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The Council's Responsibilities

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					Buckinghamshire County Council




Statement of Accounts
for the year ended 31 March 2010
Contents


Statement of Responsibilities for the Statement of Accounts                  3

Independent Auditor’s Report to Members of Buckinghamshire County Council    4

Explanatory Foreword and Financial Commentary                                7

Statement of Accounting Policies                                            11

Income and Expenditure Account                                              21

Statement of Movement on the General Fund Balance                           22

Statement of Total Recognised Gains and Losses                              23

Balance Sheet                                                               24

Cash Flow Statement                                                         26

Notes to the Financial Statements                                           28

Trust Funds Accounts                                                        77

Pension Fund Accounts                                                       78

The Annual Governance Statement 2009/10                                     90

Glossary of Terms and Acronyms Used                                         99
Statement of Responsibilities for the Statement of Accounts


The Council’s Responsibilities
The Council is required to:
• Make arrangements for the proper administration of its financial affairs and to secure that one of
  its officers has the responsibility for the administration of those affairs: in this Authority, that
  officer is the Assistant Head of Finance (Planning and Reporting), who is currently acting as the
  designated Section 151 Officer
• Manage its affairs to secure economic, efficient and effective use of resources and to safeguard
  its assets
• Approve the Statement of Accounts

The Responsibilities of the Section 151 Officer
The Section 151 Officer is responsible for the preparation of the Council’s Statement of Accounts
in accordance with proper practices as set out in the CIPFA/LASAAC Code of Practice on Local
Authority Accounting in United Kingdom (the SORP).

In preparing this Statement of Accounts, the Section 151 Officer has:
• Selected suitable accounting policies and then applied them consistently
• Made judgements and estimates that were reasonable and prudent
• Complied with the SORP

The Section 151 Officer has also:
• Kept proper accounting records which were up to date
• Taken reasonable steps for the prevention and detection of fraud and other irregularities

Certificate of the Section 151 Officer
I certify that this Statement of Accounts for the year ended 31 March 2010 gives a true and fair
view of the financial position of the Council as at 31 March 2010 and its income and expenditure
for the year ended 31 March 2010.




Richard Schmidt
Date: 28 September 2010
Assistant Head of Finance (Planning and Reporting)

Approval of the Statement of Accounts
In accordance with Section 10 of the Accounts and Audit Regulations 2003 I confirm that the
Statement of Accounts was approved by the Regulatory and Audit Committee at its meeting held
on 28 September 2010.




Peter Hardy
Date: 28 September 2010
Chairman of the Regulatory and Audit Committee




                                                  3
Independent Auditor’s Report to Members of Buckinghamshire County Council


Opinion on the Authority accounting statements
I have audited the accounting statements and related notes of Buckinghamshire County Council for
the year ended 31 March 2010 under the Audit Commission Act 1998. The accounting statements
comprise the Income and Expenditure Account, the Statement of the Movement on the General
Fund Balance, the Balance Sheet, the Statement of Total Recognised Gains and Losses, the Cash
Flow Statement, and the related notes. The accounting statements have been prepared under the
accounting policies set out in the Statement of Accounting Policies.
This report is made solely to the members of Buckinghamshire County Council in accordance with
Part II of the Audit Commission Act 1998 and for no other purpose, as set out in paragraph 49 of
the Statement of Responsibilities of Auditors and of Audited Bodies published by the Audit
Commission in April 2008.

Respective responsibilities of the Assistant Head of Finance (Planning and Reporting) and
auditor
The Assistant Head of Finance (Planning and Reporting)'s responsibilities for preparing the
accounting statements in accordance with relevant legal and regulatory requirements and the
Code of Practice on Local Authority Accounting in the United Kingdom 2009: A Statement of
Recommended Practice are set out in the Statement of Responsibilities for the Statement of
Accounts.
My responsibility is to audit the accounting statements and related notes in accordance with
relevant legal and regulatory requirements and International Standards on Auditing (UK and
Ireland).
I report to you my opinion as to whether the accounting statements give a true and fair view, in
accordance with relevant legal and regulatory requirements and the Code of Practice on Local
Authority Accounting in the United Kingdom 2009: A Statement of Recommended Practice, of the
financial position of the Authority and its income and expenditure for the year.
I review whether the governance statement reflects compliance with ‘Delivering Good Governance
in Local Government: A Framework’ published by CIPFA/SOLACE in June 2007. I report if it does
not comply with proper practices specified by CIPFA/SOLACE or if the statement is misleading or
inconsistent with other information I am aware of from my audit of the accounting statements. I am
not required to consider, nor have I considered, whether the governance statement covers all risks
and controls. Neither am I required to form an opinion on the effectiveness of the Authority’s
corporate governance procedures or its risk and control procedures.
I read other information published with the Authority accounting statements, and consider whether
it is consistent with the audited Authority accounting statements. This other information comprises
the Explanatory Foreword. I consider the implications for my report if I become aware of any
apparent misstatements or material inconsistencies with the Authority accounting statements. My
responsibilities do not extend to any other information.

Basis of audit opinion
I conducted my audit in accordance with the Audit Commission Act 1998, the Code of Audit
Practice issued by the Audit Commission and International Standards on Auditing (UK and Ireland)
issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence
relevant to the amounts and disclosures in the accounting statements and related notes. It also
includes an assessment of the significant estimates and judgments made by the Authority in the
preparation of the accounting statements and related notes, and of whether the accounting policies
are appropriate to the Authority’s circumstances, consistently applied and adequately disclosed.
I planned and performed my audit so as to obtain all the information and explanations which I
considered necessary in order to provide me with sufficient evidence to give reasonable assurance
that the accounting statements and related notes are free from material misstatement, whether
caused by fraud or other irregularity or error. In forming my opinion I also evaluated the overall
adequacy of the presentation of information in the accounting statements and related notes.




                                                 4
Independent Auditor’s Report to Members of Buckinghamshire County Council


Opinion
In my opinion the Authority accounting statements give a true and fair view, in accordance with
relevant legal and regulatory requirements and the Code of Practice on Local Authority Accounting
in the United Kingdom 2009: A Statement of Recommended Practice, of the financial position of
the Authority as at 31 March 2010 and its income and expenditure for the year then ended.

Opinion on the pension fund accounting statements
I have audited the pension fund accounting statements for the year ended 31 March 2010 under
the Audit Commission Act 1998. The pension fund accounting statements comprise the Fund
Account, the Net Assets Statement and the related notes. The pension fund accounting statements
have been prepared under the accounting policies set out in the Statement of Accounting Policies.
This report is made solely to the members of Buckinghamshire County Council in accordance with
Part II of the Audit Commission Act 1998 and for no other purpose, as set out in paragraph 49 of
the Statement of Responsibilities of Auditors and of Audited Bodies published by the Audit
Commission in April 2008.

Respective responsibilities of the Assistant Head of Finance (Planning and Reporting) and
auditor
The Assistant Head of Finance (Planning and Reporting)'s responsibilities for preparing the
pension fund accounting statements, in accordance with relevant legal and regulatory
requirements and the Code of Practice on Local Authority Accounting in the United Kingdom 2009:
A Statement of Recommended Practice are set out in the Statement of Responsibilities for the
Statement of Accounts.
My responsibility is to audit the pension fund accounting statements and related notes in
accordance with relevant legal and regulatory requirements and International Standards on
Auditing (UK and Ireland).
I report to you my opinion as to whether the pension fund accounting statements give a true and
fair view, in accordance with relevant legal and regulatory requirements and the Code of Practice
on Local Authority Accounting in the United Kingdom 2009: A Statement of Recommended
Practice, of the financial transactions of the pension fund during the year and the amount and
disposition of the fund’s assets and liabilities, other than liabilities to pay pensions and other
benefits after the end of the scheme year.
I read other information published with the pension fund accounting statements and related notes
and consider whether it is consistent with the audited pension fund accounting statements. This
other information comprises the Explanatory Foreword. I consider the implications for my report if I
become aware of any apparent misstatements or material inconsistencies with the pension fund
accounting statements and related notes. My responsibilities do not extend to any other
information.

Basis of audit opinion
I conducted my audit in accordance with the Audit Commission Act 1998, the Code of Audit
Practice issued by the Audit Commission and International Standards on Auditing (UK and Ireland)
issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence
relevant to the amounts and disclosures in the pension fund accounts and related notes. It also
includes an assessment of the significant estimates and judgments made by the Authority in the
preparation of the pension fund accounting statements and related notes, and of whether the
accounting policies are appropriate to the Authority’s circumstances, consistently applied and
adequately disclosed.
I planned and performed my audit so as to obtain all the information and explanations which I
considered necessary in order to provide me with sufficient evidence to give reasonable assurance
that the pension fund accounts and related notes are free from material misstatement, whether
caused by fraud or other irregularity or error. In forming my opinion I also evaluated the overall
adequacy of the presentation of information in the pension fund accounting statements and related
notes.

                                                 5
Independent Auditor’s Report to Members of Buckinghamshire County Council



Opinion
In my opinion the pension fund accounting statements and related notes give a true and fair view,
in accordance with the Code of Practice on Local Authority Accounting in the United Kingdom
2009: A Statement of Recommended Practice, of the financial transactions of the Pension Fund
during the year ended 31 March 2010, and the amount and disposition of the fund’s assets and
liabilities as at 31 March 2010, other than liabilities to pay pensions and other benefits after the end
of the scheme year.

Conclusion on arrangements for securing economy, efficiency and effectiveness in the use
of resources
Authority’s Responsibilities
The Authority is responsible for putting in place proper arrangements to secure economy,
efficiency and effectiveness in its use of resources, to ensure proper stewardship and governance
and regularly to review the adequacy and effectiveness of these arrangements.

Auditor’s Responsibilities
I am required by the Audit Commission Act 1998 to be satisfied that proper arrangements have
been made by the Authority for securing economy, efficiency and effectiveness in its use of
resources. The Code of Audit Practice issued by the Audit Commission requires me to report to
you my conclusion in relation to proper arrangements, having regard to the criteria for principal
local authorities specified by the Audit Commission and published in May 2008 and updated in
October 2009. I report if significant matters have come to my attention which prevent me from
concluding that the Authority has made such proper arrangements. I am not required to consider,
nor have I considered, whether all aspects of the Authority’s arrangements for securing economy,
efficiency and effectiveness in its use of resources are operating effectively.

Conclusion
I have undertaken my audit in accordance with the Code of Audit Practice and having regard to the
criteria for principal local authorities specified by the Audit Commission and published in May 2008
and updated in October 2009, and the supporting guidance, I am satisfied that, in all significant
respects, Buckinghamshire County Council made proper arrangements to secure economy,
efficiency and effectiveness in its use of resources for the year ended 31 March 2010.

Certificate
I certify that I have completed the audit of the accounts in accordance with the requirements of the
Audit Commission Act 1998 and the Code of Audit Practice issued by the Audit Commission.

Mick West
Officer of the Audit Commission
Audit Commission, Unit 5, Isis Business Centre, Horspath Road, Cowley, Oxford OX4 2RD
28 September 2010




                                                   6
Explanatory Foreword and Financial Commentary


1.    Introduction
The Accounts of Buckinghamshire County Council (the Council) for 2009/10 comprise the
following:
• Income and Expenditure Account, covering expenditure on services during the financial year
    ending 31 March 2010 and how this was financed
• Statement of Movement on the General Fund Balance
• Statement of Total Recognised Gains and Losses
• Balance Sheet, setting out the financial position of the Council on 31 March 2010
• Cash Flow Statement, summarising the overall movement of all the Council’s cash during the
    year
• Trust Funds Accounts, showing the operations of the funds for the year and their financial
    position
• Pension Fund Accounts, setting out the transactions of the Fund for the year and its financial
    position
• Annual Governance Statement

These accounts are supported by the Statement of Accounting Policies, the Notes to the Financial
Statements and a Glossary of Terms.

This Explanatory Foreword and Financial Commentary provides a brief outline of the events
affecting the Council in 2009/10 and of the Council’s financial performance and position.

Further Information
Further information about the accounts, including availability in larger font, is available by:
• Writing to:
  The Head of Finance and Commercial Services
  County Offices
  Walton Street
  Aylesbury
  HP20 1UD
• Emailing: corporatefinance@buckscc.gov.uk
• Viewing the Council’s website: www.buckscc.gov.uk

2.    Revenue Spending and Income
The revenue spending comprises the day-to-day service running expenses and general income of
the Council. It includes expenses such as salaries, heating, lighting, rents, rates, stationery and
depreciation, plus income relating to the services provided.

For 2009/10 the Council developed its budget options, within the resources available, by reference
to its Council Plan and strategic objectives. It also drew on information from formal budget
consultations with the public and other interested parties.

At a meeting held on 19 February 2009, the County Council approved a net operating budget of
£303 million for 2009/10. This represented an increase of 2.7% in spending on a comparable basis
over the previous year’s budget. Spending at this level required a Council Tax increase of 3.7%.

The budget was set to assume that there would be no use of the level of General Fund non-
earmarked reserves.




                                                    7
Explanatory Foreword and Financial Commentary


Revenue Outturn 2009/10
Throughout the financial year budgets are adjusted to reflect circumstances that were not in place
at the time of setting the budget. A summarised statement detailing the actual income and
expenditure for 2009/10, compared to each Portfolio’s revised budget, is set out below.

                                                                        Over/(Under)
  Portfolio (All values are shown £000)     Budget         Actual                          %
                                                                           Spend

   Leader                                        3,125         3,205             80            2.6%
   Deputy Leader                                 8,168         8,017           (151)         -1.8%
   Adults & Family Wellbeing                  113,546        113,546               -                 -
   Children & Young People - LA                59,194         60,150            956            1.6%
   Children & Young People - DSG               (2,247)        (2,247)              -                 -
   Planning & Environment                      20,142         19,609           (533)         -2.6%
   Resources                                   27,245         26,846           (399)         -1.5%
   Transportation                              27,253         28,783           1,530           5.6%
   Client Transport                            19,622         20,507            885            4.5%
   Capital Financing and Non Portfolio         28,436         22,018         (6,418)       -22.6%
   Total Revenue Budgets                     304,484        300,434         (4,050)          -1.3%
   (Use of) / contribution to general
                                               (2,000)        (2,998)          (998)                 -
 reserves
   Other non portfolio (use of) /
                                               (2,945)         3,881           6,826     --231.8%
 contribution to earmarked reserves
   Net Budget Requirement                    301,316        301,316                -         0.0%
   RSG and Area Based Grant                   (29,882)      (29,882)               -                 -
   NNDR                                       (47,718)      (47,718)               -                 -
   Council Tax Received                      (223,716)     (223,716)               -                 -
   Total                                   (301,316)      (301,316)                -         0.0%


The overall position was that the Council used £2.998m of the General Fund rather than the
budgeted £2.000m.

The Council’s internal management accounting structure – against which budget managers are
held accountable – differs from that which is required to be presented in the Statement of
Accounts.

The Statement of Accounts structure is determined by the Chartered Institute of Public Finance
and Accountancy (CIPFA) and set out in the Best Value Accounting Code of Practice (BVACOP). It
is designed to facilitate comparisons between different local authorities’ Statements of Accounts.
For consistency it can be seen that the total movement in the General Fund Balance reflects the
internal structure position above.

The statement of movement on the general fund balance is set out on page 22. The levels of non-
earmarked General Fund reserves have decreased by £3.674m. The levels of earmarked reserves
(excluding those earmarked for Schools), set out in Note 39, have increased by £3.125m.

Revenue Financing
The net budget requirement was financed from four main sources:
• National Non-Domestic Rates (NNDR) – £47.718m. NNDR is the amount raised from
  businesses collected locally but re-distributed nationally
• Revenue Support Grant (RSG) – £11.014m. RSG is the main non-specific grant from central
  government.

                                                 8
Explanatory Foreword and Financial Commentary


• Council Tax – £222.828m. This is the means of raising money locally, based upon the value of
  domestic property and is adjusted for the previous year’s surplus or deficit on collection
• Area Based Grant (ABG) – £18.868m.

In addition, services receive specific grants, which are accounted for as income within their own
service headings. There are conditions attached to many of these grants, which set out how, when
and on what service or activity the grant may be spent.

Non service specific grants are credited to the ‘other general government grants’ section of the
Income and Expenditure Account (I&E).

3.    Capital Spending
During 2009/10 the Council incurred capital expenditure totalling £55.361m. The capital budget is
used to record expenditure and income on fixed assets, which will be of long-term benefit to the
community such as roads and schools.

Since 1 April 2004 the Local Government Act 2003 has required local authorities to have regard to
CIPFA’s Prudential Code. This replaces the old system of credit approvals and allows local
authorities to decide for themselves how much to borrow to finance their capital programme.
Under the Code, borrowing must be affordable, prudent and sustainable, as measured by a range
of prudential indicators, over the long term. The interest payable on such loans is charged to the
Income and Expenditure Account.

Subject to availability, the Council has the option to finance its capital expenditure from several
sources, including:
• Capital receipts generated from the disposal of assets
• Government grants or contributions from third parties
• Supported borrowing (borrowing that receives revenue support from the Government)
• Prudential Borrowing/Unsupported Borrowing (borrowing that does not receive revenue support
  from the Government)
• Contributions from revenue resources
• Public Private Partnerships (PPP) and Private Finance Initiatives (PFI)

Full details of capital expenditure and its financing sources for 2009/10 are contained in Note 22 to
the main financial statements.

4.    Other Issues
Accounting for Council Tax and National Non-Domestic Rates
The SORP 2009 includes detailed requirements for accounting for Council Tax in England, which
include a requirement to include appropriate shares of Council Tax debtors in the billing authorities’
and major preceptors’ Balance Sheets.

The following changes have been made to the 2009/10 Statement of Accounts:
• The Council’s share of the Billing Authorities’ Council Tax debtor/creditors has been included in
  the Balance Sheet with corresponding amounts in the Income and Expenditure Account
• A prior year adjustment has been made to 2008/09 reported figures - details of the impact on
  the core financial statements can be seen in Note 1.




                                                  9
Explanatory Foreword and Financial Commentary


Changes to Presentation - Senior Officers Remuneration
Regulation 4 of the Accounts and Audit (Amendment No.2) (England) Regulations 2009 [SI 2009
No. 3322)] introduced a new legal requirement to increase transparency and accountability in Local
Government in reporting remuneration of senior employees.

The information is presented in Note 9 to the main financial statements.

Landsbanki Impairment

Early in October 2008, the Icelandic banks Landsbanki, Kaupthing and Glitnir collapsed and the
UK subsidiaries of the banks, Heritable and Kaupthing Singer and Friedlander (KS&F) went into
administration. The Council had £5m deposited direct with Landsbanki.

After impairments and provision for interest income due, the balance reflected as owing by
Landsbanki in the Statement of Accounts for the year ended 31 March 2010 is £3.744m.

This matter is more fully dealt with in Note 44 of the Notes to the Financial Statements.

Pension Liability
The Pension Liability shown on the Balance Sheet has increased from £311.090m in 2008/09 to
£562.102m in 2009/10.

The liabilities are the future benefit payments due from the Fund in respect of the employer after
the accounting date. Allowance is made for expected future increases in pay and pensions. The
value of the liabilities represents the discounted value of these future benefits payments i.e. the
amount of money that needs to be set aside now to meet the benefits that the employer is
committed to provide for service up to the accounting date on the basis of the assumptions used.

Liability values do not depend on market returns but yields from corporate bonds and inflation
expectations. The key parameter is the real corporate bond yield – i.e. the yield from corporate
bonds less the assumption about future inflation.

Typically a 1% change in the real bond yield will change the valuation of liabilities by 20% to 25%.
Thus the valuation of liabilities between 2008 and 2009 when real yields increased would have
seen a reduction in value of 5% to 10% thus offsetting the reduction in asset values.

The 12 months to 31 March 2010 was almost a mirror image of the previous 12 months – large
increases in market values of assets and significant reductions in bond yields. However despite
experiencing an increase in asset value of perhaps 35% in the 12 months to 31 March 2010,
liability values will have increased by more than asset values thus increasing deficits.

Each April from 1972, public-sector pensions have been increased in line with the Retail Prices
Index ('RPI').

In the June 2010 Budget it was proposed that from April 2011 the increase in pensions will be
linked to the Consumer Prices Index ('CPI'). HM Treasury has since confirmed that from April
2011 the increase in pensions will be linked to the Consumer Prices Index ('CPI').

The re-calculation of the pension liability based on CPI has resulted in a decrease of £48.564m in
the value of the Pension Fund obligation from the RPI valuation method. Both the Pension Liability
and Pension Reserve deficit would be reduced from £562.102m to £513.538m.

This is fully dealt with as a Post balance Sheet Event in Note 53 of the Notes to the Financial
Statements.


                                                 10
Statement of Accounting Policies


1.    General Principles
The Statement of Accounts summarises the Council’s transactions for the 2009/10 financial year
and its position at the year-end of 31 March 2010. It has been prepared in accordance with the
Code of Practice on Local Authority Accounting in the United Kingdom 2009 – A Statement of
Recommended Practice (the SORP).

Accounting policies specific to the Pension Fund are set out in the Pension Fund accounts on page
78.

In both cases the accounting convention adopted is historic cost, modified by the revaluation of
certain categories of tangible fixed assets.

2.    Accruals of Income and Expenditure
Activity is accounted for in the year that it takes place, not simply when cash payments are made
or received. In particular:
• Fees, charges and rents due from customers are accounted for as income at the date the
   Council provides the relevant goods or services
• Supplies are recorded as expenditure when they are consumed – where there is a gap between
   the date supplies are received and their consumption, they are carried as stocks on the Balance
   Sheet
• Works are charged as expenditure when they are completed, before which they are carried as
   works in progress on the Balance Sheet
• Interest payable on borrowings and receivable on investments is accounted for on the basis of
   the effective interest rate for the relevant financial instrument rather than the cash flows fixed or
   determined by the contract unless otherwise disclosed in the accounts
• Where income and expenditure have been recognised but cash has not been received or paid,
   a debtor or creditor for the relevant amount is recorded in the Balance Sheet
• Where it is doubtful that debts will be settled, the balance of debtors is written down and a
   charge made to revenue for the income that might not be collected

3.    Provisions
Provisions are made where an event has taken place that gives the Council an obligation that
probably requires settlement by a transfer of economic benefits, but where the timing of the
transfer is uncertain.

Provisions are charged to the appropriate service revenue account in the year that the authority
becomes aware of the obligation, based on the best estimate of the likely settlement. When
payments are eventually made, they are charged to the provision set up in the Balance Sheet.
Estimated settlements are reviewed at the end of each financial year – where it subsequently
becomes more likely than not that a transfer of economic benefits will not be required (or a lower
settlement than anticipated is made), the provision is reversed and credited back to the relevant
service revenue account.

Where some or all of the payment required to settle a provision is expected to be met by another
party (e.g. from an insurance claim), this is only recognised as income in the relevant service
revenue account if it is virtually certain that reimbursement will be received if the obligation is
settled.

4.    Reserves
The Council sets aside specific amounts as reserves for future policy purposes or to cover
contingencies. Reserves are created by appropriating amounts in the Statement of Movement on
the General Fund Balance. When expenditure to be financed from a reserve is incurred, it is
charged to the appropriate service revenue account in that year to score against the Net Cost of


                                                  11
Statement of Accounting Policies


Services in the Income and Expenditure Account. The reserve is then appropriated back into the
Movement on the General Fund Balance statement so that there is no net charge against Council
Tax for the expenditure.

Section 25 of the Local Government Act 2003 requires the Head of Finance and Commercial
Services to report to the Council on the robustness of estimates and adequacy of reserves implicit
in each year’s budget proposals. The County Council considers this report each February as part
of the budget setting process. A risk assessment has been undertaken to determine the level of
non-earmarked reserves.

Certain reserves are kept to manage the accounting processes for tangible fixed assets, financial
instruments and retirement benefits. These reserves do not represent usable resources for the
Council.

5.   Government Grants and Contributions (Revenue)
Whether paid on account, by instalments or in arrears, government grants and third party
contributions and donations are recognised as income at the date that:
• The authority satisfies the conditions of entitlement to the grant/contribution;
• There is reasonable assurance that the monies will be received
• The expenditure for which the grant is given has been incurred

Revenue grants are matched in service revenue accounts with the service expenditure to which
they relate. Grants to cover general expenditure (e.g. Revenue Support Grant, ABG and NNDR)
are credited to the foot of the Income and Expenditure Account after Net Operating Expenditure.

6.   Retirement Benefits
Employees of the Council are eligible to join either:
• The Teachers’ Pension Scheme, administered by Capita Teachers’ Pensions on behalf of the
  Department for Children, Schools and Families (DCSF); or
• The Local Government Pensions Scheme, administered by Buckinghamshire County Council

Both schemes provide defined benefits to members (retirement lump sums and pensions), earned
as employees work for the Council. However, the arrangements for the teachers’ scheme mean
that liabilities for these benefits cannot be identified to the Council. The scheme is therefore
accounted for as if it were a defined contributions scheme – no liability for future payments of
benefits is recognised in the Balance Sheet and the Children and Young People’s service revenue
account is charged with the employer’s contributions payable to teachers’ pensions in the year.

The Local Government Pension Scheme
The Local Government Pension Scheme is accounted for as a defined benefits scheme:
• The liabilities of the pension scheme attributable to the Council are included in the Balance
  Sheet on an actuarial basis using the projected unit method – i.e. an assessment of the future
  payments that will be made in relation to retirement benefits earned to date by employees,
  based on assumptions about mortality rates, employee turnover rates etc. and projections of
  earnings for current employees
• The assets of the Pension Fund attributable to the Council are included in the Balance Sheet at
  their fair value:
  • Quoted securities – current bid price
  • Unquoted securities – professional estimate
  • Unitised securities – current bid price
  • Property – market value

The change in the net pensions liability is analysed into the following components:


                                                12
Statement of Accounting Policies


• Current service cost – the increase in liabilities as a result of years of service earned this year –
  allocated in the Income and Expenditure Account to the revenue accounts of services for which
  the employees worked
• Past service cost – the increase in liabilities arising from current year decisions whose effect
  relates to years of service earned in earlier years – debited to the Net Cost of Service in the
  Income and Expenditure Account as part of Non Distributed Costs
• Interest cost – the expected increase in the present value of liabilities during the year as they
  move one year closer to being paid – debited to Net Operating Expenditure in the Income and
  Expenditure Account
• Expected return on assets – the annual investment return on the fund assets attributable to the
  Council, based on an average of the expected long-term return – credited to Net Operating
  Expenditure in the Income and Expenditure Account
• Gains/losses on settlements and curtailments – the result of actions to relieve the Council of
  liabilities or events that reduce the expected future service or accrual of benefits of employees –
  debited to the Net Cost of Service in the Income and Expenditure Account as part of Non
  Distributed Costs
• Actuarial gains and losses – changes in the net pensions liability that arise because events
  have not coincided with assumptions made at the last actuarial valuation or because the
  actuaries have updated their assumptions debited to the Statement of Total Recognised Gains
  and Losses
• Contributions paid to the Pension Fund – cash paid as employer’s contributions to the Pension
  Fund

However, statutory provisions limit the Council to raising Council Tax to cover the amounts payable
by the Council to the Pension Fund in the year. In the Statement of Movement on the General
Fund Balance this means that there are appropriations to and from the Pensions Reserve to
remove the notional debits and credits for retirement benefits and replace them with debits for the
cash paid to the Pension Fund and any amounts payable to the Fund but unpaid at the year-end.

Discretionary Benefits
The Council also has restricted powers to make discretionary awards of retirement benefits in the
event of early retirements. Any liabilities estimated to arise as a result of an award to any member
of staff (including teachers) are accrued in the year of the decision to make the award and
accounted for using the same policies as are applied to the Local Government Pension Scheme.

7.    VAT
Income and expenditure excludes any amounts related to Value Added Tax (VAT), as generally all
VAT collected is payable to Her Majesty’s Revenue & Customs (HMRC) and all VAT paid is
recoverable from it.

Any irrecoverable VAT is charged to the appropriate service within the Net Cost of Service in the
Income and Expenditure Account.

8.    Overheads and Support Services
The Council’s internal management accounting structure, against which budget managers are held
accountable, differs from the accounting structure required for the presentation of the standard
Service Expenditure Analysis (SEA) in the Income and Expenditure Account. The SEA structure is
determined by CIPFAs Best Value Accounting Code of Practice 2008/09 (BVACOP), it reflects the
format of returns required by the Government and is designed to allow comparisons between the
Statements of Accounts of different local authorities.

The costs of overheads and support services (e.g. finance, human resources etc.) are apportioned
to those SEA headings that benefit from them in accordance with the costing principles of the
BVACOP.

                                                  13
Statement of Accounting Policies



A variety of suitable apportionment bases have been used, depending on the nature of costs
involved (e.g. floor area, numbers of employees etc).

The total absorption costing principle is used so that the full cost of overheads and support
services are shared between users in proportion to the benefits received, with the exception of:
• Corporate and Democratic Core – costs relating to the Council’s status as a multi-functional,
   democratic organisation
• Non Distributed Costs – the cost of discretionary benefits awarded to employees retiring early
   and any depreciation and impairment losses chargeable on non-operational properties

These two cost categories are defined in BVACOP and accounted for as separate headings in the
Income and Expenditure Account, as part of Net Cost of Service.

