Statement of Accounts 0607 audit amendments

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SOUTH STAFFORDSHIRE
COUNCIL
STATEMENT OF ACCOUNTS
2006/07South Staffordshire Council
Statement of Accounts 2006/2007
Table of Contents
Pages
Description From To
Explanatory Foreword 1 5
Statement of Accounting Policies 6 8
The Statement of Responsibilities for the Statement of 9 9Accounts
The Accounting Statements
The Income and Expenditure Account 10 10
The Statement of Movement on the General Fund 11 11Balances
The Statement of Total Recognised Gains and Losses 12 12
The Balance Sheet 13 13
The Cash Flow Statement 14 15
Notes to the Core Financial Statements 16 29
The Collection Fund 30 32
The Statement on Internal Control 33 37
The Audit Certificate from the Audit Commission 38 39
Glossary of terms 40 45EXPLANATORY FOREWORD
Explanatory Foreword
The foreword is intended to give a brief explanation of the overall financial aspects of the
Council's activities and to draw attention to the main characteristics of the Council's
financial position.
1. Introduction to the Accounts
The Accounts set out in this document have been produced in accordance with the
statutory provisions and codes of practice which apply to local authorities. The
Statements required for 2006/07 are substantially different to those Statements required
to be produced in 2005/06 and earlier years. The new statements disaggregate the old
Consolidated Revenue account and the old Statement of Total Movement on Reserves to
produce a set of statements each with a single objective.
The Core Accounting Statements comprise:
  The Income and Expenditure Account (I&E), which summarises the costs and
income relating to the Council's day to day activities. It shows the net cost of all
the services delivered by the Council.
  The Statement of the Movement on the General Fund Balance, shows how
the activities of the Council have been financed from government grants and
income from local taxpayers.
  The Statement of Total Recognised Gains and Losses, which brings together
all the recognised gains and losses of the authority during the period and
identifies those which have and have not been recognised in the Income and
Expenditure Account.
  The Balance Sheet, which sets out the financial position of the Council as at 31st
March 2007. It records the value of the assets owned by the Council and how
these have been funded
  The Cash Flow Statement summarises the total movement of cash to and from
the authority or, simply, where the money came from and where it was spent.
This information is not easily obtained elsewhere in the accounts and although
complex this is a useful summary.
The Core Accounting Statements are supported by notes to the accounts
A supplementary statement on the Collection Fund is presented after the notes on the
core statements. The Collection Fund accounts for the council taxes and business rates
collected from local residents and businesses in South Staffordshire. It shows how this
money is then allocated between authorities delivering services to the people and
businesses within the district.
These are supported by a Statement of Accounting Policies, which follows this foreword.
2. Council Spending
The Council incurs revenue and capital expenditure during the year. The Local
Government and Housing Act 1989 (“the 1989 Act”), provides that all expenditure must
be charged to a revenue account of the authority unless it can be classified as capital or
is one of a limited number of specific exclusions.
Generally speaking revenue expenditure covers most day-to-day items that are
consumed within the year. Capital expenditure relates to spending on something of a
more lasting nature such as the purchase of an asset, which has a life beyond one year.
STATEMENT OF ACCOUNTS 2006/2007 PAGE 1EXPLANATORY FOREWORD
Revenue spending is financed from Council Tax, fees and charges, government grants
and other income. Capital spending is financed mainly from usable capital receipts from
the sale of Council assets, government grants, contributions and revenue.
The schedules below showing total income and expenditure are adjusted to reflect only
the District Council's demand on the Collection Fund for its own services, and the net
movement in borrowing and investments rather than the full turnover for treasury
operations.
2006/2007 2006/2007 2005/2006
Budget Actual Actual
£000s £000s £000s
14,078 13,620 12,436Net Cost of Service
(1,317) (1,260) (920)Depreciation
(1,241) (1,501) (1,376)Investment Income
0 (10) 213Pensions Interest & Expected Return on Pension Assets
11,520 10,849 10,353Net Expenditure
(6,610) (6,682) (5,690)Income from Grants
(3,250) (3,250) (3,153)Demand on Collection Fund
(35) 43 (100)Transfer to/(from) Revenue Reserves
(670)0 (613)Contribution from the Pensions Reserve
(68) (67) (73)Transfer from Collection fund
(1,108) (1,005) (1,428)Transfer from Capital Financing Reserve
449 (782) (704)Deficit/(Surplus for the Year)
At the end of the year it was possible to pay a surplus of £782,000 into the general fund
reserve in order to balance the Consolidated Revenue Account, rather than withdraw
£449,000 as originally budgeted. This represents an overall underspend of £1,231,000.
