Gloucestershire Police Authority
Shared by: jolinmilioncherie
-
Stats
- views:
- 0
- posted:
- 6/25/2012
- language:
- pages:
- 53
Document Sample
Gloucestershire Police
Authority
Statement of Accounts
2009/10
CONTENTS
Pages
Foreword by the Treasurer to the Police Authority 1-4
Statement of Responsibilities 5
Certification of the Accounts by the Authority 5
Auditor’s Report 6-8
Statement of Accounting Policies 9 - 14
Statement of Accounts 2009/10
Income and Expenditure Account 15
Statement of Movement on the General Fund Balance 16
Statement of Total Recognised Gains and Losses 17
Balance Sheet 18
Cash Flow Statement 19
Notes to the Accounts 20 - 48
Police Pension Fund 49 – 50
Annual Governance Statement 51
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
FOREWORD BY THE TREASURER
The purpose of this foreword is to provide a clear guide to the most significant matters reported in
the accounts. It explains the purpose of the financial statements that follow and provides a
summary of the Authority’s financial activities during 2009/10 and its financial position as at 31
March 2010.
The key duty of the Police Authority is to provide an efficient and effective police service. The
Authority sets its own budget and its own council tax precept to finance expenditure not met by
central government funding. It is responsible for managing overall expenditure within the budget.
However, responsibility for day to day financial management is delegated to the Chief Constable in
accordance with the financial framework agreed by the Authority.
The format and content of the Accounts are laid down by the Code of Practice on Local Authority
Accounting in the UK: A statement of Recommended Practice (SORP) 2009 issued by CIPFA, the
professional body of public sector accountants. The Accounts have been prepared in conjunction
with the Chief Constable’s staff. The accounting policies adopted by the Authority comply with
recommended accounting practices and are explained on pages 9 to 14. The SORP sets out the
minimum requirements considered necessary for the Statement of Accounts. These are:
Explanatory foreword
Statement of Accounting policies
Statement of Responsibilities for the Statement of Accounts
Accounting Statements
Notes to the Accounts
The core financial statements comprise:
The Income and Expenditure Account, which summarises the resources that have been
generated and consumed in providing services.
The Statement of Movement on the General Fund Balance, which compares the
Authority’s spending against the funding received in the year.
Statement of Total Recognised Gains and Losses, which brings together all the
recognised gains and losses of the Authority in the year.
The Balance Sheet which shows the Authority’s financial position at 31st March 2010, with
details of its assets and liabilities.
The Cash Flow Statement, which summarises the movements of cash arising from
transactions during the year.
The Police Pension Fund Accounts, which comprise the Fund Account, the Net Assets Statement
and the related notes are shown at the end of this Statement of Accounts.
Restatement of the 2008/09 Accounts
The SORP 2009 contains two significant changes in the preparation of the 2009/10 accounts
when compared to previous years. Because of the impact of these changes on the accounts the
2008/09 comparatives have been restated accordingly.
st
From 1 April 2009 the Council Tax income included in the Income and Expenditure Account for
the year shall be the accrued income for the year. In previous years Council Tax income included
in the Income and Expenditure Account represented the amount paid from the District Council
Collection Funds. In summary a prior period adjustment has been brought into the 2008/09
accounts as follows:
1
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
£’000
Income & Expenditure Account (177)
Statement of Movement in the General Fund Balance 177
Creditors 1,153
Debtors (1,541)
Collection Fund Adjustment Account 388
st
From 1 April 2009, in accordance with IFRIC 12, the headquarters building has been treated as
an asset on the balance sheet with a corresponding liability created at the same time. In summary
a prior period adjustment has been brought into the 2008/09 accounts as follows:
£’000
I & E – Police services 5,214
I & E – Interest payable 1,659
Statement of Movement in the General Fund Balance (6,873)
Balance Sheet - Fixed Assets 10,400
Balance Sheet – Long term debtor (253)
Balance Sheet – Long term liability (16,330)
Balance Sheet - Capital Adjustment Account 5,930
Balance Sheet – PFI residual value reserve 253
Revenue Expenditure
In February 2009 the Police Authority approved a revenue expenditure budget for 2009/10 of
£102.2 million. This was funded by £59.3 million from central government and £42.9 million from
Council Tax. The police element of the Band D Council Tax was set at £193.99, an increase of
£5.54 (2.9%) compared to 2008/09. The Authority’s actual net expenditure was £109.6m as shown
in Note 1 to the accounts. After adjusting for the contribution to the Pension Fund of £7.4m
(funded by the top up grant) the expenditure for the year was £102.2 million. This expenditure
includes £1.915 million transfers to reserves (£1.85 million to the Medium Term Financial Strategy
Reserve and £0.065 million to the General Reserve).
st
At 31 March 2010 the general reserve was £3.161 million. This represents 3% of the Authority’s
revenue budget for 2010/11 of £105.354 million, which is adequate in relation to a risk assessment
st
carried out by the Constabulary of its operational needs. Specific, earmarked reserves at 31
March 2010 totalled £15.365 million, giving total revenue reserves of £18.526 million. The specific
reserves include a £9.5 million reserve to support the Medium Term Financial Strategy. The
majority of these funds are committed to fund capital expenditure, debt charges and PFI2 project
costs.
Capital Expenditure
Capital expenditure of £5.774 million was incurred in 2009/10. £3.676 million was spent on the
refurbishment of buildings, the replacement of vehicles and the development or replacement of
existing systems and equipment. The remaining expenditure of £2.098 million was on new
development work. The main items of this expenditure were £0.822 million on additional land for
the new PFI project and £0.612 million on a new Command & Control system. This capital
expenditure was financed by a combination of capital receipts, general and specific grants, loans,
capital contributions and revenue contributions. An analysis of the expenditure and financing is
given on Page 37.
A Prudential Code for Capital Finance was introduced in 2004/05, which allows the Authority to
determine the level of borrowing that is acceptable and sustainable, as opposed to the previous
system of borrowing approvals where central government determined the maximum amounts that
authorities were allowed to borrow each year.
The Authority’s authorised borrowing limit under the Prudential Code for 2009/10 was £16.113
million. New borrowing of £5.6 million was taken out during the year to replace naturally maturing
debt (£4.627 million) and to finance new capital expenditure (£0.973 million). Total loans
st
outstanding at 31 March 2010 (including accrued interest) were £14.692 million, of which £5.6
million is repayable within 12 months and £106k was accrued interest. The costs of servicing debt
in the year were £2.089 million.
2
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
Developments
Gloucestershire County Council has made a commitment to fund an additional 63 police officers
for the Constabulary. These officers form part of the Safer Community Teams created to improve
neighbourhood policing. The Authority received £2.062 million in 2009/10 to fund all 63 officers.
Further developments in 2009/10 were the opening of the Audio Visual Interview Suite replacing
two existing properties which will now be sold and the implementation of a new Command &
Control system.
The Constabulary is developing a new organisational structure to improve the efficiency and
effectiveness of the force. The current three divisions, each with five or six inspector
neighbourhood areas (INAs) will be replaced by six local policing areas with nine safer community
teams (SCTs).
The Budget for 2010/11 was approved by the Authority in February 2010. The budget is funded by
£60.772 million from government grant (2.5% increase) and £44.582 million from the Council Tax
(3.8% increase).
Economic Climate
In May 2010 the government announced cuts to funding for 2010/11. Our revenue funding is
being reduced by £0.9m and our capital funding reduced by £0.1m. Funding for the next
Spending Review period (2011/12 to 2013/14) has not been announced, although there will be a
requirement for additional efficiencies to support front line services. There will be significant
cutbacks in public spending as the Government attempts to reduce the UK deficit. The first
nd
coalition government Budget was announced on 22 June 2010.
Pension Schemes
The Authority participates in three pension schemes: the Police Pension Scheme, the New Police
Pension Scheme and the Local Government Pension Scheme (LGPS). All three schemes are
categorised as defined benefit schemes.
The Police Pension Scheme and the New Police Pension Scheme are both unfunded schemes,
meaning that there are no investment assets built up to meet pension liabilities, and cash has to
be generated to meet actual pensions payments as they fall due. Under the Police Pension Fund
Regulations 2007, if the amounts receivable by the pension funds for the year are less than the
amounts payable, the Authority must annually transfer an amount required to meet the deficit to
the pension fund. Subject to parliamentary scrutiny and approval, up to 100% of this cost is met by
a central government top-up grant. The Authority received a top up grant for 2009/10 of £7.413m
for 100% of the deficit.
The Authority is obliged to include the police pension accounts in their statement of accounts, and
the Fund Account and Notes are shown on pages 49 and 50.
In accordance with the requirements of Financial Reporting Standard No 17 – Retirement Benefits
(FRS17), as amended, the Statement of Accounts includes net pension liabilities and a pensions
reserve in the Balance Sheet, and entries in the Income and Expenditure Account and the
Statement of Movement on the General Fund Balance to reflect movements in the assets and
liabilities relating to the pension schemes. These entries are more fully explained in note 2 to the
Accounts.
st
The Actuarial valuations for the schemes at 31 March 2010 shows a combined liability of £879m
(2009 - £574 million). This liability has a substantial impact on the net worth of the Authority,
reducing the net worth of the Authority from net assets of £43m to a negative overall balance of
£836m. However, statutory arrangements for funding this deficit mean that the financial position of
the authority remains healthy.
3
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
I hope that the explanatory notes to these Accounts will be helpful. A summary set of accounts has
been produced and published on the Authority’s website. Further information on the Authority’s
finances can be obtained by:
writing to the Treasurer to the Police Authority, Pate Court, North Place, Cheltenham.
GL50 4DY,
e-mailing the Assistant Director of Finance at peter.skelton@gloucestershire.police.uk, or
viewing the Authority website at www.gloucestershirepoliceauthority.co.uk
D Bennett, CPFA
Treasurer to the Police Authority
4
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
RESPONSIBILITIES FOR THE STATEMENT OF ACCOUNTS
The Authority’s Responsibilities
The Authority 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 Treasurer.
