draft statement of accounts 2008 audit revisions published–

Ian.Batchelor

Informations

• Publié par: Nishur
• Nombre de lectures: 15
• Langue: English

Extrait

Redditch Borough Council
Statement of Accounts
2008/09
CONTENTS
Page number

Explanatory Foreword 2
A brief explanation of the financial aspects of the Council’s activities
Statement of Accounting Policies 6
A summary of the accounting policies followed in the preparation of
The Statement of Accounts
CORE FINANCIAL STATEMENTS
Income and Expenditure Account 11
This statement reports the net cost of all the functions for which the
Council is responsible and shows how it has been financed from
Government grants and income from tax payers
Statement of Movement on General Fund 11
Balance
A summary of the differences between the outturn on the Income
and Expenditure Account and the General Fund Balance
Statement of Total Recognised Gains and Losses 13
This statement brings together all the gains and losses of the Council
for the year and shows the aggregate change in its net worth.
The Balance Sheet 14
The Balance Sheet shows the balances and reserves and long-term
indebtedness, and the fixed and current assets employed in the
Council’s operations, together with summarised information on the
fixed assets held.
The Cash Flow Statement 15
A summary of cash inflows and outflows arising from transactions
with third parties for revenue and capital purposes.
NOTES TO CORE FINANCIAL STATEMENTS 16
These notes explain in more detail the individual items shown in the
Core Financial Statements
SUPPLEMENTARY FINANCIAL STATEMENTS
HRA Income & Expenditure Account 38
Showing the major elements of housing revenue expenditure and
how these are met by rents, subsidy and other income
The Collection Fund 43
Transactions relating to non domestic rates and council tax and
their distribution between preceptors and the Council
Statement of Responsibilities for the 46
Statement of Accounts
The Council’s responsibilities under local government legislation,
and the chief finance officer’s legal and professional responsibilities
Annual Governance Statement 47
The framework within which the Authority is managed and
reviewed and the main components of the system, including the
arrangements for internal control.
Independent Auditors’ Report 53
The auditor’s opinion and comments on the Statement of Accounts
Glossary of terms 56

1 Explanatory foreword
This foreword provides a brief summary of the financial aspects of the Council’s activities
during the year.
Revenue Expenditure
Revenue expenditure covers the operational cost of services provided during the year
including capital charges and contributions to or from reserve accounts. Most revenue
expenditure is paid for from the General Fund while council housing is accounted for
separately within the Housing Revenue Account.
The General Fund
General Fund net revenue expenditure (after allowing for fees and charges to services and
the use of reserves) is financed from Government grants (Revenue Support Grant and
redistributed Non-Domestic Rates) and Council Tax income.
The table below gives a comparison between General Fund actual and budgeted
expenditure and income for the year.
2007/08 2008/09 2008/09 2008/09
Actual Original Actual D i fference
Budget
£’000 £’000 £’000 £’000

12,261 Net expenditure on services 12,997 12,288 (709)
200 Contributions to/ (from) reserves - 270 270
(956) Interest received (717) (1,065) (348)
11,505 Net General Fund expenditure 12,280 11,493 (787)
Financed by income from government
grants and local taxpayers
(1,068) Central Government Grants (781) (1,287) (506)
(5,383) NDR contribution (5,613) (5,613) -
(5,064) Council Taxpayers (5,284) (5,284) -
(20) Collection Fund surplus 21 21 -
(30) Deficit/(Surplus) for the year funded 623 (670) (1,293)
from General Fund reserves

The amount receivable from government grants and council tax income is fixed for the year,
so any difference in actual net expenditure from the budget must be balanced by a
contribution to or from General Fund reserves. The original forecast was for a deficit of
£623,140 to be funded from revenue balances. The difference of £1.3 million has arisen
from a net increase in government grants of £506,000 and an increase in interest received of
£348,000. An additional £270,000 was transferred to reserves, £200,000 to fund the cost of
implementing the job evaluation scheme, there was also £60,000 towards the emissions at
the Crematorium the net cost of providing general fund services was £709,000 less than
originally estimated.
General Fund reserves amounted to £2.131 million at the year end. These reserves, apart
from a contingency provision of £750,000, are required to support future revenue budgets.

