Summaries of actual spending 2003/04

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 2003/04

6 Revenue expenditure 2003/04 not included in the cash limit

7 Capital expenditure 2003/04

8 Departmental assurance statement

Appendix 1

Education service

Revenue Expenditure 2003/04

Construction of cash limit

1 In the revised budget, revenue expenditure under the service's direct control was subject to a cash limit set by Cabinet of £643.8m. Business rates was 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 £804,000 lower than was provided for in the revised budget and the cash limit has been adjusted accordingly.

2 Further adjustments to the cash limit have also been made in respect of:

£'000

Lower level of expenditure supported by specific

government grants -5,791

Carry forward of County Council contribution in

respect of unused Standards Fund -1,225

Overspending on teachers' sickness and maternity cover 95

Capital expenditure met from revenue in respect of

self-funded capital schemes -1,399

Net increase in schools' reserves -12

3 The adjustments referred to above are incorporated in the table below which summarises the position for the service in the year:

	£'000	£'000
Revised budget for 2003/04		643,822
Reduction for the lower level of business
rates payable		-804
Net reduction in level of expenditure
financed by Government grants:
Teachers' pay threshold payments	-814
Standards Fund	-2,886
Access and other grants	5
Early years and childcare	-2,096	-5,791
Carry forward of County Council
Contribution re Standards Fund		-1,225
Carry forward of overspending on teachers'
sickness and maternity cover		95
Revenue contributed to capital for
self-funded projects		-1,399
Net transfer to schools' reserve account		-12
Amended cash limit Net expenditure		634,686 634,199
Net underspending against Service's controllable expenditure.		-487

Appendix 2

Education service

Final Accounts 2003/04

Summary of Revenue Expenditure

Appendix 3

Education service

Revenue Expenditure 2003/04

Analysis of cash limited expenditure over services

Appendix 4

Education service

Revenue Expenditure 2003/04

Major variations in cash limited expenditure - underspending of £487,000

Appendix 6

Education service

Revenue Expenditure 2003/04 not included in the cash limit

1 Capital charges (£87.7m)

Capital charges are made to services for capital assets used in the provision of services. The actual charges are £9.1m more than the original budget. However, 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 (-£9.14m)

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 Adjustment for pension costs (£1.08m)

This adjustment represents the difference between the cash value of employer's contributions to the Local Government Pension Scheme (LGPS) (included within the service's cash limited expenditure) and the current cost of pension benefits earned by members of the LGPS during 2003/04, as assessed by the County Council's actuary. This adjustment is required by the Code of Practice on Local Authority Accounting in the UK: a Statement of Recommended Practice (2003) (SORP) with effect from 1 April 2003. The adjustment is calculated in accordance with Financial Reporting Standard 17 (FRS 17) Retirement Benefits. It relates only to "defined benefit" schemes, including the LGPS, where the assets and liabilities of the scheme can be attributed to individual employers on a consistent and reasonable basis.

4 Non distributed costs (recharge £3.07m)

These relate to the costs arising from early retirement decisions and the granting of compensatory added years (CAY) in the year of account. These are within this service's cash limited expenditure, but are recharged to "non distributed costs" as the Best Value Accounting Code of Practice requires them to be excluded from the cost of services, on the basis that the cost relates to past service.

5 Mandatory Awards (£0.85m)

The mandatory awards outturn for 2003/04 totals £850,000. Apart from the non recovery of any overpayments, mandatory awards are 100% grant aided, so the County Council is not affected by any over or under expenditure.

Appendix 7

Education Service

Capital Expenditure 2003/04

Appendix 8

Education Service

Department assurance statement for the year ended 31 March 2004

1 Introduction

1.1 The Accounts and Audit Regulation 2003 require the County Treasurer to maintain an adequate and effective system of internal audit.

1.2 From 2002/03 the Code of Practice on Local Authority Accounting in the UK has required the County Treasurer to sign a statement on the system of internal financial control as a note to the published accounts. From 2003/04, the Leader and Chief Executive will also be required to sign a more general statement of internal control. To enable them to do this, the Chief Internal Auditor is required to provide an independent opinion on the adequacy and effectiveness of the control environment, comprising risk management, control and governance for each department and the County Council as a whole.

1 Responsibilities

1.1 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.

2 Basis of opinion

2.1 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. 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.

2.2 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.

3 Opinion

3.1 In my opinion the Education department has an effective framework of control which provides reasonable assurance regarding the effective, efficient and economic achievement of the department's objectives. Audit testing has shown that the controls are generally working in practice.

Ejner Knudsen

Chief Internal Auditor

County Treasurer's Department

Hampshire County Council 28 May 2004