Manage its affairs to secure economic, efficient and effective use of resources and to
safeguard its assets.
Approve the statement of accounts.
The Treasurer’s Responsibilities
The Treasurer is responsible for ensuring that the Authority’s Statement of Accounts gives a true
and fair view of the financial position of the Authority at the accounting date and its income and
expenditure for the year, in accordance with the CIPFA Code of Practice on Local Authority
Accounting.
In relation to this Statement of Accounts the Treasurer has confirmed that:
suitable accounting policies have been applied consistently;
judgements and estimates are reasonable and prudent;
the Statement complies with the Code.
The Treasurer has also confirmed that:
proper accounting records have been kept which were up to date.
reasonable steps have been taken for the prevention and detection of fraud and other
irregularities.
5
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
Independent auditor’s report to Members of Gloucestershire Police
Authority
Opinion on the accounting statements
I have audited the accounting statements, the police pension fund accounting statements and
related notes of Gloucestershire Police Authority for the year ended 31 March 2010 under the
Audit Commission Act 1998. The accounting statements comprise the Income and Expenditure
Account, Statement of Movement on the General Fund Balance, Balance Sheet, Statement of
Total Recognised Gains and Losses, Cash Flow Statement, and the related notes. The Police
pension fund accounting statements comprise the Fund Account and the related notes. The
accounting statements and police pension fund accounting statements have been prepared under
the accounting policies set out within them.
This report is made solely to the members of Gloucestershire Police Authority 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 Treasurer and auditor
The Treasurer’s responsibilities for preparing the accounting statements, including the police
pension fund accounting statements, in accordance with applicable laws and regulations 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.
My responsibility is to audit the accounting statements 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, the police pension fund
accounting statements and related notes give a true and fair view, in accordance with applicable
laws and regulations 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; and
the financial transactions of its police 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 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 accounting statements, the police pension fund
accounting statements and related notes and consider whether it is consistent with the audited
accounting statements, the police pension fund accounting statements and related notes. This
other information comprises the Explanatory Foreword and the Annual Report. I consider the
implications for my report if I become aware of any apparent misstatements or material
inconsistencies with the accounting statements, the police pension fund accounting statements
and related notes. My responsibilities do not extend to any other information.
6
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
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, the police
pension fund 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, the police 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 accounting statements, the police pension fund 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, the police pension fund accounting statements and
related notes.
Opinion
In my opinion:
The accounting statements and related notes give a true and fair view, in accordance
with applicable laws and regulations 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; and
The police pension fund accounting statements 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 police 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.
7
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
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 relevant criteria for police
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 police 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 Gloucestershire Police Authority 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.
Martin Robinson
District Auditor
Ground and 1st Floor, Westward House, Lime Kiln Close
Stoke Gifford, Bristol, BS34 8SR
September 2010
8
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
STATEMENT OF ACCOUNTING POLICIES 2009/10
General principles
The Statement of Accounts summarises the Authority’s transactions for the 2009/10 financial year
and its position at the year-end of 31st 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). The Income and Expenditure Account (on page 15) has
been prepared in the format required under the Best Value Accounting Code of Practice. The
accounting convention adopted is historical cost, modified by the revaluation of certain categories
of tangible fixed assets.
Estimation Techniques
Accounting policies and estimation techniques have been selected and exercised, having regard
to the accounting principles and contents set out in Financial Reporting Standard (FRS) 18,
specifically:
The qualitative characteristics of financial information
Relevance
Reliability
Comparability
Understandability
Materiality
Pervasive accounting concepts
Accruals
Going concern
Primacy of legislative requirements
Debtors and creditors
The Balance Sheet and the Income and Expenditure Account are maintained on an accruals basis
in accordance with the Code of Practice. This means that the accounts are prepared on the basis
st
of income due and expenditure payable in the year to 31 March 2010, whether or not the cash
has actually been received or paid in the year. Debtors have been included where an invoice has
been raised but not paid.
st
Interest payable and receivable is accrued within the accounts up to and including 31 March
2010.
VAT
It is the Authority’s policy to reclaim VAT based on the tax date of a creditor invoice and when it is
entered into the creditor system for payment rather than the point the invoice is actually paid.
Provisions and reserves
Provisions are established to cover known liabilities that fall to be met in a later accounting period.
Reserves are created in order to provide funds for future needs.
Details of reserves are shown in the notes to the Accounts on pages 45 and 46.
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.
9
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
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 Authority and that it provides services for
more than one financial year.
Assets are capitalised when they are operationally ready for service. Prior to this they are
categorised as Assets under Construction (Work in Progress).
From 1 April 1995 the Authority have selected a de minimis threshold of £20,000 below which
assets are not capitalised, apart from vehicle purchases, which are all capitalised.
Measurement
Fixed assets are valued as recommended by CIPFA and in accordance with the Statements of
Asset Valuation Practice and Guidance Notes issued by the Royal Institution of Chartered
Surveyors. Assets are classified into the groupings required by the Code. Assets are valued as
follows:
1. Land and property
The capital outlay is shown on the basis of a valuation of the Authority’s freehold and
leasehold property at 31 March 2009, undertaken by ATIS REAL Weatheralls, Chartered
Surveyors. A “de minimis” limit of £20,000 was used for these purposes. This valuation was
reviewed by BNP Paribas at 31 March 2010, with significant changes included in these
accounts.
Operational land and property is included in the Balance Sheet on the basis of open
market value in existing use, or, where this cannot be assessed because there is no
market, depreciated replacement cost.
Non-operational land and property (that is acquired for future service requirements) is
included on the basis of open market value.
In accordance with FRS11 the Balance Sheet includes the impact from the valuation of
impairments to buildings.
2. Vehicles and equipment
Vehicles, plant and equipment are included at historical cost, less accumulated
depreciation.
When an asset is revalued, any increase in value is credited to the Revaluation Reserve. Land
st
and buildings are valued every five years. The last full valuation took place at 31 March 2009 with
st
a desktop review at 31 March 2010.
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
In between valuations an annual impairment review is undertaken of properties with less than 40
years life to identify any significant drop in value. Where impairment is identified as part of the
annual review or as a result of a valuation exercise, this is accounted for by:
- where attributable to the clear consumption of economic benefits, the loss is
charged to the relevant service revenue account.
- Otherwise, written off against any revaluation gains attributable to the relevant
10
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
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 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. Capital receipts from
the disposal of assets are accounted for on an accrual basis where the receipt is certain.
Amounts in excess of £10,000 are categorised as capital receipts. Capital receipts are required to
be credited to the Capital Receipts reserve, and can then only be used for new capital investment
or set aside to reduce the Authority’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:
Land No depreciation
Operational buildings Reducing balance method over the life of the
property as estimated by the valuer
Vehicles and equipment Straight-line allocation over the expected useful life
of the asset as advised by a suitably qualified officer
Depreciation periods have been assessed for each asset. In the case of vehicles they are
depreciated fully in their year of disposal.
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.
Intangible Fixed Assets
Expenditure on the right to use a computer programme is treated as expenditure for capital
purposes. Depreciation is calculated in the same way as for tangible assets. At the end of the life
of these assets they are treated as though they were disposed of with no capital receipt.
Charges to Revenue for Fixed Assets
Depreciation for the year is charged to the Income and Expenditure Account. The Authority is not
required to raise funds to cover depreciation. However, it is required by law to set aside a
Minimum Revenue Provision (MRP) for the repayment of external debt. For 2009/10 the amount is
£828,276. The Authority has adopted the Regulatory Method for supported borrowing on capital
st
expenditure incurred prior to 1 April 2008. New borrowing in 2009/10 will use the Asset Life
11
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
Method. Provision for MRP is made over the estimated life of the asset for which the borrowing is
undertaken, using the equal instalment method.
Depreciation is therefore replaced by a 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.
Grants and contributions
Government grants are accounted for on an accruals basis. Revenue grants are credited to the
Income and Expenditure Account and the Statement of Movement on the General Fund Balance.
Capital grants are credited to a government grants unapplied account. When capital grants are
used to finance capital expenditure they are transferred to a government grants deferred account.
Amounts are subsequently released from this account to the Income and Expenditure Account
over the life of the asset to offset any depreciation charged on the assets to which the grants
relate. The result is that no depreciation charge on the grant-aided element of fixed assets is
included in net operating expenditure.
Capital contributions are treated in an equivalent manner to capital grants.
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 the
Authority’s borrowings 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.
Financial Assets
The Authority’s Financial Assets are classified as loans and receivables i.e. assets that have fixed
or determinable payments but are not quoted in an active market. They are initially measured at
fair value and carried at their amortised cost. Annual credits to the Income & 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 the loans that the Authority 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.
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.
Leasing
Liabilities under “operating” leases are not required under the Code to be shown in the Balance
Sheet since significant residual value to the lessor under such arrangements implies no effective
transfer of ownership of assets.
Liabilities under “finance” leases, where there is only a nominal residual value to the lessor, are
categorised under Government rules as capital liabilities of the Authority (the lessee).
The current practice is to fully finance capital assets in the year of purchase, other than for Police
Headquarters, Waterwells which is a PFI based contract.
12
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
Stocks
The main stocks held by the Constabulary are uniforms, cleaning tokens, postage in franking
machines, IT equipment, fleet spares and items in the stationery store. With the exception of
uniforms, stock is valued at original purchase price. In respect of uniforms, new stock is valued at
original purchase price and returned stock that can be re-issued is valued at 50% of the original
purchase price.
Overheads
The Authority has a policy of not recharging its support service overhead costs to front line service
providing departments. However for the purposes of the preparation of the Income and
Expenditure Account the full cost of support service overheads are shared between users in
proportion to the benefits received, with the exception of:
- Corporate & Democratic Core
- Non Distributed Costs
These two cost categories are defined in BVACOP and accounted for as separate headings in the
Income and Expenditure Account, as part of the Net Cost of Services.
Pensions
As part of the terms and conditions of employment of its officers and other employees, the
Authority offers retirement benefits. Although these benefits will not actually be payable until
employees retire, the Authority has a commitment to make payments that need to be disclosed at
the time that employees earn their future entitlement.
