Transport for

South Hampshire

Statement of Accounts

2008-09

TRANSPORT FOR SOUTH HAMPSHIRE

STATEMENT OF ACCOUNTS 2008-09

Contents: Page:

Explanatory Foreword 1

Statement of Accounting Policies 4

Annual Governance Statement 6

Statement of Responsibilities - Joint Committee 14

Statement of Responsibilities - Treasurer 15

Auditor's Report 16

Income and Expenditure Account 17

Statement of Movement on General Fund Balance 18

Balance Sheet 19

Cash Flow Statement 20

Notes to the Core Financial Statements 21

EXPLANATORY FOREWORD

1. Introduction

This document contains Transport for South Hampshire's (TfSH) Statement of Accounts for the year ended 31 March 2009. Whilst there have been informal partnership arrangements pre-dating this, the Joint Committee was not formally established until 1 April 2008 and so this is the first financial year for which such accounts are required.

The pattern of presentation of the statement is laid down by a code of practice, which the TfSH Joint Committee is legally required to follow. The foreword gives:

2. Summary of Statement of Accounts

The accounts for 2008/09 are set out on pages 4 to 23. They consist of:

3. Where the money comes from

The Joint Committee's income comes from central government via Partnership for South Hampshire (PUSH) contribution in the form of New Growth Point Funding and also from partner contributions. Interest is also earned on day to day balances. See Table 1. below for details.

Table 1 - TfSH Resources 2008/09

 

Total Funds 2008/09

£'000

Revenue funds

  

PUSH contribution

279

Core Partner contributions (local authorities)

500

Other Partner contributions (local authorities)

587

Interest on balances

15

 

1,381

   

Capital funds

  

PUSH contribution

1,700

Total

3,081

4. Overview of the year - revenue account

TfSH set a revised budget of £1.319m which was £62,000 lower than final total resources for 2008/09. Total expenditure for the year was £1,247,000. The main components of the 2008/09 revenue budget and actual expenditure are set out in Table 2 below:

Table 2

Budget Heading

Latest Forecast Outturn £'000

Actual Spend 2008/09 £'000

Variation

£'000

Bus Rapid Transit

765

767

+2

Fareham Interchange study

30

30

-

Eastleigh Riverside - Multi Modal Study

36

36

-

Eastleigh Riverside - Rail Study

51

50

-1

Outline Design Strategic Development Area studies

66

66

-

Progression of Other Schemes

2

8

+6

Developing the Evidence Base

235

231

-4

Freight Strategy

5

-

-5

Funding Strategy

10

10

-

Support Staff & Audit

45

47

+2

Public Relations and Marketing

2

2

-

Balance to carry forward and additional resources

134

-

-134

Total

1,381

1,247

-134

5. Overview of the year - capital account

In 2008/09 TfSH spent £1,000,000 on capital projects - which is shown in Table 3 below.

Table 3

Scheme

Budget Allocation

£'000

Actual

Spend

£'000

Lead

Authority

Bus Rapid Transit

500

500

HCC

M27 Junction 5 Improvement

100

100

HCC

Tipner - Design and Construction of M275 Slip Road

400

400

PCC

Access to Strategic Sites

700

-

HCC

Total

1,700

1,000

  

6. Further Information

Further information can be obtained about the accounts from the Treasurer to the Transport for South Hampshire Joint Committee at the County Treasurer's Department, Hampshire County Council, The Castle, Winchester, Hampshire, SO23 8UB, telephone (01962 846931), or email [email protected].

STATEMENT OF ACCOUNTING POLICIES

1. General principles

1.1 The accounts have been prepared in accordance with the Code of Practice on Local Authority Accounting in Great Britain: A Statement of Recommended Practice (SORP) 2008 and the Accounts and Audit Regulations 2003. Any significant non-compliance is explained in the following notes.