The Housing Revenue Account (HRA)
Revenue expenditure relating to council housing is accounted for separately in the Housing
Revenue Account. The expenditure is financed from rents and charges to tenants, interest
received and retained balances.
The table below gives a comparison between Housing Revenue Account actual and
budgeted expenditure and income for the year.

2 2007/08 2008/09 2008/09 2008/09
Actual Original Actual D i f f e rence
Budget
£’000 £’000 £’000 £’000

8,824 Maintenance & management services 9,193 9,733 540
700 Revenue contribution to capital - - -
5,216 Negative Subsidy Transfer 5,835 5,835 -
398 Capital Financing Costs 492 194 (298)
706 Provision for bad debts 200 93 (107)
3,570 Depreciation 3,718 3,718 -
19,414 Housing Revenue Account expenditure 19,438 19,573 135
Financed by income from rents and
government subsidies
(19,062) Rents and charges to tenants (19,378) (19,454) (76)
(2) Other contributions - - -
(342) Interest (351) (43) 308
8 Deficit/(surplus) for the year funded (291) 76 367
from HRA reserves
The actual deficit for the year was £76,000 compared to the original budget surplus of
£291,000. There was a reduction in interest received and a reduction in costs associated
with the need to borrow to fund capital expenditure. Housing Revenue Account reserves
were £583,385 at the year-end. These reserves are required to support future revenue
budgets.
Capital expenditure
Capital expenditure relates to the acquisition or construction of fixed assets, or the renewal
and enhancement of fixed assets that will benefit the Council for more than one year. Fixed
assets include sports centres and other public buildings, council housing, equipment,
vehicles and plant. The Council’s capital expenditure in 2008/09 totalled £11.9 million
compared to an initial estimate of £14.3 million.
2008/09 2008/09 2008/09
Original Actual* Difference
Budget
£’000 £’000 £’000

Housing 8,762.9 7857.1 905.8
General Fund 5,586.2 4,048.4 1,537.8
Total capital expenditure 14,349.1 11,905.5 2,443.6
*including Work in Progress

The main items of capital expenditure were improvements to Council and private sector
housing; sports centres and other leisure and cultural assets; estate improvements and
purchase of new vehicles. The actual expenditure was lower than the original estimate due
to a delayed start on a number of projects,
The Council has previously paid for a significant proportion of the capital programme from
capital receipts. The introduction of pooling for Right to Buy (RTB) reduced the proportion
any disposal due to the Council to just 25%. In 2008/09 the Council disposed of just 6
dwelling via the RTB process. In 2008/09 the Council borrowed £4.8 million to fund capital
expenditure the balance of the required funding coming from housing revenue account Major
Repairs Reserve, government and other grants, and developers’ contributions.


3 Spending plans in 2009/10
General Fund
Budgeted expenditure for 2009/10 and the way it is financed are shown below.
2009/10
Original
Budget
£’000

Net General Fund expenditure 12,872

Financed by income from government grants and local taxpayers
Government Grants (1,276)
NDR contribution (5,221)
Council Taxpayers (5,573)
Collection Fund surplus (14)
Deficit for the year funded from General Fund reserves 788
Net expenditure is estimated to be £592,000 more than the original budget for 2008/09. The
budget includes increases of 2.5% in employee remuneration, increased superannuation
costs, increased energy costs, and an estimated increase in general prices of 3%. Funding
from General Fund reserves required to support this expenditure is £165,000 more than in
2008/09.
The Housing Revenue Account
The 2009/10 budget for the Housing Revenue Account is shown below.
2009/10
Original
Budget
£’000
Maintenance & management services 9,885
Sums transferred