The Authority participates in three separate pension schemes:
o The Local Government Pension Scheme (LGPS) for civilian employees, administered locally
by Gloucestershire County Council. This is a funded defined benefit salary scheme, meaning
that the Authority and employees pay contributions into a fund, calculated at a level intended
to balance the pension liabilities with investment assets.
o The Police Pension Scheme (PPS) and the New Police Pension Scheme (NPPS) for police
officers. These are both unfunded defined benefit final salary schemes, administered by the
Authority, meaning that there are no investment assets built up to meet the pension liabilities
and cash has to be generated to meet actual pensions payments as they eventually fall due.
Under the Police Pension Fund Regulations 2007, if the amounts receivable by the pensions
funds for the year are less than the amounts receivable, the Authority must annually transfer
an amount required to meet the deficit to the pension fund. Subject to parliamentary scrutiny
and approval, up to 100% of this cost is met by central government pension top-up grant. If
however the pension fund is in surplus for the year, the surplus is required to be transferred
from the pension fund to the police authority, which must then repay the amount to central
government.
The costs of retirement benefits are included in the Net Cost of Service when they are earned by
employees, rather than when the benefits are eventually paid as pensions. However, the charge
made against the council tax precept is based on the cash payable in the year, so the real cost of
retirement benefits is reversed out in the Statement of Movement in the General Fund Balance.
External actuaries are appointed to provide the necessary information, and their assumptions and
calculations are detailed in the pensions note (pages 21 to 25).
13
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
Private Finance Initiative (PFI)
The Authority has entered into a long-term contractual agreement under PFI whereby the
Contractor is responsible to design, build, finance, operate and maintain the new headquarters
building at Waterwells, Gloucester. The Constabulary took up occupancy of the new headquarters
in December 2005. The contract runs for thirty years until 2035.
SORP 2009 requires that these contracts are accounted for in a manner that is consistent with the
adaptation of IFRIC 12 – Service concession arrangements. This applies where:
a. the 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 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 Police Headquarters PFI contract meets these criteria and as such is recognised as an asset
on the balance sheet along with a related liability.
The Authority has reviewed all other contracts with a value of more than £100,000 per annum and
has concluded that none fall within the scope of IFRIC 12.
The PFI transactions in the accounts are detailed on Page 34.
14
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
Income and Expenditure Account
For the year ended 31st March 2010
2008/09
restated 2009/10
Net Gross Gross Net
Expenditure Expenditure Income Expenditure
£000 £000 £000 £000
55,022 Local Policing 60,991 (13,789) 47,202
10,908 Dealing with the Public 9,488 (112) 9,376
8,387 Criminal Justice Arrangements 8,489 (719) 7,770
5,670 Road Policing 5,644 (419) 5,225
6,372 Specialist Operations 6,574 (581) 5,993
2,411 Intelligence 3,788 (1,182) 2,606
11,629 Specialist Investigation 10,248 (551) 9,697
4,308 Investigative Support 4,245 (50) 4,195
1,893 National Policing 7,277 (5,576) 1,701
877 Corporate and democratic core 865 0 865
1,337 Non distributed costs 652 0 652
108,814 Net Cost of Service 118,261 (22,979) 95,282
30 Loss on disposal of fixed assets 284
2,255 Interest payable and similar charges (Note 6) 2,089
(1,459) Interest & investment income (353)
7,368 Contribution to Pension Fund Account in respect of deficit 7,413
37,340 Pensions interest cost and expected return on pensions assets 39,827
154,348 Net operating expenditure 144,542
(2,935) Revenue support grant (Note 8) (4,601)
(33,823) Police revenue grant (Note 9) (34,754)
(7,368) Police Pension Fund Top-Up Grant (Note 10) (7,413)
(21,085) National non-domestic rates redistribution (Note 11) (19,934)
(41,484) Precepts (Note 12) (42,963)
47,653 Deficit for the year 34,877
The Income and Expenditure Account summarises the resources that have been generated and
consumed in providing services and managing the Authority during the year. It includes all day-to-
day expenses and related income on an accruals basis, as well as transactions measuring the
value of the fixed assets actually consumed and the real projected value of the retirement benefits
earned by employees in the year.
The substantial deficit on this account does not mean that immediate action is needed to reduce
expenditure or raise the Council tax precept. To gain a clear understanding of the Authority’s
financial performance for the year it is necessary to review the Statement of Movement on the
General Fund Balance.
15
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
Statement of Movement on the General Fund Balance
For the year ended 31st March 2010
2008/09
restated 2009/10
£000 £000
47,653 Deficit for the year on the Income and Expenditure Account 34,877
(47,653) Net additional amount required by statute and non-statutory proper (34,942)
practices to be debited or credited to the General Fund Balance for the
year (Note 20)
0 (Increase) Decrease in General Fund Balance for the year (65)
(3,096) General Fund Balance brought forward (3,096)
(3,096) General Fund Balance carried forward (3,161)
The Income and Expenditure Account shows the Authority’s actual financial performance for the
year, measured in terms of resources consumed and generated over the year. However, the
Authority is required to raise council tax on a different accounting basis, the main differences
being:
Capital investment is accounted for as it is financed, rather than when the 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 General Fund Balance compares the Authority’s spending against the council tax that 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.
The reconciliation statement summarises the differences between the outturn on the Income and
Expenditure Account and the General Fund Balance.
16
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
Statement of Total Recognised Gains and Losses
2008/09
restated 2009/10
£000 £000
(47,653) Deficit for the year on the Income & Expenditure Account (34,877)
7,232 Surplus arising on revaluation of fixed assets 444
91 Capital contributions received 0
1,368 Actuarial gains(losses) on pension fund assets & liabilities (Note 2) (269,608)
(38,962) Total recognised gains for the year (304,041)
The Statement of Total Recognised Gains and Losses brings together all the gains and losses of
the Authority for the year and shows the aggregate increase in its net worth. In addition to the
surplus/deficit generated on the Income and Expenditure Account, it includes gains and losses
relating to the revaluation of fixed assets and the re-measurement of the net liability to cover the
cost of retirement benefits.
The cumulative effect on reserves of prior year adjustments is detailed below.
£000
st
Original Balance sheet total net worth as at 31 March 2009 (526,252)
Prior year adjustments,
Capital Adjustment Account (5,930)
Collection Fund Adjustment Account 387
PFI Residual Value reserve (253)
st
Restated Balance sheet total net worth as at 31 March 2009 (532,048)
17
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
Balance Sheet as at 31st March 2010
2008/09 Note
restated 2009/10
£000 £000
Fixed Assets
936 Intangible Fixed Assets 21 1,268
Tangible Fixed Assets 22
Operational assets
43,710 Land and Buildings 42,655
4,393 Vehicles 3,892
5,318 Equipment 5,580
Non-operational assets
605 Surplus Assets 1,143
427 Assets under Construction 807
2,225 Investment Properties 3,040
56,678 Total Tangible Fixed Assets 57,117
57,614 Total long-term Assets 58,385
Current Assets
415 Stocks 373
11,109 Debtors and payments in advance 27 8,954
9 Cash at bank and in hand 901
20,193 Temporary Investments 28 22,181
31,726 32,409
89,340 Total Assets 90,794
Current liabilities
11,109 Creditors and receipts in advance 29 10,625
4,709 Borrowing repayable within 12 months 30 5,600
15,818 16,225
73,522 Total Assets less current liabilities 74,569
Long-term liabilities
9,001 Long-term borrowing 30 9,092
573,700 Liability relating to defined benefit pension scheme 2 878,538
16,330 PFI Finance lease 19 16,070
914 Capital grant unapplied 33 1,395
5,625 Capital grant deferred 32 5,563
605,570 910,658
(532,048) Total Assets less liabilities (836,089)
Financed by:
7,215 Revaluation Reserve 34 7,057
14,840 Capital Adjustment Account 35 15,686
718 Usable Capital Receipts Reserve 37 459
311 Revenue Contribution to Capital Reserve Unapplied 38 300
26 Capital Contributions Unapplied 36 0
387 Collection Fund Adjustment Account 39 421
15,059 Specific Reserves 40 15,365
3,096 General Reserves 41 3,161
(573,700) FRS17 Pension Reserve 2 (878,538)
(532,048) Total net worth (836,089)
The Balance Sheet incorporates balances on the funds and accounts of the Authority as at 31st
March 2010. It does not include balances on trust funds or Property Act and Court Orders Funds.
18
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
Cash Flow Statement for the year ended 31st March 2010
2008/09 restated 2009/10
£000 £000 £000 £000
Revenue Activities
Cash outflows
92,760 Cash paid to and on behalf of employees 96,837
23,709 Other operating cash payments 21,570
116,469 118,407
Cash inflows
(41,307) Council Tax receipts (42,930)
(21,085) National non-domestic rates received (19,934)
(2,935) Revenue support grant (4,601)
(33,823) Police grant (34,754)
(12,775) Other grants (16,250)
(1,172) Cash received for goods and services (1,236)
(4,370) Other operating cash receipts (4,992)
(117,467) (124,697)
(998) Net Cash Flow (note 46) (6,290)
Servicing of Finance
Cash outflows
2,174 Interest paid 2,079
Cash inflows
(1,256) Interest received (636)
918 1,443
(80) (4,847)
Capital Activities
Cash outflows
4,268 Purchase of fixed assets (note 47) 5,660
Cash inflows
(305) Sale of fixed assets (1,199)
(1,422) Capital grants received (2,063)
2,541 2,398
2,461 Net cash inflow before financing (2,449)
Management of Liquid Resources
(2,610) Net increase (decrease) in short term deposits (note 48) 2,270
Financing activities (note 48)
Cash outflows
4,627 Repayments of amounts borrowed 4,627
276 Capital element of finance lease payment 260
Cash inflows
(4,627) New loans raised (5,600)
276 (713)
127 Net (increase)decrease in cash (note 49) (892)
This consolidated statement summarises the inflows and outflows of cash arising from
transactions with third parties for revenue and capital purposes. Cash is defined for the purpose of
this statement as cash in hand and deposits repayable on demand less overdrafts repayable on
demand.