2. Debtors and creditors

2.1 Debtors and creditors have been accrued in accordance with the Code of Practice.

3. Reserves and provisions

3.1 Specific amounts are set aside as reserves for future policy purposes or to cover contingencies. Reserves are created by transferring amounts in the Statement of Movement on the General Fund Balance. Expenditure on items for which the reserves were originally created is shown as service expenditure in the Income and Expenditure Account and then transferred back into the General Fund Balance Statement so that there is no net charge against council tax for the expenditure. Variations to earmarked reserves are shown in the notes to the accounts.

3.2 Provisions represent legal liabilities when the amount or date of payment is uncertain. They are charged to the revenue account in the year they are recognised.

3.3 TfSH currently maintains no such reserves or provisions.

4. Fixed Assets

4.1 TfSH is not a legal entity, and therefore cannot own any assets.

5. Specific Revenue Government Grants

5.1 Government grants for specific purposes are included in the accounts on the basis of the grant conditions that apply. These grants are shown against the relevant service in the Income and Expenditure Account.

6. Financial Instruments

6.1 In accordance with Financial Reporting Standard (FRS 26) long-term debtors, debtors, payments in advance and temporary lending are classified as loans and receivable financial instruments. Creditors, receipts in advance and temporary and long-term borrowing are classified as financial liabilities at amortised cost.

6.2 The Authority has not granted any soft loans.

ANNUAL GOVERNANCE STATEMENT

1. SCOPE OF RESPONSIBILITY

Transport for South Hampshire ("TfSH") is a Joint Committee comprising 3 local authorities ("the Councils"). The primary governance arrangements that apply directly to those members and officers of the Councils who are engaged in TfSH activities are those maintained by their own individual local authority (for example, Codes of Conduct). The relationship between the Councils in respect of TfSH are set out in the Joint Agreement ("the Agreement") which has been approved by each of the Councils at a full council meeting. A copy of the Agreement is available at:

http://www3.hants.gov.uk/tfsh-legal-agreement.pdf

Southampton City Council's Solicitor to the Council (and their Monitoring Officer) has also been appointed as the Lead Advisor on legal and constitutional issues for TfSH, and also the statutory Monitoring Officer for TfSH. As such, the Southampton City Council governance arrangements take precedence, and form the basis of TfSH's governance framework for the operation of the Joint Committee and its activities.

Hampshire County Council has been appointed as the lead authority for financial matters and the County Treasurer is the statutory Chief Financial Officer ("CFO") for TfSH. As such, Hampshire County Council's financial regulations take precedence, and form the basis of TfSH's own financial protocols.

TfSH ("the Joint Committee") is responsible for ensuring that its business is conducted in accordance with the law and proper standards, and that public money is safeguarded and properly accounted for, and used economically, efficiently and effectively. The Joint Committee also has a duty under the Local Government Act 1999 to make arrangements to secure continuous improvement in the way in which its functions are exercised, having regard to a combination of economy, efficiency and effectiveness. In discharging this overall responsibility, the Joint Committee is responsible for putting in place proper arrangements for the governance of its affairs, facilitating the effective exercise of its functions, and which includes arrangements for the management of risk.

In addition to the Agreement, the Joint Committee has established financial protocols ("the Protocols") for TfSH. These have been in operation from the start of the year, but due to the interdependencies with the financial protocols for the Partnership for Urban South Hampshire ("PUSH"), interim delegations were given to the Project Director to formalise the process, until the full Protocols were agreed by the Joint Committee. These documents are available at:

http://www.hants.gov.uk/decisions/decisions-docs/081017-tshjcc-R1010111724.html

http://www.hants.gov.uk/decisions/decisions-docs/090429-tshjcc-R0422154443.html

2. THE PURPOSE OF THE GOVERNANCE FRAMEWORK

The governance framework comprises the systems and processes, and culture and values, by which the Joint Committee is directed and controlled and its activities through which it accounts to, engages with and leads the community. It enables the Joint Committee to monitor the achievement of its strategic objectives and to consider whether those objectives have led to the delivery of appropriate, cost effective services.

