Hertsmere Borough Council Presentation of the 2017/18 Statement of - - PowerPoint PPT Presentation
Hertsmere Borough Council Presentation of the 2017/18 Statement of Accounts 1 Agenda The Accounts and Audit Regulations (England) 2015 The Process and Timetable for Sign Off Statement of Accounts Financial Results:
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The Accounts and Audit (England) Regulations 2015 state that:
are ‘true and fair’ by 31 May each year.
must consider the accounts, approve the accounts by resolution at that meeting and ensure that the accounts are signed by the person presiding at that
and fair view of both the financial position and the income and expenditure for that financial year, before the authority approves it.
The regulations do not require approval by Council of the Statement of Accounts prior to 31 May. In line with good practice, the Council (through this committee) continues to review the Accounts as submitted to external audit. Officers have worked and will continue to work with the external auditors (Ernst & Young) to achieve this timetable.
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Financial Monitoring Report (FMR) reported by service area Preparation of year end accounts Signed and certified as “true and fair” by Chief Finance Officer Presented to Audit Committee (made available for public scrutiny on website) Scrutinised by monitoring panel monthly and overview committee quarterly Re-certification by CFO and approval by Audit Committee External auditor provides opinion (made available for public scrutiny on website) External audit of year end accounts Presentation of accounts to Full Council Publication of finalised accounts
30 April 2018 31 May 2018 31 May 2018 18 June 2018 30 July 2018 September 2018 April – May 2018 4
Overview:
Local Authority Accounting in the UK (The Code)” as issued by the Chartered Institute of Public Finance & Accountancy (CIPFA) which is based on IFRS, where adopted by The Code.
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Reconciliation of the Surplus Reported in the FMR to the Statement
2017/18: £’000 £’000 Surplus as reported in the FMR 530
Year End Adjustments: Provision for losses at Hertfordshire Building Control Ltd (134) Provision for other losses (450) Other minor adjustments 18 Operational adjustments (566) Operational deficit (36) Collection Fund Deficit for the year (783) Collection Fund Adjustments Account 648 Collection Fund Adjustments (135) Section 31 Grants 206 Increase in Council Fund 35 Add back: Transfers to Earmarked Reserve (Note 5.32.2 page 87) 378 Increase in General Fund 413 The increase in the General Fund represents the actual movement reported for the year. The surplus reported in the Financial Monitoring Report (FMR) of £530k moves to a surplus of £35k in the Statement of Accounts (Appendix 1, pages 14), and further adjusted for Earmarked Reserves which now form part of the general fund balance as follows:
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Reconciliation of the Movement on the General Fund for the Year : how it is shown in the accounts
2016/17 2017/18 £’000 £’000 2,133 Net increase / (decrease) for the year 413 Made up as follows: 3,265 Reported surplus / (deficit) on provision of services per I&E (based on IFRS Code) (3,575) Adjustments between accounting basis and funding basis under regulations (Note 5.14 page 52): (882) Collection Fund (Note 5.32.4 page 93) 648 (250) Capital, pension and accumulated absence adjustments 3,340 2,133 Increase/(decrease) in the General Fund 413
Extracted from the Movement in Reserves Statement
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Financial Monitor: March 2018 Budget Actual Surplus / (Deficit) Services: £’000 £’000 £’000
PLANNING & ECONOMIC DEVELOPMENT 1,189 1,085 104 HOUSING SERVICES 900 1,065 (164) ENVIRONMENTAL HEALTH 1,016 976 40 STREET SCENE SERVICES 4,253 4,203 50 ENGINEERING SERVICES 27 33 (6) ASSET MANAGEMENT (2,943) (3,062) 120 PARTNERSHIP & COMMUNITY ENGAGEMENT 1,173 1,158 15 FINANCE & BUSINESS SERVICES 2,363 2,351 12 LEGAL & DEMOCRATIC SERVICES 1,340 1,246 94 HUMAN RESOURCES & CUSTOMER SERVICES 1,107 1,058 48 EXECUTIVE DIRECTORS 491 506 (15) AUDIT & ASSURANCE 111 121 (10) NET SERVICE EXPENDITURE 11,027 10,740 287 Other Costs - including Audit, Levy, Interest, MRP 451 208 243 TOTAL COSTS 11,478 10,948 530
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£’000
The Planning underspend comes from additional planning income £124k. This is a result of more planning applications, and the 20% fee increase from January 2018. 104 The Housing overspend is from the increased cost of temporary accommodation (£424k), offset in part by additional income (£223k). There were also additional legal costs. £100k of reserve funding with allocated to keep the overspend at this level. (164) Asset Management generated £268k additional income mainly from rent reviews and additional lettings of commercial properties. This was partially
undertake the rent reviews) and additional premises costs of £75k (mainly due to increases in rates).