19
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
NOTES TO THE ACCOUNTS
1. Subjective analysis of spending
2008/09
restated 2009/10
£000 £000
55,457 Police pay and allowances 56,873
26,690 Civilian pay and allowances 28,036
1,796 Other employee expenses 1,466
10,850 Police pensions 11,100
(4,464) FRS17 Pension costs (4,598)
5,000 Premises 5,093
2,175 Transport 2,132
13,199 Supplies and services 12,720
1,450 Agency and contracted services (Note 3) 1,476
13,952 Gain/Loss on revaluation of assets (1,000)
4,343 Depreciation 4,963
130,448 Gross Operating Expenditure 118,261
Income
(14,294) Specific grants (Note 4) (14,279)
(1,412) Amortisation of government grants ( Note 32) (1,643)
(5,928) Income from fees and charges (Note 5) (7,057)
108,814 Net Expenditure after income from fees and charges 95,282
2,255 Interest paid (Note 6) 2,089
(1,459) Interest and investment income (353)
37,340 Pension interest costs and expected return on pension assets 39,827
146,950 Net operating expenditure 136,845
(44) Transfers to earmarked reserves 305
1,135 Revenue contributions to capital 1,725
(16,015) Transfer from capital adjustment account (Note 7) (1,491)
7,368 Contribution to Pension Fund Account in respect of deficit 7,413
(32,876) Contribution from FRS17 pensions reserve (35,230)
106,518 Net expenditure to be met from Grants & Taxation 109,567
(2,935) Revenue Support Grant (Note 8) (4,601)
(33,823) Police Revenue Grant (Note 9) (34,754)
(7,368) Police Pension Fund Top-Up Grant (Note 10) (7,413)
(21,085) National non-domestic rates redistribution (Note 11) (19,934)
(41,307) Precepts (Note 12) (42,930)
0 (Increase) Decrease in General Fund Balance for the year (65)
20
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
2. Pension costs
As part of the terms and conditions of employment of its officers and other employees, the
Authority offers retirement benefits. Although these benefits will not actually be payable until
employees retire, the Authority has a commitment to make payments that need to be disclosed at
the time that employees earn their future entitlement.
The Authority participates in three separate pension schemes:
o The Local Government Pension Scheme (LGPS) for civilian employees, administered locally
by Gloucestershire County Council. This is a funded defined benefit salary scheme, meaning
that the Authority and employees pay contributions into a fund, calculated at a level intended
to balance the pension liabilities with investment assets.
o The Police Pension Scheme (PPS) and the New Police Pension Scheme (NPPS) for police
officers. These are both unfunded defined benefit final salary schemes, administered by the
Authority, meaning that there are no investment assets built up to meet the pension liabilities
and cash has to be generated to meet actual pensions payments as they eventually fall due.
Under the Police Pension Fund Regulations 2007, if the amounts receivable by the pensions
funds for the year are less than the amounts receivable, the Authority must annually transfer
an amount required to meet the deficit to the pension fund. Subject to parliamentary scrutiny
and approval, up to 100% of this cost is met by central government pension top-up grant. If
however the pension fund is in surplus for the year, the surplus is required to be transferred
from the pension fund to the police authority, which must then repay the amount to central
government.
Transactions relating to retirement benefits
The costs of retirement benefits are included in the Net Cost of Service when they are earned by
employees, rather than when the benefits are eventually paid as pensions. However, the charge
made against the council tax precept is based on the cash payable in the year, so the real cost of
retirement benefits is reversed out in the Statement of Movement in the General Fund Balance.
The following transactions have been made in the Income and Expenditure Account and the
Statement of Movement in the General Fund Balance during the year:
2009/10 2008/09
£000 £000
Local Government Pension Scheme (LGPS)
Income and Expenditure Account
Net cost of services
Current service cost 1,909 2,197
Past service costs 0 659
Curtailment & settlement costs 17 156
Net operating expenditure
Interest cost 3,369 3,336
Expected return on assets in the scheme (1,941) (2,596)
Net charge to the Income & Expenditure Account 3,354 3,752
Statement of Movement in the General Fund Balance
Reversal of net charges made for retirement benefits in
accordance with FRS17 (3,354) (3,752)
Amount charged against the General Fund Balance for pensions in
the year: Employers' contributions payable to the scheme 3,460 3,292
21
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
2009/10 2008/09
£000 £000
Police Pension Scheme (PPS)
Income and Expenditure Account
Net cost of services
Current service cost 13,300 14,600
Past service costs 0 0
Net operating expenditure
Interest cost 38,000 36,400
Net charge to the Income & Expenditure Account 51,300 51,000
Statement of Movement in the General Fund Balance
Reversal of net charges made for retirement benefits in (51,300) (51,000)
accordance with FRS17
Actual amount charged against the General Fund Balance for
pensions in the year: Retirement benefits payable to pensioners 18,700 20,400
2009/10 2008/09
£000 £000
New Police Pension Scheme (NPPS)
Income and Expenditure Account
Net cost of services
Current service cost 1,300 1,100
Past service costs 0 0
Net operating expenditure
Interest cost 400 200
Net charge to the Income & Expenditure Account 1,700 1,300
Statement of Movement in the General Fund Balance
Reversal of net charges made for retirement benefits in (1,700) (1,300)
accordance with FRS17
Actual amount charged against the General Fund Balance for
pensions in the year: Retirement benefits payable to pensioners (1,120) (600)
In addition to the recognised gains and losses included in the Income and Expenditure Account,
actuarial gains and losses of -£269,608,000 were included in the Statement of Total Recognised
Gains and Losses. The cumulative amount of actuarial gains and losses recognised in the
Statement of Total Recognised Gains and Losses is -£230,552,000:
£000
LGPS (28,652)
Police Pension Scheme (196,000)
New Police Pension Scheme (5,900)
Total (230,552)
The cumulative Actuarial Gains and Losses are based on Actuarial Gains and Losses from the
2004/05 accounting period onwards.
22
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
Assets and liabilities in relation to retirement benefits
Reconciliation of present value of the scheme liabilities:
LGPS PPS NPPS
2009/10 2008/09 2009/10 2008/09 2009/10 2008/09
£000 £000 £000 £000 £000 £000
st
As at 1 April (47,738) (46,716) (553,100) (529,700) (3,900) (1,600)
Current service cost (1,909) (2,197) (13,300) (14,600) (1,300) (1,100)
Interest cost (3,369) (3,336) (38,000) (36,400) (400) (200)
Contributions by scheme (1,360) (1,278) (4,400) (4,400) (600) (400)
participants
Transfers (in)out - - 400 200 (500) (200)
Actuarial gains & losses (37,309) 5,641 (237,300) 7,200 (6,200) (400)
Benefits paid 1,085 963 22,700 24,600 - -
Past service costs 0 (659) - - - -
Losses on curtailments (17) (156) - - - -
st
As at 31 March (90,617) (47,738) (823,000) (553,100) (12,900) (3,900)
Reconciliation of fair value of the scheme assets:
LGPS
2009/10 2008/09
£000 £000
st
As at 1 April 31,018 35,804
Expected rate of return 1,941 2,596
Actuarial gains/ (losses) 11,201 (11,073)
Employers contributions 3,460 3,292
Contributions by scheme participants 1,444 1,362
Benefits paid (1,085) (963)
st
As at 31 March 47,979 31,018
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 scheme has made a positive return on assets in the year of £13.142m (2008/09: £8.362m
negative return).
Scheme History
2005/06 2006/07 2007/08 2008/09 2009/10
£000 £000 £000 £000 £000
Present value of liabilities
- LGPS (47,740) (51,126) (46,716) (47,738) (90,617)
- Police Pension Scheme (629,500) (612,300) (529,700) (553,100) (823,000)
- New Police Pension - (800) (1,600) (3,900) (12,900)
Scheme
- Total (677,240) (664,226) (578,016) (604,738) (926,517)
Fair value of assets in LGPS 29,127 34,176 35,804 31,018 47,979
Surplus (deficit) in the
scheme
- LGPS (18,613) (16,950) (10,912) (16,720) (42,638)
- Police Pension Scheme (629,500) (612,300) (529,700) (553,100) (823,000)
- New Police Pension - (800) (1,600) (3,900) (12,900)
Scheme
- Total (648,113) (630,050) (542,212) (573,720) (878,538)
23
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
The Authority has elected not to restate the fair value of scheme assets for previous periods as
permitted by FRS17 (as revised). The liabilities show the underlying commitments that the
authority has in the long run to pay retirement benefits. The total liability of £879m has a
substantial impact on the net worth of the Authority as recorded in the Balance Sheet, resulting in
a negative overall balance of £836m. However, statutory arrangements for funding the deficit
mean that the financial position of the authority remains healthy:
The deficit on the LGPS will be made good by increased contributions over the remaining
working life of employees, as assessed by the scheme actuary.
Finance is only required to be raised to cover police pensions when the pensions are actually
paid.
st
The total contributions expected to be made to the LGPS by the Authority in the year to 31 March
2011 is £3.45m.
The projected current service costs for the Police Schemes for 2010/11 are for the Police Pension
Scheme £24.8 million (from £13.5 million in 2009/10) and for the New Police Pension Scheme
£3.3 million (from £1.1 million in 2009/10). The current service cost represents the increase in the
benefits earned by the employees in the current period based on their pay and length of service.
Basis for estimating assets and liabilities
Liabilities have been assessed on an actuarial basis using the projected unit method, an estimate
of the pensions that will be payable in future years dependent on assumptions about mortality
rates, salary levels etc. Both the Police Pension Schemes and the Local Government Pension
Scheme have been assessed by Hymans Robertson LLP, an independent firm of actuaries.
Estimates for the Local Government Pension Scheme have been based on the latest full valuation
st st
of the scheme as at 31 March 2007. The next formal valuation is due at 31 March 2010.