The system of internal control is a significant part of that framework and is designed to manage risk to a reasonable level. It cannot eliminate all risk of failure to achieve policies, aims and objectives and can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an ongoing process designed to identify and prioritise the risks to the achievement of the Joint Committee's policies, aims and objectives, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically.

The governance framework has been in place for the Joint Committee for the year ended 31 March 2009 and up to the date of approval of the statement of accounts.

3. THE GOVERNANCE FRAMEWORK

The following describes the key elements of the systems and processes that comprise the Joint Committee's governance arrangements including arrangements for:

Identifying and communicating the Joint Committee's vision of its purpose and intended outcomes for citizens and service users:

The sub-regional strategy for South Hampshire sets out objectives to provide sustained economic vitality and viability with a high quality of life for all. Transport for South Hampshire will develop an integrated transport network that supports these key principles at a time of economic and housing growth.

Those objectives need to be translated into actions that will deliver change.  TfSH's Business Plan sets out how the sub-regional strategy is to be delivered.  This first Business Plan covers the period 2007-09, and is available from:

http://www.hants.gov.uk/decisions/decisions-docs/071122-countc-R1115155749.html

http://www.hants.gov.uk/decisions/decisions-docs/071122-countc-R1115155802.html

In addition to the Business Plan, the Joint Committee has approved a "TfSH Statement: Towards Delivery" as the basis of the transport strategy and the packages of interventions required in order to deliver the growth agenda.

TfSH is the transport delivery agency for the South Hampshire sub-region and covers Portsmouth, Southampton and part of Hampshire. This TfSH Statement sets out issues and priorities for the area in the context of planned growth. There are three main strands of the strategy: Reduce-Manage-Invest. All can work together to enable the planned growth and to deliver the development sites identified.

The report and Statement are available at:

http://www.hants.gov.uk/decisions/decisions-docs/080414-tshjcc-R0408161647.html

http://www3.hants.gov.uk/tfsh-towards-delivery-april-2008.pdf

TfSH is a part of the South Hampshire Agreement is a Multi Area Agreement ("MAA") for South Hampshire.  It has been prepared by PUSH on behalf of, and with input from:

The South Hampshire Agreement focuses on selected key elements of the PUSH Business Plan and will support the delivery of our ambitious programme by strengthening the bonds of collaboration between local partners, Government Departments and their agencies.

This agreement proposes a total of eight outcomes and eight enabling measures.  With these in place, PUSH and its key partners - Job Centre Plus, Learning and Skills Council, Business Link, SEEDA and Transport for South Hampshire - will achieve more rapid and certain progress in delivering the PUSH / TfSH Business Plans and sub-regional strategy.  This in turn will support the achievement of objectives and targets in the Regional Economic Strategy and national Public Service Agreements, particularly relating to skills, employment, housing supply and regional economic performance.

The South Hampshire Agreement is available at:

http://www.push.gov.uk/pdf/MAA_draft_v_7%201a_Submission_Draftl_020707.pdf

Reviewing the Joint Committee's vision and its implications for the governance arrangements:

Southampton City Council has adopted a Code of Corporate Governance ("CCG") which identifies in one core document how the Council ensures that it runs itself in a lawful, structured, ethical and professional manner. The CCG is administered by the Monitoring Officer and is updated periodically by the Council's Standards and Governance Committee. As TfSH follows Southampton's governance arrangements (its Constitution etc) subject to where Hampshire County Council's financial regulations take precedence, and form the basis of TfSH's own financial protocols (as Hampshire's CFO is TfSH's CFO), Southampton's CCG reflects and represents TfSH's governance arrangements. The full document is published on the City Council's internet site at:

http://www.southampton.gov.uk/Images/Code%20of%20Corporate%20Governance%20-%20March%2008_tcm46-160197.pdf