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2016/17 Increase / (Decrease) 2017/18 31 March: £’000 £’000 £’000 Assets: Non-Current Assets (fixed assets, long term debtors & investments) 137,424 974 138,398 Current Assets (cash at bank, short term debtors & investments) 55,435 4,560 59,995 Total Assets (page 26) 192,859 5,534 198,393 Liabilities: Current Liabilities (short term liabilities & bank overdrafts) 13,748 (320) 13,428 Non-current Liabilities (pension liabilities, S106 monies held) 46,896 1,214 48,110 Total Liabilities (Page 26) 60,644 894 61,538 Net Assets 132,215 4,640 136,855
Net Assets :
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Net Assets increase / (decrease) – page 26 Draft Accounts £4,640k Non-current asset movements No significant movements in year – large movements within PPE, for instance valuation of BGCC and Elstree Film Studios. The increases in value from revaluation gains and additions broadly offset the depreciation and valuation and impairment losses. No other major movements. £974k Current assets An increase in cash (£1.4m) and short term investments (£5.0m). This comes in part from improved debt collection, reflected in lower debtor balance (£1.8m), increased s106 and CIL income (£2.6m), LAMS repaid (net £1m), movements in non cash transactions (e.g. provisions £2.0m). £4,560k Current liabilities Reduced creditors, and increase in short term provision. £320k Long term liabilities
Favourable £1.3m pension liability movement (reflected in the reserve 5.32.5); £1.3m adverse provision requirement for NNDR appeals; a £0.4m long term liability in respect
£0.8m additional capital receipts in advance
(£1,214k)
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Usable Increase Unusable
2016/17 Increase/ (Decrease) 2017/18 31 March: £’000 £’000 £’000 Usable Reserves: (Note 5.31, p86) Council (General) Fund 7,902 35 7,937 Earmarked Reserves 18,788 378 19,166 Usable Capital Receipts 6,585 1,661 8,246 Capital Grants Unapplied 4,832 1,775 6,607 Total Usable Reserves
(Slides 28-29)
38,107 3,849 41,956 Unusable Reserves: (Note 32, p91) Revaluation Reserve 62,808 3,325 66,133 Capital Adjustment Account 65,948 (3,301) 62,647 Pension Reserve (38,215) 1,298 (36,917) Collection Fund Adj. Account & Other Reserves 3,567 (531) 3,036 Total Unusable Reserves
(Slides 28-29)
94,108 791 94,899 Total Net Worth 132,215 4,640 136,855
Financing:
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Usable Reserves - £41.9m
expenditure.
statutory regulation of accounting processes cause a distortion of this balance.