The principal assumptions used by the Actuary have been:
LGPS Police Pension
Schemes
2009/10 2008/09 2009/10 2008/09
Long term expected rate of return on
assets in the scheme:
Equity investments 7.8% 7.0% - -
Bonds 5.0% 5.4% - -
Property 5.8% 4.9% - -
Cash 4.8% 4.0% - -
Mortality Assumptions:
Longevity at 65 for current pensioners:
Male 22.7 20.4 22.6 22.6
Female 26.1 23.4 26.0 26.0
Longevity for future pensioners:
Male 24.8 22.6 24.2 24.2
Female 28.3 25.5 27.7 27.7
Rate of inflation 3.8% 3.1% 3.8% 3.1%
Rate of increase in salaries 5.3% 4.6% 5.3% 4.6%
Rate of increase in pensions 3.8% 3.1% 3.8% 3.1%
Expected return on assets 6.9% 5.9% - -
Rate for discounting scheme 5.5% 6.9% 5.5% 6.9%
liabilities
Take-up of option to convert annual 50% pre 50% 90% old 90%
pension into retirement lump sum 1/4/08 scheme, no
75% post allowance
31/3/08 new
scheme
24
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
The Police Pension Schemes have no assets to cover their liabilities. The Local Government
Pension Scheme’s assets consist of the following categories, by proportion of the total assets
held:
2009/10 2008/09
Equity investments 67% 50%
Bonds 24% 25%
Property 6% 8%
Cash 3% 17%
100% 100%
History of experience gains and losses
The actuarial gains identified as movements on the Pensions Reserve in 2009/10 can be
st
analysed into the following categories measured as a percentage of assets or liabilities at 31
March 2010:
2005/06 2006/07 2007/08 2008/09 2009/10
% % % % %
LGPS
Differences between the expected and 22.75 (10.93) (30.49) (18.19) 77.76
actual return on assets
Experience gains & losses on liabilities (0.06) 0.06 1.91 0.01 0.04
Police Pension Scheme
Experience gains & losses on liabilities (0.78) (6.91) (1.28) 2.89 (0.81)
New Police Pension Scheme
Experience gains & losses on liabilities - (1.13) (6.25) 20.51 (6.99)
3. Agency and Contracted Services
2009/10 2008/09
£000 £000
Forensic Science Service 626 608
Fingerprint Information System 63 63
Crime & Disorder Act Grants 399 283
Mutual Aid – payments made 28 79
Support Service Contracts - Gloucestershire County Council 229 273
Other Services 131 144
Total 1,476 1,450
25
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
4. Specific Grants
2009/10 2008/09
£000 £000
Home Office Grants
Security Grant 4,232 3,998
Crime Fighting Fund Grant 2,433 2,433
Additional Rule 2 2,053 1,815
Basic Command Unit 324 286
Police Community Safety Officers 2,562 2,873
Private Finance Initiative (PFI) 2,261 2,261
Criminal Justice Board 245 154
IPLDP 0 238
Specials Initiative 0 57
No Witness 0 5
Other Home Office Grants 169 174
14,279 14,294
5. Income from Fees and Charges
2009/10 2008/09
£000 £000
Special Services 619 633
Camera Project 274 351
Gloucestershire County Council - Police Officers (Note 18) 2,062 1,473
Mutual Aid – payments received 74 71
Hypothecation – POCA 346 307
Court orders 23 0
Operation Largo 170 0
ACPO Grant – Regional Intelligence Unit 1,018 866
Vehicle Recovery 540 529
Seizure of Uninsured Vehicles (26) 13
Software Development Project (5) 22
Sales Income 181 167
Firearms Certificates 85 53
Training Courses 16 104
Rents 129 82
Crime Records Bureau 246 167
Abstraction Reports 89 48
Tri Service Recharge 436 366
Operation Outlook 0 61
Special Branch 66 47
Operation Ironman 0 60
LAA agreements 183 45
Miscellaneous 531 463
TOTAL 7,057 5,928
In addition to the above income the Authority received £12,200 worth of goods and services
from sponsors and donors during the year (£14,525 in 2008/09).
26
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
6. Interest payable and similar charges
2008/09
2009/10 restated
£000 £000
Interest payable 2,089 2,255
2,089 2,255
7. Income & Expenditure Account - Contribution from capital adjustment account
The Authority is required by statute to set aside a minimum revenue provision (MRP) for the
redemption of external debt. For 2009/10 the amount is £828,276.
2008/09
2009/10 restated
£000 £000
Provision for depreciation 4,963 4,343
Provision for (gain)loss on revaluation of assets (1,000) 13,952
Transfer from Government grant deferred account (1,644) (1,412)
2,319 16,883
Less: Minimum Revenue Provision (MRP) (828) (868)
Transfer from Capital Adjustment Account 1,491 16,015
8. Revenue support grant
Revenue support grant (RSG) is paid by the Government to all authorities, using a
distribution formula.
9. Police revenue grant
The revenue grant is provided by the Home Office as part of the funding required by an
authority to finance a budget in line with the Government’s assessment. The balance of
funding is from business rates, revenue support grant and Council Tax.
10. Police Pension Top-Up Grant
The Authority operates a Pension Fund, which is balanced to nil at the end of the year. The
Authority receives a Top-Up Grant from the Home Office equal to this deficit to balance the
fund.
11. National non-domestic rates income
The national non-domestic rates (or business rates) are collected by District Councils, paid
to the Government, and then distributed to all local authorities in proportion to population.
The amount received by an authority is taken into account by the Government in
determining the RSG to be paid.
27
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
12. Precepts
The difference between the budget and the funding provided by the Government is met from
local taxpayers via the Council Tax. The amount required from the local taxpayers is
“precepted” by the Police Authority on the District Councils in Gloucestershire who include
this in their Council Tax levies. For 2009/10 the Gloucestershire Police Authority’s budget
gave rise to a Council Tax (police element) at Band D of £193.99 per dwelling (compared
st
with £188.45 per dwelling in 2008/09). From 1 April 2009 the Council Tax income included
in the Income and Expenditure Account for the year shall be the accrued income for the
year. In previous years Council Tax income included in the Income and Expenditure
Account represented the amount paid from the Collection Fund. Note 1 contains the amount
paid from the Collection Fund.
13. Seconded officers
2009/10 2008/09
£ £
Cost of police officers on secondment 673,132 515,381
Expenditure in the Income and Expenditure Account does not include the cost of police
officers on secondment. The Constabulary was fully reimbursed for this cost by the
organisations with whom the officers were on secondment.
14. Income & Expenditure Account - Police Authority administrative costs and members’
allowances
2009/10 2008/09
£ £
Costs directly attributable to administration of Police
Authority 726,482 739,248
Allowances & expenses paid to members 184,893 177,517
Number of members 17 17
In accordance with the Authority’s policy on overhead apportionment, no overheads are
allocated to the Police Authority.
The allowance scheme is based on the payment of salary reflecting the role undertaken
within the Authority, by each of the Members. This Authority has chosen to make payments
based on the lowest point on each band.
Details of the Member’s Allowance Scheme can be found on the Police Authority’s website
www.gloucestershirepoliceauthority.co.uk.
28
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
15. Remuneration of Senior Staff
The Authority is required, under Regulation 4 of the Accounts and Audit (Amendment No.2)
(England) Regulations 2009, to report the numbers of staff with pay and benefits in excess
of £50,000 in multiples of £5,000. This includes the remuneration of senior employees and
relevant police officers which are also disclosed individually. The numbers for 2008/09 have
been re-stated following an amendment to the calculation methodology used.
Number of Employees
Remuneration Band 2009/10 2008/09
£50,000 - £54,999 71 62
£55,000 - £59,999 22 24
£60,000 - £64,999 8 9
£65,000 - £69,999 5 7
£70,000 - £74,999 6 5
£75,000 - £79,999 3 4
£80,000 - £84,999 7 5
£85,000 - £89,999 3 1
£90,000 - £94,999 0 0
£95,000 - £99,999 0 0
£100,000 - £104,999 1 1
£105,000 - £109,999 0 1
£110,000 - £114,999 2 0
£115,000 - £119,999 0 0
£120,000 - £124,999 0 0
£125,000 - £129,999 0 0
£130,000 - £134,999 0 0
£135,000 - £139,999 0 0
£140,000 - £144,999 0 1
The Authority is required, under Regulation 4 of the Accounts and Audit (Amendment No.2)
(England) Regulations 2009, to disclose individual remuneration details for senior
employees and relevant police officers. Details for 2009/10 and 2008/09 are as follows:
29
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
Total Total
2009/10 Remuneration Remuneration
Salary excluding including MEMO:
(including Compensation pension Employers pension Employees
fees & Expense for loss of Benefits in Other contributions Pension contributions Pension
Post holder allowances) Bonuses allowances office Kind Payments 2009/10 Contributions 2009/10 Contributions
information £ £ £ £ £ £ £ £ £ £
Chief Constable A 108,126 0 5,792 0 0 0 113,918 23,304 137,222 10,592
(to 01/01/10)
Chief Constable B 32,736 0 12,584 0 569 0 45,889 7,590 53,479 3,450
(from 02/01/10)
Post total 140,862 0 18,376 0 569 0 159,807 30,894 190,701 14,042
DCC A 63,546 0 6 0 1,715 0 65,267 14,770 80,037 6,713
(to 31/10/09)
DCC B 46,552 0 0 0 1,972 0 48,524 10,705 59,229 4,866
(from 01/11/09)
Post total 110,098 0 6 0 3,687 0 113,791 25,475 139,266 11,579
ACC - Operational services A 67,368 0 0 0 2,760 0 70,128 14,664 84,792 6,666
(to 31/10/09)
ACC - Operational services B 40,332 0 3,404 0 0 0 43,736 9,589 53,325 4,316
(from 22/10/09)
Post total 107,700 0 3,404 0 2,760 0 113,864 24,253 138,117 10,982
ACC - Corporate services 96,280 0 25,181 0 1,451 0 122,912 22,528 145,440 10,239
PA Chief Executive 85,449 0 384 0 0 0 85,833 13,843 99,676 6,409
PA Treasurer 33,343 0 103 0 0 0 33,446 5,401 38,847 2,401
Director of Finance 74,768 0 1,190 0 0 0 75,958 12,112 88,070 5,383
Director of People 74,768 0 1,170 0 0 0 75,938 12,112 88,050 5,383
Notes:
1. Taxable relocation costs are included in the Expense allowances column (Chief Constable B - £12,584 & ACC Corporate services - £20,922)
2. The expense allowances also refers to the lump sum car allowance paid to officers who do not take up their entitlement for a provided car and the taxable value of payments
made to officers for business mileage undertaken in their private vehicles.