9.    Intangible Fixed Assets
Expenditure on assets that do not have physical substance but are identifiable and controlled by
the Council (e.g. software licences) is capitalised when it will bring benefits to the Council for more
than one financial year. The balance is amortised to the relevant service revenue account over the
economic life of the investment to reflect the consumption of benefits.

10.   Tangible Fixed Assets
Tangible fixed assets are assets that have physical substance and are held for use in the provision
of services or for administrative purposes on a continuing basis.

Recognition: expenditure on the acquisition, creation or enhancement of tangible fixed assets is
capitalised on an accruals basis, provided that it yields benefits to the Council and the services that
it provides for more than one financial year. Where additions on any single suite of works falls
below the de-minimis level of £10,000 this expenditure will be charged to revenue. Expenditure
that secures but does not extend the previously assessed standards of performance of assets (e.g.
repairs and maintenance) is charged to revenue as it is incurred.

Measurement: assets are initially measured at cost, comprising all expenditure that is directly
attributable to bringing the asset into working condition for its intended use. Assets are then carried
in the Balance Sheet using the following measurement bases:
• Investment properties and assets surplus to requirements – lower of net current replacement
    cost or net realisable value
• Dwellings, other land and buildings, vehicles, plant and equipment – lower of net current
    replacement cost or net realisable value in existing use
• Infrastructure assets and community assets – depreciated historical cost

Net current replacement cost is assessed as:
• Non-specialised operational properties – existing use value
• Specialised operational properties – depreciated replacement cost
• Investment properties and surplus assets – market value

Assets included in the Balance Sheet at current value are revalued where there have been
material changes in the value, but as a minimum every five years. Increases in valuations are
matched by credits to the Revaluation Reserve to recognise unrealised gains. Exceptionally, gains
might be credited to the Income and Expenditure Account where they arise from the reversal of an
impairment loss previously charged to a service revenue account.

Assets valued at £50,000 or more have been valued in accordance with a five yearly valuation
cycle by the Council’s Internal Valuer in accordance with the Statements of Asset Valuation
Practice and Guidance Notes of The Royal Institute of Chartered Surveyors (RICS).

                                                  14
Statement of Accounting Policies



This valuation includes all land and buildings valued at £50,000 or more, along with a large number
of small pieces of highways land and woodland areas (approximately 520 acres), which, if
assessed individually would be below the £50,000 threshold.

Some information has been obtained from existing records or site plans without a detailed site
survey.

The Revaluation Reserve contains revaluation gains recognised since 1 April 2007 only, the date
of its formal implementation. Gains arising before that date have been consolidated into the Capital
Adjustment Account.

Impairment: the values of each category of assets and of material individual assets that are not
being depreciated are reviewed at the end of each financial year for evidence of reductions in
value. Where impairment is identified as part of this review or as a result of a valuation exercise,
and is attributable to the clear consumption of economic benefits, the loss is charged to the
relevant service revenue account. Otherwise it is written off against any revaluation gains
attributable to the relevant asset in the Revaluation Reserve, with any excess charged to the
relevant service revenue account.

Where an impairment loss is charged to the Income and Expenditure Account but there were
accumulated revaluation gains in the Revaluation Reserve for that asset, an amount up to the
value of the loss is transferred from the Revaluation Reserve to the Capital Adjustment Account.

Disposals: when an asset is disposed of or decommissioned, the value of the asset in the Balance
Sheet is written off to the Income and Expenditure Account as part of the gain or loss on disposal.
Receipts from disposals are credited to the Income and Expenditure Account as part of the gain or
loss on disposal (i.e. netted off against the carrying value of the asset at the time of disposal). Any
revaluation gains in the Revaluation Reserve are transferred to the Capital Adjustment Account.

Amounts in excess of £10,000 are categorised as capital receipts. The balance of receipts is
required to be credited to the Usable Capital Receipts Reserve, and can then only be used for new
capital investment or set aside to reduce the Council’s underlying need to borrow (the capital
financing requirement). Receipts are appropriated to the Reserve from the Statement of
Movement on the General Fund Balance.

The written-off value of disposals is not a charge against Council Tax, as the cost of fixed assets is
fully provided for under separate arrangements for capital financing. Amounts are appropriated to
the Capital Adjustment Account from the Statement of Movement on the General Fund Balance.

Depreciation: depreciation is provided for on all assets with a determinable finite life (except for
investment properties), by allocating the value of the asset in the Balance Sheet over the periods
expected to benefit from their use. Depreciation is calculated on the following bases:
Dwellings and other buildings – straight-line allocation over the life of the property as estimated by
the valuer
Vehicles, plant and equipment – straight-line allocation over the life of the asset
Infrastructure – straight-line allocation over the life of the asset

The useful lives of fixed assets vary according to the category type:
• Building lives are assessed by the valuer upon acquisition and, where the building is subject to
  depreciation, reviewed at each revaluation, and updated as necessary
• Vehicle lives are determined at the time of purchase by an appropriate officer, and vary
  according to type of vehicle
• Equipment is depreciated over 3 or 5 years
• Infrastructure is depreciated over 40 years


                                                  15
Statement of Accounting Policies


• Land is not depreciated
• Assets under Construction are not depreciated

Revaluation gains are also depreciated, with an amount equal to the difference between current
value depreciation charged on assets and the depreciation that would have been chargeable
based on their historical cost being transferred each year from the Revaluation Reserve to the
Capital Adjustment Account.

Grants and contributions: where grants and contributions are received that are identifiable to
fixed assets with a finite useful life, the amounts are credited to the Capital Grants Deferred
Account or the Capital Contributions Deferred Accounts – see Notes 33 and 34.

The balance is then written down to revenue to offset depreciation charges made for the related
assets in the relevant service revenue account, in line with the depreciation policy applied to them.

In the event that a grant cannot be attributed to an asset (either because the grant conditions do
not specify precisely which assets are being funded or because the Council has no reasonable
basis for allocating the funds to particular projects) then there is no justification for deferring the
income and the grant will be credited in full to the income and expenditure account under the
appropriate service heading.

11.   Charges to Revenue for Fixed Assets
Service revenue accounts, support services and trading accounts are debited with the following
amounts to record the real cost of holding fixed assets during the year:
• Depreciation
• Impairment losses due to the clear consumption of economic benefits and other losses where
  there are no accumulated gains in the Revaluation Reserve against which they can be written
  off
• Amortisation of intangible fixed assets

The Council is not required to raise Council Tax to cover depreciation, impairment losses or
amortisations. However, it is required to make an annual provision from revenue to contribute
towards the reduction in its overall borrowing requirement (equal to an amount calculated on a
prudent basis determined by the Council in line with statutory guidance). Depreciation, impairment
losses and amortisations are therefore replaced by revenue provision in the Statement of
Movement on the General Fund Balance, by way of an adjusting transaction with the Capital
Adjustment Account for the difference between the two.

12.   Revenue Expenditure Funded from Capital Under Statute
Expenditure incurred during the year that may be capitalised under statutory provisions but does
not result in the creation of a tangible asset has been charged as expenditure to the relevant
service revenue account in the year. Where the Council has determined to meet the cost of this
expenditure from existing capital resources or by borrowing, a transfer to the Capital Adjustment
Account then reverses out the amounts charged in the Statement of Movement on the General
Fund Balance, so there is no impact on the level of Council Tax.

Foundation Schools/VA Schools/VC Schools
The Schools Standards and Framework Act 1998 changed the status of Grant Maintained Schools
to Foundation Schools maintained by the Local Education Authority. The change for funding
purposes took effect from 1 April 1999. This change has resulted in the inclusion of balances
within the Balance Sheet for current assets and liabilities controlled by Foundation Schools.
However, the fixed assets and long term liabilities of Foundation Schools remain vested in the
Governing Bodies and are not included in the Balance Sheet – see Note 21 to the financial
statements.

                                                   16
Statement of Accounting Policies



In Buckinghamshire there are 21 Foundation Schools. In addition, the Council also has 37
voluntary aided schools (VA schools) and 34 voluntary controlled schools (VC schools). The
Council owns some of the assets in relation to these schools but some of the assets are the
property of another party (e.g. the diocese). The Council recognises the value of the assets it
owns in relation to VA/VC Schools in the Balance Sheet. All capital expenditure on Foundation
Schools and VA/VC school assets that the Council does not own are treated as revenue
expenditure funded from capital under statute.

13.   Leases
Where the Council is a Lessee
Finance Leases
Where the Council enters into material finance leases the asset is recognised in the Council’s
Balance Sheet, together with any associated liability to fund the asset. Rentals payable under
finance leases are apportioned between a finance charge and a reduction in the liability. The
apportionment bases used ensures that the finance charge is allocated over the term of the lease.

Operating Leases
Leases that do not meet the definition of finance leases are accounted for as operating leases.
Rentals payable are charged to the relevant service revenue account on a straight-line basis over
the term of the lease, generally meaning that rentals are charged when they become payable.

Where the Council is a Lessor
Finance Leases
Amounts due from material finance leases are recorded in the Balance Sheet as a debtor. Rentals
receivable are apportioned between reducing the debtor and finance interest earnings. The
apportionment basis used ensures that the earnings are normally allocated over the lease term to
give a constant periodic rate of return to the Council.

Operating Leases
Rentals receivable are charged to the relevant service revenue account on a straight-line basis
over the term of the lease, generally meaning that rentals are charged when they become payable.

14.   Financial Liabilities
Financial liabilities are initially measured at fair value and carried at their amortised cost. Annual
charges to the Income and Expenditure Account for interest payable are based on the carrying
amount of the liability, multiplied by the effective rate of interest for the instrument. For most of the
borrowings that the Council has, this means that the amount presented in the Balance Sheet is the
outstanding principal repayable and interest charged to the Income and Expenditure Account is the
amount payable for the year in the loan agreement.

Gains and losses on the repurchase or early settlement of borrowing are credited and debited to
Net Operating Expenditure in the Income and Expenditure Account in the year of
repurchase/settlement.

However, where repurchase has taken place as part of a restructuring of the loan portfolio that
involves the modification or exchange of existing instruments, the premium or discount respectively
is either deducted from or added to the amortised cost of the new or modified loan and the write-
down to the Income and Expenditure Account is spread over the life of the loan by an adjustment
to the effective interest rate.



                                                   17
Statement of Accounting Policies


Where premiums and discounts have been charged to the Income and Expenditure Account,
regulations allow the impact on the General Fund Balance to be spread over future years. If this
impact is material the Council has a policy of spreading the gain/loss over the term that was
remaining on the loan against which the premium was payable or discount receivable when it was
repaid. The reconciliation of amounts charged to the Income and Expenditure Account to the net
charge required against the General Fund Balance is managed by a transfer to or from the
Financial Instruments Adjustment Account in the Statement of Movement on the General Fund
Balance.

15.   Financial Assets
Financial assets are classified into two types:
• Loans and receivables – assets that have fixed or determinable payments but are not quoted in
   an active market
• Available for Sale assets – assets that have a quoted market price and/or do not have fixed or
   determinable payments

Loans and Receivables
Loans and receivables are initially measured at fair value and carried at their amortised cost.
Annual credits to the Income and Expenditure Account for interest receivable are based on the
carrying amount of the asset multiplied by the effective rate of interest for the instrument. For most
of the loans that the Council has made, this means that the amount presented in the Balance
Sheet is the outstanding principal receivable and interest credited to the Income and Expenditure
Account is the amount receivable for the year in the loan agreement. However, the Council has
made a number of loans to voluntary organisations at less than market rates (soft loans). When
soft loans are made, and these are material, a loss is recorded in the Income and Expenditure
Account for the present value of the interest that will be foregone over the life of the instrument,
resulting in a lower amortised cost than the outstanding principal. Interest is credited at a
marginally higher effective rate of interest than the rate receivable from the voluntary organisations,
with the difference serving to increase the amortised cost of the loan in the Balance Sheet.
Statutory provisions require that the impact of soft loans on the General Fund Balance is the
interest receivable for the financial year – the reconciliation of amounts debited and credited to the
Income and Expenditure Account to the net gain required against the General Fund Balance is
managed by a transfer to or from the Financial Instruments Adjustment Account in the Statement
of Movement on the General Fund Balance. Where assets are identified as impaired because of a
likelihood arising from a past event that payments due under the contract will not be made, the
asset is written down and a charge made to the Income and Expenditure Account. Any gains and
losses that arise on the derecognition of the asset are credited/debited to the Income and
Expenditure Account.

Available for Sale Assets
The Council currently does not hold any Available for Sale financial assets.

Guarantees
Guarantees that the Council has made are only reflected in the Statement of Accounts to the
extent that provisions might be required or a contingent liability note is needed under the policies
set out in Policy 3.

16.   Stocks and Work in Progress
Stocks are included in the Balance Sheet at the lower of cost and net realisable value. Work in
progress is subject to an interim valuation at the year-end and recorded in the Balance Sheet at
cost plus any profit reasonably attributable to the works.




                                                  18
Statement of Accounting Policies


17.   Interests in Companies and Other Entities
The Income and Expenditure Account reflects all of the Council’s revenue activities. The Balance
Sheet has been prepared by aggregating the account balances of all the Council’s services and
funds, and by eliminating all internal transactions between funds.

The Council has considered whether or not Group Accounts should be prepared and has
concluded that it has no significant or controlling interests in other entities that would have a
material effect on the accounts. There is however a supplementary financial statement in regard to
Trust Funds which are administered by the Council as corporate trustee or as the designated
treasurer.

The Council has no material interests in companies or other entities that could be regarded as
subsidiaries, associates or joint ventures. The Council is invited to appoint Members to many
entities of local, regional and national significance. These appointments have been examined,
together with members’ own declaration of interests, and reported related parties. No material
reportable interests were identified. Minority interests in companies and involvement in
partnerships are reported in Notes 45 and 46 to the financial statements.

18.   Related Parties
All County Councillors and senior officers of the Council have been asked to declare any
transactions either they, their close family, or any organisations that they are involved with have
with the Council. The disclosure in Note 13 to the financial statements is based on the responses
received by the Head of Finance and Commercial Services. Some organisations are considered to
be related parties due to the value of transactions with the County Council. Those with whom total
transactions in the year exceeded £2m have been disclosed in Note 13.

19.   Private Finance Initiative (PFI)
The Council has not entered into any PFI transactions.

The Council has considered whether or not any similar transactions have been entered into. Both
of the following criteria must be met for a transaction to be accounting for as a PFI type
transaction:
(a) the local authority controls or regulates what services the operator must provide with the
property, to whom it must provide them, and at what price; and where
(b) the local authority controls – through ownership, beneficial entitlement or otherwise – any
significant residual interest in the property at the end of the term of the arrangement.

The Council has no property or other assets that meet both of the above criteria.

20.   Landfill Allowances
The Waste and Emissions Trading Act 2003 places a duty on waste disposal authorities to reduce
the amount of biodegradable municipal waste (BMW) disposed to landfill. From 1 April 2005
central government introduced a trading scheme, which allocates tradable landfill allowances.

These allowances are recognised as current assets in the Council’s Balance Sheet at market
value. As waste is sent to landfill a liability is incurred to hold allowances equal to the landfill usage
that is recognised as a current liability in the Council’s Balance Sheet. Unused allowances at the
end of the year are shown on the Balance Sheet, as an earmarked reserve, at a weighted average
value. For further details see Note 27 to the financial statements.




                                                   19
Statement of Accounting Policies


21.   Council Tax
In England the billing authorities act as the agents of the major preceptors and consequently the
practice in 2008/09 of including all council tax debtors in the billing authorities’ Balance Sheet did
not comply with UK GAAP.

The 2009 SORP includes detailed requirements for accounting for Council Tax in England, which
include a requirement to include appropriate shares of Council Tax debtors and creditors in the
billing authorities’ and major preceptors’ Balance Sheets.

Refer to Note 1 of the Notes to the Financial Statements.




                                                  20
Income and Expenditure Account


This account summarises the resources that have been generated and consumed in providing
services and managing the Council during the last year. It includes all revenue expenditure and
related income on an accruals basis, as well as transactions measuring the value of fixed assets
actually consumed and the real projected value of retirement benefits earned by employees during
the year.

  Restated
                  Income and Expenditure Account                         2009/10
  2008/09
    Net           (All values are shown £000)              Expenditure    Income           Net
        2,707     Central Services                               1,708       (1,039)             669
         439       Court Services                                 435              -             435
                   Cultural, Environmental & Planning
      40,827                                                    44,565       (6,524)        38,041
                 Services
     133,109       Children’s & Education Services             513,412    (412,084)        101,328
                   Highways, Roads and Transport
      37,583                                                    44,775       (7,313)        37,462
                 Services
         939       Housing Services                              6,791       (6,287)             504
     110,861      Adult Social Care                            162,029      (47,297)       114,732
        6,635     Corporate and Democratic Core                  7,537         (798)         6,739
        2,395     Non Distributed Costs                          2,889          304          3,193
    335,495        Net Cost of Services                       784,141    (481,038)        303,103
                   Net (Gain)/Loss on Disposal of Fixed
      17,799                                                                                (2,754)
                 Assets
         412      Precepts Paid                                                                  414
             -    Trading Accounts                                                                   -
      15,580      External Interest Payable                                                 14,326
     (10,451)     Interest and Investment Income                                            (7,473)
             -    Deferred Premium                                                                   -
      (1,047)     Corporate Provision for Doubtful Debts                                             -
      46,597      Pensions Interest Cost                                                    43,942
     (27,123)     Return on Pension Assets                                                 (22,917)
             -    Impairment of Financial Assets                                                     -
    377,262       Net Operating Expenditure                                               328,641
     (24,857)     Revenue Support Grant and ABG                                            (29,882)
     (50,808)     Non-Domestic Rates Distribution                                          (47,718)
      (4,841)     Other General Government Grants                                           (1,515)
    (212,977)      Council Tax Income                                                     (223,716)
                   Income from Taxation and General
  (293,483)                                                                             (302,831)
                  Government Grants
                   (Surplus)/Deficit for the year
      83,779      transferred to the General Fund                                           25,810
                  Balance

There were no acquired or discontinued operations during the current or preceding year.

The outturn on this account must be taken in conjunction with the Statement of Movement on the
General Fund Balance in order to ascertain the overall financial performance of the Council in the
year.




                                                     21
Statement of Movement on the General Fund Balance


The Income and Expenditure Account shows the Council’s actual performance for the year,
measured in terms of the resources consumed and generated over the last twelve months.
However, the Council is required to raise Council Tax on a different basis, the main differences
being:
• Capital expenditure is accounted for as it is financed rather than when fixed assets are
   consumed
• Retirement benefits are charged as amounts become payable to Pension Funds and
   pensioners, rather than as future benefits are earned

The Statement of Movement on the General Fund Balance compares the Council’s spending
against the Council Tax it raised for the year, taking into account the use of reserves built up in the
past and contributions to reserves earmarked for future expenditure.

This reconciliation statement summarises the difference between the outturn on the Income and
Expenditure Account and the General Fund Balance. Note 18 to the financial statements gives a
further analysis of the Statement of Movement on the General Fund Balance.

  Restated        Statement of Movement on the General Fund Balance
                                                                                           2009/10
  2008/09       (All values are shown £000)
       83,779     (Surplus)/Deficit for the year on the Income and Expenditure Account         25,810
                  Net additional amount required by statute or non-statutory proper
     (83,004)                                                                                (22,136)
                practices (Note 18)
         775      (Increase)/Decrease in General Fund Balance                                   3,674
     (47,642)     General Fund Balance brought forward                                       (46,867)
    (46,867)     General Fund Balance Carried Forward                                       (43,193)
                 Amount of General Fund Balance held by schools under local
     (24,869)                                                                                (24,193)
                management schemes
     (21,998)    Amount of non-earmarked General Fund Balance                                (19,000)
    (46,867)      General Fund Balance Carried Forward                                      (43,193)




                                                  22
Statement of Total Recognised Gains and Losses


The Statement of Total Recognised Gains and Losses (STRGL) brings together all the gains and
losses of the Council for the year and shows the aggregate (increase)/decrease in its net worth.
The gain on the revaluation of fixed assets (mostly land and buildings) and the actuarial loss on
pension assets and liabilities represent gains and losses from re-measuring (broadly revaluing)
certain assets and liabilities to current value at the Balance Sheet date and do not contribute to the
resources that can be used to fund the Council’s services.

  Restated        Statement of Total Recognised Gains and Losses
                                                                                          2009/10
  2008/09       (All values are shown £000)
       83,779     (Surplus)/Deficit for the year on the Income and Expenditure Account        25,810
     (17,849)     (Gain)/Loss arising on revaluation of fixed assets (Note 36)              (11,544)
                  Actuarial (Gains)/Losses on Pension Fund assets and liabilities (Note
        3,526                                                                                236,107
                12)
          890     Other movements                                                                   -
      70,346      Total Recognised (Gains)/Losses for the Year                              250,373
      (6,073)     Effect of prior period adjustments on total net worth                        (245)
      64,273      Total Recognised (Gains)/Losses                                           250,128




                                                   23
Balance Sheet


The Balance Sheet summarises the balances of all services and funds of the Council, excluding
funds held on behalf of third parties, Trust Funds, Voluntary Funds and the Pension Fund.

  Restated
  31 March       Balance Sheet (All values are shown £000)     Note        31 March 2010
    2009
                 Fixed Assets
       2,390     Intangible Assets                              20          2,991
     921,482     Tangible Fixed Assets: Operational            19.1       928,462
      18,006     Tangible Fixed Assets: Non Operational        19.2        33,158
    941,878      Total Fixed Assets                                                     964,611
      44,950     Long Term Investments                                     17,316
      31,161     Long Term Debtors                              26         29,772
     76,111      Total Long Term Assets                                                  47,088
  1,017,989      Total Fixed and Long Term Assets                                     1,011,699
                 Current Assets
             -   Cash and Bank Balance                                      5,681
             -   Landfill Allowances                            27               -
         177     Stocks and Work in Progress                    28            278
      32,944     Debtors                                        29         36,044
             -   Temporary Loans                                            3,521
     118,681     Temporary Investments                                    144,931
    151,802      Total Current Assets                                                   190,455
  1,169,791      Total Assets                                                         1,202,154
                 Current Liabilities
      (1,060)    Cash and Bank Balance                                           -
      (1,820)    Short Term Borrowing                           32         (4,333)
     (11,207)    Temporary Loans                                32         (7,061)
   (123,943)     Creditors (Revenue)                            31      (133,595)
      (7,162)    Creditors (Capital)                            31         (8,530)
  (145,192)      Total Current Liabilities                                            (153,519)
                 Other Liabilities
   (235,457)     Long Term Borrowing                            32      (231,124)
   (110,769)     Capital Grants Deferred                        33      (135,287)
     (30,986)    Capital Contributions Deferred                 34        (34,200)
      (4,936)    Provisions                                     35         (5,003)
   (311,090)     Pension Liability                             12.3     (562,102)
       (502)     Deferred Liability                                         (188)
  (693,740)      Total Other Liabilities                                              (967,904)
  (838,932)      Total Liabilities                                                   (1,121,423)
    330,859      Total Assets Less Total Liabilities                                     80,731
                 Financed by
       3,181     Financial Instruments Adjustment Account       40          3,527
     (38,296)    Revaluation Reserve                            36        (49,100)
   (495,870)     Capital Adjustment Account                     37      (487,015)
         245     Collection Fund Adjustment Account             51            (41)



                                                  24
Balance Sheet


     (24,278)    Usable Capital Receipts Reserve                38.1       (24,163)
      (5,948)    Deferred Capital Receipts                      38.2        (5,607)
     311,090     Pension Reserve                                 12         562,102
     (24,869)    General Fund Reserves Earmarked for Schools     39        (24,193)
     (34,116)    Reserves Earmarked for Other Purposes           39        (37,241)
     (21,998)    General Fund Reserves Non Earmarked             39        (19,000)
  (330,859)      Total Net Worth                                                         (80,731)


These financial statements replace the unaudited financial statements authorised at the meeting of
Regulatory and Audit Committee on 29 June 2010




Richard Schmidt
Date: 28 September 2010
Assistant Head of Finance (Planning and Reporting)




                                                   25
Cash Flow Statement



  31 March     Cash Flow Statement
                                                                    31 March 2010
    2009       (All values are shown £000)
               Revenue Activities
               Cash Outflows
    407,286    Employee related costs                              426,375
    327,526    Other operating costs                               380,551
    734,812                                                                    806,926
               Cash Inflows
    (50,808)   National Non Domestic Rates                         (47,718)
    (24,857)   Revenue Support Grant and Area Based Grant          (29,882)
   (214,834)   Council Tax                                        (222,869)
     (4,841)   Other general government grants                      (1,515)
   (390,974)   Government grants for specific purposes            (434,448)
    (95,176)   Cash received for goods and services               (103,366)
  (781,490)                                                                   (839,798)
   (46,678)    Net Cash Flow from Operating Activities                         (32,872)
               Servicing of Finance
               Cash Outflows
     13,839    Interest paid                                        14,310
         44    Interest paid on finance leases                          16
     13,883                                                                     14,326
               Cash Inflows
    (10,277)   Interest received                                    (7,105)
        (94)   Interest received on finance leases                    (368)
   (10,371)                                                                     (7,473)
      3,512    Net Cash Flow from Servicing of Finance                           6,853
               Capital Activities
               Cash Outflows
     41,636    Purchase of fixed assets                             51,030
      9,950    Purchase of long term investments                   (27,634)
     51,586                                                                     23,396
               Cash Inflows
     (2,242)   Sale of fixed assets                                 (5,275)
    (18,773)   Capital grants received                             (30,097)
     (7,172)   Capital contributions received                       (4,483)
   (28,187)                                                                    (39,855)
     23,399    Net Cash Flow from Capital Activities                           (16,459)
               Net Cash Flow before Financing and Management
   (19,767)                                                                    (42,478)
               of Liquid Resources
               Management of Liquid Resources
     15,531    Net increase/(decrease) in temporary investments     25,838
       (874)   Net increase/(decrease) in temporary loans            8,079
     14,657                                                                     33,917
               Financing
    (50,000)   New loans raised                                      1,820


                                                     26
Cash Flow Statement


     52,450   Repayments of amounts borrowed        -
      2,450                                              1,820
     17,107   Net Cash Flow from Financing              35,737
    (2,660)   (Increase)/Decrease in Cash               (6,741)




                                               27
Notes to the Financial Statements


1.        Change in Accounting Policy
The 2009 SORP includes detailed requirements for accounting for Council Tax in England, which
include a requirement to include appropriate shares of Council Tax debtors and creditors in the
billing authorities’ and major preceptors’ Balance Sheets.

The following changes have been made to the Statement of Accounts for the year ended 31 March
2010:

      •     The Council’s share of the Billing Authorities’ Council Tax debtor and creditors has been
            included in the Balance Sheet with corresponding amounts in the Income and Expenditure
            Account, and supporting notes.
      •     A prior year adjustment has been made to 2008/09 reported figures.

1.1       Prior Period Adjustments

There has been one prior period adjustment to the opening balances to reflect the required
changes in relation to accounting for local taxes. Details of this can be found in the explanatory
foreword and accounting policy 21. The effect on each of the core financial statements is
summarised in the tables below.