expenditure, but which have not yet been spent: – Earmarked revenue reserves of £19.1m (also general fund – see MIRS p24 £27m) – Usable Capital Receipts of £8.2m earmarked or due to be earmarked for specific capital projects
Unusable Reserves - £94.9m
Council Fund under statute, including:
– impairments and depreciation – IAS19 pension adjustments – Staff leave accrual – Collection fund balances
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Usable Reserves – Increase £3.849m Increase in Usable Reserves (1) General Fund and Earmarked Reserves increased by £0.413m (2) Capital receipts reserve increased by £1.661m (3) Capital grants and contributions unapplied increased by £1.775m
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Capital Receipts Reserve £000 £000 Balance 31 March 2017 6,585 Receipts in year Deferred receipts realised - S106 interests Gemini Park 398 Land at Byron Avenue 563 RTB re Stock transferred 138 Local Authority Mortgage Scheme loan repayment 1,000 Other 28 2,127 Applied in year to finance capital expenditure Refurbishment of lock-up garages
Management of Asbestos in HBC Buildings
Crown Road Units
CPO 111 Strafford gate, Potters Bar
Balance 31 March 2018 8,246
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Capital Grants Unapplied £000 £000 Balance 31 March 2017 4,832 Receipts in year Disabled Facilities Grant 962 Studio Way Woodland (HV200) 28 Community Infrastructure Levy 1,584 E&B Grant (Bowls Club) 60 S106 244 2,878 Applied in year Revenue expenditure funded from capital under statute
Studio Way
Bushey Splashpark
Balance 31 March 2018 6,607
2016/17 Movement 2017/18 Main Earmarked Reserves: £’000 £’000 £’000 Council Contribution to Pension Fund 500 500 Waste Service Vehicle Replacement 1,446 273 1,719 Land Drainage 894 (359) 535 Parking repairs and renewals 630 (50) 580 IS Infrastructure Replacement 543 (80) 463 New Homes Bonus Equalisation 2,156 818 2,974 Innovation and Investment fund 5,085 (709) 4,376 Housing and Ctax benefit equalisation reserve 634 410 1,044 Business Rates Equalisation Account 1,666 1,666 Other balances 5,234 75 5,309 Total 18,788 378 19,166
Note: all earmarked reserves have been ring-fenced for specific purposes.
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Unusable Reserves: (Note 32, p91) 2016/17 £'000 Increase / Decrease 2017/18 £'000 Revaluation Reserve 62,808 3,325 66,133 Capital Adjustment Account 65,948
62,647 Pension Reserve
1,298
Collection Fund Adj. Account & Other Reserves 3,567
3,036 Total Unusable Reserves 94,108 791 94,899
Unusable Reserve movements explained
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Increase in Unusable Reserves (1) Revaluation reserve increase £3.3m: mainly revaluation gains (£5.0m) adjusted for difference between historic cost and current cost depreciation (£1.2m) and revaluation gains on disposal (£0.5m). (2) Capital adjustment account decrease (£3.3m) of which:
Impairment £6.7m, REFCUS £1.0m, add back donated £1.4m gain, current assets written off on disposal £0.5m)
receipt of LAMs funding (£1.0m.))
£0.5m, and the excess over historic cost depreciation £1.2m. (3) Deferred capital receipts £0.116m: These include £448k of new receipts not yet realised e.g. donated s106 assets, and £398k realised and transferred to the capital receipts reserve.
Increase in Usable Reserves (4) Collection Fund Adjustment Account (£648k) /MIRS:
CFund Forecast: £298k surplus (£296k+£2k) ; CFund Actual: £350k deficit (£159k-£509k).
council tax setting, that we would make a surplus for the year of £296k (HBC share), our actual surplus was £159k. The movements on the adjustment account reflect the timing differences.
that we expected a surplus of +£2k, the actual instead was -£509k. Again, the system is based on financial stability and certainty, so the timing difference is dealt with through the CFAA. (5) Pensions reserve £1,298k - this debit reserve, reflects the £36.9m shortfall in resources set aside by the Council to meet the cost of post employment benefits for past and current employees. The increase in the value of assets in the scheme exceeded the increase in the liabilities by £1.3m, this has therefore reduced the shortfall on the reserve this year.
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Business Rates £’000 Council Tax £’000 Income collectable 46,340 65,592 Precepts from DCLG (incl. tariff), County & Police (26,206) (56,053) Precepts from HBC & parishes (17,470) (7,880) Costs, write-offs and impairment allowances (298) (331) Provision for future appeals* (3,639)
(1,273) 1,328 Hertsmere’s share: taken to Income & Expenditure Account (509) 159 Other preceptors’ shares (764) 1,169 (1,273) 1,328
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2016/17 ’000 2017/18 £’000 The I&E account The NNDR receipt for Hertsmere 18,842 17,470 Tariff payable (15,217) (14,600) Growth levy payable (419) (387) S31 Grant (mainly SBRR) 424 247 Surplus / (Deficit) NNDR – before MIRS 889 (509) Council Tax income excl Parishes 6,410 6,709 Surplus / (Deficit) Council Tax – before MIRS 208 159 (Deficit)/Income 11,137 9,089
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