-904 |
Extra contributions from outside bodies particularly Countryside Agency and additional earned income across sites |
Arts Sport and Community |
|||
Premises related expenditure |
+9 |
111 |
Extra spending across centres met from increased income |
Income |
-16 |
-962 |
Extra income across centres |
Calshot |
|||
Supplies and services |
+107 |
452 |
Extra spending on courses, equipment and materials |
Fees and charges |
-111 |
-1,465 |
Income from higher usage and extra courses |
Policy Development fund |
-14 |
486 |
Planned underspend to meet additional spending on Director and Business Development |
Director and Business development |
+17 |
237 |
Set up costs of new department |
Appendix 5
Recreation and Heritage Service
Revenue Expenditure 2002/03
Trading units - Summarised Accounts 2002/03
The trading unit in this statement is allowed to carry forward planned surpluses and deficits. The statements set out below show the actual performance for 2002/03 compared with the revised budget. | ||
Revised Budget 2002/03 |
Actual 2002/03 | |
£'000 |
£'000 | |
Arts Marketing Hampshire |
||
Trading Account |
||
Income |
266 |
249 |
Expenditure |
267 |
251 |
Net operating deficit (-) |
-1 |
-2 |
Reserve Account |
||
Balance at 1 April 2002 |
26 |
26 |
Deficit (-) for 2002/03 |
-1 |
-2 |
Balance at 31 March 2003 |
25 |
24 |
Appendix 6
Recreation and Heritage Service
Revenue expenditure 2002/03 not included in the cash limit
1 |
Capital charges (£6,323,000) |
Capital charges are made to services for capital assets used in the provision of services. The actual charges are £345,000 less than the budget. This will have no direct effect upon the overall budget requirements of the County Council as the capital charges are replaced by actual financing costs in the central asset management revenue account. | |
2 |
Central support services, repairs and maintenance of buildings (£2,089,000) |
These items are within the control of Policy and Resources. Support services are apportioned to services in accordance with the level of services provided and office accommodation occupied. Control of the budget for repairs and maintenance of buildings is by the nature of work and where it is most required rather than by service. | |
3 |
Corporate and democratic core (recharge £115,000) and unapportionable overheads (recharge £205,000) |
These items cover management and support costs that relate to member support and advice and to pension costs for added years and early retirements. They are within this service's control and so are charged against this committee's cash limit. But they are then recharged to Policy and Resources outside of the cash limit as the Best Value Accounting Code of Practice requires these to be excluded from the cost of services. | |
Appendix 7
Recreation and Heritage Service
Capital programme 2002/03
£'000 |
|||||
1 |
Construction of total resources |
||||
Original programme limit per 2002/03 budget book |
557 | ||||
Cash limit brought forward from 2001/02 |
437 | ||||
2001/02 share of capital receipts |
5 | ||||
Unallocated cash limit |
73 | ||||
1,072 | |||||
2 |
Schemes started during 2002/03 |
||||
Libraries' computerisation and security |
100 | ||||
Libraries minor works |
35 | ||||
Countryside minor works and improvements |
129 | ||||
Rights of Way improvements |
100 | ||||
Winchester Theatre Royal grant |
51 | ||||
Museums gallery regeneration |
18 | ||||
Museums care of collections |
17 | ||||
450 | |||||
3 |
Schemes carried forward |
||||
Already approved by the Executive Member to start in 2003/04 |
|||||
£'000 |
Reason for the delay | ||||
Countryside minor works and improvements |
42 |
Operational reasons, including legal disputes and assembling funding from other services. | |||
Grants to village halls |
100 |
Assembling funding from other sources. | |||
Keymer House |
217 |
Delay whilst further funding is being assembled. | |||
Community recreation and sport |
15 |
Awaiting lottery bid outcome. | |||
Outdoor centres |
48 |
Awaiting outcome of New Opportunities Fund application | |||
West End Arts Centre facilities |
55 |
Assembling funding from other sources | |||
Cricklade Theatre grant |
5 |
Work now planned for summer. | |||
Tower Arts Centre facilities |
45 |
Work now planned for summer | |||
Fairfields Art Centre grant |
32 |
Improvement proposals not yet finalised. | |||
Minor arts grants |
6 |
Assembling funding from other sources. | |||
565 |
|||||
Appendix 8
Recreation and Heritage Service
Departmental Assurance statement for the year ended 31 March 2003
1 |
Introduction |
1.1 |
The Accounts and Audit Regulation 2003 require the County Treasurer to maintain an adequate and effective internal audit. |
1.2 |
From 2002/03 The Code of Practice on Local Authority Accounting in the UK requires the Chief Internal Auditor to provide an independent opinion on the adequacy and effectiveness of the system of internal financial control operating in the County Council. To enable him to do this, and independent opinion on the adequacy and effectiveness of the system of internal control has been prepared for each department. |
1.3 |
The much broader issue of Corporate Governance has risen in prominence in the public sector, most recently as a result of the publication of the Chartered Institute of Public Finance and Accountancy (CIPFA)/Society of Local Authority Chief Executives (SOLACE) framework document, "Corporate Governance in Local Government - Keystone for Community Governance", and the introduction of Comprehensive Performance Assessment (CPA) for local authorities. This requires local authorities to develop their own codes of corporate governance and report on how they have monitored the effectiveness of corporate governance arrangements in the year. |
1.4 |
The Standards Committee approved Hampshire County Council's Code of Corporate Governance in January 2003 and the Chief Internal Auditor has been given the responsibility to independently review the adequacy and effectiveness of the Code and the extent of compliance with it. This is reflected in internal audit plans for 2003/04, working towards providing an independent opinion on the adequacy and effectiveness of the system of corporate governance operating in the County Council in the future. |
2 |
Responsibilities |
2.1 |
It is a management responsibility to develop and maintain the internal control framework, and to ensure that resources are properly applied in the manner and on the activities intended. It is the responsibility of Internal Audit to form an independent opinion, based on reviews during the year, on the adequacy and effectiveness of the system of internal control. |
3 |
Basis of opinion |
3.1 |
The strategic and annual internal audit plans were prepared by the Chief Internal Auditor to take account of the characteristics and relative risks of the activities involved and were approved by the County Treasurer. |
3.2 |
The internal audit plan has been delivered in accordance with the Code of practice for internal audit in local government in the United Kingdom, issued by CIPFA. |
3.3 |
Work has been planned and performed so as to obtain all the information and explanations which were considered necessary in order to provide sufficient evidence to give reasonable assurance that the internal control system is operating effectively. However, this assurance can never be absolute. The most that the internal audit service can do is to provide reasonable assurance that there are no major weaknesses in the system of control. |
4 |
Opinion |
4.1 |
In my opinion Recreation and Heritage has an effective framework of control which provides reasonable assurance regarding the effective, efficient and economic achievement of the department's objectives. |
Ejner Knudsen Chief Internal Auditor County Treasurer's Department Hampshire County Council 23 May 2003 |