_Measuring the quality of services for users, for ensuring they are delivered in accordance with the authority's objectives and for ensuring that they represent the best use of resources:

The Joint Committee set an initial revenue budget at its meeting of 14 April 2008, and an initial allocation from PUSH towards its capital programme at its meeting of 17 October 2008. Monitoring reports are considered on a quarterly basis. These reports are available at:

http://www.hants.gov.uk/decisions/decisions-docs/080414-tshjcc-R0408161605.html

http://www.hants.gov.uk/decisions/decisions-docs/081017-tshjcc-R1010111724.html

http://www.hants.gov.uk/decisions/decisions-docs/090429-tshjcc-R0422154432.html

The Joint Committee reviews its performance on a half yearly basis, and is currently reviewing the Business Plan in the light of the outcomes during 2008/09. A performance monitoring framework is still to be established. The progress report is available at:

http://www.hants.gov.uk/decisions/decisions-docs/081017-tshjcc-R1010111724.html

http://www.hants.gov.uk/decisions/decisions-docs/081017-tshjcc-R1010111714.html

_Defining and documenting the roles and responsibilities of the executive, scrutiny and officer functions, with clear delegation arrangements and protocols for effective communication:

The Joint Committee has a Joint Agreement and Financial Protocols setting out how it operates, how decisions are made and the procedures followed to ensure that these are efficient, transparent and accountable to local people. Some of these processes are required by the law, while others are a matter for the Joint Committee to choose.

The Financial Protocols set out the detailed rules governing the Joint Committee's business including details of the scheme of delegation that provide for delegation to senior officers (Lead Chief Officer and the Project Director).

_Developing, communicating and embedding codes of conduct, defining the standards of behaviour for members and staff:

Members and officers acting on behalf of TfSH are required to follow their individual authority `Members' Code of Conduct' or `Officer Code of Conduct' as appropriate.

The Members' Code covers areas of individual behaviour such as Members not abusing their position or not misusing their authority's resources. In addition there are rules governing disclosure of private interests and withdrawal from meetings where Members have relevant interests. Members are also required to record on the public register their financial and other interests.

_Reviewing and updating standing orders, standing financial instructions, a scheme of delegation and supporting procedure notes/manuals, which clearly define how decisions are taken and the processes and controls required to manage risks:

The Joint Agreement sets out how the Joint Committee operates, how decisions are made and the procedures which are followed to ensure that these are efficient, transparent and accountable

to local people. This includes information on how the Joint Committee operates, how decisions are made and the role of overview and scrutiny.

Periodically, as appropriate, the Monitoring Officer, together with the Project Director and Treasurer, conducts a review of the Joint Committee's governance arrangements, which are considered by the Joint Committee from time to time.

All reports submitted to the Joint Committee for a decision must receive legal and financial clearance prior to publication in accordance with the published procedures.

Undertaking the core functions of an audit committee, as identified in CIPFA's Audit Committees - Practical Guidance for Local Authorities:

It is not practical for TfSH to have a formally constituted Audit Committee whose role would be to provide independent assurance to the Joint Committee on the adequacy of the risk management framework and the internal control and reporting environment, including (but not limited to) the reliability of the financial reporting process and the annual governance statement.

The Joint Committee therefore acts in this capacity directly to receive the accounts, annual governance statement and the reports of the appointed auditor.

_Ensuring compliance with relevant laws and regulations, internal policies and procedures, and that expenditure is lawful

It is the role of the Monitoring Officer and the Treasurer to ensure compliance with relevant laws and regulations and that expenditure is lawful. This is achieved through the governance framework including the Joint Agreement itself and the Financial Protocols.

_Whistle-blowing and receiving and investigating complaints from the Public

Any complaints received by the Joint Committee in respect of unlawful conduct, illegality, financial

malpractice or dangers to the public, employees or the environment would be dealt with by the Monitoring Officer, in line with Southampton City Council's procedures.