3.The benefits in kind entries do not refer to cash payments made to the officers but to the notional value of the benefit provided instead of cash payments. The main benefit being the
provision of a car for which the officer is then taxed (and for which the officers also make a contribution in respect of private use).
4. The employees pension contribution represents a deduction made from each individuals salary.
30
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
Total Total
2008/09 Remuneration Remuneration
Salary excluding including MEMO:
(including Compensation pension Employers pension Employees
fees & Expense for loss of Benefits in Other contributions Pension contributions Pension
Post holder allowances) Bonuses allowances office Kind Payments 2008/09 Contributions 2008/09 Contributions
information £ £ £ £ £ £ £ £ £ £
Chief Constable 134,373 0 7,633 0 141 0 142,147 30,277 172,424 13,762
DCC 106,670 0 0 0 3,196 0 109,866 24,772 134,638 11,259
ACC - Operational services A 21,862 0 1,605 0 0 0 23,467 4,236 27,703 1,925
(to 17/6/08)
ACC - Operational services B 80,241 0 0 0 2,179 0 82,420 18,323 100,743 8,342
(from 16/6/08)
Post total 102,103 0 1,605 0 2,179 0 105,887 22,559 128,446 10,267
ACC - Corporate services A 23,676 0 0 0 541 0 24,217 4,690 28,907 2,117
(to 15/6/08)
ACC - Corporate services B 76,089 0 5,979 0 0 0 82,068 17,772 99,840 8,078
(from 2/6/08)
Total 99,765 0 5,979 0 541 0 106,285 22,462 128,747 10,195
Police Authority
Chief Executive 83,267 0 1,168 0 0 0 84,435 13,489 97,924 6,245
Director of Finance 72,859 0 1,067 0 0 0 73,926 11,803 85,729 5,246
Director of People 72,491 0 1,065 0 0 0 73,556 11,803 85,359 5,246
Notes:
1. The Police Authority Treasurer was an employee of Gloucestershire County Council (GCC) in 2008/09. GCC charged the Police Authority £39,274 for this service in 2008/09.
2. There were no taxable relocation costs incurred in 2008/09.
3. The expense allowances mainly refers to the lump sum car allowance paid to officers who do not take up their entitlement for a provided car and the taxable value of payments
made to officers for business mileage undertaken in their private vehicles.
4.The benefits in kind entries do not refer to cash payments made to the officers but to the notional value of the benefit provided instead of cash payments. The main benefit being the
provision of a car for which the officer is then taxed (and for which the officers also make a contribution in respect of private use).
5. The employees pension contribution represents a deduction made from each individuals salary.
31
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
16. Related Party Transactions
The Authority is required to disclose material transactions with related parties – bodies or
individuals that have the potential to control or influence the Authority or to be controlled or
influenced by the Authority. Disclosure of these transactions allows readers to assess the
extent to which the Authority 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 Authority.
Central government has effective control over the general operations of the Authority. It is
responsible for providing the statutory framework within which the Authority operates and
provides the majority of funding in the form of grants:
2009/10
£000
General Revenue Grants 59,289
Specific Revenue Grants 21,692
Capital Grants 1,156
82,137
Members of the Authority have direct control over the Authority’s financial and operating
policies. The Chief Executive of the Authority has written to all Members explaining the
requirement and the need for disclosure. No instances of transactions involving related
parties have been declared. The Register of Members’ Interest is open to public inspection
at Pate Court, Cheltenham.
Officers – during 2009/10 there were no material declared related party transactions to
disclose.
Gloucestershire County Council has contracted with the Authority to improve neighbourhood
policing by providing funding for an additional 63 police officers for community safety teams.
The County Council paid £2,062k to the Authority in 2009/10 for all four tranches totalling 63
police officers.
17. Payments to External Auditors
During the financial year 2009/10 the Authority employed the Audit Commission to
undertake several areas of work. The following fees were paid during the year:
2009/10 2008/09
£000 £000
External audit services 78 76
Other services 1 0
Total 79 76
These costs are included in the Agency and Contracted section of the Revenue Account,
and shown under Other Services in the analysis in note 3.
32
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
18. Partnership Working
During the year the Gloucestershire Police Authority (GPA) worked with partners on five
projects. In each case an agreement exists that defines the role of each of the bodies
involved. In all of these arrangements each party is responsible for their own liabilities and
these cannot be passed or transferred to the other parties involved. The first three of these
partnerships come under the category of a Joint Arrangement which is Not an Entity
(JANE).
a. Gloucestershire Tri Service Emergency Centre (GTEC)
This is a control room centre shared by Police, Fire and Ambulance Services
within Gloucestershire, situated at the Waterwells Business Park, Gloucester. As
part of the Legal Agreement, Police are the lead Authority on the purchase of
facility management services for the building. These costs are then recharged to
the other two services on the basis agreed within the legal document.
£’000
st
GPA Fixed Asset valuation at 31 March 2010 5,742
GPA Premises Expenditure 2009/10 160
(net of partners contributions)
GPA Income from partners 2009/10 (356)
b. Tri Service Fleet Workshops
This is a fleet workshop shared by Police, Fire and Ambulance Services within
Gloucestershire, situated at the Waterwells Business Park, Gloucester. As part of
the Legal Agreement, Police are the lead Authority on the purchase of facility
management services for the building. These costs are then recharged to the
other two services on the basis agreed within the legal document.
£’000
st
GPA Fixed Asset valuation at 31 March 2010 1,763
GPA Premises Expenditure 2009/10 66
(net of partners contributions)
GPA Income from partners 2009/10 (79)
c. Air Support
This is a partnership with Avon and Somerset Police Authority for the provision of
a helicopter. Avon and Somerset Police Authority administer the scheme and an
agreed contribution is paid based on the number of flying hours.
£’000
st
GPA Fixed Asset valuation at 31 March 2010 86
GPA Revenue payment to Avon & Somerset Constabulary 420
GPA Revenue expenditure 2009/10 585
(including payment to Avon & Somerset)
d. Gloucestershire Camera Safety Partnership
The partnership is led and administered by Gloucestershire County Council. The
Authority is reimbursed, by the County Council, for the eligible running costs of the
camera system.
e. Gloucestershire County Council – Additional Police Officers
Gloucestershire County Council has contracted with the Authority to improve
neighbourhood policing by providing funding for an additional 63 police officers.
The funding for all four tranches totalling 63 police officers was provided in
2009/10. This initiative will enable the establishment of dedicated community
policing teams across the County.
33
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
19. Private Finance Initiative (PFI)
The Authority has entered into a long-term contractual agreement under PFI whereby the
Contractor is responsible to design, build, finance, operate and maintain the new
headquarters building at Waterwells, Gloucester. The agreement imposes a 30 year
st
commitment on the Authority from occupation of the building in December 2005. From 1
April 2009, in accordance with IFRIC 12, the headquarters building has been treated as an
asset on the balance sheet with a corresponding liability created at the same time
The annual unitary charge for 2009/10 was £3.11 million (£1.2m service charge, £1.65m
interest & £0.26m principal). The Authority will receive notional credit approvals totalling £28
million from the Home Office over the life of the arrangement. The Authority has opted for
payment of these credits on an annuity basis. The Authority will receive a constant level
amount of £2.26 million per year over the life of the contract.
The movement in the value of assets held under PFI is detailed below.
Value of assets held under PFI
(excluding land) Total
£000
Balance at 1 April 2009 10,400
Revaluation in year 321
Depreciation in year (321)
Balance at 31 March 2010 10,400
The movement in the value of the liability associated with PFI is detailed below.
Value of liabilities resulting from PFI Total
£000
Balance at 1 April 2009 16,330
Lease repayment 260
Balance at 31 March 2010 16,070
The payments due to be made under the PFI contract are analysed below assuming a 2.5%
annual indexation rate.
Repayment of Service
liability Interest charges Total
£000 £000 £000 £000
Within one year 272 1,579 1,200 3,051
Within 2 to 5 years 938 6,031 5,597 12,566
Within 6 to 10 years 1,560 6,967 8,065 16,592
Within 11 to 15 years 2,248 6,134 9,310 17,692
Within 16 to 20 years 3,578 4,791 10,570 18,939
Within 21 to 25 years 6,386 3,150 10,814 20,350
Within 26 to 30 years 1,089 216 1,532 2,837
TOTAL 16,071 28,868 47,088 92,027
34
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
20. Note of reconciling items for the Statement of Movement on the General Fund Balance
2008/09
restated 2009/10
£000 £000 £000
Amounts included in the Income and Expenditure Account
but required by statute to be excluded when determining
the Movement on the General Fund Balance for the year
(19) Amortisation of intangible fixed assets (191)
(4,324) Depreciation and impairment of fixed assets (4,772)
(13,952) Gains(Losses) on revaluation of fixed assets 1,000
1,412 Government grants deferred amortisation 1,643
(30) Net gain(loss) on the sale of fixed assets (284)
177 Transfer to/from Collection Fund Adjustment Account 33
(32,876) Net charges made for retirement benefits in accordance with (35,230)
FRS17
(49,612) (37,801)
Amounts not included in the Income and Expenditure
Account but required by statute to be included when
determining the Movement on the General Fund Balance
for the year
868 Minimum revenue provision for capital financing 828
1,135 Capital expenditure charged in-year to the General Fund 1,725
Balance
2,003 2,553
Transfers to or from the General Fund Balance that are
required to be taken into account when determining the
Movement on the General Fund Balance for the year
(44) Net transfer to earmarked reserves 306
(44) 306
Net additional amount required to be credited to the
(47,653) General Fund Balance for the year (34,942)
21. Intangible Fixed Assets
Intangible Fixed Assets for the Authority relate to purchased software licences.