The main items making this up were:-
Savings or increased income
£ £
Receipt of Local Authority Business Growth Incentive Grant 421,000
Increased income, mainly on leisure services, licensing, 249,000
Hinksford & Industrial Units
Lower than expected uptake of concessionary fares 178,000
Lower spending on salaries and supplies and services in Local 278,000
Taxation, Housing, Corporate Policy, Architecture and
Landscapes and Environmental Health
Extra investment income 259,000
Additional Revenue Support Grant in respect of previous years 72,000
1,457,000
Increased expenditure or reduced income
Provisions in respect of Housing Benefit Subsidy Claim 163,000
Reduced income from building control 79,000
Expenditure on Customer Relationship Management project 41,000
283,000
Net savings due to larger items 1,174,000
The difference between these figures and the overall underspend of £1,231,000 is made
up of many smaller variances, both under and over spends, across the whole range of
the Council’s services.
STATEMENT OF ACCOUNTS 2006/2007 PAGE 2EXPLANATORY FOREWORD
3. Pensions Disclosure
The information contained within this disclosure has been supplied by Staffordshire
County Council as the administering authority of the defined benefit multi-employer
pension scheme to which South Staffordshire Council contributes.
The notes to the accounting statements show that this Council’s portion of the pension
fund shows a net liability (deficit) of just under £9.7m at 31 March 2007. The effect of
this is to reduce the Council’s overall reserves as shown in the balance sheet. This is
being addressed by increasing the employer’s contribution rate to the fund from 9.7% in
2006/07 to 11.7% in 2007/08. These contributions are planned to rise by 2% per year
to a peak of 17.7% in 2011/12.
The latest formal valuation of the Staffordshire County Council Pension Fund for funding
purposes was as at 31 March 2004.
4. Investments
In accordance with best practice the Council carries out its treasury management
activities in accordance with CIPFA’s Code of Practice on Treasury Management in the
Public Services 2001, which it has adopted as Council policy.
The bulk of the Council’s investments are invested with the council’s fund managers,
Alliance Capital.
The Council's assets and investments are currently valued at £43.8 million.
5. Capital Account
The original budget for capital expenditure totalled £2,744,500. To this was added
slippage from the previous year of £2,601,900. The schemes that this slippage related
to are listed below:-
Scheme £
Social Housing Grants 86,400
Waste Collection Vehicles 855,000
Housing Renovation Grants 175,700
Geographical Information System 38,800
E Government Schemes 29,000
Leisure Centre Disabled Access Works 2,800
Hinksford Car Park 2,500
Municipal Cemeteries 500,000
Environmental Improvements 251,600
Anite Pericles project 200,000
Electronic Document Management 217,800
Tree Management System 15,900
Replacement of Old PCs 3,700
Virtual Private Network 13,400
Network Infrastructure Upgrade 17,000
Laches Close/Cocksparrow Lane 62,700
Recycling Boxes 105,000
Public Lighting 4,700
Brewood Public Conveniences 4,200
Capital Grants and Loans 15,700
Total 2,601,900
STATEMENT OF ACCOUNTS 2006/2007 PAGE 3EXPLANATORY FOREWORD
Further schemes totalling £534,910 were approved during the year. They were:-
Scheme £
New Financial Software 140,000
E Forms For Internet 3,000
Area Network Storage Device 20,000
Estate Improvements 264,500
Customer Relationship Management System 55,410
Dual Monitor/Upgraded PCs 13,000
Penkridge LC CCTV 10,000
Grants and Loans 10,000
Fly Tipping Surveillance 5,000
Postal Vote Verification 14,000
Total 534,910
stThe final programme therefore stood at £5,881,310. At 31 March 2006 outturn
expenditure stood at £3,167,438. The majority of the underspend relates to