Extract from Income and Expenditure Account:

      As per
                                                                                             Restated
     Published         Income and Expenditure Account (All values are
                                                                               Adjustment    2008/09
     2008/09         shown £000)
                                                                                              Figures
      Figures
      (214,834)       Council Tax Income                                            1,857     (212,977)
                      (Surplus)/Deficit for the year transferred to the
          81,922                                                                    1,857       83,779
                     General Fund Balance

Extract from the Statement of Movement on the General Fund Balance:

      As per
                       Statement of the Movement on the General Fund                         Restated
     Published
                     Balance                                                   Adjustment    2008/09
     2008/09
                     (All values are shown £000)                                              Figures
      Figures
                       (Surplus)/Deficit for the year on the Income and
           81,922                                                                   1,857       83,779
                     Expenditure Account
                       Net additional amount required by statute or non-
          (81,147)                                                                 (1,857)     (83,004)
                     statutory proper practices

Extract from the Statement of Total Recognised Gains and Losses:

      As per
                                                                                             Restated
     Published         Statement of Total Recognised Gains and Losses
                                                                               Adjustment    2008/09
     2008/09         (All values are shown £000)
                                                                                              Figures
      Figures
                       (Surplus)/Deficit for the year on the Income and
           81,922                                                                   1,857       83,779
                     Expenditure Account
           (4,216)     Effect of prior period adjustments on total net worth       (1,857)      (6,073)




                                                        28
Notes to the Financial Statements


Extract from the Balance Sheet:

   As per
                                                                                         Restated
  Published
                   Balance Sheet (All values are shown £000)               Adjustment    2008/09
  2008/09
                                                                                          Figures
   Figures
                   Current Assets
        31,155     Debtors                                                      1,789        32,944
  1,168,002        Total Assets                                                 1,789    1,169,791
                   Current Liabilities
      (121,909)    Creditors (Revenue)                                         (2,034)    (123,943)
  (836,898)        Total Liabilities                                          (2,034)    (838,932)
      331,104      Total Assets Less Total Liabilities                          (245)      330,859
                   Financed by
              -    Collection Fund Adjustment Account                             245          245
  (331,104)        Total Net Worth                                                245    (330,859)


1.2    Effect on Current Year
Extract from Income and Expenditure Account:

  2009/10                                                                                 As per
   Figures          Income and Expenditure Account (All values are                       Published
                                                                           Adjustment
   prior to       shown £000)                                                            2009/10
 adjustment                                                                               Figures
      (301,943)    Council Tax Income                                             (41)    (301,984)
                   (Surplus)/Deficit for the year transferred to the
        25,851                                                                   (41)       25,810
                  General Fund Balance

Extract from the Statement of Movement on the General Fund Balance:

  2009/10                                                                                 As per
                    Statement of the Movement on the General Fund
   Figures                                                                               Published
                  Balance                                                  Adjustment
   prior to                                                                              2009/10
                  (All values are shown £000)
 adjustment                                                                               Figures
                    (Surplus)/Deficit for the year on the Income and
        25,851                                                                    (41)       25,810
                  Expenditure Account
                    Net additional amount required by statute or non-
       (22,177)                                                                    41      (22,136)
                  statutory proper practices

Extract from the Statement of Total Recognised Gains and Losses:

  2009/10                                                                                 As per
   Figures          Statement of Total Recognised Gains and Losses                       Published
                                                                           Adjustment
   prior to       (All values are shown £000)                                            2009/10
 adjustment                                                                               Figures
                    (Surplus)/Deficit for the year on the Income and
        25,851                                                                    (41)       25,810
                  Expenditure Account
             0     Effect of prior period adjustments on total net worth        (245)         (245)




                                                    29
Notes to the Financial Statements


Extract from the Balance Sheet:

  2009/10                                                                                  As per
   Figures                                                                                Published
                  Balance Sheet (All values are shown £000)              Adjustment
   prior to                                                                               2009/10
 adjustment                                                                                Figures
                  Current Assets
        33,535    Debtors                                                       2,509         36,044
     1,199,645    Total Assets                                                  2,509     1,202,154
                  Current Liabilities
     (131,127)    Creditors (Revenue)                                         (2,468)      (133,595)
 (1,118,955)      Total Liabilities                                          (2,468)     (1,121,423)
       80,690     Total Assets Less Total Liabilities                              41        80,731
                  Financed by
             0    Collection Fund Adjustment Account                              (41)           (41)
      (80,690)    Total Net Worth                                                (41)      (80,731)


2.     Long Term Contracts: Un-discharged Obligations
The disclosures below set out the Council’s un-discharged obligations under long-term contracts
which will impact on future years’ Income and Expenditure Accounts. Only obligations in excess of
£2m per annum are reported.

Connexions Buckinghamshire
As at 31 March 2010 the Council is committed to making payments of revenue expenditure of
£3.083m in 2010/11 under contract with Connexions Buckinghamshire for the provision of
Connexions Services for young people in Buckinghamshire. The contract expires on 31 March
2011.

Children and Adolescence Mental Health Services in Buckinghamshire (CAMHS)
As at 31 March 2010 the Council is committed to making gross payments of revenue expenditure
of £5.716m in 2010/11 and £5.892m in 2011/12 under contract with the Oxfordshire and
Buckinghamshire Mental Health Trust for the provision of Children and Adolescence Mental Health
Services in Buckinghamshire. The County Council’s contribution to the pooled budget will be
£1.305m in 2010/11 and £1.343m in 2011/12. The arrangement is covered by a S75 Pooled
Budget Agreement with the Buckinghamshire Primary Care Trust to jointly fund the expenditure.
The contract expires on 31 March 2012.

Fremantle Trust
As at 31 March 2010, the Council is committed to making payments estimated at £167m over a
period of 30 years under a contract with Fremantle Trust for the provision of care to the elderly in
residential and nursing homes. The actual level of payments will depend upon the Council’s take-
up of beds and Fremantle's performance in providing services. The contract will expire on 4th April
2040.

As at 31 March 2010, the Council is committed to making payments estimated at £94m over a
period of 30 years under a contract with Fremantle Trust for the provision of care to people with
learning disabilities in residential homes and supported living accommodation. The actual level of
payments will depend upon the Council’s take-up of places and Fremantle's performance in
providing services. The contract will expire on 4th April 2040

Heritage Care
As at 31 March 2010, the Council is committed to making payments estimated at £174m over a
period of 25 years under a contract with Heritage Care for the provision of care to the elderly in

                                                 30
Notes to the Financial Statements


residential homes, nursing homes and sheltered accommodation. The actual level of payments will
depend upon the Council’s take-up of places and Heritage's performance in providing services.
The contract will expire on 4th April 2035

Aylesbury Vale Waste
As at 31st March 2010 the Council is committed to making payments of revenue expenditure
estimated on current tonnages of £2.1m in 2010/11, £3.6m in 2011/12 and £4.0m in 2012/13 under
a contract with Waste Recycling Group for the provision of landfill disposal of household and
municipal waste. The actual level of payments will depend upon waste arising growth and the
amount of waste diverted away through recycling/composting. The contract expires on 31 March
2013.

Wycombe Waste
As at 31st March 2010 the Council is committed to making payments of revenue expenditure
estimated on current tonnages of £1.5m in 2010/11 under a contract with Veolia for the provision
of landfill disposal of household and municipal waste. The actual level of payments will depend
upon waste arising growth and the amount of waste diverted away through recycling/composting.
The contract expires on 30 September 2010.

South Bucks and Chiltern Waste
As at 31st March 2010 the Council is committed to making payments of revenue expenditure
estimated on current tonnages of £3.1m in 2010/11 and £3.4m in 2011/12 under a contract with
Veolia for the provision of landfill disposal of household & municipal waste. The actual level of
payments will depend upon waste arising growth and the amount of waste diverted away through
recycling/composting. The contract expires on 31 March 2012.

Ringway Jacobs
As at 31 March 2010 the Council is committed to a contract with Ringway Jacobs for the provision
of highways services within Buckinghamshire. Although there is no obligation on the Council to pay
any fixed or certain amounts to Ringway Jacobs, it is estimated that payments will be
approximately £25m per annum. The contract is currently due to expire on 31 March 2017 however
good performance can extend the contract by up to 7 years.

3.     Agency Services
Agency is the provision of service by an authority on behalf of another body legally responsible for
providing the service. The expenditure incurred by the authority that provides the service is
reimbursed by the body statutorily responsible for the provision. Therefore agency expenditure is
not reflected in the income and expenditure account.

From 1st April 2003 BCC has an agency agreement with Buckinghamshire PCT formerly known as
Chiltern and South Bucks PCT (Chiltern and South Bucks PCT on behalf of Wycombe PCT and
the Vale of Aylesbury PCT) to administer payments and registered nursing care contributions on
behalf of Bucks PCT. This contract ceased on the 31st August 2009.


     2008/09     Agency Service (All values are shown £000)                              2009/10

         2,560   Payments made is respect of self funders                                       844
         2,772   Payments made in respect of Buckinghamshire County Council clients           1,101
        5,332    Total Amount Reimbursable                                                    1,945


4.     Schemes Under the Transport Act 2000 (Road Charging Schemes)
The Council does not operate any road charging schemes under the Transport Act 2000.



                                                 31
Notes to the Financial Statements


5.      Area Based Grant
From the 2008/09 financial year Local Area Agreement (LAA) Grant and several service specific
grants were replaced by Area Based Grant (ABG). ABG is a general grant. This means that no
conditions on use are imposed on the Council, ensuring full local control over how funding can be
used. Because of its nature ABG is accounted for in the same manner as Revenue Support Grant
(RSG) and is consolidated with RSG in the bottom section of the Income and Expenditure Account
with other general income sources such as income from the Collection Fund and National Non-
Domestic Rates (NNDR) distribution.

The split between Area Based Grant and Revenue Support Grant can be seen in the table below


     2008/09      Area Grants (All values are shown £000)                               2009/10

         17,784   Area Based Grant                                                           18,868
          7,073   Revenue Support Grant                                                      11,014
        24,857    Total                                                                     29,882


6.      Precepts Paid
The following table provides information on precepts paid to other bodies providing public services


     2008/09      Precept (All values are shown £000)                                   2009/10

            412   Flood Defence - Environment Agency                                            414
            412   Total                                                                         414


7.      Trading Accounts
Trading accounts are internal services operating under service level agreements and recharging
their customers for the costs of their services. A small proportion of the trading accounts’
customers are external to the Council. The turnover and surplus/deficits on the Council’s trading
accounts are shown below.

                  2008/09                                                                2009/10
      2008/09                       Activity (All values are shown        2009/10
                  Surplus/                                                               Surplus/
      Turnover                     £000)                                  Turnover
                  (Deficit)                                                              (Deficit)

          4,266               34    Legal and Administration                  4,620                  23
          3,409           (313)     Fleet Hire                                3,404           (327)
          7,675         (279)       Total                                     8,024          (304)


8.      Leases
8.1     Finance Leases: Council as a Lessor
In 2007/08 the Council granted a finance lease to a company for rights to gravel extraction from
Council land near Denham. The Council receives a guaranteed payment related to the extraction
of gravel. In 2009/10 the guaranteed payment received in relation to extraction was £0.782m.

The element of this rental in relation to finance costs (£0.368m) was credited to the income and
expenditure account. The balance (£0.414m), representing consideration for the rights to extract
and use the gravel, was recognised as a usable capital receipt.




                                                    32
Notes to the Financial Statements


8.2   Finance Leases: Council as a Lessee
The Council has nine properties included in its asset register that are finance leases. These nine
properties fall into two broad categories, Offices and Training Centres and Libraries.

Offices and Training Centres
• Hillcrest Training Centre – Day Centre
• Beaconsfield Court Offices
• Chiltern Area Office

Libraries
• Aylesbury Lending Library
• Wycombe Library
• Haddenham Library
• Amersham Library
• Stokenchurch Library
• Gerrards Cross Library

All properties have rentals payable of less than £1k per annum (with the exception of Chiltern Area
Office – £12k per annum). As a result no corresponding liability has been recognised in relation to
these assets.

The Council leases various items of equipment from Investec Asset Finance plc. These leases
have been assessed as finance leases and are recognised in the asset register as plant with a net
book value of £0.455m. These leases run for various time periods with the last lease ending in
2012/13. Rentals payable for 2009/10 were £0.326m. The element of this rental in relation to
finance costs (£0.016m) was credited to the income and expenditure account. The balance
(£0.310m) was used to reduce the liability. As at 31 March 2010 the liability for the future payments
was £0.184m.

8.3   Operating Leases: Council as a Lessor
As a lessor, the Council leases some of its property and vehicles. These are leased for a variety of
purposes including agricultural tenancies, service tenancies, provision of community services,
roundabout sponsorship and commercial lets.


  2008/09        Lease Income Received (All values are shown £000)                       2009/10

        1,175    Land and Buildings                                                           1,505
           69    Vehicles                                                                         73
       1,244     Total Rental Income                                                         1,578


The following table highlights the values of the assets used in generating the income above. It
should be noted that many of the Council’s leases relate to leasing only of part of an asset.

Where a reliable valuation of the element of the building/site that is being leased is not readily
available, the table below does not include any value in relation to these assets. These leases do
not reduce the service potential of the assets and are incidental in nature e.g. the lease of roof
space on County Hall for telecommunications equipment.

Of the land and buildings rental income reported above £0.850m relates to land and buildings
included in the table below and £0.655m relates to land and buildings that are only partly leased
out.




                                                 33
Notes to the Financial Statements


                                                               Land and           Vehicles,
     Assets (All values are shown £000)                                                                  Total
                                                               Buildings          Plant etc.
     Cost or valuation
     Balance as at 1 April 2009                                    18,858                  295             19,153
     Additions                                                      4,903                      -            4,903
     Disposals                                                      (406)                 (21)              (427)
     Reclassifications                                              1,019                   28              1,047
     Revaluations                                                   1,627                      -            1,627
     Balance as at 31 March 2010                                  26,001                  302             26,303
     Depreciation and impairments
     Balance as at 1 April 2009                                     (564)                 (86)              (650)
     Depreciation                                                 (3,845)                 (48)            (3,893)
     Disposals                                                             -                13                    13
     Reclassifications                                                  (25)              (10)               (35)
     Revaluations                                                       268                    -                 268
     Balance as at 31 March 2010                                 (4,166)                 (131)           (4,297)
     Balance Sheet Amount as at 31 March 2010                     21,835                  171             22,006
     Balance Sheet Amount as at 1 April 2009                      18,294                  209             18,503


8.4     Operating Leases: Council as a Lessee

                                                                   2009/10
                   Lease Amounts          Land       Lease       IT                        Other
                                                                               Photo-
 2008/09         Paid (All values are      and        Car      Equip-
                                                                               copiers
                                                                                           Equip-          Total
                 shown £000)             Building   Scheme      ment                        ment
                   Amounts paid
       2,213                                 498         956       367             254             128      2,203
                 during the year

                   Amounts due within
       1,568                                 402      1,069        253             229             76       2,029
                 1 year
                   Amounts due within
       2,204                                 875         757       281             266             128      2,307
                 2 - 5 years
                   Amounts due after 5
       1,065                               1,283           -        22               3             65       1,373
                 years
                  Total Estimated
      4,838                                2,560     1,826        556             498          269         5,709
                 Future Payments


9.      Officers Remuneration
The numbers of employees who were paid a remuneration of £50,000 or more are shown below in
bands of £5,000. The remuneration amounts are required to include all sums paid or receivable by
employees, expense allowances chargeable to tax and the money value of benefits in kind. In
practical terms this comprises gross pay (i.e. before the deduction of employees’ pension
contributions and before tax) and redundancy and early retirement payments received.




                                                    34
Notes to the Financial Statements



  Non                                                            Non                       Redun-
          School   Total                                                 School   Total
 School                     Remuneration      Remuneration      School                     dancy/
          2008/    2008/                                                 2009/    2009/
 2008/                      Band              Band              2009/                      Retire-
            09      09                                                     10      10
   09                                                             10                       ments
    110      226     336    50,000-59,999     50,000-54,999         60      136     196          -
                                              55,000-59,999         45       83     128          2
     49       63     112    60,000-69,999     60,000-64,999         26       43      69          -
                                              65,000-69,999         18       27      45          1
     10       21      31    70,000-79,999     70,000-74,999         11       16      27          1
                                              75,000-79,999          3       12      15
     16       14      30    80,000-89,999     80,000-84,999          7        4      11          1
                                              85,000-89,999          4        1       5          1
      6        7      13    90,000-99,999     90,000-94,999          6        4      10          -
                                              95,000-99,999          4                4          1
                        -   100,000-109,999   100,000-104,999                 3       3          -
                                              105,000-109,999                          -
                        -   110,000-119,999   110,000-114,999                          -         -
                                              115,000-119,999                          -
               1       1    120,000-129,999   120,000-124,999                          -         -
                                              125,000-129,999                 1       1
                        -   130,000-139,999   130,000-134,999                 1       1          -
                                              135,000-139,999                          -
      4                4    140,000-149,999   140,000-144,999        4                4          -
                                              145,000-149,999        1                1
      1                1    150,000-159,999   150,000-154,999                          -         -
                                              155,000-159,999                          -
                        -   160,000-169,999   160,000-164,999                          -         -
                                              165,000-169,999                          -
                        -   170,000-179,999   170,000-174,999                          -         -
                                              175,000-179,999                          -
                        -   180,000-189,999   180,000-184,999                          -         -
                                              185,000-189,999                          -
                        -   190,000-199,999   190,000-194,999                          -         -
                                              195,000-199,999                          -
                        -   200,000-209,999   200,000-204,999                          -         -
                                              205,000-209,999                          -
      1                1    210,000-219,999   210,000-214,999        1                1          -
                                              215,000-219,999                          -


The disclosure bands have been reduced from £10,000 for the year ended 31 March 2009 to
bands of £5,000 for the year ended 31 March 2010. The comparative data for the year ended
31 March 2009 has not been restated into the £5,000 bands as the additional information is not
readily available.

A senior employee is an employee whose salary is more than £150,000 per year, or one whose
salary is at least £50,000 per year and who is:



                                                 35
Notes to the Financial Statements


a) the designated head of paid service, a statutory chief officer or a non-statutory chief officer of a
relevant body, as defined under the Local Government and Housing Act 1989
b) the head of staff for a relevant body which does not have a designated head of paid service; or
c) any person having responsibility for the management of the relevant body, to the extent that the
person has power to direct or control the major activities of the body, in particular activities
involving the expenditure of money, whether solely or collectively with other persons.

Senior employees are typically an authority’s Chief Executive (or equivalent), their direct reports
(other than administration staff), statutory chief officers and potentially any employee that the
authority considers having responsibilities and powers indicated in c) above.

                                                                        Total                       Total
                                             Salary
                                                                    Remuneration                Remuneratio
                                           (Including                                Pension
   Post / Post Holder (All     Financial                 Benefits     excluding                  n including
                                             Fees &                                 Contribu-                  Note
   values are shown £)           Year                    In Kind       pension                     pension
                                           Allowance                                  tions
                                                                    contributions               contribution
                                               s)
                                                                      2009/10                    s 2009/10

    Chief Executive - Chris    2009/10      207,000       4,535         211,535       47,333       258,868
          Williams             2008/09      203,100       6,209         209,309       44,775       254,084

     Strategic Director -      2009/10      142,968          603        143,571       32,603       176,174
   Communities and Built
   Environment (Formerly
        Planning and           2008/09      142,882          525        143,407       31,440       174,848
      Transportation)

     Strategic Director -
     Adults and Family         2009/10      142,100       5,824         147,924       32,536       180,460
 Wellbeing (Formerly Adult
        Social Care)           2008/09      142,100       7,392         149,492       31,377       180,869


     Strategic Director -
                               2008/09      142,100       4,829         146,929       31,262       178,191      1
    Community Services

      Strategic Director -     2009/10      142,100       1,654         143,754       32,536       176,290
 Children and Young People
     (Formerly Children        2008/09      142,100       1,992         144,092       31,377       175,469
          Services)


     Strategic Director -      2009/10      142,223             -       142,223       32,398       174,621
  Business and Customer
 Transformation (Formerly      2008/09              -           -               -           -      173,974      2
        Resources)
                               2008/09       12,269           44          12,313       2,706        15,019      3

    Corporate Director -
    People, Policy and         2009/10      136,010       4,304         140,314       31,147       171,461
 Communications (Formerly
    People and Policy)         2008/09      136,131       4,528         140,659       27,696       168,355

   Statutory Officer - Head    2009/10       80,972       4,390           85,362      18,599       103,961
          of Legal
                               2008/09       79,190       4,918           84,108      17,537       101,645

   Statutory Officer - Head    2009/10       97,063          603          97,666      22,389       120,055
         of Finance
                               2008/09       87,577          525          88,102      19,312       107,414


Notes:
   1. Post deleted, responsibilities split between Communities and Built Environment and Adults
       and Family Wellbeing.

                                                    36
Notes to the Financial Statements


      2. Post holder external contractor not paid through BCC payroll.
      3. Post holder left employment 04/05/09

All employees in the above table are also included in the table showing the number of employees
in each £5,000 salary band.

There were no payments relating to bonuses, expenses allowances or compensation for loss of
office made to senior officers during 2009/10.

10.     Schools Delegated Budgets
Nursery, Primary, Secondary and Special Schools have delegated budgets. Part of the
arrangements under delegation is the carry forward of under and over-spends against budget.


  2008/09          Activity (All values are shown £000)                                  2009/10

          8,828    Devolved formula capital carried forward                                 10,562
         16,888    Surpluses carried forward                                                15,007
          (847)    Deficits carried forward                                                 (1,376)
        24,869     Total                                                                    24,193


11.     Dedicated Schools Grants
From 1 April 2006 the Council’s expenditure on schools has been funded by the Dedicated
Schools Grant (DSG), provided by the Department for Education and Skills. DSG is ring-fenced
and can only be applied to meet expenditure properly included in the Schools Budget. The
Schools Budget includes elements for a restricted range of services provided on an authority wide
basis and for Individual Schools Budgets (ISBs). Over and under-spends on the two elements are
required to be accounted for separately. In distributing DSG the Council is subject to a statutory
upper limit on the amount of grant that may be allocated to central expenditure. Any over or under
spend of the grant allocated to central expenditure must be carried forward to support future years’
schools’ budgets. In 2009/10 an underspend of £2.628m has been carried forward to support the
Schools Budget in 2010/11.

                                                                Central
   (All values are shown £000)                                                ISB         Total
                                                              Expenditure
   Final DSG for the year                                        (46,607)    (236,913)    (283,520)
   Brought forward from previous year                             (4,831)            -      (4,831)
   Carry forward to next year agreed in advance                         -            -             -
   Agreed Budget Distribution in 2009/10                        (51,438)    (236,913)    (288,351)
   Actual central expenditure                                      48,810            -       48,810
   Actual ISB deployed to schools                                       -     236,913      236,913
   Buckinghamshire County Council contribution for the
                                                                        -                          -
 year
   Carry Forward to 2010/11                                       (2,628)            -     (2,628)


12.     Pension Costs
12.1 Participation in Pension Schemes - Teachers
Teachers employed by the Council and its Foundation Schools are members of the Teachers
Pension Scheme, administered by the Teachers’ Pension Agency. It provides teachers with
defined benefits upon their retirement and the Council contributes towards the costs by making
contributions based on a percentage of members’ pensionable salaries.


                                                   37
Notes to the Financial Statements



In 2009/10 the Council paid £21.90m to Teachers’ Pensions in respect of teachers’ retirement
benefits representing 14.1% of pensionable pay. The figures for 2008/09 were £21.07m and
14.1%. There were no contributions remaining payable at the year-end. The scheme is a defined
benefit scheme. Although the scheme is unfunded, Teachers’ Pensions use a notional fund as the
basis for calculating the employers’ contribution rate payable. However, it is not possible for the
Council to identify a share of the underlying liabilities in the scheme attributable to its own
employees. For the purposes of this Statement of Accounts, it is therefore accounted for on the
same basis as a defined contribution scheme.

The Council is responsible for the costs of any additional benefits awarded upon early retirement
outside of the terms of the teachers’ scheme. These benefits are fully accrued in the pensions
liability described in Accounting Policy Note 6.

12.2 Participation in Schemes - Local Government Pension Scheme
Employees of the Council, with the exception of teachers, are admitted to the Buckinghamshire
County Council Pension Fund. This is administered under the Regulations governing the Local
Government Pension Scheme (LGPS), a defined benefit scheme. Retirement benefits earned by
employees in the LGPS are included in the Income and Expenditure Account as costs to services
in the year that they are earned (rather than when they are actually paid). However, as the charge
against Council Tax has to be based on the employer contributions actually payable in the year, an
amount is reversed out of the Statement of Movement on the General Fund Balance (see Note 18),
to meet this requirement.

12.3 Local Government Pension Scheme - Transaction that Occurred During the Year

  2008/09        Pensions Costs (All values are shown £000)                               2009/10

                 Income and Expenditure Account
                 Net cost of services:
      29,090     Current service cost                                                        19,959
        2,184    Past service cost                                                                  -
          211    Costs due to curtailments/settlements                                        1,452
                 Net operating expenditure:
      46,597     Interest cost                                                               43,942
     (27,123)    Expected return on assets                                                  (22,917)
      50,959     Net charge to the Income and Expenditure Account                            42,436
                  Statement of Movement on the General Fund Balance:
                  Reversal of net charges made for retirement benefits in accordance
     (50,959)                                                                               (42,436)
                with FRS17
                  Amount charged against the General Fund Balance for pensions in the
      28,582                                                                                 27,531
                year
                  Movement on Pension Liability in relation to in year charges to
    (22,377)                                                                               (14,905)
                the General Fund
                  Movement on Pension Reserve in relation to Actuarial gains and losses
      (3,526)                                                                              (236,107)
                in STRGL
    (25,903)     Total in-year Movement in Pension Liability                              (251,012)
    (285,187)    Balance of Pension Liability at 1 April                                   (311,090)
  (311,090)      Balance of Pension Liability at 31 March                                 (562,102)


The figures disclosed in the accounts and in this note are derived from the Valuation of the Fund
carried out by the Fund’s independent actuary, Barnett Waddingham, as at 31 March 2010.



                                                   38
Notes to the Financial Statements


12.4 Local Government Pension Scheme - Assets and Liabilities in Relation to Retirement
     Benefits
Reconciliation of present value of the scheme assets and liabilities:


  2008/09            Defined Benefit Obligation (All values are shown £000)                     2009/10

  (702,610)          Balance at 1 April                                                         (657,774)
     (29,090)        Current service cost                                                         (19,959)
     (46,597)        Interest cost                                                                (43,942)
     100,741         Actuarial Gains and Losses                                                  (329,303)
        (211)        Costs due to curtailments/settlements                                         (1,454)
              -      Liabilities extinguished on settlements                                             26
       28,782        Benefits Paid net of transfers in                                              29,748
      (2,184)        Past service cost                                                                      -
      (8,301)        Contributions by Scheme Participants                                          (7,805)
        1,696        Unfunded pension payments                                                       1,937
  (657,774)          Balance at 31 March                                                       (1,028,526)


Reconciliation of fair value of the scheme assets:


  2008/09            Funded Liabilities (All values are shown £000)                             2009/10

    417,423          Balance at 1 April                                                           346,684
       27,123        Expected rate of return                                                        22,917
    (104,267)        Actuarial Gains and Losses                                                     93,196
       28,582        Employer Contributions                                                         28,047
        8,301        Contributions by Scheme Participants                                            7,805
     (30,478)        Benefits Paid                                                                (31,685)
              -      Receipt of bulk transfer value                                                    (24)
    346,684          Balance at 31 March                                                          466,940


The expected return on scheme assets is determined by considering the expected returns
available on the assets underlying the current investment policy. Expected yields on fixed interest
investments are based on gross redemption yields as at the Balance Sheet date. Expected returns
on equity investments reflect long-term real rates of return experienced in the respective markets.
The actual return on scheme assets in the year was £116.113m (2008/09: loss of £77.144m).

12.5 Local Government Pension Scheme - Scheme History

                                                           Pensions Fund Reserve (All values
  2005/06         2006/07     2007/08       2008/09                                               2009/10
                                                         are shown £000)
  (731,469)       (750,038)   (702,610)     (657,774)     Defined benefit obligation             (1,029,042)
   394,793         432,225     417,423       346,684      Scheme assets                             466,940
                                                          Deficit in the Fund at the End of
  (336,676)       (317,813)   (285,187)     (311,090)                                              (562,102)
                                                         Period

The Council has elected not to restate fair value of scheme assets for the year ending 31.03.2006
as permitted by FRS 17 (as revised).



                                                         39
Notes to the Financial Statements


The liabilities show the underlying commitment that the authority has to pay retirement benefits in
future years. The total liability of £1,028m has a substantial impact on the net worth of the Council
as recorded in the Balance Sheet. However statutory arrangements for funding the deficit mean
that the financial position of the Council remains healthy.

The deficit will be made good by increased contributions, assessed by the Actuary, over the
remaining working life of employees.

The total employer contributions expected to be made to the Local Government Pension
Scheme by the Council in the year to 31 March 2011 is £27.447m.

12.6 Local Government Pension Scheme - Basis for Estimating Assets and Liabilities

  2008/09         Financial Assumptions                                                       2009/10

                  Long term expected rate of return on the assets in the scheme
        7.3%      Equity investments                                                                7.8%
        4.0%      Gilts                                                                             4.5%
        6.5%      Bonds                                                                             5.5%
        6.8%      Property                                                                          7.3%
        3.0%      Cash                                                                              3.0%
          n/a     Alternative assets                                                                7.8%
                  Mortality Assumptions
                  Longevity at 65 for current pensioners:
  22.21 years     Men                                                                         22.21 years
  25.26 years     Women                                                                       25.26 years
                  Longevity at 65 for future pensioners:
  22.96 years     Men                                                                         22.96 years
  25.99 years     Women                                                                       25.99 years
                  Other Assumptions
        3.0%      Rate of inflation                                                                 3.9%
        4.5%      Rate of increase in salaries                                                      5.4%
        3.0%      Rate of increase in pensions                                                      3.9%
        6.7%      Rate for discounting scheme liabilities                                           5.5%
       50.0%      Take up option to convert annual pension into retirement lump sum               50.0%


The Local Government Pension Scheme’s assets consist of the following categories, by proportion
of assets held.

 2008/09        2008/09    Scheme Assets as Proportion of all Assets            2009/10         2009/10
  Value            %      Held (All values are shown £000)                       Value             %
   211,892         61%       Equity investments                                  326,859            70%
     69,753        20%       Gilts                                                 28,016             6%
     26,071         8%       Bonds                                                 37,355             8%
     20,524         6%       Property                                              37,355             8%
     18,444         5%       Cash                                                     9,339           2%
          0         0%       Alternative assets                                    28,016             6%
   346,684        100%       Balance at 31 March                                466,940           100%




                                                    40
Notes to the Financial Statements


No property or assets owned by the Pension Fund are occupied or used by Buckinghamshire
County Council

12.7 Local Government Pension Scheme - History of Experience Gains/Losses
The actuarial gains identified as movements on the pensions reserve in 2009/10 can be analysed
into the following categories, measured as a percentage of assets and liabilities at 31 March 2010.