Total
£000
Balance at 1 April 2009 936
Expenditure in year 523
Depreciation in year (191)
Balance at 31 March 2010 1,268
35
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
22. Tangible Fixed Assets
Operational assets Non-operational assets Total
Land & Vehicles Equipment Surplus Investment Assets under
Buildings Assets Properties Construction
£000 £000 £000 £000 £000 £000 £000
Cost
Balance as at 1st April 2009 43,710 7,690 15,305 605 2,225 427 69,962
(restated)
Additions 398 867 1,954 545 823 664 5,251
Transfers 284 0 0 0 0 (284) 0
Disposals (1,450) (859) 0 0 0 0 (2,309)
Revaluations 980 0 0 25 (8) 0 997
Balance as at 31st March 43,922 7,698 17,259 1,175 3,040 807 73,901
2010
Accumulated Depreciation
Balance as at 1st April 2009 0 3,297 9,987 0 0 0 13,284
(restated)
Depreciation in the year 1,709 1,368 1,692 36 0 0 4,805
Disposals 0 (859) 0 0 0 0 (859)
Revaluations (442) 0 0 (4) 0 0 (446)
Balance as at 31st March 1,267 3,806 11,679 32 0 0 16,784
2010
Balance sheet amount at
31st March 2010 42,655 3,892 5,580 1,143 3,040 807 57,117
Balance sheet amount at
31st March 2009 43,710 4,393 5,318 605 2,225 427 56,678
st
Land and Buildings includes the land for the Police Headquarters at a value of £2.8m at 31
March 2010. The Police HQ building is supplied under a PFI agreement (note 19). All other
assets are owned by the Police Authority. Surplus assets have been shown separately in the
2009/10 accounts. Previously these were incorporated into the Land & Buildings category.
The following assets were disposed of during the year
Sales Net Book Gain
Proceeds Value (Loss)
£000 £000 £000
Land and Buildings 1,166 1,450 (284)
Vehicles 206 0 206
Total 1,372 1,450 (78)
The loss on the disposal of land and buildings is recognised in the Income and Expenditure
Account on Page 15. The gain on the disposal of vehicles is not included in the Income and
Expenditure Account. Sale proceeds for vehicles are under £10k for an individual vehicle, and
are therefore not classified as capital receipts. Income from the sale of vehicles is included in
Income from Fees and Charges (Note 5).
36
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
23. Summary of capital expenditure and method of finance
Capital Expenditure £000
Replacement and Refurbishment of Assets
Vehicles 867
Equipment - IT upgrade/development of existing systems 1,866
Buildings 943
3,676
New Development Work
Land 822
Equipment - Command & Control system 612
1,434
Assets under Construction
IT Systems 664
Total Capital Expenditure 5,774
Allocated:
Intangible Assets 523
Tangible Assets 5,251
Capital Financing £000
Capital expenditure financed by:
Government Grants 1,581
Capital Contributions 26
Revenue Contributions 1,736
Capital Receipts 1,458
Loans 973
5,774
24. Commitments under capital contracts
At 31st March 2010 the Authority had entered into a significant capital contract for the
st
purchase of mobile data licences. Payments outstanding against this contract as at 31
March 2010 totalled £265k.
25. Assets owned by the Authority include the following:
31/03/2010 31/03/2009
Police Headquarters 1 1
Resource Centre 1 1
Training Centre 1 1
Tri-Service Control Room 1 1
Tri-Service Workshops 1 1
Interview Suite 1 0
Inspector Area Stations 17 17
Operational Stations 15 17
Residential/Station Houses 3 10
Surplus assets 4 0
Radio Stations & Aerials 3 3
Vehicles 451 468
A total of 6 properties were sold in 2009/10. The Police Headquarters building has now been
capitalised and is recognised as a PFI asset on the asset register.
37
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
Vehicles, equipment and assets under construction are valued on the basis of historic cost.
st
Operational land and buildings were valued on the basis of Existing Use Value (EUV) as at 31
March 2010. The effect of this was to increase the EUV of this category by £980k since the last
st
valuation at 31 March 2009. Surplus assets and investment properties were valued on the basis
st
of current Market Value (MV) as at 31 March 2010. The effect of this was to increase the MV of
surplus assets by £25k and decrease the MV of investment properties by £8k since the last
st
valuation at 31 March 2009.
26. Long Term Debtors
The Authority’s PFI contract under IFRIC 12 has transferred the asset to the balance sheet
with an associated liability. A long term debtor reflecting the residual value of the asset is no
longer required. As the 2008/09 balance sheet has been restated to reflect IFRIC 12 the
Authority has no long term debtors in the accounts.
27. Debtors and payments in advance
2008/09
2009/10 restated
£000 £000
Government 4,600 6,307
General 2,226 2,717
Payments in advance 2,128 2,085
Total 8,954 11,109
Government Debtors includes £2.029 million owed by the Home Office for the Pension Top-
Up Grant.
28. Temporary Investments (short term)
The sum of £22.181 million represents loans to the money market of temporary cash
balances at 31 March 2010.
29. Creditors and receipts in advance
2008/09
2009/10 restated
£000 £000
Government 4,714 4,452
General 5,308 6,263
Capital 266 152
Receipts in advance 337 242
Total 10,625 11,109
38
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
30. Analysis of external borrowing
Source of loan Average Total outstanding at
interest 31st March
rate payable 2010 2009
£000 £000
Nottingham City Council 5,600 0
Public Works Loan Board 4,001 8,710
Dexia Public Finance Bank 5,091 5,000
Total outstanding 4.56% 14,692 13,710
Analysis of loans by maturity
Short term – less than one year 5,600 4,709
Between 1 and 2 years 0 0
Between 2 and 5 years 137 138
Between 5 and 10 years 138 138
Between 10 and 15 years 1,442 1,216
Between 15 and 20 years 1,057 638
Between 20 and 25 years 1,227 1,871
More than 25 years 5,091 5,000
Total 14,692 13,710
rd
The Registered Holder of the Dexia Loan has the right, on 3 April 2016, to alter the interest rate
applicable to the loan, subject to conditions contained in the loan instrument. The Authority may
prepay the amount of Principal and all accrued interest thereon on the date the Interest is altered
st
without penalty. As at 31 March 2010 there were no defaults or breaches against any of the loans
in the above schedule. In the event of a default against the Dexia loan the registered holder may
call for immediate repayment of the amount of Principal together with all interest accrued and
together with any broken funding costs and associated financing costs thereby incurred.
In the event of a default against Public Works Loan Board (PWLB) loans advanced after 31 March
2004, interest will be charged on late payments at the Bank of England ‘repo’ rate for the day from
the relevant payment date to the date on which the Board’s account is credited. The same term
applies to delayed premature payments. For loans advanced on or after 1 March 1985 but before
1 April 2004, interest will be charged on late payments of fixed rate loans on the whole of the late
payment (i.e. both principal and interest) from the relevant payment date at the appropriate fixed
rate in force on that date for loans repayable at maturity after one year, to the date on which the
Board’s account is credited.
Financial liabilities and financial assets represented by loans and receivables are carried in the
Balance Sheet at amortised cost. The fair value of the Dexia loan has been calculated with
reference to information published by Sector as at 31 March 2010. The interest rate applied is
3.962% based on a 60 year loan with the first option at 10 years and semi annual calls thereafter.
The fair value of the PWLB loans have been calculated by reference to the ‘premature repayment’
set of rates in force on 31st March 2010 and 31st March 2009. Carrying amounts for instruments
maturing in the next twelve months is assumed to approximate fair value. The fair value of trade
and other receivables is taken to be the invoiced or billed amount.
The fair value of external borrowings is as follows:
31 March 2010 31 March 2009
External Borrowings Carrying amount Fair Value Carrying amount Fair Value
£’000 £’000 £’000 £’000
Dexia 5,091 5,586 5,000 5,938
Nottingham City Council 5,600 5,600 0 0
Public Works Loan Board 4,001 4,541 8,710 9,680
39
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
31. Disclosure of nature and extent of risks arising from financial instruments
The Authority’s activities expose it to a variety of financial risks:
- credit risk, the possibility that other parties may fail to pay amounts due to the
Authority
- liquidity risk, the possibility that the Authority might not have funds available to
meet its commitments to make payments
- market risk, the possibility that financial loss might arise for the Authority as a
result of changes in such measures as interest rates and stock market
movements
The Authority’s overall risk management programme focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects on the resources available
to fund services. Risk management is carried out by staff in the Finance department, under
policies approved by the Authority in the Annual Treasury Management report. The Authority
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 not made with foreign banks and
financial institutions unless they are rated independently and meet the minimum credit rating
criteria as set out in the Annual Investment Strategy, approved by the Authority in February
2009. The Authority has a policy of not lending more than £5m of its surplus balances to one
institution.
The credit criteria in respect of financial assets held by the Authority are as detailed below:
Maximum
Financial asset category Criteria investment
Deposits with UK banks Minimum total assets - £15m
£1,000m
Deposits with UK building societies Minimum total assets - £25m
£1,000m
The Authority’s current approved lending list includes all UK banks and building societies
with assets in excess of £1 billion and many of these do not have a credit rating. In addition,
the list includes wholly owned subsidiaries of UK clearing banks.
The following analysis summarises the Authority’s potential maximum exposure to credit
risk, based on historical experience of default and write-offs.
40
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
Historical Estimated
experience maximum
adjusted for Estimated exposure
Amount market maximum at 31
at 31 Historical conditions at exposure to March
March experience 31 March default and 2009
2010 of default 2010 uncollectability (restated)
£’000 % % £000 £’000
Deposits with 22,181 0.0 0.0 0 0
banks and
financial
institutions
Council tax 1,422 22.9 22.1 313.5 312.9
receipts
Other 737 0.6 0.5 3.7 9.1
Customers
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.