_Identifying the development needs of members and senior officers in relation to their strategic roles, supported by appropriate training:

The Councils individually have their own programmes for member and senior officer learning and development to cover general development needs. From time to time, TfSH organises member and senior officer workshops to address emerging development needs specific to the Joint Committee.

_Establishing clear channels of communication with all sections of the community and other stakeholders, ensuring accountability and encouraging open consultation:

TfSH has not yet established a Communications Strategy, although, the Joint Committee is able to draw on the existing communication channels of the Councils.

4. REVIEW OF EFFECTIVENESS

The Joint Committee has a responsibility for conducting, at least annually, a review of the

effectiveness of its governance framework including the system of internal control. The review of

effectiveness is informed by the work of the Project Director, Monitoring Officer and Treasurer.

The review process, applied in respect of maintaining and reviewing the effectiveness of the system of internal control, is informed by:

The Joint Committee

The Joint Agreement forms the cornerstone of effective corporate governance, supported by the Governance Framework and the Financial Protocols. It has been approved by the full Council meetings of each of the partner local authorities.

The Joint Committee acting as an audit committee

The Joint Committee receives reports to meet certain statutory obligations, such as approving the Annual Governance Statement, the Statement of Accounts and receiving the annual external auditor's report.

The Senior Management Board

The Senior Management Board is an informal body and without statutory powers or authority, save as directly delegated to individual officers by their authority/the Joint Committee of TfSH. Its terms of reference include:

The Working Groups

These Working Groups are informal bodies and without statutory powers or authority save as directly delegated to individual officers by their authority/the Joint Committee of TfSH. The working groups cover:

The terms of reference include:

Internal audit

The Joint Committee does not operate an Internal Audit function. However, the County Council's internal audit function does undertake an assurance role that provides an independent and objective opinion to the Treasurer and to the external auditor to ensure that the financial systems and controls are in place. The audit plan for TfSH is agreed with the Treasurer, Project Director and external auditor, and is incorporated within Hampshire County Council's Environment Department's cyclical audit plan.

The Internal Audit Section is subject to regular review by the Joint Committee's external auditors who seek to place reliance on the work carried out by the section.

Other explicit review/assurance mechanisms.

The Annual Governance Statement is reviewed each year. This statement, insofar as it is applicable to a Joint Committee, follows the guidance set out within the CIPFA/SOLACE framework: "Delivering Good Governance in Local Government" published in June 2007.

5. SIGNIFICANT GOVERNANCE ISSUES

No significant governance issues have been identified. However, following the first year of operation, the Financial Protocols are being reviewed to improve them further, and a revised set of protocols will be brought to the Joint Committee for approval during 2009/10.

We propose over the coming year to take steps to address the above matter to further enhance our governance arrangements. We are satisfied that these steps will address the need for improvements that were identified in our review of effectiveness and will monitor their implementation and operation as part of our next annual review.

Signed _____________________________________

Councillor Mel Kendal

(Chairman)

Signed ______________________________________

Keith Willcox

(Project Director)

STATEMENT OF RESPONSIBILITIES FOR THE STATEMENT OF ACCOUNTS

- JOINT COMMITTEE

1. The Joint Committee's responsibilities

2. The Chairman's Statement

Councillor Mel Kendal

Chairman - Joint Committee

STATEMENT OF RESPONSIBILITIES FOR THE STATEMENT OF ACCOUNTS

- TREASURER

1. The Treasurer's responsibilities

2. The Treasurer's statement

I certify that the Statement of Accounts presents fairly the financial position of the Transport for South Hampshire as at 31 March 2009 and its income and expenditure for the year ended 31 March 2009.

.

INDEPENDENT AUDITOR'S REPORT

THE AUDITOR'S OPINION AND CERTIFICATE WILL APPEAR HERE FOLLOWING THE COMPLETION OF THE AUDIT FOR INCLUSION IN THE FINAL PUBLISHED ACCOUNTS.