  2005/06     2006/07     2007/08     2008/09      Differences due to                        2009/10


                                                   Experience Gains and Losses and
      17.8%      1.4%      -12.6%       -30.1%                                                 20.0%
                                                 Assets
                                                   Experience Gains and Losses and
      0.0%       0.0%         0.3%        0.0%                                                   0.0%
                                                 Liabilities

13.    Related Party Transactions
The Council is required to disclose material transactions with related parties. These are bodies or
individuals that have the potential to control or influence the Council or to be controlled or
influenced by the Council. Disclosure of these transactions allows an assessment to be made of
the extent to which the Council might have been constrained in its ability to operate independently
or might have secured the ability to limit another party’s ability to bargain freely with the Council.

Central Government has effective control over the general operations of the Council. It is
responsible for providing the statutory framework within which the Council operates, provides the
majority of its funding in the form of grants and prescribes the terms of many of the transactions
that the Council has with other parties. A detailed schedule of government grants is set out in Note
50 relating to the Cash Flow Statement.

Members of the Council have direct control over the Council’s financial and operating policies. A
number of senior officers and County Councillors are members of voluntary organisations, which
receive small grants and funding from the Council. Twenty-five County Councillors are members of
district councils; eight are members of parish councils and eight are members of town councils.
Notes 45 and 46 disclose details of transactions with Companies to which the Council has
appointed Member representatives and of transactions with Partnerships to which either Members
or senior officers are designated to represent the Council’s interests.

During the year, the Pension Fund had an average balance of £2.309m of surplus cash deposited
with the Council. The Council paid the Fund a total for interest of £0.009m on these deposits. The
Council charged the Fund £1.057m for expenses incurred in administering the Fund. The Council
also provides several support services, including financial and legal work, through a series of
service level agreements, to the Buckinghamshire and Milton Keynes Fire Authority.

The Community Leaders Fund has £134,775 to share amongst all 57 County Councillors based on
the population size of their electoral divisions. The scheme has been set up to enable County
Councillors to spend money on the well being of the local communities that they represent. Grants
from the Fund have been made to a variety of organisations including schools, voluntary groups
and parish councils. A register of payments made through the Community Leaders Fund is
available on request.

Based on the level of payments made during 2009/10, total transactions over £2m with any specific
party are considered to render them related parties of the Council:




                                                  41
Notes to the Financial Statements



                                                                               Total       Owing
 Related Party         Activity (All values are shown £000)
                                                                              2009/10     31/03/10
 HMRC                  Payment of Employers and Employees Contributions          64,137        5,510
 BAM Construction      Capital Projects                                          20,457        1,500
 Ringway Jacobs        Running of Transport Services                             19,829        6,658
 OBMH Partnership
                       Provision of care                                         11,625            3
 NHS Trust
 The Fremantle
                       Provision of care to Social Services Clients              11,309          695
 Trust
 Hightown
                       Supported Living - Adults with Learning Disabilities       7,020           51
 Praetorian Housing
 Turnstone Support     Supported Living - Adults with Learning Disabilities       6,874           61
 Veolia
 Environmental         Waste Disposal Contractors                                 5,986          514
 Services
 Heritage Care         Provision of care to Social Services Clients               5,409          144
 Hays Specialist
                       Recruitment Consultants                                    5,106          129
 Recruitment
 Buckinghamshire
                       Provision of care                                          4,295          464
 PCT
 Thames Valley
                       Thames Valley Safer Roads Partnership                      4,035           90
 Police Authority
 Connexions
                       Advice & Assistance for 13-19 year olds                    3,954            3
 Buckinghamshire
 Arriva the Shires
                       Bus Services                                               3,264           68
 and Essex
 Waste Recycling
                       Waste Management                                           3,177          301
 Ltd
 ASM Metal
                       Waste Disposal Contractors                                 2,922          209
 Recycling
 Choice Support        Provision of care                                          2,756           14
 Wernick Group         Capital Projects                                           2,716           75
 Birse Civils          Capital Projects                                           2,452          908
 BT Payment
                       Communication services                                     2,235           66
 Services
 Kingerlee             Capital Projects                                           2,000          161


There were no amounts owing by related parties that were written off during the year.

During the year £30.043m was received from HM Revenue & Customs, representing the net
recovery of VAT incurred.

14.   Minimum Revenue Provision (MRP)
The Council is required to set aside a minimum amount from revenue for the repayment of debt.
The minimum amount is broadly calculated from:
• Debt relating to capital expenditure incurred prior to 1 April 2008 will be calculated, broadly on
  the basis of 4% of the Council’s Capital Financing Requirement
• Debt relating to capital expenditure incurred from 1 April 2008 will be calculated, broadly on the
  annuity asset life method. The MRP charge in relation to this expenditure will apply from the
  year following the year in which the fixed asset becomes operational

The MRP charge for 2009/10 is £9.573m net (£9.739m net for 2008/09). The amount charged to
services as depreciation is reversed in the Statement of Movement on the General Fund Balance
and replaced by the MRP.


                                                  42
Notes to the Financial Statements



15.   Health Act 2006 Pooled Funds – Section 75 Agreements
15.1 Joint Pooled Equipment Partnership with Buckinghamshire Primary Care Trust
Buckinghamshire PCT (Bucks PCT) acted as host for the pooled budget for the period 1st April
2009 to 27 July 2009.

                  Pooled Equipment Agreement with Bucks PCT
  2008/09                                                                           2009/10
                (All values are shown £000)
                 Expenditure
                 Buckinghamshire County Council
         308     Aids to daily living                                                          84
         210     Minor adaptations                                                             71
          74     Maintenance of equipment                                                      37
          88     Beds and hoists                                                               23
          15     Pooled budget manager                                                          5
                 Legal services                                                                6
         695     Total Buckinghamshire County Council                                      226
                 Bucks PCT
          49     Equipment purchases                                                           30
          49     Mobility equipment                                                            9
         229     Pressure care equipment                                                   119
          90     Beds and accessories                                                          36
         145     Manual handling equipment                                                     12
          36     Personal care equipment                                                        4
            5    Equipment rentals                                                              -
          40     Maintenance contracts                                                         26
            2    Spares/repairs                                                                 -
          15     Pooled budget manager                                                          5
         660     Total Bucks PCT                                                           241
       1,355     Total Expenditure                                                         467
                 Income
         695     Buckinghamshire County Council                                            226
         660     Bucks PCT                                                                 241
       1,355     Total Income                                                              467
            -    Balance                                                                        -


As from 28 July 2009, Buckinghamshire County Council acted as the host partner for the
equipment pool.




                                                  43
Notes to the Financial Statements



                  Pooled Equipment Agreement with Bucks PCT
  2008/09                                                                            2009/10
                (All values are shown £000)
                 Expenditure                                                             1,662
                 Income
                 Contribution from Buckinghamshire County Council                           796
                 Contribution from Bucks PCT                                                866
            -    Total Income                                                            1,662
            -    Balance                                                                       -


15.2 Learning Disabilities
The Section 75 Partnership with Bucks PCT has been superseded by a Section 256 agreement
transferring funding from Bucks PCT to Buckinghamshire County Council.

15.3 Adult Mental Health
Partnership with Buckinghamshire Primary Care Trust (Bucks PCT) for the period 1st April 2009 to
31st March 2010. Bucks PCT acted as host for the Mental Health agreement.

                  Adult Mental Health Partnership
  2008/09                                                                            2009/10
                (All values are shown £000)
                 Expenditure
                 PCT Lead Fund
      41,190     NHS Trust services (see Footnotes 1 and 2)                              30,326
       1,530     Continuing care placements with Non-NHS providers                        3,945
         714     Services directly provided by Buckinghamshire PCT                          728
         159     GP counselling services                                                    136
         279     Non statutory service providers                                            285
          13     Management                                                                  16
                 Lead Commissioning (Specialised Services) see Footnote 1                 5,144
                 Pooled Fund
       1,039     Local Authority commissioned                                             1,678
         (85)    Mental Health Grant                                                           -
         226     Management                                                                 266
                 Buckinghamshire County Council Lead Fund
       6,927     Social care                                                              6,577
     51,992      Total Expenditure                                                      49,101
                 Income
    (44,960)     Contribution from Buckinghamshire PCT                                 (41,787)
      (7,032)    Contribution from Buckinghamshire County Council                       (7,321)
   (51,992)      Total Income                                                         (49,108)
                 Balance                                                                    (7)


Note 1 - At the 1st April 2009, activity and budget associated with Forensic In-patients and
Forensic Out of Area Treatments (OATs) was transferred to Specialised Commissioning hosted by
Hampshire PCT and is shown under lead commissioning. All this activity and expenditure was
previously within the OBMHT Contract (NHS Trust Services)



                                                   44
Notes to the Financial Statements


Note 2 - As from 1st April 2009 there were further changes to the OBMHT contract; Children and
Adolescent Mental Health Services (CAMHS) were separately contracted (see Note 15.6) and the
budget for Continuing Care OATs patients was transferred back to the PCT, value of the transfer
£1.7m

15.4 Integrated Mental Health Provision for Adults of Working Age Agreement
Partnership with Oxfordshire and Buckinghamshire Mental Health Partnership NHS Trust (OBMH)
for the period 1st April 2009 to 31st March 2010. OBMH acted as host for the pooled budget.

                  Integrated Mental Health Provision for Adults of Working Age
  2008/09       Agreement                                                           2009/10
                (All values are shown £000)
                  Expenditure
                 Pooled Fund
      13,817     Integrated AWA MH provided services                                    13,819
     13,817      Total Expenditure                                                      13,819
                 Income
       2,866     Contribution from Buckinghamshire County Council                          2,685
      10,951     Contribution from OBMH                                                 11,134
     13,817      Total Income                                                           13,819
            -    Balance                                                                       -


15.5 Integrated Mental Health Provision for Older People Agreement
Partnership with Oxfordshire and Buckinghamshire Mental Health Partnership NHS Trust (OBMH)
for the period 1st April 2009 to 31st March 2010. OBMH acted as host for the pooled budget.

                  Integrated Mental Health Provision Older People Agreement
  2008/09                                                                           2009/10
                (All values are shown £000)
                 Expenditure
                 Pooled Fund
       5,453     Integrated OPMH provided services                                         5,079
       5,453     Total Expenditure                                                       5,079
                 Income
       1,081     Contribution from Buckinghamshire County Council                          1,116
       4,372     Contribution from OBMH                                                    3,963
       5,453     Total Income                                                            5,079
            -    Balance                                                                       -


15.6 Children and Adolescence Mental Health Services (CAMHS)
Partnership with Bucks PCT for the period 1 April 2009 to 31 March 2010. Buckinghamshire
County Council acted as the host for the CAMHS agreement. This is the first year of the
partnership.




                                                45
Notes to the Financial Statements



                   Children and Adolescence Mental Health Services
  2008/09                                                                                 2009/10
                 (All values are shown £000)
                  Expenditure
             -    Pooled Fund CAHMS                                                             5,551
            -     Total Expenditure                                                            5,551
                  Income
             -    Contribution from Buckinghamshire County Council                              1,307
             -    Contribution from Bucks PCT                                                   4,244
            -     Total Income                                                                 5,551
            -     Balance                                                                            -


16.   Members Allowances
Total allowances paid to members of the Council amounted to £1.050m in 2009/10 (£1.072m in
2008/09). Each County Councillor received a basic allowance of £10,718 per annum (£10,482 in
2008/09), with additional allowances for specific responsibilities. Detailed information on individual
allowances paid is available on request.

17.   Audit Fees
Audit fees due during the year to the Audit Commission, the Council’s external auditor, for work on
external audit and inspection are set out below.


  2008/09          Audit Fees (All values are shown £000)                                 2009/10

          225      External audit services                                                        218
           17      Statutory inspection                                                              -
           17      Certification of grant claims and returns                                       22
            2      Other services                                                                  10
         261       Total Audit Fees                                                               250


18.   Reconciliation of the Surplus/Deficit for the Year on the Income and Expenditure
      Account to the Surplus/Deficit for the Year on the General Fund Balance
The deficit for the year disclosed in the Income and Expenditure Account is £25.810m (£83.779m
deficit in 2008/09). The deficit for the year on the General Fund Balance is £3.674m, of which
£0.676m is in relation to a reduction in schools balances and £2.998m deficit relating to other
Council activities (£0.776m deficit in 2008/09, of which £1.741m was in relation to a reduction in
schools balances and £0.965m surplus relating to other Council activities).

The Income and Expenditure Account discloses the income received and the expenditure incurred
in operating the Council’s services for the year and is equivalent to the Profit and Loss Account of
a business. Income and expenditure and the resulting surplus or deficit for the year are measured
using essentially the same accounting conventions that UK businesses are required to use in
preparing their audited annual financial statements. Accountants refer to such accounting
conventions as UK Generally Accepted Accounting Practices (UK GAAP). This UK GAAP based
approach is codified in the Code of Practice on Local Authority Accounting (the SORP), which local
authorities are required by statute to observe when preparing their annual statement of accounts.

However, the items that the Council is required to credit and debit to its General Fund when
determining the surplus or deficit on its General Fund are laid down in statute and non-statutory
‘proper practices’ rather than being UK GAAP based. While the amounts included in the Income


                                                    46
Notes to the Financial Statements


and Expenditure Account and in the General Fund are largely the same, there are a number of
differences. For example, a charge for the depreciation or the impairment of fixed assets must be
made to the Income and Expenditure Account in accordance with the SORP but these must be
excluded from the General Fund Balance in accordance with statute.

The surplus or deficit on the Income and Expenditure Account is one measure of the Council’s
operating financial performance for the year, a measure comparable to the profit or loss of a
company. However, the surplus or deficit on the General Fund Balance is the more important
since it indicates whether the Council added to or drew on its General Fund Balance during the
year. This in turn affects the amount of the General Fund Balance that the Council can take into
account when determining its spending plans for Council Tax financed services for future years
and the amount of Council Tax income it should budget to raise from its Council Tax payers.

The table below gives a detailed breakdown of the difference between the income and expenditure
included in the Council’s Income and Expenditure Account in accordance with the SORP, and the
amounts that statutory and non-statutory proper practices required the Council to debit and credit
to the General Fund Balance shown in the Statement of Movement on the General Fund Balance.

                  Reconciliation of the Surplus/Deficit for the Year on the
                Income and Expenditure Account to the Surplus/Deficit for the
  2008/09                                                                              2009/10
                Year on the General Fund Balance
                (All values are shown £000)
     (71,888)    Depreciation and impairment of tangible fixed assets                     (37,302)
        (647)    Depreciation and impairment of intangible fixed assets                      (952)
        7,124    Government Grants Deferred amortisation                                     6,848
        (538)     Writedown of final deferred charges                                               -
                  Writedown of Revenue Expenditure Funded from Capital Under
      (2,209)                                                                              (3,269)
                Statute (REFCUS)
         328     Writedown of REFCUS grants                                                  1,514
     (17,769)    Net gain/(loss) on sale of fixed assets                                     2,754
     (22,377)    FRS 17 adjustments                                                       (14,905)
      (1,857)    Collection Fund Adjustment Account                                                41
        (665)    Financial Instruments adjustments                                           (346)
  (110,498)                                                                              (45,617)
        9,739    MRP                                                                         9,573
      12,433     Capital expenditure charged to General Fund                                 8,822
      22,172                                                                               18,395
        1,961    Voluntary MRP                                                               1,961
        3,361    Net transfers to/(from) Earmarked Reserves                                  3,125
       5,322                                                                                5,086
                 Net Additional amount to be (Credited)/Debited to the General
    (83,004)                                                                             (22,136)
                Fund Balance for the Year




                                                   47
Notes to the Financial Statements


19.   Movement of Tangible Fixed Assets
19.1 Operational Assets

   Operational Assets (All values   Land and         Vehicles,          Infra-        Community
                                                                                                   Total
 are shown £000)                    Buildings        Plant etc.       structure         Assets

  Cost or valuation
  Balance as at 1 April 2009         739,181            18,087         253,007                -   1,010,275
  Additions                            17,418            1,938           10,256               -      29,612
  Donations                                     -                 -               -           -              -
  Disposals                             (902)             (294)                   -           -     (1,196)
  Reclassifications                     4,749               343                   -           -       5,092
  Revaluations                         10,169                22                   -           -      10,191
  Impairment                         (15,797)                                                 -    (15,797)
  Balance as at 31 March 2010        754,818           20,096         263,263                 -   1,038,177
  Depreciation and impairments
  Balance as at 1 April 2009         (69,098)          (5,716)         (13,979)               -    (88,793)
  Depreciation                       (12,282)          (3,217)          (7,257)               -    (22,756)
  Disposals                                32               135                   -           -            167

  Reclassifications                             -                 -               -           -              -
  Revaluations                          1,667                     -               -           -       1,667
  Balance as at 31 March 2010       (79,681)          (8,798)         (21,236)                -   (109,715)
  Balance Sheet Amount as at 31
                                     675,137           11,298         242,027                 -    928,462
 March 2010
  Balance Sheet Amount as at 1
                                     670,083           12,371         239,028                 -    921,482
 April 2009
  Nature of asset holding
  Owned                              661,811            10,843         242,027                -    914,681
  Finance Lease                        13,326               455                   -           -      13,781
  PFI                                           -                 -               -           -              -
                                     675,137           11,298         242,027                 -    928,462




                                                48
Notes to the Financial Statements


19.2 Non Operational Assets
                                                                      Assets
   Non Operational Assets (All          Surplus       Investment
                                                                       Under         Total
 values are shown £000)                 Assets         Properties
                                                                    Construction

  Cost or valuation
  Balance as at 1 April 2009               3,513                -       14,706        18,219
  Additions                                       -             -       20,926        20,926
  Donations                                       -             -              -               -
  Disposals                              (1,719)                -              -     (1,719)
  Reclassifications                               -             -      (5,123)       (5,123)
  Revaluations                               958                -              -             958
  Balance as at 31 March 2010             2,752                -       30,509         33,261
  Depreciation and impairments
  Balance as at 1 April 2009               (213)                -              -       (213)
  Depreciation                              (33)                -              -         (33)
  Impairment                                                                                   -
  Disposals                                  132                -              -             132
  Reclassifications                               -             -              -               -
  Revaluations                                11                -              -              11
  Balance as at 31 March 2010             (103)                -              -        (103)
  Balance Sheet Amount as at 31
                                          2,649                -       30,509         33,158
 March 2010
  Balance Sheet Amount as at 1
                                          3,300                -       14,706         18,006
 April 2009
  Nature of asset holding
  Owned                                    2,649                -       30,509        33,158
  Finance Lease                                   -             -              -               -
  PFI                                             -             -              -               -
                                          2,649                -       30,509         33,158


19.3 Valuations of Tangible Fixed Assets
The following statement shows the progress of the Council’s five year rolling programme for the
revaluation of fixed assets. The valuations are carried out by an internal valuer, Ken Oldknow (BSc
MRICS). The valuations have been verified by Graham Morley, the Strategic Property Group
Manager. The basis for valuation is set out in the statement of accounting policies.

   Valuation of Fixed Assets (All          Land and            Surplus        Investment
                                                                                                   Total
 values are shown £000)                    Buildings           Assets          Properties
  Cost or valuation
  2005/06                                         34,158               720          2,825           37,703
  2006/07 [a]                                 440,518                9,051               -         449,569
  2007/08                                         10,082            19,356            629           30,067
  2008/09                                         61,328                  -              -          61,328
  2009/10                                         65,486             1,228               -          66,714
  Total                                       611,572               30,355         3,454           645,381


 [a] This line shows that in 2008/09 revised valuations were made to assets originally valued as
part of the rolling programme in 2006/07. This was carried out as part of the Council’s impairment


                                                  49
Notes to the Financial Statements


review and reflects the downward trend in land values experienced during 2008/09. The original
total value of the assets valued during 2006/07 was £487.411m.

In general the property types valued in each year are:
• Miscellaneous properties, including parkland and office accommodation (1 April 2009)
• Miscellaneous properties, including libraries and youth centres (1 April 2008)
• Miscellaneous properties including agricultural estates and social services properties (1 April
   2007)
• Schools (1 April 2006)
• Residential properties (1 April 2005)

20.   Movement of Intangible Fixed Assets
This is capital expenditure on software and IT system development that does not create a tangible
asset. As a rule, capital investment in software and IT systems is depreciated over five years. The
only exception to this relates to the replacement payroll system that is being depreciated over an
estimated life of ten years.

                                                                                       Intangible
  Intangible Assets (All values are shown £000)
                                                                                         Assets
  Original cost                                                                               3,444
  Amortisation to 1 April 2009                                                              (1,054)
  Balance as at 1 April 2009                                                                  2,390
  Expenditure in year                                                                         1,553
  Amortisation in year                                                                        (952)
  Balance as at 31 March 2010                                                                2,991


21.   Foundation Schools
The table below shows the value of Foundation Schools within Buckinghamshire. The values
shown below consist of 20 Foundation Schools at the end of 2009/10 (20 in 2008/09). These
values are not included within fixed assets as shown on the Balance Sheet.


  2008/09         Foundation Schools (All values are shown £000)                        2009/10

      160,350     Value of Foundation Schools                                              161,194
      160,350     Total                                                                   161,194




                                                 50
Notes to the Financial Statements


22.   Capital Expenditure and Financing

  2008/09         Capital Expenditure and Financing (All values are shown £000)           2009/10

                  Capital Investment
          1,045   Intangible assets                                                            1,553
         28,829   Operational assets                                                          47,791
          9,553   Non operational assets                                                       2,747
          2,209   Revenue Expenditure Financed from Capital Under Statute (REFCUS)             3,270
      41,636      Total                                                                      55,361
                  Sources of Finance
          2,935   Capital Receipts                                                             5,731
         18,772   Government grants                                                           29,783
          7,168   3rd party contributions                                                      4,793
           328    REFCUS direct funding                                                        1,514
         12,433   Revenue contributions                                                        8,822
              -   Unsupported borrowing                                                        4,718
      41,636      Total                                                                      55,361


23.   Commitments Under Capital Contracts
The following large capital contracts which have been entered into by the Council and have
outstanding payments of over £0.250m as at 31 March 2010:

                                                                           Amount          Future
 Projects at 31 March 2010     Type of                       Contract    Outstanding    Investment
                                              Contractor
 (All values are shown £000)   Contract                       Value      at 31 March       Period
                                                                             2010         (Years)
 Amersham Adult Learning                    Kingerlee
                                Building                           549            448               1
 Centre                                     Limited
                                            BAM
 Cressex Community School       Building    Construction        31,128          5,300               1
                                            Limited
 John Colet School              Building    Jacobs               1,776          1,679               1
 Total                                                         33,453          7,427


In order to provide comparative figures, the table below details capital contracts entered into by the
Council that had outstanding payments of over £0.250m as at 31 March 2009:




                                                  51
Notes to the Financial Statements



                                                                     Amount         Future
Projects at 31 March 2009     Type of                   Contract   Outstanding   Investment
                                           Contractor
(All values are shown £000)   Contract                   Value     at 31 March      Period
                                                                       2009        (Years)
                                Civil
                                         Birse Civils
Aylesbury Transport Hub        Engen-                      6,173         2,360            1
                                         Limited
                               eering
                                Civil
Aston Clinton Household                  Weldon Plant
                               Engen-                      1,756         1,463            1
Waste Recycling Centre                   Limited
                               eering
                                Civil    J Browne
High Heavens Household
                               Engen-    Construction      1,363         1,363            1
Waste Recycling Centre
                               eering    Limited
Sir William Borlase School,              Kingerlee
                              Building                       500           500            1
Marlow                                   Limited
Micklefield Library           Building   Beard               488           442            1
                                         Rok Building
Bourne End Library            Building                       366           337            1
                                         Limited
                                         BAM
Cressex Community School      Building   Construction     31,128        25,965            2
                                         Limited
                                         Kingerlee
Maplewood Special School      Building                     1,805         1,236            1
                                         Limited
Total                                                    43,579        33,666




                                                52
Notes to the Financial Statements


24.   Major Capital Schemes
During the year, payments in excess of £0.500m were made in respect of the following major
capital schemes:


  2008/09       Major Capital Schemes (All values are shown £000)                   2009/10

                Children and Young People's Services
       5,287    Secondary Schools                                                       20,133
         569    Special Schools                                                          1,144
                Adults & Family Wellbeing
         772    High Wycombe Library                                                           -
                Planning & Environment
         911    New Aylesbury HWRC                                                       1,634
                High Heavens HWRC                                                        2,536
                Langley Park                                                             1,158
         715    Waste Management facility                                                      -
                Transportation
       6,145    Aylesbury Transport Hub and Bridge                                       1,567
       1,936    Aylesbury Vale Parkway - Access Road and Services                        1,046
                Elmhurst Road Improvements                                                   755
       1,753    Principal Roads Maintenance                                              1,788
       1,014    Stoke Hammond Bypass                                                           -
         645    Aylesbury Eastern Links Scheme                                                 -
         587    Aylesbury Vale Parkway - Park and Ride                                         -
                Resources
       2,120    Planned Maintenance Programme                                            2,049
       1,719    Major emergency Property Schemes                                         2,948
                New County Offices Refurbishment                                         1,181
      24,173    Total                                                                  37,939




                                                 53
Notes to the Financial Statements


25.   Statement of Physical Assets

  Statement of Physical Assets             2008/09       2009/10

  Schools
  Nursery Schools                                    2             2
  Community Schools                             123           123
  Voluntary Controlled Schools                   34            34
  Voluntary Aided Schools                        37            37
  Community Special Schools                      12            12
  Pupil Referral Units                               5             5
  Environmental Studies Centre                       2             2
  Planning & Transportation
  Kilometres of Principal Roads                 323           323
  Kilometres of Other Roads                    2,908         2,908
  Divisional Area Offices                            3             3
  Highways Depots                                    3             3
  Vehicles                                      230           216
  Other Plant and Equipment                     100           119
  Adult Social Care
  Adult Disability Resource Centres              17            13
  Group Homes                                        5             5
  Hostels/ Small Staffed Units                       4             4
  Elderly Day Centres                                7             6
  Wycombe Laundry                                    1             1
  Other ASC Properties                               3             3
  Community
  Continuing Education Service                       4             4
  Youth and Community Service                    17            17
  Libraries                                      28            26
  Museum Facilities                                  2             2
  Farms and Smallholdings                        69            65
  Other Holdings                                 20            20
  Country Parks                                      5             5
  Picnic Sites                                   15            15
  Community Assets                                   7             7
  Community Wood                                     5             5
  Gypsy Sites                                        8             8
  Waste Disposal and Landfill Sites              10            10
  Registrars’ Offices                                2             2
  Children & Young People
  Homes for Children/ Young People                   8             8
  Family Centres                                     3             3
  Resources
  Offices (including County Hall)                13            13
  Car Parks                                          1             1


                                      54
Notes to the Financial Statements



25.1 Further Information on Community Assets
Brill Windmill
Brill Windmill represents one of the most ancient and valuable post mills in the country. Situated on
a hill top position in Brill, the mill is a major landmark in Buckinghamshire and an important
reminder of what was once a common feature of the British landscape.

Cholesbury Camp
Cholesbury Camp is a large ‘multivallate’ hill-fort on the borders of Buckinghamshire and
Hertfordshire.

Coombe Hill Monument
The monument commemorates those lost during the Boer War and stands at the summit of
Coombe Hill.

Gott’s Monument
Gott’s Monument on the corner of Micholls Avenue and Chesham Lane bears an inscription ‘1785’
as part of a milestone to Newland, Chesham, Denham, Uxbridge and London.

Kederminster Library and Pew
This collection of 300 theological works came to us in 1945, as part of a purchase of ‘Green Belt’
land at Langley, in south Buckinghamshire. The Library is still housed in the highly-ornate room at
St Mary’s Church, Langley Marish, provided by Sir John Kederminster in 1623.

The John Hampden Memorial
This monument, in memory of John Hampden a local landowner, faces the Hampden Valley on
which he refused to pay Ship Money to King Charles I which led to the English Civil War (1642-8).

Whiteleaf Cross and Woods
The chalk hill-figure of Whiteleaf Cross has dominated the local landscape for several centuries,
becoming a cultural focus associated with many aspects of local life. It was first officially noted by
Francis Wise in 1742, but its full history is unknown and is the subject of much local speculation
and folklore.

26.   Long Term Debtors
Long-term debtors are amounts owing to the Council, but which are likely to be repaid over periods
longer than one year.


  2008/09         Long Term Debtors (All values are shown £000)                            2009/10

          794     Learning and Skills Council                                                      695
            8     Right to buy mortgages and other loans                                            15
       23,585     Reprovisioning of social care                                                 22,877
        1,147     Other ASC long term debt                                                         998
        5,534     Finance lease debtors                                                          5,187
           93     Recovery of salary overpayments                                                        -
      31,161      Total                                                                        29,772


The balance within long-term debtors entitled ‘Re-provisioning of social care’ relates to the benefits
that the Council will receive in future years in relation to social care contracts, resulting from prior
year property transfers to social care providers. These figures are estimated and the basis of the
estimate uses the Bank of England inflation target.


                                                    55
Notes to the Financial Statements


27.   Landfill Allowances
The Waste and Emissions Trading Act 2003 places a duty on waste disposal authorities to reduce
the amount of biodegradable municipal waste (BMW) disposed to landfill. From 1 April 2005 it
introduced a trading scheme, which allocates tradable landfill allowances. The figures below are
shown as current assets and current liabilities in the Balance Sheet. Each year the tonnage figures
are based on estimated usage for the final quarter of the year: the opening balance has been
adjusted to reflect the final position for the previous year.

  Restated
                 2008/09                                                 2009/10       2009/10
  2008/09                         Activity
                  Value                                                   Tonnes        Value
   Tonnes
     55,966                 -     Revised opening balance at 1 April         71,800                 -
      112,424               -     Allowances received                       102,044                 -
      (96,590)              -     Allowances used                           (93,907)                -
      71,800                -     Total                                      79,937                 -


In 2007/08 values of trading allowance dropped to £0 per tonne as there was no active trading
market for landfill allowances. In 2009/10 there has been limited trading, most recently between
£0.50 and £0 per tonne. The Council continues to value its landfill allowances at £0 per tonne.

28.   Stocks and Work in Progress
Stock held by the Council relates to livestock, ICT equipment and stores of salt


  2008/09        Stocks and Work in Progress (All values are shown £000)               2009/10

           82    Salt                                                                          137
           40    ICT Network Equipment                                                             51
           36    Stock Held at Thrift Farm                                                         40
             5   Schools Installation ICT Equipment                                                36
           14    Other ICT Equipment                                                               14
          177    Total                                                                        278


29.   Debtors
Debtors are amounts due to the Council for goods or services supplied, but that are unpaid at the
Balance Sheet date.

  Restated
                 Debtors (All values are shown £000)                                   2009/10
  2008/09
                 Amounts falling due within 1 year
        7,989    Government departments                                                      7,731
        6,062    Other local authorities                                                     7,088
       16,997    Sundry debtors                                                             19,521
        2,461    Payments in advance                                                         1,906
           49    Car loans to employees                                                            57
      33,558                                                                               36,303
                 Amounts falling due after 1 year
          105    Car loans to employees                                                        123
        (719)    Provision for bad debts                                                     (382)
      32,944     Total                                                                     36,044


                                                    56
Notes to the Financial Statements


30.    Provision for Doubtful Debts
An impairment review of debtors was carried out in accordance with accounting policy 15. A risk
evaluation based on the value and types of debt was carried out to determine which debts to
individually assess and for which a corporate provision could be made.


  2008/09          Provision for Bad Debts (All values are shown £000)                2009/10

          (719)    Debts assessed individually requiring impairment                          (382)
              -    Debts provided corporately requiring impairment                                -
         (719)     Total                                                                   (382)


31.    Creditors
  Restated
                   Creditors (All values are shown £000)                              2009/10
  2008/09
        (5,414)    HM Revenue and Customs                                                      (7)
        (2,439)    Government departments                                                    (853)
        (6,205)    Other local authorities                                                (7,195)
        (2,139)    Deposits from contractors and others                                   (2,404)
       (30,194)    Other sundry creditors                                               (45,447)
       (77,552)    Receipts in advance and deferred income                              (77,689)
        (7,162)    Capital expenditure creditors                                          (8,530)
  (131,105)        Total                                                              (142,125)


32.    External Borrowing
The interest rates payable as at 31 March 2010 vary between 3.70% and 10.25%. The total loans
outstanding are analysed by maturity as follows:


  2008/09          Debt Maturity Profile (All values are shown £000)                  2009/10

      (13,028)     Less than 1 year                                                    (11,394)
        (1,820)    1-2 years                                                              (1,732)
       (15,586)    2-5 years                                                            (25,675)
       (57,843)    5-10 years                                                           (53,022)
      (160,208)    Over 10 years                                                       (150,695)
  (235,457)        Total more than 1 year                                             (231,124)
  (248,485)        Total Loans                                                        (242,518)


33.    Capital Grants Deferred
Capital grants deferred represent funding received from central government departments for
specific capital projects.


  2008/09          Capital Grants Deferred (All values are shown £000)                2009/10

       (98,276)    Opening balance at 1 April                                          (110,769)
       (18,772)    Grants applied to finance capital in year                            (29,783)
         6,279     Grants released to offset depreciation                                    5,265
  (110,769)        Total                                                              (135,287)


                                                    57
Notes to the Financial Statements


34.    Capital Contributions Deferred
Capital contributions deferred represent funding received from external bodies, other than central
government departments, for specific capital projects.


  2008/09           Capital Contributions Deferred (All values are shown £000)                            2009/10

      (24,660)      Opening balance at 1 April                                                             (30,986)
       (7,168)      Contributions applied to finance capital in year                                        (4,793)
           (4)      Write down of Right to Buy long term debtors                                                 (4)
          846       Contributions released to offset depreciation                                             1,583
      (30,986)      Total                                                                                  (34,200)


35.    Provisions
Provisions are made where an event has taken place that gives the Council an obligation that
probably requires settlement by a transfer of economic benefits, but where the timing of the
transfer is uncertain.

  Provisions (All values are shown                31 March   Additions                                     31 March
                                                                             Use Of       Transfers
 £000)                                              2009        To                                           2010

  A Insurance                                      (4,711)      (192)                 9         (9)         (4,903)
  B Social Services                                  (225)               -       125                  -       (100)
  Total Provisions                                (4,936)       (192)           134             (9)         (5,003)


The £9k total transfer in relates to the net transfer from reserves (see also Note 39).
A) Insurance provisions exist for meeting notified claims under a self-insurance scheme. There are
cumulative limits to these, above which claims will be met by the Council’s insurers. These cover
areas of insurance such as motor, fire, maternity cover and employees. In addition a provision is
maintained for possible liabilities following the Municipal Mutual Insurance ceasing to undertake
new business. The level of the insurance provision has been determined by the Council’s risk and
insurance department based on claims records.

B) The Social Services provision has been set up to cover costs of potential claims under Section
117 of the Mental Health Act.

36.    Revaluation Reserve
The Revaluation Reserve contains revaluation gains recognised since 1 April 2007 only, the date
of its formal implementation. Gains arising before that date have been consolidated into the Capital
Adjustment Account.


  2008/09           Revaluation Reserve (All values are shown £000)                                       2009/10

      (28,132)      Opening Balance as at 1 April                                                          (38,296)
         1,114      Adjustment to convert depreciation and impairment to historic cost                          327
      (17,849)      Revaluation of fixed assets                                                            (11,544)
         6,571      Disposal of fixed assets                                                                    413
      (38,296)      Total                                                                                  (49,100)




                                                       58
Notes to the Financial Statements


37.    Capital Adjustment Account
The purpose of the Capital Adjustment Account is to contain the details of the costs of consuming
fixed assets and the resources that have already been set aside to finance capital expenditure. A
credit balance on this account represents that capital finance has been set aside at a faster rate
than fixed assets have been consumed by the Council. The balance on this account is significantly
affected by the amalgamation of the Fixed Asset Restatement Account as at 31 March 2007. The
effect of this amalgamation will reduce over time as assets held as at 31 March 2007 are disposed
of or decommissioned.


  2008/09          Capital Adjustment Account (All values are shown £000)               2009/10

      (554,808)    Opening Balance as at 1 April                                          (495,870)
                   Adjustment to Opening Balance                                                 22
                   Historical Cost of Fixed Assets
        72,535      Depreciation and Impairments                                            38,255
                    Adjustment from Revaluation Reserve to Convert Depreciation and
        (1,114)                                                                               (327)
                  Impairment to HC
        26,073     Book Value of Disposals                                                    2,616
        (6,571)    Revaluation Gains in Relation to Disposals                                 (413)
                   REFCUS / Deferred Charges
           538     Write-down of deferred charges                                                 -
         2,209     REFCUS expense                                                             3,268
          (328)    REFCUS funding                                                           (1,514)
                   Resources Set Aside to Finance Capital
        (2,935)    Capital Receipts                                                         (5,848)
       (12,433)    Direct Revenue Financing                                                 (8,822)
        (6,280)    Grants                                                                   (5,265)
          (845)    Contributions                                                            (1,583)
        (9,950)    Gross Statutory MRP                                                      (9,573)
        (1,961)    Voluntary MRP                                                            (1,961)
  (495,870)        Balance as at 31 March                                               (487,015)


38.    Useable Capital Receipts and Deferred Capital Receipts
38.1 Useable Capital Receipts Reserve
The Usable Capital Receipts Reserve represents the capital receipts available to finance capital
expenditure in future years, after setting aside any statutory amounts for the repayment of external
loans.


  2008/09          Useable Capital Receipts Reserve (All values are shown £000)         2009/10

      (22,345)     Opening Balance as at 1 April                                           (24,278)
        (4,766)    Receipts in year                                                         (5,275)
          (102)    Transfer from Deferred Capital Receipts                                    (341)
         2,935     Receipts used for financing Capital Expenditure                            5,731
      (24,278)     Total                                                                  (24,163)


The balance of usable capital receipts represents the future income to be derived from the sale of
social care properties.


                                                    59
Notes to the Financial Statements



38.2 Deferred Capital Receipts
The Deferred Capital Receipt represents the future cash payments expected to be received from
the disposal of assets where the exact amount is subject to some variation. Due to this variation it
would not be appropriate to use these amounts to support the capital programme prior to receiving
the cash.

Therefore this is a deferred capital receipt. Amounts will be transferred to Usable Capital Receipts
as the cash is received.


  2008/09        Deferred Capital Receipts Reserve (All values are shown £000)           2009/10

            -    Opening Balance as at 1 April                                               (5,948)
      (6,050)    Deferred capital receipts in year                                                 -
          102    Transfer to Useable Capital Receipts                                           341
     (5,948)     Total                                                                      (5,607)




                                                     60
Notes to the Financial Statements


39.   Analysis of Movements on Revenue Reserves
The Council sets aside specific amounts for future policy purposes or to cover contingencies.

   Analysis of Movements on Reserves      31 March    Additions                             31 March
                                                                   Use Of       Transfers
 (All values are shown £000)                2009         To                                   2010

   Earmarked Reserves
   A Revenue Contribution to Capital       (13,540)    (10,040)      8,260              -   (15,320)
   B Doubtful Debt Reserve                  (2,241)       (113)        896              -    (1,458)
   C Priority Spend                         (1,870)        (58)        419              -    (1,509)
   D LPSA Reserve                           (2,574)     (5,782)      6,289              -    (2,067)
   E LSC Reserve                            (1,590)           -        573            91        (926)
   F Efficiency Fund and SALIX              (1,904)       (709)        288              -    (2,325)
   G Commuted Sums                            (356)       (170)        103              -       (423)
   H Fleet Renewals                         (1,098)       (853)        277              -    (1,674)
   I Insurance                              (2,642)       (427)             -       (251)    (3,320)
   J Training                                  (20)           -         19              -         (1)
   K Public Service Agreement                  (58)           -             -           -        (58)
   L Election Expenses                        (312)        (81)        326              -        (67)
   N Transformation                         (1,162)       (258)      1,263              -       (157)
   O Social Care Placement                    (673)     (1,774)        931           122     (1,394)
   P IT Development                           (587)           -             -        387        (200)
   Q Car Leasing                              (596)        (88)             -           -       (684)
   R Youth Offending Service                   (71)           -             -           -        (71)
   S PC Renewals                              (422)     (1,834)      1,593              -       (663)
   T Farm Compensation                         (15)           -             -           -        (15)
   AA Other                                 (2,385)     (5,254)      2,658            72     (4,909)
   Sub Total                              (34,116)    (27,441)     23,895            421    (37,241)
   General Fund
   AB Earmarked for Schools                (24,869)    (35,965)     36,641              -   (24,193)
   AC Non-earmarked                        (21,998)           -      3,410          (412)   (19,000)
   Sub Total                              (46,867)    (35,965)     40,051          (412)    (43,193)
   Total Reserves                         (80,983)    (63,406)     63,946               9   (80,434)


A) The Revenue Contribution to Capital Reserve is used for the financing of capital expenditure.
The balance represents amounts set aside to fund future capital schemes.

B) The Doubtful Debt Reserve relates to the amounts that the Council is setting aside to mitigate
the risk of bad debts.

C) The Priority Spend Reserve is to help address Council budget priorities.

D) The Local Public Service Agreement (LPSA) reserve has been set up to set aside monies
earned in reward grant that relates to 2008/09 but are earmarked to be spent in future years.

E) The LSC reserve is used as a mechanism for equalising under and overspends on the adult
learning budgets. These budgets are monitored on an academic year basis rather than on the
Council’s financial year.



                                                61
Notes to the Financial Statements


F) Portfolios may call on the Efficiency Fund to finance initial expenditure on projects that will lead
to longer-term savings.

G) The Commuted Sums Reserve is made up of payments from private developers to compensate
the Council for additional costs incurred in maintaining infrastructure facilities associated with new
developments.

H) The Fleet Renewals Reserve is used for the financing of capital expenditure. The balance
represents amounts set aside to fund future vehicles purchases.

I) The Insurance Reserve relates to the estimated liabilities in respect of insurance claims not yet
notified.

J) The Training Reserve is used to provide for Youth Training within the Council.

K) The Public Service Agreement (PSA) Reserve is used to fund additional expenditure over the
period of the PSA to support the achievement of the PSA targets.

L) The Election Expenses Reserves has been set up to fund the expenses for the full Council
elections which occur every four years.

N) The Transformation Reserve has been created to fund upfront work required to achieve future
savings resulting from the Council’s service transformation activities.

O) The Social Care Placement Reserve has been set up to create suitable placements for adult
social care clients through the support of innovative and cost effective schemes such as supported
living, extra care and through securing nomination rights to accommodation in community
developments.

P) The IT Development Reserve is used to fund future IT developments.

Q) The Car Leasing Reserve covers the cost of administration, insurance and relief vehicles.

R) The Youth Offending Service Reserve holds partnership funding from the Police, Probation
Service, Health, Education and Social Services to provide support to offenders.

S) The PC Renewals Reserve is used for the financing of capital expenditure. The balance
represents amounts set aside to fund future purchases of computers, software licences and
servers.

T) The Farms Compensation Reserve has been set up to cover compensation to tenants when the
Council buys out their tenancies on agricultural estates.

AB) The General Fund Reserve for Schools contains the balances held by schools under
delegated schemes that are ring-fenced.

AC) The Non-Earmarked Reserve is kept at a prudent level to cover unforeseen eventualities and
liabilities.




                                                  62
Notes to the Financial Statements


40.   Financial Instruments Adjustment Account
This account has been set up to ameliorate the effects on the General Fund Balance of the
exceptional occurrence of having to restate financial instruments on the 2007/08 Balance Sheet.

                     Financial Instruments Adjustment Account (All values are
  2008/09                                                                               2009/10
                   shown £000)
        3,118       Opening Balance as at 1 April                                            3,181
           (601)    Recognition of discounts and premiums                                         -
           (123)    Amortisation of discounts and premiums                                   (122)
            787     Impairment losses relating to Icelandic Investments                        468
        3,181       Total                                                                    3,527


Buckinghamshire County Council has adopted CIPFAs Treasury Management in the Public
Services: Code of Practice, and has set treasury management indicators to control key financial
instrument risks in accordance with CIPFAs Prudential Code.

41.   Financial Instruments Balances
The investments and borrowings disclosed in the Balance Sheet are made up of the following
categories of financial instruments:

                                                 Long Term    Long Term
   Financial Instruments Balances                                          Current 31   Current 31
                                                  31 March     31 March
 (All values are shown £000)                                               March 2009   March 2010
                                                   2009         2010
   Financial liabilities at amortised cost          236,897      231,124       58,056       68,090
   Financial liabilities at fair value through
 profit and loss
   Total                                           236.897      231,124        58,056       68,090
   Loans and receivables                             76,111       47,048      144,142      181,883
   Available for sale financial assets
   Unquoted equity investment at cost
   Total                                            76,111        47,048     144,142      181,883


Long-term loans and receivables at 31 March 2010 include £10m worth of investments placed over
2 and 3 years.




                                                     63
Notes to the Financial Statements


42.   Financial Instrument Gains and Losses
The gains and losses recognised in the Income and Expenditure Account and STRGL in relation to
financial instruments are made up as follows:

                                            Liabilities
                                            Measured                      Available
   Financial Instruments Gains and                          Loans and
                                                at                         for Sale        Total
 Losses (All values are shown £000)                        Receivables
                                            Amortised                       Assets
                                               Cost
  Interest expense                             (14,461)               -               -     (14,461)
  Losses on derecognition                                             -               -              -
  Impairment losses                               (722)               -               -        (722)
  Total                                       (15,183)               -                -    (15,183)
  Interest income                                      -         6,091                -        6,091
  Gains on derecognition                                              -               -              -
  Total                                               -         6,091                 -       6,091
  Gains on revaluation                                 -              -               -              -
   Losses on revaluation                               -              -               -              -
   Amounts recycled to the Income and
                                                    722               -               -            722
 Expenditure after impairment
   Surplus Arising on Revaluation of
                                                   722               -                -         722
 Financial Assets
   Net Gain/(Loss) for the Year               (14,461)          6,091                 -     (8,370)


43.   Fair Values of Assets and Liabilities Carried at Amortised Cost
Financial liabilities and financial assets represented by loans and receivables are carried in the
Balance Sheet at amortised cost. Their fair value can be assessed by calculating the present value
of the cash flows that will take place over the remaining term of the instruments, using the following
assumptions:

• The fair value of PWLB loans as at 31 March 2009 is the repayment cost as calculated using
  the relevant interest rates as at 31 March 2009. The fair value of PWLB loans as at 31 March
  2010 is the repayment cost calculated using the repayment interest rates at 31 March 2010.
  The relevant interest rates are published on the Debt Management Office website

• The fair value of the LOBOs are based on calculations using the market interest rates available
  for similar loans from similar lenders at the 31 March 2010

• No early repayment or impairment is recognised

• Where an instrument will mature in the next 12 months, carrying amount is assumed to
  approximate to fair value

• The fair value of trade and other receivables is taken to be the invoiced or billed amount less
  the provision for bad debt




                                                 64
Notes to the Financial Statements



                                             Carrying       Fair Value         Carrying        Fair Value
   Fair Value of Liabilities (All values
                                            Amount 31       31 March          Amount 31        31 March
 are shown £000)
                                            March 2009        2009            March 2010         2010
  Financial Liabilities
  PWLB                                         154,484          195,356             149,124        181,736
  LOBO                                          82,413              83,856           82,000         96,260
  Long Term Borrowing                          236,897         279,212              231,124       277,996
   Finance leases                                  502                 502              188            188
   Temporary Loans & Short Term
                                                13,027              13,027           11,394         11,394
 Borrowing
  Creditors                                    129,071          129,071             142,125        142,125
  Total Liabilities                            379,497         421,812              384,831       431,703
 Less Statutory items to be excluded
   Payments in Advance                         (77,552)        (77,552)             (77,689)      (77,689)
  Collection fund adjustment                    (2,034)             (2,034)          (2,469)       (2,469)
  VAT                                           (4,958)             (4,958)          (5,459)       (5,459)
  Total deducted from Liabilities             (84,544)        (84,544)          (85,617)          (85,617)


  Total Fair Value of Liabilities              294,953         337,268              299,214       346,086


The fair value is higher than the carrying amount because the authority’s portfolio of loans includes
a number of fixed rate loans where the interest rate payable is higher than the prevailing rates at
the Balance Sheet date.

This commitment to pay interest above current market rates increases the amount that the
authority would have to pay if the lender requested or agreed to early repayment of the loans.

                                                      Carrying                       Carrying
                                                                      Fair Value                  Fair Value
  Fair Value of Assets (All values are shown           Amount                         Amount
                                                                      31 March                    31 March
 £000)                                                31 March                       31 March
                                                                        2009                        2010
                                                        2009                           2010
  Loans and Receivables
  Fixed Term Investments < 1yr                         118,681          121,658         144,931      155,534
  Fixed Term Investments > 1yr                            44,950          48,716         17,316       11,911
  Long Term Debtors                                       31,161          31,161         29,772       29,772
  Cash & Bank                                                   -               -         5,681        5,681
  Temporary Loans                                               -               -         3,521        3,521
  Debtors                                                 32,944          32,944         36,044       36,044
  Total Loans & Receivables                            227,736          234,479        237,265      242,463
  Less Statutory items to be excluded
  Receipts in advance and deferred income                 (2,461)        (2,461)        (1,906)      (1,906)
  Collection fund adjustment                              (1,789)        (1,789)        (2,510)      (2,510)
  HMRC                                                    (3,233)        (3,233)        (3,878)      (3,878)
  Total to be deducted from Loans &
                                                       (7,483)          (7,483)        (8,294)      (8,294)
 Receivables


  Total Fair Value of Assets                           220,253          226,996        228,971      234,169




                                                 65
Notes to the Financial Statements


The fair value is higher than the carrying amount because the authority’s portfolio of investments
includes a number of fixed rate loans where the interest rate receivable is higher than the rates
available for similar loans at the Balance Sheet date. This guarantee to receive interest above
current market rates increases the amount that the authority would receive if it agreed to early
repayment of the loans.

44.    Nature and Extent of Risks Arising from Financial Instruments
The authority’s overall treasury risk management programme focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects on the resources available to
fund services.

Treasury risk management is carried out by a central treasury team, under policies approved by
the Council in the annual Treasury Management Strategy. The Council provides written principles
for overall risk management, as well as written policies covering specific areas, such as interest
rate risk, credit risk, and the investment of surplus cash.

Credit Risk
Credit risk arises from deposits with banks and financial institutions, as well as credit exposures to
the authority’s customers. Deposits are only made with banks and financial institutions that meet
predetermined minimum criteria suggested by the Council’s independent financial advisors, Sector,
based upon the scores given to them by the Fitch rating agency.

Lending up to 3 months
The maximum amount that can be invested is £10m to institutions in the UK, or from sovereign
rated AAA countries , with a support rating of 3 or higher, short term rating of F1+, long term rating
of AA- or greater and individual rating which equals or exceeds C. The maximum amount that can
be invested is £10m to UK or institutions from sovereign rated AAA countries, with a support rating
of 1 or 2, a short term rating of F1, long term rating of A+ or A, and an individual rating which
equals or exceeds C. The maximum duration of the investment is 3 months.

Country – UK or Sovereign Rating AAA

              Short term rating of F1+
              Long term rating AAA,AA+,AA,AA-

              Short term rating of F1
              Long term rating A+, A

 Individual                       Support
                  1           2             3          4
      A
      A/B
      B
      B/C
      C
      C/D
      D

Lending up to 1 year
The maximum amount that can be invested is £15m to institutions based in the UK or sovereign
rated AAA countries, with a support rating of 1 or 2, short term rating of F1+, long term rating of

                                                  66
Notes to the Financial Statements


AA- or greater and an individual rating which equals or exceeds C. Institutions with a support rating
of 3 require an individual rating A. The maximum amount that can be invested is £15m to
institutions based in the UK or sovereign rated AAA countries, with a support rating of 1 or 2, short
term rating of F1, long term rating of A+ or A, and an individual rating which equals or exceeds B.
The maximum duration of the investment is 1 year.

Country – UK or Sovereign Rating AAA

              Short term rating of F1+
              Long term rating AAA,AA+,AA,AA-

              Short term rating of F1
              Long term rating A+, A

 Individual                       Support
                  1           2             3         4
     A
    A/B
     B
    B/C
     C
   C/D
     D

Lending up to 2 years
For investing up to 2 years UK or institutions from sovereign rated AAA countries, with a support
rating of 1 or 2, a short term rating of F1+ with minimum AA- long term rating and an individual
rating greater than C. The maximum amount that can be invested with a counterparty is £15m.

Country – UK or Sovereign Rating AAA

              Short term rating of F1+
              Long term rating AAA,AA+,AA,AA-

 Individual                       Support
                  1           2             3         4
     A
    A/B
     B
    B/C
     C
   C/D
     D

Lending up to 5 years
For investing up to 5 years UK or institutions from sovereign rated AAA countries, with a support
rating of 1 or 2, a short term rating of F1+ with minimum AA long term rating and an individual
rating greater than C. The maximum amount that can be invested with a counterparty is £15m.

                                                 67
Notes to the Financial Statements



Country – Sovereign Rating AAA

              Short term rating of F1+
              Long term rating AAA,AA+,AA,AA-

 Individual                      Support
                 1           2             3          4
     A
    A/B
     B
    B/C
     C
    C/D
     D

The maximum period for investments is 5 years as approved in the Annual Investment Strategy.

Landsbanki Impairment
Early in October 2008, the Icelandic banks Landsbanki, Kaupthing and Glitnir collapsed and the
UK subsidiaries of the banks, Heritable and Kaupthing Singer and Friedlander (KS&F) went into
administration. The Council had £5m deposited direct with Landsbanki.

All monies within these institutions are currently subject to the respective administration and
receivership processes. The amounts and timing of payments to depositors such as the Council
will be determined by the administrators/receivers.

Based on the latest information available the Council considers that it is appropriate to consider an
impairment adjustment for the deposits, and has taken the action outlined below. As the available
information is not definitive as to the amounts and timings of payments to be made by the
administrators/receivers, further adjustments may be required to the accounts in future years.

Landsbanki is an Icelandic entity. Following steps taken by the Icelandic Government in early
October 2008 its domestic assets and liabilities were transferred to a new bank (New Landsbanki)
with the management of the affairs of Old Landsbanki being placed in the hands of a resolution
committee. Old Landsbanki’s affairs are being administered under Icelandic law. Old Landsbanki’s
latest public presentation of its affairs was made to creditors on 20 February 2009 and can be
viewed on its website. This and other relevant information indicates that recovery of between 90-
100% shall be achieved. The Council has taken a mid point position and assumed recovery at 95%
by 2018. The Council has therefore decided to recognise an impairment based on it recovering 95p
in the £.

Recovery is subject to the following uncertainties
and risks:
• Confirmation that UK Council deposits enjoy preferential creditor status. Current advice
  indicates that this will be the case but this still has to be tested through the Icelandic courts
• The impact of exchange rate fluctuations on the value of assets recovered by the resolution
  committee and on the settlement of the Council’s claim, which may be denominated wholly or
  partly in currencies other than sterling
• The impact (if any) of the freezing order made by the UK Government over Landsbanki’s
  London branch assets


                                                 68
Notes to the Financial Statements


Failure to secure preferential creditor status would have a significant impact upon the amount of
the deposit that is recoverable. The total assets of the bank only equate to one third of its liabilities,
assuming that the Bond remains at its current value. Therefore, if preferential creditor status is not
achieved the recoverable amount may only be 38p in the £.

No information has been provided by the resolution committee about the timing of any payments to
depositors. Because it is anticipated that all the assets of Landsbanki Islands will need to be
realised to repay priority creditors, settlement in a single sum is unlikely. Therefore, in calculating
the impairment, the Council has used the estimated repayment timetables for Heritable and KS&F
as a basis for its assumption about the timing of recoveries.

It is therefore assumed that the repayments will be split roughly as follows:

 Anticipated repayment date                                            95% recovery           38% recovery
 October 2011                                                                  22.1%                    9.0%
 October 2012 to October 2017 (6 repayments)                     8.9% x 6 = 53.4%           3.6% x 6 = 21.6%
 October 2018                                                                  19.5%                    7.4%

Recoveries are expressed as a percentage of the Council’s claim in the administration, which it is
expected may validly include interest accrued up to 7 October 2008.

A further impairment of £0.722m has been recognised within the income and expenditure account
included within the external interest payable line. This figure was calculated in accordance with
guidance published in LAAP Bulletins 79 and 82.

Interest due but not received in relation to this investment of £0.254m has been credited to the
interest income line in the Income and Expenditure Account in this year.

The Council has applied statutory regulations that delay the impact of any impairment charges to
the General Fund Balance. This has been achieved by debiting the Financial Instrument
Adjustment Account and Crediting the Statement of Movement in General Fund Balance by
£0.468m. However, this entry will need to be reversed in 2010/11.

Exposure to Credit Risk
The following analysis summarises the Council’s potential maximum exposure to credit risk, based
on experience of default and uncollectability over the last three financial years, adjusted to reflect
current market conditions.

                                                                           Estimated            Estimated
                               Amount                                      Maximum              Maximum
   Exposure to Credit Risk                 Historical     Historical
                                at 31                                     Exposure to          Exposure to
 (All values are shown                    Experience     Experience
                                March                                     Default and          Default and
 £000)                                    of Default      Adjusted
                                2010                                     Uncollectability     Uncollectability
                                                                          for 2008/09          for 2009/10

                                  A            B             C                                    (A x C)
    Deposits with banks and
 financial institutions         159,055     0.75%          1.00%                    1,524                1,591
 (excluding Icelandic Banks)
  Customers                      33,916     0.00%          4.30%                    2,960                1,458
                               192,971                                             4,484                3,049


No credit limits were exceeded during the reporting period and the authority does not expect any
losses from non-performance by any of its counterparties in relation to deposits.