INCOME AND EXPENDITURE ACCOUNT

2007-08

  

2008-09

Total Net

Spend

  

Note

Revenue Expenditure

Grants for Capital Purposes

Total Net Expenditure

£

    

£

£

£

 

Highways, Roads and Transport Services:

        

-

Transport for South Hampshire

1

1,247,581

1,000,000

2,247,581

           
           

-

Net cost of Services

  

1,247,581

1,000,000

2,247,581

           

-

Interest Payable

      

-

-

Interest Receivable

3

    

-15,200

-

Net Operating Expenditure

      

2,232,381

           

-

PUSH Funding - Revenue

      

-279,000

-

PUSH Funding - Capital

      

-1,700,000

-

Partnership Contributions

4

    

-1,087,275

-

Surplus/Deficit for Year

      

-833,894

STATEMENT OF MOVEMENT ON THE GENERAL FUND BALANCE

2007-08

    

2008-09

   

Note

Revenue

Capital

Total

£

    

£

£

£

-

General Fund Balance Brought Forward

  

-

-

-

           

-

Surplus/Deficit for the year on the Income and Expenditure Account

  

-133,894

-700,000

-833,894

           

-

Balance on General Fund Carried Forward

  

-133,894

-700,000

-833,894

STATEMENT OF RECOGNISED GAINS AND LOSSES

The only recognised gains and losses are incorporated into the Income and Expenditure Account and the Statement of Movement on the General Fund Balance.

BALANCE SHEET

2007-08

    

2008-09

£

  

Note

£

 

Current Assets:

    

-

Debtors

5

-

-

Payments in Advance

  

-

-

Cash

  

1,250,319

-

Total Current Assets

  

1,250,319

       
 

Current Liabilities:

    

-

Creditors

6

416,425

-

Receipts in Advance

7

-

 

Total Current Liabilities

  

416,425

       

-

Net Current Assets

  

833,894

       
 

Financed By:

    
 

General Reserves

    

-

For revenue purposes

  

133,894

-

For capital purposes

  

700,000

-

    

833,894

CASH FLOW STATEMENT

2007-08

    

2008-09

£

  

Note

£

 

Revenue Activities

    
 

Cash Outflows:

    

-

Operating Costs

  

1,231,156

-

    

1,231,156

 

Cash Inflows:

    

-

Specific Government Grants (NGP)

  

-279,000

-

Other Income

  

-1,087,275

-

    

-1,366,275

       

-

Net Cash inflow from revenue activities

8

-135,119

       
 

Returns on Investments and Servicing of Finance

    
 

Cash Outflow:

    

-

Interest Paid

  

-

 

Cash Inflow:

    

-

Interest Received

  

-15,200

       

-

Net Cash inflow from Servicing of Finance

  

-15,200

       
 

Capital Activities

    
 

Cash Outflow:

    

-

Grants for Capital Purposes

  

600,000

     

600,000

 

Cash Inflows:

    

-

Capital Grant

  

-1,700,000

-

    

-1,700,000

-

Net Cash inflow from Capital Activities

9

-1,100,000

       

-

Net Cash Inflow

  

-1,250,319

NOTES TO THE CORE FINANCIAL STATEMENTS

1 Apportionment of Costs From Corporate and Democratic Core

2 Project Specific Income

3 Interest Received

4 Partner Contributions

5 Debtors

There are no debtors at 31 March 2009.

6 Creditors

7 Receipts in Advance

There are no Receipts in Advance at 31 March 2009.

8 Reconciliation of Income and Expenditure Account to net cash inflow from revenue activities

9 Reconciliation of Income and Expenditure Account to net cash flow from capital activities

10 Disclosure of Audit Costs

11 Other notes that require disclosure but which this Joint Committee has nothing to report