                                                    69
Notes to the Financial Statements


The authority does not generally allow credit for customers, such that £6.8m of the £33.9m balance
is past its due date for payment. The past due amount can be analysed by age as follows:


   Past Due Debt Analysis (All values are shown £000)                       2008/09         2009/10

   Less than 3 months                                                             1,333           3,867
   3 to 6 months                                                                    512             769
   6 months to 1 year                                                               260             583
   More than 1 year                                                               2,170           1,634
   Total                                                                          4,275          6,853


Of the £33.9m balance £14.7m of debtors were individually assessed for impairments. A risk
evaluation based on the value and types of debt was carried out to determine which debts to
individually assess. This review resulted in a required provision of £0.382m to be made in respect
of these debtors.

Liquidity Risk
As the authority has ready access to borrowings from the Public Works Loans Board, there is no
significant risk that it will be unable to raise finance to meet its commitments under financial
instruments. Instead, the risk is that the authority will be bound to replenish a significant proportion
of its borrowings at a time of unfavourable interest rates. The strategy is to ensure that not more
than 15% of loans are due to mature within any rolling three-year period through a combination of
careful planning of new loans taken out and (where it is economic to do so) making early
repayments.

The maturity analysis of financial liabilities is as follows:

  Maturity Analysis of Financial Liabilities (All values are shown
                                                                            2008/09         2009/10
 £000)
   Less than 1 year                                                              13,027         11,394
   Between 1 and 2 years                                                          1,820           1,732
   Between 2 and 5 years                                                         15,586         25,675
   More than 5 years                                                            218,051        203,717
   Total                                                                       248,484        242,518


Market Risk

Interest Rate Risk

The authority is exposed to significant risk in terms of its exposure to interest rate movements on
its borrowings and investments. Movements in interest rates have a complex impact on the
authority.
For instance, a rise in interest rates would have the following effects:
• Borrowings at variable rates – the interest expense charged to the Income and Expenditure
    Account will rise
• Borrowings at fixed rates – the fair value of the liabilities borrowings will fall
• Investments at variable rates – the interest income credited to the Income and Expenditure
    Account will rise
• Investments at fixed rates – the fair value of the assets will fall

Borrowings are not carried at fair value, so nominal gains and losses on fixed rate borrowings
would not impact on the Income and Expenditure Account or STRGL.

                                                     70
Notes to the Financial Statements



However, changes in interest payable and receivable on variable rate borrowings and investments
would be posted to the Income and Expenditure Account and affect the General Fund Balance
pound for pound.

The authority has a number of strategies for managing interest rate risk. Policy is to aim to keep a
maximum of 20% of its borrowings in variable rate loans.

During periods of falling interest rates, and where economic circumstances make it favourable,
fixed rate loans will be repaid early to limit exposure to losses. The risk of loss is ameliorated by
the fact that a proportion of government grant payable on financing costs will normally move with
prevailing interest rates or the Council’s cost of borrowing and provide compensation for a
proportion of any higher costs. If interest rates had been 1% higher with all other variables held
constant, the financial effect in 2009/10 would have been:

   Financial Effect of 1% Higher Interest Rate (All values are
                                                                            2008/09        2009/10
 shown £000)
   Increase in interest payable on variable rate borrowings                        149            101
   Increase in interest receivable on variable rate investments                  (125)           (248)
   Increase in government grant receivable for financing costs                        -                 -
   Impact on Income and Expenditure Account                                         24          (147)
   Decrease in fair value of fixed rate investment assets                        1,237            631
   Impact on STRGL                                                               1,237            631
   Decrease in fair value of fixed rate borrowings liabilities (no I/E or
                                                                                31,918         34,019
 STRGL impact)

The impact of a 1% fall in interest rates would be as above but with the movements being
reversed.

Price Risk
The authority does not invest in equity shares.

Foreign Exchange Risk
The authority has no financial assets or liabilities denominated in foreign currencies
and thus has no exposure to loss arising from movements in exchange rates.

45.   Local Authority Companies
Each of the following companies is regulated under the Local Authorities (Companies) Order 1995,
by virtue of the Council’s interest and any other interest held by other local authorities.

(a) Beaconsfield High School (Superturf) Ltd
This company limited by guarantee, with no share capital, is wholly owned by Beaconsfield High
School, a charity. In the event of a winding up of the company the liability of each member is
limited to £1. The latest accounts show that as at 31 March 2009 the company’s net assets were
£30,539 (2007/08: £28,233). The principal activity of the company is the provision of sports
facilities for hockey, tennis and netball.

(b) Chiltern Woodlands Project Ltd
The Council has a 10% interest in the Chiltern Woodlands Project Ltd, which is a company limited
by guarantee with no share capital. In the event of a winding up of the company the liability of
each member is limited to £1. The latest accounts show that as at 31 March 2009 the Company's
net assets were £74,000 (2007/08 £82,000) and the loss at 31 March 2009 was £8,151 (2007/08



                                                      71
Notes to the Financial Statements


profit £25,991). The Company promotes and encourages the sympathetic management of
woodlands in the Chiltern Hills.

(c) Thames Valley Groundwork Trust Ltd
The Council has a 7% interest in Thames Valley Groundwork Trust Ltd which is a company limited
by guarantee and registered charity. The aim of the company is to engage to enhance and
promote Countryside activities. The latest accounts show that as at 31 March 2009 the Company’s
net assets were £500k (2007/08 £525k).

(d) Trading Standards South East Limited
This company is limited by guarantee and has no share capital. It was created by 19 local
authorities in the South East region to utilise government funding provided for the delivery of a
trading standards advice service. The County Council is a member and director of the company
and is represented by the Head of Public Protection.

Copies of the accounts of the Council's associated companies disclosed are available from
Companies House.

46.   Partnerships
(a)      Bucks and Milton Keynes Sports Partnership
Buckinghamshire County Council is in partnership with Aylesbury Vale District Council (the host
authority), Chiltern District Council, Milton Keynes Council, South Bucks District Council and
Wycombe District Council. The partnership has been established to "co-ordinate, develop and
improve the sporting opportunities available to all people in Buckinghamshire". The work is
undertaken in co-operation with Sport England who provides lottery funding to Aylesbury Vale
District Council.

(b) Buckinghamshire Drug and Alcohol Action Team
The County Council is the host authority for the Buckinghamshire Drug and Alcohol Action Team
(DAAT), a partnership of organisations (Health, Police, Probation, and the Prison service) that
have a role in tackling substance misuse. The DAAT Partnership Board is the strategic group that
is responsible for overseeing the implementation of the National Drug Strategy and the National
Alcohol Harm Reduction Strategy. This involves identifying local priorities, promoting action plans
and deploying resources with the object of achieving local targets and key performance indicators.
The aim is to help young people to resist drugs mis-use, to protect communities from drug and
alcohol related anti-social and criminal behaviour, to enable people with drug and alcohol problems
to overcome them and to stifle the availability of illegal drugs. Funding is received from the
Government and various other agencies and utilised in line with the agreed aims and objectives of
the DAAT.

Funding received by the Drug and Alcohol Action Team in 2009/10 was £4,397,002. Funding
received from external sources: £1,846,136 HO Adult Pooled Treatment Budget, £87,003 Dept of
Health YP, £299,329 HO Drug Intervention Programme, £32,000 Partner contributions, £1,252,119
PCT £68,694 BIG Lottery Fund and £34,122 Thames Valley Police.

Expenditure in 2009/10 was £3,949,178. However £222,025 received from the PCT has been
carried forward and is committed in 2010/11. A further £225,799 which is APTB and PCT funding
has been committed in the Adult Treatment Plan 2010/11.

The Council’s contribution was £632,747 (£171,036 MTP Alcohol, £273,914 MTP YP, £115,965
BCC Education funding, £71,832 Adult Social Care). However, through ABG additional resource is
received which amounts to £144,852 (£79,989 HO YP and £64,863 Dept for Children, Schools and
Families)

(c) Chilterns Conservation Board

                                                 72
Notes to the Financial Statements


The CROW Act 2000 placed a statutory duty on local authorities to prepare a management plan for
any area of outstanding natural beauty. This duty passes to a Conservation Board where such
exists. The management plan details a strategy for the area setting out a framework for nature
conservation, land and water management, recreation and access, planning and development, the
rural economy and transport within which public bodies operate. The council made a contribution of
£16,550 to the Board in 2009/10

(d) East-West Rail Consortium
The East West Rail Consortium is an organisation whose objective is the assessment of the
feasibility of, and facilitating the establishment of, a strategic rail link connecting East Anglia with
Central Southern and Western England. Membership of the consortium is open to local authorities,
businesses and other bodies who share this objective. Members pay an annual subscription to the
consortium and additional funding is sought from the Government and other agencies in pursuit of
the objective. Expenditure incurred by the consortium in 2009/10 was £4k.

(e) Joint Waste Committee for Bucks
The Committee’s objective is the closer integration of waste management within Buckinghamshire.
The purpose of the Committee is to facilitate the effective planning and delivery of local authority
waste services by establishing a framework and partnership for consultation and co-operation, so
as to make best use of the councils’ combined resources to mutual advantage. The Committee’s
finances are managed by South Bucks District Council. The Council’s contribution in 2009/10 was
£65,371. The joint committee funds various projects, and pays for the cost of a county staff
member.

(f) Milton Keynes Partnership Committee
This Committee was created by English Partnerships to ensure a co-ordinated approach to the
planning and delivery of growth and development in Milton Keynes. Its roles are to co-ordinate and
implement the delivery of growth and ensure that homes, infrastructure, jobs and community
facilities are provided as part of a joined up approach. The partnership brings together Milton
Keynes Council, Local Strategic Partnership representatives from the health, community and
business sectors and independent representatives. The Council’s contribution in 2009/10 was
£7,000

(g) South East Local Transport Consortium
The South East Local Transport Consortium (SELTA) is an organisation comprising of south east
local authorities, which has the objective of providing consistent public transport data to the
National Traveline telephone enquiry and internet site. The Council acts as treasurer to the
Consortium collecting contributions due from members and paying creditors. In 2009/10 total
expenditure was £402k.

(h) Thames Valley Safer Roads Partnership
The Thames Valley Safer Roads Partnership consists of nine Highway Authorities plus the Police,
the Crown Prosecution Service and the Courts Service. The Partnership was established to meet
the government target ‘Road Casualty Reduction 2010’ by reducing the number of people killed
and injured on the roads in the Thames Valley Region. The Highway Authorities who are members
of the Partnership receive a Road Safety Grant as part of their Local Transport Plan settlement,
and an element of this forms the source of the Partnership’s income. This income is used to fund
the safety camera enforcement process and to educate drivers about the dangers involved with
speeding. The County Council acts as treasurer to the Partnership, and in this role collects the
partners’ contributions and makes payments in respect of expenditure incurred in pursuit of the
Partnership’s objectives. In 2009/10 Buckinghamshire County Council’s contribution was £822k.




                                                  73
Notes to the Financial Statements


(i) Youth Offending Service
The Youth Offending Service is a support service for 8-18 year olds. It supports offenders and
provides positive action to prevent offending. It is funded externally by the Police, Probation
Service and Health, and internally by Children and Young Peoples Services. In 2009/10 the
Buckinghamshire County Council element of the funding was £914k with the other agencies
providing £1,142k, a total of £2,056k. Total expenditure for the year was £2,060k.

(j) Colne Valley Partnership
The Colne Valley Regional Park consists of a significant area of countryside to the west of London
and was established in the mid 1960’s to create a series of new facilities for public enjoyment. The
Colne Valley Partnership is a voluntary association of 8 local authorities and the company
Groundwork Thames Valley which exists to manage, support and promote the Park and provide
planning and financial support. The main aims of the Partnership are to maintain and enhance the
landscape of the Park, resist urbanisation, conserve the natural resources of the Park and provide
accessible facilities for recreation. The County Council acts as treasurer to the Partnership. The
Council’s contribution in 2009/10 was £9,637.

(k) Supporting People Commissioning Body for Buckinghamshire
The Council is the administering authority for the Supporting People Programme in
Buckinghamshire and is required to establish a Commissioning Body, which has overall
responsibility for the Supporting People strategy and for disbursement of the Supporting People
grant in the County. The body is a partnership of Buckinghamshire County Council, District
Councils, Buckinghamshire Primary Care Trust and Thames Valley Probation Service.

(l) Bucks Creative Partnership
This company was formally known as Bucks Art Partnership. Buckinghamshire County Council is
represented on the committee that decides the action plan, in association with District Councils and
the Arts Council South East.

(m) CADEX Agreement
CADEX is a partnership comprising Buckinghamshire County Council, Aylesbury Vale District
Council, Bucks and Milton Keynes Fire Authority, Chiltern District Council, Chesham Town Council,
South Bucks District Council and Wycombe District Council who all make annual contributions to
the partnership which are held by Buckinghamshire County Council as host authority. It was
created to contribute to the cost of a number of Police Community Support Officers, as well as
funding a Rural Transport Officer and supporting the establishment of an SLA based framework for
Voluntary and Community Sector engagement in partnership working.

47.    Reconciliation of Net (Surplus)/Deficit on the Income and Expenditure Account to
       Revenue Cash Flow

  31 March        Reconciliation of Revenue Cash Flow to I&E
                                                                              31 March 2010
    2009          (All values are shown £000)
        83,779    Net deficit/(surplus) on I&E account                                      25,810
      (117,071)   Transfer of transactions to cash basis                      20,366
         3,606    Removal of non operating transactions                      (6,853)
  (113,465)                                                                                 13,513
        (7,792)   (Decrease)/Increase in Debtors                               3,100
        (9,170)   (Increase)/Decrease in Revenue Creditors                   (9,652)
           (30)   (Decrease)/Increase in Stocks                                  101
      (16,992)                                                                             (6,451)
      (46,678)    Revenue Cash Flow Deficit/(Surplus)                                       32,872




                                                     74
Notes to the Financial Statements


48.   Movement in Cash

 Reconciliation of Movement in Cash to Net Debt                31 March        31 March
                                                                                                Movement
 (All values are shown £000)                                     2009            2010
 Cash in Hand                                                             -                 -             -
 Bank Balance                                                      (1,060)              5,681       6,741
 Net Cash Flow from Operating Activities                          (1,060)               5,681       6,741


49.   Movements in Other Current Assets
 Movement in Other Current Assets                              31 March        31 March
                                                                                                Movement
 (All values are shown £000)                                     2009            2010
 Debtors (adjusted for Bad Debts)                                   32,944          36,044          3,100
 Revenue Creditors                                               (123,943)       (133,595)         (9,652)
 Stocks                                                                177                278         101
 Net Cash Flow from Operating Activities                         (90,822)        (97,273)         (6,451)


50.   Specific Government Grants Received
                   Specific Government Grants Received (All values are shown
  2008/09                                                                                       2009/10
                  £000)
      275,335      Dedicated Schools Grant                                                        283,520
       44,197      Learning and Skills Council Grant                                               41,387
       33,463      LEATGS Grant                                                                           -
       14,775      Education Standards Grant                                                              -
          7,159    GSSG Grant                                                                      10,514
          5,588    Supporting People Grant                                                          5,588
          1,948    DAT Adult Pooled Treatment                                                       2,734
              -    ABG received from Government                                                    18,868
              -    Education Standard Grant (Cash in hands)                                        15,053
              -    LSC ACL & FE Grant Income                                                        4,324
              -    PSA Reward Grant                                                                 1,246
              -    Social Care Reform Grant                                                         1,334
              -    Standards Fund                                                                  42,050
          8,509    Total of grants below £1 million                                                 7,830
      390,974      Total                                                                          434,448


The table above lists all revenue grants received in excess of £1 million and shows the overall total
received.

51.   Collection Fund Adjustment Account

                   Collection Fund Adjustment Account (All values are shown
  2008/09                                                                                       2009/10
                  £000)
              -    Opening Balance as at 1 April                                                      245
       (1,612)     Recognition of share of surplus / (deficit) on the Collection Fund               (245)
          1,857    Transfer to neutralise the effect on the General Fund Balance                      (41)
           245     Total                                                                             (41)




                                                      75
Notes to the Financial Statements


52.   Contingent Liabilities and Contingent Assets
There are no contingent liabilities or contingent assets.

53.   Post Balance Sheet Events
Each April from 1972, public-sector pensions have been increased in line with the Retail Prices
Index ('RPI').

In the June 2010 Budget it was proposed that from April 2011 the increase in pensions will be
linked to the Consumer Prices Index ('CPI'). HM Treasury has since confirmed that from April
2011 the increase in pensions will be linked to the Consumer Prices Index ('CPI').

RPI has indeed generally been higher than CPI, and the average “gap” over the last 20 years has
been around 0.5% per annum. Hence, if this past trend continues then the future pension
increases are expected to be 0.5% less than previously projected.

Accordingly the Council’s actuaries have adjusted their assumption in relation to future levels of
pension increase by reducing the assumption by 0.5% per annum.

The re-calculation of the pension liability based on CPI has resulted in a decrease of £48.564m in
the value of the Pension Fund obligation from the RPI valuation method. Both the Pension Liability
and Pension Reserve deficit would be reduced from £562.102m to £513.538m. As this is noted as
a Post Balance Sheet Event, the Balance Sheet at 31 March 2010 has not been amended.

The effect that the Post Balance Sheet Event would have on the Balance Sheet as reported at
31 March 2010 is reflected in the table below:


                                                                  Balance Sheet      After Actuarial
   (All values are shown £000)
                                                                  31 March 2010       Adjustment

   Pension Liability                                                    (562,102)           (513,538)
   Total Other Liabilities                                             (970,417)          (921,853)
   Total Liabilities                                                 (1,117,902)        (1,069,338)
   Total Assets Less Total Liabilities                                     80,731           129,295


   Pension Reserve                                                        562,102            513,538
   Total Net Worth                                                       (80,731)         (129,295)


54.   Authorisation of Accounts for Issue
The Statement of Accounts for the year ended 31 March 2010 was authorised for issue on 24 June
2010 by the Regulatory and Audit Committee. All events up to this date have been considered for
inclusion in the accounts.




                                                  76
Trust Funds Accounts


The Council is responsible for administering trust funds, which have been established over the
years for a variety of purposes.

The Education Trust Funds are connected with the education service and were established to
provide either school prizes or grants to students.

The Thameside Preservation Trust was established in the 1930s for the purpose of acquiring and
preserving an area of land adjoining the River Thames at Bourne End.

The Colne Valley Standing Conference is a Trust formed by a consortium of local authorities with
an interest in the Colne Valley Park. Buckinghamshire County Council has administered the
Conference from 1 April 1995.

Receipts of the funds are invested internally, whilst the capital bases of the funds are either
invested in gilts or income shares of the Charities Official Investment Fund. The funds are not
included in the Council’s Balance Sheet. The financial position of the funds is set out below:

                                                                             Colne
  Restated        Trust Funds (All                           Thameside
                                           Education                         Valley        Total
   Total        values are shown                            Preservation
                                          Trust Funds                       Standing      2009/10
  2008/09       £000)                                          Trust
                                                                           Conference
                 Market Value at 1
         214                                       107               35            44             186
                April
           60    Add income                            4               -           44              48
         (61)     Less expenditure                    (4)              -         (56)             (60)
                  Movement in
         (27)                                         20               -            -              20
                investments
         186      Total                            127               35            32             194
                 Comprising
          103    Cash                                 24             35            32              91
           11    Capital                              11               -            -              11
           72    Other investments                    92               -            -              92
         186     Total                             127               35            32             194


The 2008/09 figures have been restated to correct minor addition errors in the published Statement
of Accounts for the year ending 31 March 2009.

In addition to the above the Council manages monies on behalf of clients in the form of
receiverships and other quasi trustee relationships totalling £4.393m.




                                                 77
Pension Fund Accounts


1.     Introduction
Buckinghamshire County Council administers a Pension Fund covering staff employed by the
County Council, Milton Keynes Council, the district and parish Councils of Buckinghamshire,
Thames Valley Police Authority, Buckinghamshire Fire and Rescue Service, and other scheduled
and admitted bodies. These are listed in Note 19 to these Financial Statements. Teachers, fire
fighters and police officers, for whom separate pension schemes apply, are excluded from the
Pension Fund.

The purpose of the Pension Fund is to provide defined benefits for employees and their widows,
widowers and children, based on pay and past service.

2.     Membership of Fund
The following summarises the membership of the Fund:

     31 March                                                                         31 March
                 Membership of the Fund
       2009                                                                             2010
        20,071   Contributors                                                              20,571
        11,426   Pensioners                                                                12,213
        14,775   Deferred Pensioners                                                       15,522
        46,272   Total Membership of the Fund                                             48,306


3.     Statement of Investment Principles (SIP)
In order to ensure the proper management of the Fund, the Council has adopted a Statement of
Investment Principles (SIP) in relation to the investment of the Pension Fund’s assets. The SIP can
be viewed on the Council’s pension website
http://www.buckscc.gov.uk/bcc/pensions/investments/introduction.page

4.     Further Information
The County Council publishes a separate Annual Report on the Pension Fund, which gives more
detailed information, to request a copy please send an email to pensions@buckscc.gov.uk




                                                78
Pension Fund Accounting Policies and Notes


Pension Fund Account for the Year Ended 31 March 2010

  31 March                                                                 31 March
                 Pension Fund Account (All values are shown £000)   Note
    2009                                                                     2010
                 Contributions Receivable                            3
     70,273      Employers                                                    79,678
     25,058      Employees and Members                                        27,666
      9,431      Transfers in                                                 13,694
    104,762      Total Contributions Receivable                             121,038
                 Benefits Payable                                    5
    (47,433)     Pensions                                                    (51,852)
    (16,960)     Lump Sums                                                   (18,274)
                 Payments to and on Account of Leavers               6
        (35)     Refunds of contributions                                        (36)
     (5,333)     Transfers out                                                (9,993)
     (1,487)     Administrative expenses                             7        (1,433)
   (71,248)                                                                 (81,588)
     33,514      Net Additions from Dealings with Members                     39,450
                 Returns on Investments
     24,853      Investment income                                   8        26,940
   (255,725)     Change in market value of investments               9       306,048
             -   Taxation                                            14       (1,055)
     (2,386)     Investment management expenses                      10       (3,003)
  (233,258)      Net Return on Investments                                  328,930
  (199,744)      Net Increase/(Decrease) in Fund During the Year            368,380
  1,207,157      Net Assets of the Fund as at 1 April                      1,007,413
  1,007,413      Net Assets of the Fund as at 31 March                     1,375,793


Net Assets Statement

  31 March                                                                 31 March
                 Net Assets Statement (All values are shown £000)   Note
    2009                                                                     2010
                 Investments                                         11
                 Fixed Interest Securities
     78,215      - Public Sector                                              27,531
     71,606      - Other                                                      63,397
    299,990      Equities                                                    535,765
     38,014      Index-linked Securities                                      32,016
    404,549      Managed Funds - Other                                       565,454
     65,503      Unit Trusts - Property                                      116,995
     41,408      Cash Deposits                                                15,061
             -   Derivative Contracts                                            (16)
             -   Dividend income receivable                                    3,623
    999,285      Net Investments                                           1,359,826
      8,128      Net Current Assets                                  13       15,967
  1,007,413      Net Assets at 31 March                                    1,375,793




                                                79
Pension Fund Accounting Policies and Notes


1.     Accounting Policies
The accounts have been prepared in accordance with the Code of Practice on Local Authority
Accounting and the Statement of Recommended Practice on Financial Reports of Pension
Schemes (Revised May 2007).

The accounts summarise the transactions and net assets of the Fund and do not take account of
liabilities to pay pensions and other benefits in the future. These are addressed by a triennial
valuation (see Note 15).

The Pension Fund does not form part of the Accounts of Buckinghamshire County Council.

2.     Basis of Preparation
The financial statements are prepared on an accruals basis, unless otherwise stated. That is,
income and expenditure are recognised as they are earned or incurred, not as they are received or
paid.

Foreign currency transactions are translated into sterling at the exchange rate ruling at the date of
transaction.

3.     Contributions
Contributions relating to wages and salaries paid up to 31 March 2010 have been included in these
accounts.


     2008/09       Contributions (All values are shown £000)                             2009/10

                   Employers
        25,003     Administering Authority                                                    31,622
        39,987     Scheduled Bodies                                                           43,442
         4,929     Admitted Bodies                                                             4,536
                   Employers Augmentation Costs
            31     Administering Authority                                                          -
           323     Scheduled Bodies                                                                78
               -   Admitted Bodies                                                                  -
                   Members
         7,583     Administering Authority                                                     9,417
        15,769     Scheduled Bodies                                                           16,160
         1,706     Admitted Bodies                                                             2,089
        95,331     Total Contributions                                                      107,344


4.     Transfer Values
The individual transfer values relate to transfers, which have been received and paid during the
financial year i.e. included on a cash basis.

On 31 March 2010 there were 6 transfer values out greater than £50,000, for which £1.180m had
not been paid; there were 8 transfer values in greater than £50,000, for which £1.511m had not
been received.




                                                 80
Pension Fund Accounting Policies and Notes


5.     Benefits Payable
Benefits payable includes all valid benefit claims notified during the financial year.


     2008/09       Benefits Payable (All values are shown £000)                          2009/10

                   Pensions
        19,944     Administering Authority                                                  21,494
        23,061     Scheduled Bodies                                                         25,485
         4,428     Admitted Bodies                                                           4,873
        15,509     Commutations and lump sum retirement benefits                            16,242
         1,451     Lump sum death benefits                                                   2,032
        64,393     Total Benefits Payable                                                   70,126


6.     Payments to and on Account of Leavers
                   Payments to and on Account of Leavers (All values are
     2008/09                                                                             2009/10
                   shown £000)
            28     Refunds to members leaving service                                           26
               7   Payments for members joining the state scheme                                10
               -   Group transfers to other schemes                                                -
         5,333     Individual transfers to other schemes                                     9,993
         5,368     Total Payments to and on Account of Leavers                              10,029


7.     Administrative Expenses

     2008/09       Administrative Expenses (All values are shown £000)                   2009/10

         1,329     Administration of benefits                                                1,289
            64     Actuarial fees                                                               60
            94     Legal and performance measurement fees                                       84
         1,487     Total Administrative Expenses                                             1,433


8.     Investment Income

     2008/09       Investment Income (All values are shown £000)                         2009/10

         7,934     Income from fixed interest securities                                     5,787
        11,809     Dividends from equities                                                  13,079
           650     Income from index-linked securities                                         507
           902     Interest on cash deposits                                                   168
         3,512     Income from property unit trust                                           3,539
            46     Other                                                                     3,860
        24,853     Total Investment Income                                                  26,940


Other Investment income in 2008/09 was offset by taxation costs of £0.96m, 2009/10 taxation
costs are reported as a separate line in the Fund Account.




                                                     81
Pension Fund Accounting Policies and Notes


9.      Investments
All investments are valued on a fair value basis and where there is an active market the bid price is
the appropriate quoted market price. The investment accounting information is provided by BNY
Mellon, the Fund’s custodian bank.

 Investments (All                                                        Change in
                               Value at 31   Purchases       Sales                      Value at 31
 values are shown                                                         Market
                               March 2009     at Cost      Proceeds                     March 2010
 £000)                                                                     Value
  Fixed interest securities        149,821      530,579     (597,509)         8,037          90,928
     Equities                      299,990    1,082,067    (1,002,669)       156,377        535,765
     Index-linked securities        38,014      174,378     (183,084)          2,708         32,016
     Managed funds                 404,549      132,311     (112,379)        140,973        565,454
     Unitised property funds        65,503       55,364        (5,908)         2,036        116,995
     Derivative Contracts                -        1,265          (972)          (309)           (16)
     Cash deposits                  41,408                     (9,864)       (16,483)        15,061
                                  999,285    1,975,964    (1,912,385)       293,339      1,356,203
 Outstanding dividends,
 accrued interest and                4,165                                                    3,623
 recoverable taxes
                                1,003,450                                                1,359,826


Managed funds are pooled funds, which mean that the Pension Fund is not the named owner of
specific investments. The funds include the following types of investments:
• Equities
• Fixed interest securities
• Index linked securities
• Hedge fund of funds
• Private equity fund of funds

The change in the fair value of investments during the year comprises all increases and decreases
in the fair value of investments held at any time during the year, including profits and losses
realised on sales of investments during the year. Following a change in investment strategy a
major transition took place during 2009/10 resulting in higher sales and purchases activity than
usual.

The purchase costs of investments include transaction costs, brokerage commission and other
fees incurred in the acquisition of investments.

On 31 March 2010 the assets which exceed 5% of the total value of the net assets of the Fund are
a £95.5m investment in Legal & General Investment Management’s UK Equity Index and a
£115.8m investment in Legal & General’s Europe (ex UK) Equity Index.




                                                 82
Pension Fund Accounting Policies and Notes



10.   Investment Management Expenses
The value of the fund with the fund managers as at 31 March 2010 was £1,360m. Fund manager
fees have been calculated according to the specific mandate and the associated contract
agreement as follows:

 Fund Manager                        Mandate                   Negotiated Fee Basis        Proportion
                                                                                           of Fund
 Aviva Investors                     Property                  Percentage of fund          9%
 BlackRock                           Cash / inflation plus     Percentage of fund          2%
 Blackstone Alternative Asset        Hedge fund of funds       Percentage of fund          4%
 Management
 DB Advisors                         Less constrained global   Performance related fee     7%
                                     equities
 Investec Asset Management           Less constrained global   Performance related fee     7%
                                     equities
 Legal & General Investment          Passive index-tracker     Percentage of fund          31%
 Management
 Mirabaud Investment                 UK equities               Percentage of fund          11%
 Management Limited
 Pantheon Private Equity             Private Equity            Percentage of Funds         3%
                                                               Committed & Incentive Fee
 Partners Group                      Private Equity            Percentage of fund          1%
 Royal London Asset                  Core Plus Bonds           Performance related fee     9%
 Management
 Schroders                           Less constrained UK       Performance related fee     7%
                                     equities
 Standard Life Investments           Less constrained UK       Performance related fee     8%
                                     equities

11.   Analysis of the Value of Investments
                   Analysis of the Value of Investments (All values are shown
   2008/09                                                                                 2009/10
                   £000)
                   Fixed Interest Securities
       78,215      UK public sector                                                              27,531
       71,606      UK other                                                                      63,397
      149,821      Total Fixed Interest Securities                                               90,928
                   Equities
      144,813      UK listed                                                                    238,961
      155,177      Overseas listed                                                              296,804
      299,990      Total Equities                                                            535,765
                   Other
       38,014      UK Index-linked securities                                                    32,016
      404,549      Managed funds                                                                565,454
       65,503      Unitised property funds                                                      116,995
               -   Dividend income receivable                                                     3,623
               -   Derivatives                                                                     (16)
       41,408      Cash deposits - sterling and foreign cash                                     15,061
      549,474      Total Other                                                               733,133
      999,285      Total Value of Investments                                              1,359,826


                                                       83
Pension Fund Accounting Policies and Notes


The £12.7m cash balances held by the pension fund to manage daily cash flow and to pay
pensions due were included as cash deposits in Note 11 in the investment assets in 2008/09, the
equivalent £12.6m in 2009/10 is reported within Note 13 current debtors as cash balances (not
forming part of the investment assets). £3.623m dividend income receivable in 2009/10 is included
in Note 11 the investment assets, the £4.165m dividend income receivable in 2008/09 was
reported as a current debtor in Note 13.

12.   Related Parties
Since summer 2009 the Pension Fund’s surplus cash held for day to day cash flow purposes has
been invested in a call account. A small residual balance is pooled with the County Council’s cash
balances. Cash balances were high in the first quarter prior to funding a major transition that the
Fund undertook during 2009/10 so the Fund had an average investment balance of £2.3m earning
interest of £9.5k.

13.   Current Assets and Liabilities

  2008/09        Current Assets and Liabilities (All values are shown £000)             2009/10

                 Current Debtors (Assets)
        4,886    Contributions due 31 March                                                   8,312
        4,165    Dividend income receivable                                                           -
            -    Cash balances (not forming part of the investment assets)                   12,601
        2,047    Sundry debtors and prepayments                                               1,649
      11,098     Total Debtors                                                              22,562
                 Current Creditors (Liabilities)
        (585)    Management charges                                                           (668)
        (601)    HM Revenue and Customs                                                       (650)
      (1,038)    Unpaid benefits                                                            (1,349)
            -    Borrowings                                                                 (3,520)
        (746)    Sundry accruals                                                              (408)
      (2,970)    Total Creditors                                                           (6,595)
       8,128     Net Current Debtors or (Creditors)                                         15,967


14.   Taxation
The Fund is unable to reclaim Advance Corporation Tax (ACT). However, the fund retains the
following taxation status:
(i) VAT input tax is recoverable on all fund activities by virtue of Buckinghamshire County Council
being the administering authority.
(ii) The fund is an exempt approved fund under the Income Taxes Act 1988 and is therefore not
liable to UK income tax or capital gains tax.
(iii) Income earned from investments overseas in the United States and certain other countries is
exempt from national taxation and therefore not subject to withholding tax.

15.   Actuarial Position of the Fund
In accordance with the Local Government Pension Scheme Regulations 1997 as amended,
actuarial valuations are currently made at three-yearly intervals.

The main purposes of actuarial valuations are:

(a)  to assess the contributions required to provide for benefits currently accruing to active
members;

                                                   84
Pension Fund Accounting Policies and Notes



(b)       to assess whether the funds in hand are sufficient to meet the existing commitments.

If funds are not sufficient, additional employers’ contributions are payable, whereas if the funds are
more than sufficient these may be reduced.

The Fund’s Actuary, Barnett Waddingham LLP, undertook a valuation of the Fund as at 31 March
2007 in compliance with Regulation 77(1) of the Local Government Pension Scheme Regulations
1997 (SI 1997 No 1612) as amended. On that date the market value of the assets held were
£1,205,218m, sufficient to cover 81% of the accrued liabilities assessed on an ongoing basis. The
revised employers’ contribution arrangements were effective from 1 April 2008 and these are set to
recover the deficiency over a twenty-year period.

The main assumptions used in the valuation were:

(i)       Investment return - equities                    7.6%   per annum
(ii)      Investment return - gilts                       4.7%   per annum
(iii)     Investment return - bonds and property          5.4%   per annum
(iv)      Investment return - discount rate               6.8%   per annum
(v)       Pay increases                                   4.8%   per annum
(vi)      Price inflation / pension increases             3.3%   per annum

An interim valuation took place as at 31 March 2009 which showed that the funding level had
decreased to 63%. The outcome of the next triennial valuation as at 31 March 2010 will be
published in Autumn 2010

16.     Contractual Commitments
Contractual commitments that the Fund has entered into by 31 March 2010 are:

                                                                              Amount
                                                                                                 Total
                                                                             Paid as at
      Contractual Commitments                                                                 Contractual
                                                                             31 March
                                                                                              Commitment
                                                                               2010
                                                                               $000              $000
      Pantheon Asia Fund V LP                                                     9,000            25,000
      Pantheon USA Fund Vll Limited                                               7,565            21,250
      Pantheon USA Fund Vlll Feeder LP                                           12,075            75,000
      Pantheon Global Secondary Fund IV Feeder LP                                         -        15,000
      Partners Group Global Resources 2009, LP                                    5,506            22,644
                                                                               €000              €000
      Pantheon Europe Fund V “A” LP                                               8,791            18,125
      Pantheon Europe Fund Vl LP                                                 13,650            65,000
      Partners Group Global Real Estate 2008 SICAR                                7,472            21,998
      Partners Group Global Infrastructure 2009 SICAR                             4,030            22,259




                                                     85
Pension Fund Accounting Policies and Notes


17.   Additional Voluntary Contributions (AVCs)
AVC providers secure additional benefits on a money purchase basis for those members electing
to pay additional voluntary contributions. The AVC providers to the Fund are Prudential and
Clerical Medical. Prudential invests in several funds including a with profits accumulation fund, a
deposit fund and a discretionary fund. Clerical Medical invests in with profits and unit-linked funds,
the financial year for this fund is 1 November to 31 October and the financial information included
is for this period. These amounts are not included in the Pension Fund Accounts in accordance
with regulation 5(2)c of the Pension Scheme (Management and Investment of Funds) Regulations
1998 (SI 1998 No 1831.)


  2008/09        Prudential (All values are shown £000)                                   2009/10

        4,615    Value of AVC fund at beginning of year                                        4,367
          835    Employees contributions                                                         848
         (76)    Investment income                                                               126
      (1,007)     Benefits paid and transfers out                                              (736)
       4,367     Value of AVC fund at year end                                                 4,605


 1.11.2007 -                                                                            1.11.2008 -
                 Clerical Medical (All values are shown £000)
 31.10.2008                                                                             31.10.2009
        4,128    Value of AVC fund at beginning of year                                        3,836
          523    Employees contributions                                                         388
        (747)    Investment income                                                                37
         (68)    Benefits paid and transfers out                                               (610)
       3,836     Value of AVC fund at year end                                                 3,651


18.   Contingent Liability
The Pension Fund is currently in arbitration with one of the Scheduled Bodies within the Fund,
depending on the outcome of the arbitration there is a possibility that a sundry debtor account of
£64,000 will not be paid.

19.   List of Scheduled and Admitted Bodies
Scheduled Bodies

       Buckinghamshire County Council
       Buckinghamshire & Milton Keynes Fire Authority
       Thames Valley Police Authority
       Aylesbury Vale District Council
       Chiltern District Council
       Milton Keynes Council
       South Bucks District Council
       Wycombe District Council

       Amersham Town Council
       Aston Clinton Parish Council
       Aylesbury Town Council
       Bletchley & Fenny Stratford Town Council
       Buckingham Town Council
       Bucks Valuation Tribunal Service
       Burnham Parish Council
       Campbell Park Parish Council

                                                    86
Pension Fund Accounting Policies and Notes


      Chalfont St Giles Parish Council
      Chalfont St Peter Parish Council
      Chepping Wycombe Parish Council
      Chesham Bois Parish Council
      Chesham Town Council
      Chiltern Crematorium
      Chilterns Conservation Board
      Denham Parish Council
      Farnham Royal Parish Council
      Gerrards Cross Parish Council
      Great Missenden Parish Council
      Hambleden Parish Council
      Hazlemere Parish Council
      Iver Parish Council
      Lane End Parish Council
      Little Marlow Parish Council
      Marlow Town Council
      Newport Pagnell Town Council
      Olney Town Council
      Piddington & West End Parish Council
      Princes Risborough Town Council
      Shenley Brook End and Tattenhoe Parish Council
      Shenley Church End Parish Council
      Stantonbury Parish Council
      Stony Stratford Town Council
      Wendover Parish Council
      West Bletchley Town Council
      West Wycombe Parish Council
      Winslow Town Council
      Woburn Sands Town Council
      Wolverton & Greenleys Town Council
      Wooburn Parish Council

      Amersham & Wycombe College
      Aylesbury College
      Aylesbury Vale Academy
      Buckinghamshire New University
      Beaconsfield High School
      Beechview Middle School
      Brookmead School
      Brushwood Middle School
      Castlefield School
      Chalfonts Community College
      Cottesloe School
      Cressex School
      Danesfield School
      Denbigh School
      Germander Park School
      Gerrards Cross C E School
      Glastonbury Thorn First School
      Great Marlow School
      Hamilton Primary School
      Lord Grey School
      Loudwater Combined School
      Loughton Middle School


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Pension Fund Accounting Policies and Notes


      Milton Keynes College
      New Bradwell Combined School
      Ousedale School
      Overstone Combined School
      Portfields Combined School
      Radcliffe School
      Royal Grammar School, Wycombe
      St Paul’s RC School
      Shenley Brook End School
      Sir Frank Markham School
      Southwood Middle School
      Stanton Middle School
      Stantonbury Campus
      Two Mile Ash School
      Waddesdon C E School

      Election Fees:
      Aylesbury Vale Local
      Aylesbury Vale Parliamentary
      Chiltern Local
      Chiltern Parliamentary
      Milton Keynes Local
      Milton Keynes Parliamentary
      Wycombe Local
      Wycombe Parliamentary
      South Bucks Local
      South Bucks Parliamentary

Admitted Bodies

      AMEY plc
      ASM Metal Recycling Limited
      Aylesbury Vale Advantage
      Aylesbury Vale Dial-a-Ride
      Beacon Housing Association
      Betterklean
      Bucks Association for the Blind
      Bucks Association of Local Councils
      Bucks Community Action
      Busy Bee Cleaning Service
      Catermasters
      Connaught Housing
      Connection (MKC)
      Cygnet Foods
      Excelcare
      Fremantle Trust
      Hays Specialist Recruitment
      HBS
      Heritage Care
      Hightown Praetorian and Churches Housing Association
      National Foundation for Educational Research (NFER)
      NFER Publishing
      Northgate Arinso
      Oxon and Bucks Mental Health Authority
      Paradigm Housing Association


                                           88
Pension Fund Accounting Policies and Notes


      Penn School
      Pitney Bowes
      Police Superintendent’s Association
      Race Equality Council
      Ringway Jacobs
      SDK (Environmental)
      Serco
      Superclean
      Vale of Aylesbury Housing Trust
      Walton High School
      Wolverton & Watling Way Pools Trust
      Wycombe Dial-A-Ride




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The Annual Governance Statement 2009/10



Annual Governance Statement 2009/2010

1.    Scope of responsibility

1.1   Buckinghamshire County Council (BCC) 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.
      BCC 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.

1.2   In discharging this overall responsibility, BCC is responsible for putting in place proper
      arrangements for the governance of its affairs and facilitating the effective exercise of its
      functions, which includes arrangements for the management of risk.

1.3   The Council has approved and adopted a code of corporate governance, which is consistent
      with the principles of the 2007 CIPFA/SOLACE guidance “Delivering Good Governance in
      Local Government”. A copy of the code is available on our website (Code of Governance,
      Appendix I and Appendix II).

1.4   This Annual Governance Statement (AGS) explains how BCC has complied with the code
      and the requirements of Regulation 4(2) of the Accounts and Audit Regulations 2006 in
      relation to the publication of a Statement on Internal Control.

2.    The purpose of the governance framework

2.1   The governance framework comprises the systems and processes, culture and values of the
      authority. The Council leads, engages and is accountable to its community. The framework
      enables the authority to monitor the achievement of its strategic objectives and to consider
      whether those objectives have led to the delivery of appropriate, cost-effective services.

2.2   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 not achieving policies, aims
      and objectives and therefore provides a reasonable (rather than an absolute) assurance of
      effectiveness. The system of internal control is based on an ongoing process designed to
      identify and prioritise the risks to the Council of not meeting its policies, aims and objectives
      and evaluates the likelihood of those risks being realised.

3.    The governance framework

3.1   BCC has the following arrangements in place regarding its key systems and processes which
      comprise the authority’s governance framework:

      Policy, Planning and Decision Making
3.2   BCC has grouped its priorities for the next four years into seven themes that are aligned with
      the Buckinghamshire family of Sustainable Community Strategies:
      • Build and sustain prosperity
      • Exceptional environment
      • Promote opportunities for all
      • Support people who need our help
      • Promote community spirit
      • Tailor services to meet local need
      • Deliver effective and efficient services


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      These themes form the basis of the Corporate Plan and Service Plans and provide the focus
      for the improvements that are being made in all areas of the Council. The Policy,
      Performance & Communication service facilitates delivery of the Corporate Plan, working
      closely with Services and Partners to spread best practice, track performance and strengthen
      performance against local targets.

3.3   Equality and Diversity make up one element of the Corporate Plan and work in this area is
      supported by the work of our Community Cohesion team. All our key policies are equality
      impact assessed.

3.4   Policy and decision making is undertaken via a Leader and Cabinet Structure with Cabinet
      Member portfolios. There are eight statutory committees and 17 established Local Area
      Forums/Local Community Partnerships. The local area forums/local community partnerships
      have a remit to discuss and propose local issues to the Cabinet through local area planning
      arrangements and to advise on council expenditure. Members of the public can raise issues
      of local concern and discuss these with their councillors. Every Committee report is subject
      to a review by the Head of Legal & Democratic Services and Head of Finance & Commercial
      Services / s151 Officer, to ensure that the Council is acting lawfully and that the risk
      implications of reports requiring a decision are identified.         Cross-organisation joint
      committees are established where it is appropriate, such as for the Local Area Agreement 2.

3.5   The Council has a statutory Regulatory and Audit Committee which oversees the regulatory
      and governance functions of the Council such as reviewing the work of the Audit and Risk
      Management Team and External Audit. This Committee provides independent assurance to
      the Council on risk management and internal control, and the effectiveness of the
      arrangements the Council has for these matters. This Committee also provides overview to
      the financial reporting process. The Committee meets at least quarterly and seeks to
      strengthen the assurance framework of the Council and also receives quarterly progress
      reports on internal control and risk management.

3.6   Another of the statutory committees is the Standards Committee. This Committee reviews
      and oversees Councillor training and the Council’s Code of Conduct. The Standards
      Committee receives annual reports on member conduct and deals with any complaints made
      against members.

3.7   There are also two Overview and Scrutiny Committees in operation, reduced from five during
      the second quarter of 2009/10. These are organised to hold the Cabinet and other local
      public bodies to account.

3.8   The Council obtains stakeholder views through a number of different ways, as outlined on
      the public website, coordinated by the Policy, Performance & Communication service.
      Stakeholder views are considered as part of standard reporting that underpins decision-
      making.

      Monitoring of performance and compliance
3.9   The Council has a duty to ensure that it acts in accordance with the law and various
      regulations, including European Commission Directives, in the performance of its functions.
      The Council has developed policies and procedures for its members and staff to ensure that,
      as far as possible, all understand their responsibilities both to the authority and the public.
      These procedures and policies are laid down in the Constitution, Standing Orders, Financial
      Regulations, Contracts Manual, Local Management in Schools Handbook and service
      procedure documentation.

3.10 The Council has adopted Codes of Conduct for its Members and staff and provides training
     in these areas as part of induction programmes. The Council’s Monitoring Officer, the Head


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     of Legal & Democratic Services, is responsible for monitoring and reporting on significant
     breaches of the Member code to the Standards Committee and/or the Standards Board for
     England. Member training events are frequently held and attendance is recorded. The
     Council’s Anti-Fraud and Corruption Framework (which includes whistleblowing) applies to all
     stakeholders.

3.11 The Council has established a Code of Governance which outlines the Council’s commitment
     to conducting its operations in accordance with good governance principles. The Code co-
     ordinates the various strands of governance across the organisation.         To enhance the
     Council’s governance arrangements, Heads of Service, corporate process owners and
     project managers are required to sign off an internal control self-assessment which is used to
     identify any weak areas of internal control. An action plan of improvements is built into the
     governance process. On a sample basis, these self-assessments are verified by the Internal
     Audit team.

3.12 Performance is reported quarterly at Cabinet and the Chief Officers’ Management Team
     (COMT). Service plans contain a variety of performance indicators and targets that are
     regularly reviewed by Heads of Service, Strategic Directors and the Chief Executive through
     the ‘COMTstat’ process. Members play a regular role in performance management,
     providing challenge to officers. Portfolio holders have regular meetings with Strategic
     Directors and review finance and performance indicators each month. Overview and Scrutiny
     panels monitor performance through the regular review of performance information and
     make recommendations for the improvement of services. All staff receive an annual
     appraisal of their individual performance assessed against the objectives and performance
     targets previously set. All employees also receive a series of one to ones throughout the year
     to ensure performance is consistent.

3.13 COMT and the Extended Management Team (EMT) have executive responsibilities for
     overview in ensuring that services are delivered in accordance with Council policy and
     procedures. EMT meet fortnightly.

3.14 The Council has a duty to manage its risks effectively. This is achieved through various
     mechanisms. The key corporate risks are reviewed on a quarterly basis by the Chief Officer’s
     Management Team. The EMT considers significant service risks to the authority and whether
     or not these should be escalated up to the Corporate Register due to their corporate/strategic
     significance. EMT also monitors the progress of the management of risks within service risk
     registers informed by regular reports by the Chief Auditor. EMT also has the responsibility for
     annually reviewing the adequacy of the existing Risk Management Strategy. The Chief
     Executive, via the Chief Auditor, is responsible for officer and Member awareness and
     providing guidance and training to enhance understanding of how to implement risk
     management in accordance with responsibility.

3.15 The Audit and Risk Management Team provide the Council’s Internal Audit function and
     provide an assurance function to the Council and the Head of Finance and Commercial
     Services / s151 Officer as to the adequacy of the Council’s financial and operational
     systems. The Internal Audit team are compliant with the CIPFA Code of Practice for Internal
     Audit and the Annual Internal Audit Report for 2009/10 concluded that the system of internal
     control facilitates the effective exercise of the Council’s functions. In addition to quarterly
     assignment reports sent to service managers, quarterly summary reports are sent to the
     Head of Finance and Procurement, the Chief Executive (who is required to submit a formal
     response), and the Regulatory and Audit Committee.

3.16 The Council has a Partnership Strategy, to which all key partnerships comply. Good
     governance for partnerships is covered within the strategy and the Council centrally records
     all its significant partnerships.


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3.17 The Council contributes to the delivery of the Bucks Strategic Partnership’s (LSP) objectives
     which set out a vision for the County over the coming years. The Council’s strategic planning
     priorities are directly aligned with those of the Buckinghamshire family of Sustainable
     Community Strategies. The Council is therefore better able to relate its own performance to
     the outcomes it seeks for the County. This also facilitates greater alignment of priorities
     between the Council and other key partners and service delivery agencies, such as the Fire
     Authority, Primary Care Trust and the Police.

     Financial Management of the Council
3.18 The Council has a statutory responsibility under the Accounts and Audit Regulations 2003
     (revised 2006) for ensuring that the financial management arrangements are adequate and
     effective and that there is a sound system of internal control that facilitates the effective
     exercise of the Council’s functions. The Chief Financial Officer (Head of Finance and
     Commercial Services) has the statutory responsibility under Section 151 of the Local
     Government Act 1972 for the proper administration of the Council’s financial affairs and
     specifically to:
     • Maintain accounts and financial records to meet the requirements of Statutes,
        Regulations, Accounting Conventions and Codes of Practice.
     • Be responsible for maintaining an independent audit function to carry out an examination
        of accounting, financial and other operations of the Council.
     • Put in place financial standards across the Council to deliver a framework for financial
        control, provide accurate, timely and consistent monitoring information and sound advice
        on financial decisions to be made by officers and members.

3.19 The Council has a medium term financial strategy under which it plans its finances over a
     four-year rolling period. This is considered by the Cabinet and COMT. The Council sets
     annual revenue and capital budgets that are subject to challenge by member panels and
     reviewed by Overview and Scrutiny. Budgets are monitored throughout the year by various
     mechanisms.

3.20 The Council has a set of Financial Regulations and Standing Orders as to Contracts which
     form part of the Constitution. Heads of Service are required to keep accurate financial
     records, comply with the financial control framework and take timely actions to keep spend
     within budget. Formal monthly monitoring sessions occur.

3.21 Individual Service Managers have considerable responsibility with respect to finance. These
     responsibilities include maintaining a proper system of budgetary control, maximising income
     and ensuring grant claims are submitted on time and ensuring that adequate financial
     controls are in place. The Council has adopted the principles of the DCSF Financial
     Management Standard in Schools (FMSiS). Internal audit lead the external inspection of
     FMSiS and also lead a co-ordinating group with other local authorities.

3.22 Finance staff collate financial information provide financial advice to the service managers,
     help to implement the financial control framework and ensure sound financial administrative
     systems are in place. Financial Regulations were revised in 2009 and the Financial
     Instructions are in the process of being updated during 2010 to ensure that guidance is up to
     date and relevant.

3.23 The Council’s external auditors provide independent scrutiny of the control mechanisms and
     the accuracy and legitimacy of the Council’s financial transactions. The external auditors
     also provide the Council with an assessment of their Financial Management, Financial
     Reporting, Internal Control and Value for Money systems with the Comprehensive Area
     Assessment review. Auditor reports, in addition to statutory financial reports are considered
     by the Regulatory and Audit Committee.


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3.24 A Scheme of Delegation that sets out the powers delegated to officers, the Financial
     Regulations and Contract Procedure Rules form part of the Constitution. The Constitution is
     reviewed regularly by the Monitoring Officer and is available on the Internet; any
     recommended amendments are explained in reports for approval by full Council.

     Economic, Effective and Efficient Use of Resources and Continuous Improvement
3.25 Individual service managers are responsible for ensuring that they adopt the principles of
     continuous improvement and value for money. The Procurement and Commissioning
     Service work with all services to ensure purchasing decisions maximise the economic,
     effective and efficient use of resources. In 2009 The Council started a three year
     Transformation Programme designed to make savings, whilst improving the way in which the
     Council works and how it delivers its services: There are 7 strands of transformational
     activity:
     1. Customer Focus
     2. Redesigning the Organisation
     3. Optimising Workstyles and Places
     4. Streamlining Business Processes
     5. Standardising Business Support
     6. Managing Third Party Spend
     7. Self Directed Support - Adult Social Care Transformation

3.26 The Council’s Use of Resources (including Value for Money) is also monitored by the
     external auditor within the Comprehensive Area Assessment. For 2009, the external auditor
     provided the Council with an assessment that the Council overall was “performing well”.

4.    Review of effectiveness

4.1   BCC has responsibility for conducting, at least annually, a review of the effectiveness of its
      governance framework, including the system of internal control. The Council’s review of
      effectiveness is an ongoing process using outcomes from many of the procedures described
      above. All outcomes are considered by the officers responsible for developing the Annual
      Governance Statement. Outcomes are compared with the 6 Principles of Good Governance
      outlined within the Council’s Code of Governance and the CIPFA SOLACE framework to
      ascertain whether there are any gaps in the assurance framework. Further work is
      undertaken if gaps are identified.

4.2   The review which has been undertaken for the purposes of this statement has relied upon
      the work of the Chief Executive, Head of Finance and Commercial Services/S151, the Head
      of Legal Services/Monitoring Officer , Policy, Performance & Communications service, Audit
      and Risk Management Team, the Insurance Manager, the Cabinet, our external auditors
      (The Audit Commission) and Ofsted. We have also used the assurances provided by our
      Heads of Service, corporate process owners and project managers through their signing of
      the “Certificate of Assurance over Internal Controls” self assessment document. The key
      structures and processes that have been used during 2009/10 to maintain and review the
      effectiveness of internal control are described below:

      The Council:
       • Agrees our annual budget in accordance with the Council Plan priorities;
       • Receives an annual budget report that summarises the financial position and the
          projected transactions for the year; and
       • Has agreed the Constitution that sets out the decision making structure, delegated
          authority and Financial Regulations which underpin the internal control framework.
      The Cabinet:


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The Annual Governance Statement 2009/10


        • Monitors performance against the Corporate Objectives;
        • Makes key decisions subject to inclusion on the forward plan;
        • Considers and reviews budget monitoring reports and performance reports on a
          quarterly basis;
      The Regulatory and Audit Committee:
        • Consider external auditor reports;
        • Consider annual and quarterly reports from Internal Audit;
        • Review and agree this Statement;
        • Review and agree the final accounts;
        • Consider issues of key risk identified by the Corporate Risk Register or specifically
          raised by the Head of Finance; and
        • Receive reports from the Insurance Manager??
      The Standards Committee:
        • Receive reports from the Council’s Monitoring Officer on significant breaches of the code
          of conduct and consider reports from the Standards Board for England.
      Overview and Scrutiny Committee:
        • Oversees and scrutinises decisions made by the Cabinet.
      Pension Fund Committee:
        • Oversees all matters relating to the BCC Pension Fund.
      Management Teams:
        • Various bodies such as EMT and COMT receive regular reports in relation to assurance
          (e.g. financial, risk, audit, performance).
      Internal Audit and Risk Management:
        • Provide objective and independent assurance to the Council on operational and financial
          controls via delivery of an agreed audit plan;
        • Where identified as a result of audit work, significant internal control weaknesses have
          been reported to Strategic Directors and Heads of Service at the conclusion of each
          audit. A quarterly report of significant findings is made to the Regulatory and Audit
          Committee.
        Control Risk Self Assessment:
        • All Heads of Service plus a selection of Corporate Process Owners and Project
          Managers sign off the “Certificate of Assurance over the Internal Control Framework”;
          and
        • Sample verification checking and feedback by Internal Audit.
      External Audit and Inspectorates:
        • The Head of Finance and Procurement meets the External Auditors on a monthly basis
          and any concerns they have regarding the internal control environment are raised.
          These meetings become more frequent during the closing of the accounts process when
          any material weaknesses or issues are raised;
        • The External Auditor’s reports are considered by the Regulatory and Audit Committee.
        • The External Auditor and the Internal Auditor meet bi-monthly to discuss areas of risk
          and to agree work plans to ensure good co-ordination of resources.
      The outputs from various Inspectorates in relation to the Comprehensive Area Assessment
      and for example the Care Quality Commission (previously Commission for Social care
      Inspection, also provide some assurance as to the internal control environment.

4.3   There were no issues of significance arising through our effectiveness review of our system
      of internal control other than those listed below. The internal audit process identified
      individual systems and processes with a limited system of control, but these have been
      accepted by Management and action plans put in place to address them. The internal audit
      follow up process ensures progress on these actions is reported to the Regulatory and Audit
      Committee. In addition to follow up audits, the Regulatory and Audit Committee should also
      receive    regular   reports     on   the     implementation     status  of    all   agreed


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The Annual Governance Statement 2009/10


      recommendations/management actions arising from audit reports; this was not achieved in
      2009/10 and has been identified as an action required in this report.
4.4   The annual Certificate of Assurance procedure has overall identified that strong governance
      is applied across the Services and within projects and key processes. There was one
      exception regarding the process for Sustainability which had a relatively low score of
      compliance against the key governance controls. The corporate process for Sustainability is
      under development so the outcome is not unexpected. Whilst the self assessment has
      scored lowly, the Officer responsible has developed action plans to address the gaps during
      the next year.
4.5   The Council’s review of the effectiveness of the system of internal audit (also as required by
      the Audit and Accounts Regulations 2006), is informed by:
      • A review of Internal Audit (including the co-sourced external provider) and the extent to
        which external audit placed reliance upon Internal Audit in relation to the key financial
        systems;
      • The Use of Resources assessment on internal control;
      • A self-assessment of the extent of compliance against the Chartered Institute of Public
        Finance and Accountancy (CIPFA) Code of Practice for Internal Audit (2006);
      • Performance against targets;
      • Summaries of customer satisfaction questionnaires; and
      • Effectiveness of the Regulatory and Audit Committee.

      The Internal Audit Function operates in compliance with the CIPFA Code of Practice, and
      has fulfilled its statutory role such that a reasonable opinion on the Council’s system of
      internal control could be given; however, the performance of the service when measured
      against its targets has demonstrated there is room for improvement, in particular with regards
      to the completion of the Audit Plan and individual audit assignments on a timely basis.

      There is one gap in the current internal audit process that was not satisfactorily addressed in
      2009/10; the reporting of progress on the implementation of material recommendations to the
      Regulatory and Audit Committee. It is a key role of the Regulatory and Audit Committee to
      monitor that appropriate and timely action is taken to address any material weaknesses in
      the governance framework or the system of internal control, and it is reliant on the
      information provided by Internal Audit to undertake this role effectively.

5.    Significant governance issues

5.1 It should be noted that governance issues facing the organisation are not necessarily always
    a result of weaknesses within the internal control framework.

5.2 The 2008/09 annual governance statement identified three areas of significant concern.
    These were:
    • Payroll Control Account
    The legacy issue of the control account not reconciling has been resolved by detailed
    investigation of the unreconciled items, and the eventual writing off of those actions where the
    investigation was inconclusive or no longer cost effective to pursue. A full report was
    presented to the Regulatory and Audit Committee in April 2010.

      •   Investment in Landsbanki Bank

      This was a specific issue that impacted on several Councils, and was included in the AGS
      due to the value of monies at risk following the collapse of Landsbanki Bank. During 2009/10
      good practice guidance on Treasury Management was published nationally and was
      embraced by the Council; as a result changes have been made to the process including a



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The Annual Governance Statement 2009/10


      new role for the Regulatory and Audit Committee of routinely scrutinising the Treasury
      Management Strategy and operation.

      •   Project governance

      In the 2008/9 Annual Governance Statement it was highlighted that The Council has a
      challenging improvement agenda over the coming years that needs to be underpinned with a
      robust project management process. A framework for improving major procurement and
      project outcomes has been drafted and actions, including a refresh of the project
      management guidance are in progress.

5.3   There are no material weaknesses identified from the effectiveness work carried out in
      2009/10, but an area for improvement in the governance framework has been identified; the
      Regulatory and Audit Committee should be receiving timely reports on the progress with
      implementing audit recommendations (Internal Audit and External Audit). This information is
      required so that the Committee can gain assurance that management are taking appropriate
      action to address areas of unacceptable risk exposure.

5.4   Although not identified as weaknesses, there are two developing areas during 2010/11 that
      are issues for the governance of The Council:

      •   With a greater reliance placed on the delivery of services through contracting
          arrangements it is essential that effective contract management is in place to ensure that
          the contract is delivering the contracted services efficiently, effectively and in accordance
          with the contract terms.
      •   Following the closure of the Pathfinder Project, The Council is now considering other
          options for delivering shared back office services. This will result in changes to the
          governance and key control processes in areas such as ICT, Finance and HR.

      These developments in 2010/11 require close monitoring to ensure the outcomes do not
      weaken the governance framework, or leave The Council exposed to unacceptable levels of
      risk.


5.5   Over the coming year, BCC will take steps to address the matters detailed in the appendix to
      further enhance our governance arrangements. We are satisfied that these steps will
      address the need for improvements that were identified in our review and will monitor their
      implementation and operation as part of our next annual review.

6     Declaration

6.1   We have been advised on the implications of the result of the review of effectiveness by the
      Regulatory and Audit Committee and a plan to address weaknesses and ensure continuous
      improvement of the system is in place.

      Chris Williams                          David Shakespeare
      Chief Executive                         Leader of the Council




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Governance Issues and Actions Required


    Governance Issue                       Action to be taken                  Responsible      Timescale for
                                                                               Officer          completion


    The Regulatory and Audit               Progress reports to be presented    Chief Internal   September
    Committee has not been receiving       quarterly to the Regulatory and     Auditor          2010
    progress reports on the status of      Audit Committee.
    internal and external audit
    recommendations. As a
    Committee they are tasked with
    monitoring that risk management
    is effective and therefore should
    be receiving regular updates
    where weaknesses in control have
    been identified that leave the
    Council exposed to unacceptable
    levels of risk.

    With an increase in reliance on        Review of the effectiveness of      Chief            March 2011
    outsourcing or partnership             existing contract management        Executive
    arrangements for the delivery of       guidance and procedures in
    services, Contract Management          respect of key contracts /
    must be robust to ensure that          partnerships.
    contracts are delivering efficient
    and effective services in
    accordance with the contract
    terms.

    Effective Governance and internal      Governance framework and            Chief            March 2011
    control must be maintained as an       design of the system of internal    Executive /
    outcome from the review of the         control to be clear outputs from    S151 Officer /
    delivery of the back office services   any development of new service      Head of Legal
    currently managed by The Council,      delivery arrangements, that are     Services
    including Finance, HR and ICT.         subject to the review and
                                           approval of the Head of Finance
                                           / S151 Officer, and the Head of
                                           Legal Services before going live.


.




                                                         98
Glossary of Terms and Acronyms Used


Accrue
If something is accruing, it is building up day by day. If an organisation owes money for goods and
services but has not received a bill up to the date it prepares its accounts, it will estimate what it
owes. It will then include the debt in its accounts. This estimated liability is called an accrual.

Actuary
An actuary is an expert on pension scheme assets and liabilities, life expectancy and
probabilities for insurance purposes (the likelihood of things happening). An actuary works out
whether enough money is being paid into a pension scheme to pay the pensions when they are
due.

Additional Voluntary Contributions (AVC)
An extra pension contribution you can make when a member of an employer Occupational Pension
Scheme.

Advanced Corporation Tax (ACT)
Until 1999 this tax was paid by companies on the dividends they paid. The advance corporation tax
paid could usually be offset against the corporation tax due on the company's profits.

Agency Services
These are services we provide for other organisations, or services other organisations provide for
us.

Additions
This represents capital expenditure that has been incurred on completed schemes in the year.

Amortisation
The process of charging capital expenditure, usually on intangible fixed assets, to the accounts
over a suitable period of time.

Appropriations
Amounts transferred between the revenue account and revenue or capital reserves.

Area Based Grant (ABG)
Area Based Grant is a general grant allocated directly to local authorities as additional revenue
funding to areas. It is allocated according to specific policy criteria rather than general formulae.
Local authorities are free to use all of this non-ringfenced funding as they see fit to support the
delivery of local, regional and national priorities in their areas.

Balance Sheet
A balance sheet is a summary of an organisation's financial position. It lists the values, in the
books of account on a particular date, of all the organisation's assets and liabilities. The assets
and liabilities are grouped in categories, to paint a picture of the organisation's strengths and
weaknesses.

Best Value Accounting Code of Practice (BVACOP)
This determines the structure of the Statement of Accounts. It is designed to facilitate comparisons
between different local authorities’ Statements of Accounts.

Biodegradable Municipal Waste (BMW)
The fraction of municipal waste that will degrade within a landfill. It includes, amongst other
materials, food waste, green waste, paper and cardboard.




                                                   99
Glossary of Terms and Acronyms Used


Budget
A statement which reflects the County Council’s policies in financial terms and which sets out its
spending plans for a given period. The revenue budget (spending other than capital spending) is
finalised and approved in February before the start of the financial year on 1 April.

Capital Adjustment Account (CAA)
The purpose of the Capital Adjustment Account is to contain the details of the costs of consuming
fixed assets and the resources that have already been set aside to finance capital expenditure.

Capital Financing
The means by which capital expenditure incurred by the Council is funded.

Capital Spending
Spending on assets which will be of relatively long-term value to the County Council, for example
land, buildings and equipment. They are also referred to as ‘capital expenditure’ and ‘capital
payments’.

Capitalisation
The classification of expenditure as capital rather than revenue, subject to the condition that the
expenditure yields a benefit to the Council for a period of more than one year.

Capital Receipts
Amounts received from sale of capital assets. These can only be used for ‘capital purposes’ – to
repay an existing debt, or to finance new capital spending. Amounts received that have not yet
been used are referred to a ‘capital receipts unapplied’.

Cash Flow Statement
Summarises the inflows and outflows of cash arising from transactions with third parties for capital
and revenue purposes. It provides a link between the Balance Sheet at the beginning of the year,
the Income and Expenditure Account for the year and the Balance Sheet at the end of the year.

Chartered Institute of Public Finance and Accountancy (CIPFA)
The Chartered Institute of Public Finance and Accountancy is the accountancy body which
recommends accounting practice for the preparation of local authority accounts.

Consistency
The principle that the same accounting treatments are used from year to year so that useful
comparisons can be made. Any significant change in policies must be declared in the accounting
statements.

Contingencies
Sums set aside to meet either the potential costs of activities expected to occur during future
years.

Corporate and Democratic Core
Corporate and Democratic Core represents costs associated with democratic representation and
management and corporate management. Democratic representation and management includes
all aspects of Members’ activities. Corporate management concerns the cost of the infrastructure
that allows services to be provided and the cost of providing information that is required for public
accountability. Such costs form part of total service expenditure, but are excluded from the costs of
any particular service.

Council Tax
This is a tax charged locally on private houses. It provides some of the money to run local councils.



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Glossary of Terms and Acronyms Used



County and District Chief Executive’s Group (CADEX)
A partnership created to contribute to the cost of a number of Police Community Support Officers,
as well as funding a Rural Transport Officer and supporting the establishment of an SLA based
framework for Voluntary and Community Sector engagement in partnership working.

Creditor
This is someone who is owed money.

Current Assets
These are short-term assets which are constantly changing in value, such as stocks, debtors and
bank balances.

Current Liabilities
These are short-term liabilities which are due to be paid in less than one year, such as bank
overdrafts, money owed to suppliers and employees' PAYE.

Debtor
This is someone who owes money.

Dedicated Schools Grant (DSG)
A specific grant that must be spent on schools.

Deferred Benefits
A future benefit which is being paid for in the current accounting period.

Deferred Charges
Capital expenditure incurred although a tangible fixed asset is not owned by the Council.

Deferred Liabilities
An amount already received by the County Council that is being credited to the Income and
Expenditure Account over a number of years.

Delegated Budgets
Budgets for which schools and other services have complete autonomy in spending decisions.

Depreciation
Depreciation is the drop in value of an asset due to wear and tear, age and obsolescence (going
out of date) as recorded in an organisation's financial records.

Depreciated Historic Cost
The value of an asset shown in the Balance Sheet calculated from the original cost less
depreciation to date.

Disposals
This happens when something is sold, transferred or given away.

Earmarked Reserves
These reserves represent monies set aside that can only be used for a specific usage or purpose.

Exceptional Items
Items that derive from the ordinary activities of the authority and are material in terms of the
authority’s overall expenditure and not expected to recur frequently or regularly.




                                                  101
Glossary of Terms and Acronyms Used


Extraordinary Items
Material items possessing a high degree of abnormality, which derive from events or transactions
that fall outside the ordinary activities of the authority and which are not expected to recur.

Finance Lease
Under this type of lease the organisation leasing the goods is treated as if it owns the goods. It
gains the profits that would come with ownership but it also suffers the losses.

Financial Instrument
For all terminology relating to financial instruments please see Financial Instruments section in the
glossary below.

Financial Reporting Standards (FRS)
As determined by the Accounting Standards Board.

Financial Reporting Standard 17 (FRS 17)
Sets out the accounting treatment for retirement benefits such as pensions and medical care
during retirement.

Fixed Asset
A fixed asset is one which is intended to be used for several years. Examples are buildings,
machinery and vehicles.

General Fund
The Council’s main revenue fund to which all revenue receipts are credited, and from which
revenue liabilities are discharged. The movement on the fund in year represents the excess of
income over expenditure once notional charges and credits have been replaced by the amounts
required to be funded from Council Tax. Part of the balance of the General Fund is earmarked
specifically for schools.

Generally Accepted Accounting Practice (GAAP)
The overall body of regulation establishing how accounts must be prepared in the United Kingdom.

Government Grants
Amounts received from central Government towards funding the County Council’s activities.

Gross Book Value (GBV)
The carrying value of assets in the Balance Sheet excluding deductions in relation to cumulative
depreciation.

HM Revenue and Customs (HMRC)
Formed on the 18 April 2005, following the merger of Inland Revenue and HM Customs and Excise
Departments. They ensure the correct tax is paid at the right time.

Impairment
A reduction in the value of a fixed asset arising from physical damage to the asset, dilapidation,
obsolescence or a fall in market values.

Income and Expenditure Account (I&E)
This account records an organisation's income and spending and shows the surplus or shortfall.

Individual Schools Budgets (ISB)

Infrastructure
The County Council’s network of roads, pavements and bridges.


                                                 102
Glossary of Terms and Acronyms Used


Income
Amounts which the Council receives, or expects to receive, from any source. Income includes fees,
charges, sales, capital receipts, government grants, the precept on Council Tax collection funds,
Revenue Support Grant and National Non-Domestic Rate.

Intangible Fixed Assets
Intangible assets cannot be touched. An example is computer software.

International Financial Reporting Standards (IFRS)
Standards, Interpretations and the Framework for the Preparation and Presentation of Financial
Statements.

Investments
Short term investments comprise deposits of temporary surplus funds with banks or similar
institutions. Long term investments comprise similar funds held for a period of more than one year.

Kaupthing, Singer and Friedlander (KS&F)
UK subsidiary of Landsbanki.

Landfill Allowance Trading Scheme (LATS)
The scheme allocates tradable landfill allowances to each waste disposal authority in England and
authorities can buy, sell or carry forward landfill allowances depending on usage requirements.

Lender Option, Borrower Option Loans (LOBOs)
A LOBO is a form of loan where, after an agreed initial period, and then at other pre-agreed
intervals, the lender has the option to change the interest rate. If the lender changes the interest
rate, the borrower then has the option of either continuing the loan at the new rate, or ending the
loan without penalty, by repaying the outstanding principal in full, within the contracted time
(usually five days).

Lessor
A lessor is the owner of an asset which is leased to another party.

Lessee
A lessee is the party that leases an asset that is owned by another party.

Local Area Agreements (LAA)
Sets out the priorities for a local area agreed between central government and a local area (the
local authority and Local Strategic Partnership) and other key partners at the local level.

Local Authority Accounting Panel (LAAP)
A CIPFA department that provides guidance on topical issues and accounting developments and
when appropriate provides clarification on the detailed accounting requirements.

Local Authority Business Growth Incentive Scheme (LABGI)
The Local Authority Business Growth Incentives scheme (LABGI) provides an incentive for local
authorities to promote economic growth in the area by allowing them to retain a proportion of any
increase in business rates revenues.

Local Government Association (LGA)
A voluntary lobbying organisation acting as the voice of the local government sector.

Local Government Pension Scheme (LGPS)
The pension scheme administered by Buckinghamshire County Council on behalf of its employees
and other scheduled and admitted bodies.


                                                 103
Glossary of Terms and Acronyms Used


Local Public Service Agreement (LPSA)
Government initiative whereby demanding performance targets are set to deliver improvements for
local people through partnerships with District Councils and other organisations.

Local Strategic Partnership (LSP)
A partnership that brings together public and private organisations to work together on improving
life in the region.

Long Term Borrowing
The main element of long term borrowing is comprised of loans that have been raised to finance
capital expenditure projects.

Market Value
The monetary value of an asset as determined by current market conditions at 31 March 2010.

Materiality
The concept that any omission from or inaccuracy in the statement of accounts should not be so
large as to affect the understanding of those statements by a reader.

Minimum Revenue Provision (MRP)
The minimum amount (as laid down in statute) that the County Council must charge to the
accounts each year in order to meet the costs of repaying amounts borrowed.

National Non-Domestic Rates (NNDR)
Business tax set by central government and distributed to local authorities.

Net Book Value
This is what an asset cost, as recorded in the books of account, less all the depreciation taken off
the asset for age and wear.

Net Current Replacement Cost
The estimated cost of replacing or recreating the particular asset in its existing condition and in its
existing use, i.e. the cost of its replacement or of the nearest equivalent asset, adjusted to reflect
the current condition of the existing asset.

Net Realisable Value
The expected proceeds from the sale of an asset when sold on the open market between a willing
buyer and a willing seller less all the expenses incurred in selling the asset.

Non Distributed Costs
Costs that cannot be specifically applied to a service or services and are held centrally, comprising
certain pension costs and the costs of unused shares of IT facilities and other assets.

Non Operational Assets
Fixed assets held by the Council that are not currently used in the provision of services. This
includes properties that are awaiting sale and properties and assets under construction.

Operational Assets
Assets that are used for the provision of services for which it has either a statutory or discretionary
responsibility. Infrastructure relates to the network of roads, bridges, sewers, and lighting etc. that
is a pre-condition to development and transportation.

Operating Lease
Under this type of lease, ownership of the leased goods stays with the lessor (the company leasing
out the goods).


                                                  104
Glossary of Terms and Acronyms Used


Precept
The amount collected by the District Councils on behalf of the County Council for the County
Council’s share of the Council Tax.

Prepayments
In a set of accounts this means something which has been paid out which covers a period after the
end of the accounting period. You may have paid an insurance premium for the year to 30
September. If your accounting year ends on 30 June, 3 months of your premium will be prepaid.

Primary Care Trust (PCT)
A type of NHS trust, part of the National Health Service in England, that provides some primary
and community services or commission them from other providers, and are involved in
commissioning secondary care.

Prior Period Adjustments/Prior Year Adjustments
Those material adjustments applicable to prior years arising from changes in accounting policies or
from the correction of fundamental errors. They do not include minor corrections or adjustments of
accounting estimates made in prior years.

Private Finance Initiative (PFI)
A means of securing new assets and associated services in partnership with the private sector.

Projected Unit Method
An accrued benefits valuation method in which the scheme liabilities make allowance for
projected earnings.

Provisions
When accounts are being prepared and an amount needs to be set aside for liabilities which are
known to exist, but which cannot be measured accurately, the amount set aside is called a
provision.

Prudential Code
Since 1 April 2004 the Local Government Act 2003 has required local authorities to have regard to
CIPFA’s Prudential Code. This replaces the old system of credit approvals and allows local
authorities to decide for themselves how much to borrow to finance their capital programme. Under
the Code, borrowing must be affordable, prudent and sustainable, as measured by a range of
prudential indicators, over the long term.

Public Private Partnerships (PPP)
Arrangements typified by joint working between the public and private sector, PPP’s can cover all
types of collaboration between the public and private sectors to deliver policies, services and
infrastructure. Where delivery of public services involves private sector investment in
infrastructure, the most common form of PPP is the Private Finance Initiative.

Public Service Agreement (PSA)
These were first introduced in the 1998 Comprehensive Spending Review which set around 600
performance targets for around 35 areas of Government.

Public Works Loan Board (PWLB)
A government body from which a local authority may raise long-term loans.

Receipts in Advance
Amounts received by the Council during this year that relate to goods or services to be received or
delivered in future years.



                                                105
Glossary of Terms and Acronyms Used


Related Party
This is someone, or an organisation, which controls or significantly influences another organisation.

Reserves
These are amounts set aside in one year's accounts, which can be spent in later years. Some
types of reserve can only be spent if certain conditions are met.

Revenue Expenditure
Revenue expenditure is spending on the day to day running costs of the Council. It includes
expenditure on employees, premises, transport and supplies & services.

Revenue Expenditure Funded from Capital Under Statute (REFCUS)
Expenditure which legislation classifies as capital, although it does not result in the creation of a
fixed asset. These were previously defined as ‘Deferred Charges’.

Revenue Support Grant (RSG)
A general grant from central government to contribute towards the cost of providing services.
When taken together with national non-domestic rates, it is known as the ‘Formula Grant’.

Right to Buy (RTB)
The Right to Buy scheme gives eligible Council tenants the right to buy their property from their
Council at a discount.

Royal Institution of Chartered Surveyors (RICS)
Professional body for qualifications and standards in land, property and construction.

SAP
The general ledger system developed by SAP AG used by Buckinghamshire County Council to
record financial transaction data.

Section 151 Officer
The Officer designated to assume overall responsibility for the administration of the financial affairs
of the Council and for the preparation of the Council’s Statement of Accounts.

Service Expenditure Analysis (SEA)
The SEA structure is determined by CIPFA Best Value Accounting Code of Practice 2008
(BVACOP) and reflects the format of returns required by the Government and is designed to allow
comparisons between the Statements of Accounts of different local authorities.

Service Level Agreement (SLA)
Part of a service contract where the level of service is formally defined.

Slippage
This is when delays occur in capital works and therefore payments are not made in the financial
year originally anticipated.

Statement of Investment Principles (SIP)
Principles adopted by Buckinghamshire County Council in relation to the investment of assets of
the Council’s Pension Fund.

Statement of Movement on the General Fund Balance
This statement, reconciles the outturn on the Income and Expenditure Account to the General
Fund Balance.




                                                  106
Glossary of Terms and Acronyms Used


Statement of Total Recognised Gains and Losses (STRGL)
This statement summarises all the gains and losses incurred in the financial year 2008/09 and
measures the movement in the Balance Sheet net worth.

Statement of Recommended Practice (SORP)
CIPFA/LASAAC code of practice on local authority accounting in the United Kingdom.

Stock
Raw materials and consumable goods bought but not yet used at the end of the accounting period.

Surplus
The remainder after taking away all expenditure from income.

Tangible Fixed Assets
Fixed assets that have physical substance and which yield benefits to the County Council for a
period of more than one year.

Trading Account
Services which are funded by generating income from internal and external clients.

Trust Funds
Funds administered by the Council for such purposes as charities, prizes and specific projects.

Usable Capital Receipts Reserve
A reserve held to provide an alternative source for financing future capital expenditure, and to
ensure some stability in the level of capital programmes that can be financed.

Value Added Tax (VAT)
A tax that’s charged on most goods and services that VAT-registered businesses provide in the
UK.

Voluntary Aided Schools (VA School)
Voluntary-aided schools are mainly religious or ‘faith’ schools, although anyone can apply for a
place.

Voluntary Controlled Schools (VC Schools)
Voluntary-controlled schools are similar to voluntary aided schools, but are run by the local
authority.

Work in Progress (WIP)
The value of rechargeable work which has not been recharged at the end of the financial year.

Financial Instrument Accounting is based upon some of the most complicated accounting
standards. This sub glossary has been produced to explain some terms to readers of the
accounts.

Amortised Cost Using the Effective Interest Rate Method
Amortised cost is a mechanism that sees through contractual terms to measure the real cost that
an authority bears each year from entering into a financial liability. For instance, if a premium is
paid for the right to enter into a loan at less than market rates or a period of lower than market
interest rates is granted and compensated for by a period of higher than market rates, authorities
are required to account using a single effective interest rate. Interest payable in the I+E Account
will then be recognised on a level interest rate basis over the expected life of the loan.




                                                 107
Glossary of Terms and Acronyms Used



Available for Sale Financial Instrument Reserve
The gain or loss arising from a change in the fair value of an Available for Sale financial asset
should be taken to the Available for Sale Reserve with the exception of impairment losses.

Discount
An unforeseen gain to the Council resulting from the early repayment of a loan or restructuring of a
loan portfolio.

Effective Interest Rate
When determining ‘fair value’, adjustments for transaction costs need to be taken into account
when calculating the effective interest rate of the instrument. The effective interest rate is defined
as the rate of interest that will discount all the cash flows that will take place throughout the
expected life of a financial instrument down to the fair value of the asset calculated at initial
measurement. The cash flows included in the calculation will cover both interest and principal, plus
any other consideration that the authority is scheduled to give or receive during the instrument’s
life, however described in the contract. Effective Interest Rate Accounting does not apply to all
loans. Examples of loans that do involve effective
interest rate calculations include:
• Those where interest is programmed to vary in accordance with an underlying measure that
reflects the cost of borrowing (such as LIBOR)
• Those where the variation in the interest payable is programmed at the start of the contract (such
as a stepped interest loan)

Equity Instrument
A contract that evidences a residual interest in the assets of an entity after deducting all of its
liabilities (such as an equity share in a company) – will only apply to investments in other entities
held by the authority.

Fair Value
The amount for which an asset could be exchanged or a liability settled, assuming that the
transaction was negotiated between parties knowledgeable about the market in which they are
dealing and willing to buy/sell at an appropriate price, with no other motive in their negotiations
other than to secure a fair price adjusted for transaction costs that are directly attributable to the
acquisition/issue of the instrument (e.g. fees, commissions, taxes etc).

Financial Asset
A right to future economic benefits controlled by the authority that is represented by:
• Cash
• An equity instrument of another entity
• A contractual right to receive cash (or another financial asset) from another entity
• A contractual right to exchange financial assets/liabilities with another entity under conditions that
are potentially favourable to the authority

Financial Asset Available for Sale
This category contains items that do not fit under any of the other financial asset categories.
Examples include equity shareholdings and quoted investments. Available for Sale assets are
carried at their fair value, with movements in fair value taken to the STRGL. Interest and dividends
income are charged to the I+E Account, alongside gains/losses on derecognition.

Financial Asset Fair Value through Profit and Loss
This designation is used for assets that an entity determines are held for trading and for derivatives
with a positive value. The distinctive treatment of such assets would be that all gains and loss are
posted to the I+E Account when they arise. However, the Council does not hold any assets of this
nature.


                                                  108
Glossary of Terms and Acronyms Used




Financial Asset Loans and Receivables
These are defined as financial assets (excluding derivatives) that have fixed or determinate
payments and that are not quoted in an active market. Examples include operational debtors and
bank deposits. Loans and receivables are carried at amortised cost. The I+E Account is charged
with interest receivable, impairment losses and any gain or loss on ‘derecognition’ (i.e. disposal or
maturity). Movements in fair value during the life of the asset are not recognised.

Financial Instrument
Any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another.

Financial Instruments Adjustment Account
This account has been set up to ameliorate the effects on the General Fund Balance of
exceptional occurrence of having to restate financial instruments on the 2007/08 Balance Sheet.

Financial Liability
An obligation to transfer economic benefits controlled by the authority that is represented by:
• A contractual obligation to deliver cash (or another financial asset) to another entity
• A contractual obligation to exchange financial assets/liabilities with another entity under
conditions that are potentially unfavourable to the authority

Financial Liability Amortised Cost
This category contains all of an authority’s financial liabilities that are not ‘held for trading’ or are
derivatives. Examples include operational creditors and borrowings. These liabilities are carried at
amortised cost. The I+E Account is charged with interest payable.

Financial Liability Fair Value Through Profit and Loss
This classification is used for liabilities held for trading or derivatives with a negative value. Under
FRS 26, an entity can also choose to designate a financial liability as at fair value through profit
and loss that would not by definition be required to be so classified, but the SORP does not permit
this. The distinctive treatment of such assets would be that all gains and loss are posted to the I+E
Account when they arise. However, the Council does not hold any assets of this nature.

Guarantees
A requirement for the Council to make specified payments to reimburse the holder of a debt if the
debtor fails to make payment when due in accordance with the terms of the contract.

Impairments
At each Balance Sheet date an assessment is made of whether there is objective evidence that
any financial asset or group of financial assets may be impaired (this includes assessing provision
for doubtful debts). An assessment should first be made of whether evidence of impairment exists
individually for financial assets that are individually significant. Then an assessment of impairment
should be made individually or collectively for financial assets that are not individually significant.

Overhanging Premiums and Discounts
Premiums and discounts that relate to transactions prior to 1 April 2007 for which there is either no
qualifying replacement loan or modified financial liability or for which the loan/liability has been
derecognised. Premiums and discounts do not have a separate existence as financial instruments
(as they usually represent payments made in termination of a contractual obligation) but will only
be carried on the Balance Sheet to the extent that they can be linked in substance to a
replacement transaction. If there is no replacement transaction to link to, the accumulated
premiums and discounts will need to be derecognised at 1 April 2007, no matter what year they
were first recognised.


                                                   109
Glossary of Terms and Acronyms Used




Premium
An unforeseen loss to the Council resulting from the early repayment of a loan or restructuring of a
loan portfolio.

Soft Loans
These are loans given to or received by the Council with associated interest payments at less than
market rates. Examples of Soft Loans made by the Council include loans to employees. The
SORP requires the discounted interest rate to be recognised as a reduction in the fair value of the
asset when measured for the first time. There may be occasions when an authority is in receipt of
loans that are interest free or at less than prevailing market rates. If material, the effective interest
rate of these loans will need to be calculated so that the value of the financial assistance provided
to the authority by the lender can be separated from the financing cost of the transaction. It should
be noted that this does not apply to PWLB loans – although they might have marginally lower than
market interest rates, this reflects the ability of the Government itself to borrow cheaply, not a
subsidisation of local government.




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