The Authority does not generally allow credit for customers, such that £0.1m of the £0.7m
balance on the Accounts Receivable ledger at 31 March 2010 was past its due date for
payment (i.e. 30 day payment terms). The past due amount can be analysed by age as
follows:
31 March 31 March
2010 2009
£000 £’000
Less than three months 87 34
More than three months 53 106
Total 140 140
Liquidity risk
The Authority has a comprehensive cash flow management system that seeks to ensure
that cash is available as needed. 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 there are adequate though not excessive cash
resources, borrowing arrangements and overdraft facilities to enable the Authority at all
times to have the level of funds available to it which are necessary for the achievement of its
business objectives.
The maturity analysis of financial liabilities is as follows:
31 March 2010 31 March 2009
£’000 £’000
Less than one year 5,600 4,709
Between one and two years 0 0
Between two and five years 137 138
More than five years 8,955 8,863
Total 14,692 13,710
All trade and other payables are due to be paid in less than one year.
41
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
Market risk
Interest rate risk
The Authority is exposed to some 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. However,
changes in interest payable and receivable on variable rate borrowings and investments will
be posted to the Income and Expenditure Account and effect the General Fund Balance £
for £. Movements in the fair value of fixed rate investments will be reflected in the STRGL.
The Authority has a number of strategies for managing interest rate risk. Policy is to aim to
keep a maximum of 25% of its borrowings in variable rate loans and limits are set on the
maturity structure of its borrowings. 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 Authority’s cost of borrowing and provide compensation for a proportion of any
higher costs.
The Treasury management team has an active strategy for assessing interest rate exposure
that feeds into the setting of the annual budget and which is used to update the budget
quarterly during the year. This allows any adverse changes to be accommodated. The
analysis will also advise whether new borrowing taken out is fixed or variable. Because the
Authority, as at 31 March 2010, had no variable rate borrowings or investments the impact
of any interest rate changes on the Income and Expenditure Account and the Statement of
Total Recognised Gains and Losses would be zero.
Price risk
The Authority does not invest in equity shares nor does it have shareholdings in joint
ventures or local industry. There is, therefore, no exposure to price risk.
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. Income received
in a foreign currency is banked immediately and converted using the exchange rate
applicable at the time of banking.
42
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
32. Capital Grants Deferred
Capital grant used to finance capital expenditure is placed in the Capital Grant Deferred
Account and is used to offset depreciation charged against the asset financed by the grant.
2009/10 2008/09
£000 £000
Balance as at 1st April 5,625 4,555
Used to finance capital expenditure (Note 33) 1,581 2,482
Used to offset depreciation charge (1,643) (1,412)
st
Balance as at 31 March 5,563 5,625
33. Capital Grant Unapplied
2009/10 2008/09
£000 £000
Balance as at 1st April 914 2,065
Grants received 2,062 1,331
Used to finance capital expenditure (Note 32) (1,581) (2,482)
st
Balance as at 31 March 1,395 914
34. Revaluation Reserve
The capital accounting rules require the establishment of a revaluation reserve. The balance
represents the unrealised net gains from revaluations made after 1 April 2007. The balance at 31
March 2010 represents the revaluation gains resulting from the revaluation exercise of all
st
properties undertaken as at 31 March 2009 supplemented by a desktop review at 31 March
2010.
2009/10 2008/09
£000 £000
st
Balance as at 1 April 7,215 0
Revaluation gains in year 443 7,233
Depreciation (345) 0
Transfer of revaluation gains on disposal (256) (18)
st
Balance as at 31 March 7,057 7,215
43
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
35. Capital Adjustment Account
The capital accounting rules require the establishment of a capital adjustment account. The
balance reflects the timing difference between the cost of fixed assets consumed and the capital
financing set aside to pay for them.
2008/09
2009/10 restated
£000 £000
Balance as at 1st April 14,840 28,518
Capital receipts applied (Note 37) 1,458 587
Revenue contributions to capital (Note 38) 1,736 993
Capital contributions applied (Note 36) 26 65
Losses on revaluation 1,000 (13,899)
Contribution from reserve (2,180) (1,054)
Disposals (1,194) (370)
st
Balance as at 31 March 15,686 14,840
36. Capital Contributions Unapplied
2009/10 2008/09
£000 £000
Balance as at 1st April 26 0
Capital contributions received 0 91
Used to finance capital expenditure (Note 35) (26) (65)
st
Balance as at 31 March 0 26
37. Usable Capital Receipts Reserve
2009/10 2008/09
£000 £000
Balance as at 1st April 718 1,000
Disposal proceeds 1,199 305
Used to finance capital expenditure (Note 35) (1,458) (587)
st
Balance as at 31 March 459 718
38. Revenue Contribution to Capital Reserve Unapplied
2009/10 2008/09
£000 £000
Balance as at 1st April 311 169
Transfer from revenue (Note 1) 1,725 1,135
Used to finance capital expenditure (Note 35) (1,736) (993)
st
Balance as at 31 March 300 311
44
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
39. Collection Fund Adjustment Account
2008/09
2009/10 restated
£000 £000
Balance as at 1st April 387 210
Transfer from revenue 34 177
st
Balance as at 31 March 421 387
40. Specific Reserves
The following reserves have been set up to fund future spending:
Reserve Balance Net Balance
st st
1 April Movement 31 March
2009 In Year 2010
£000 £000 £000
Vehicle replacement reserve 881 0 881 Note (a)
Medium Term Financial Strategy 8,809 657 9,466 Note (b)
Reserve
Carry Forward Reserve 5,369 (353) 5,016 Note (c)
Total 15,059 304 15,363
a) Vehicle Replacement Reserve
This reserve was created in 2008/09, funded from the Medium Term Financial
Strategy Reserve.
b) Medium Term Financial Strategy Reserve
This represents financial resources to cover the funding gap expected under CSR
2007, Private Finance Initiative funding and the Local Government Pension
Scheme.
c) Carry Forward Reserve
The carry forward reserve represents amounts not spent in the revenue budget,
which are transferred to the following year to meet planned expenditure.
The main elements of the carry forward are listed below:
£000
Project costs 1,254
IS costs 709
Review, retention & disposal team 442
Equipment 534
POCA initiatives 282
Other specific carry forwards 1,514
General carry forwards 250
Police Authority carry forwards 31
5,016
45
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
41. General Reserves
st
The balance of £3.161 million in the General Reserves as at 31 March 2010 represents
the working balance requirement of the Authority, held at 3% of the revenue budget.
42. Contingent liabilities
The authority has five legal cases pending against it with a value, after adjusting for the
probability of fruition, of £198k.
43. Trust and other funds
The Authority is responsible for various trusts and other funds, summarised below. These
balances, which are appropriately invested, are not included in the Balance Sheet.
Balance at Income Expenditure Balance at
01/04/2009 31/03/2010
£ £ £ £
Property Act 26,612 40,239 (33,134) 33,717
Court Orders 811,958 219,251 (740,104) 291,105
838,570 259,490 (773,238) 324,822
(i) Property Act
The fund holds the proceeds from the sale of unclaimed property, believed to have
been stolen. The proceeds, after defraying the costs of handling the property, are
available for distribution each year to local charities as directed by the Chief
Constable.
(ii) Court Orders
Money seized in connection with possible criminal activity is held pending a decision,
by the courts, on the lawful owner, or distribution if no legal owner is identified.
44. Euro
There were no transactions in euros during the year.
45. Post Balance Sheet Events
The Chancellor of the Exchequer announced in his Emergency Budget on 22 June 2010
that the consumer prices index rather than the retail prices index will be the basis for future
public sector pension increases. In accordance with paragraph 21 of Financial Reporting
Standard 21 (Events after the balance sheet date), this change is deemed to be a non-
adjusting post balance sheet event. It is estimated that this change will reduce the value of
an average employer’s FRS17 liabilities in the Pension Funds by around 6-8%. This would
reduce the liability relating to defined benefit pension schemes from £879m to between
£808m and £826m.
46
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
46. Cash Flow Statement - Reconciliation of Income and Expenditure Account surplus to
revenue activities net cash flow
2008/09
2009/10 restated
£000 £000
Deficit for the year (34,877) (47,653)
Adjustment for non-cash transactions:
Add: Net charges made for retirement benefits in 35,229 32,876
accordance with FRS17
Add: Depreciation 4,963 4,343
Add: Loss (gain) on revaluation of fixed assets (1,000) 13,952
Less: Grant amortisation (1,643) (1,412)
Add: Loss on disposal of fixed assets 284 30
2,956 2,136
(Increase)/decrease in stock 42 (119)
(Increase)/decrease in debtors 1,826 (1,737)
Increase/(decrease) in creditors (270) (78)
4,554 202
Items classified in servicing of finance:
Interest receivable (353) (1,459)
Interest payable 2,089 2,255
Net Cash Flow 6,290 998
47. Cash Flow Statement - Purchase of fixed assets
2009/10
£000
Capital expenditure - per Balance Sheet on accruals basis 5,774
Add: Capital creditors brought forward 152
Less: Capital creditors carried forward (266)
Capital expenditure - on cash basis (per Cash Flow Statement) 5,660
48. Cash Flow Statement - Movement in financing and management of liquid resources
As at
31/03/2009 As at Movement
restated 31/03/2010 in year
£000 £000 £000
Short term borrowing - repayable within one year 4,627 5,600 (973)
Long term borrowing - repayable after more than one year 8,986 8,986 0
Capital element of finance lease payment 16,330 16,070 260
29,943 30,656 (713)
Temporary investments (19,894) (22,164) 2,270
Increase in cash from financing & liquid resources activities 10,049 8,492 1,557
47
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
49. Cash Flow Statement - Movement in net debt
As at
31/03/2009 As at Movement
restated 31/03/2010 in year
£000 £000 £000
Movement in cash
Bank overdraft (139) (31) 108
Bank accounts 98 881 783
Imprest accounts 50 51 1
Increase in cash 9 901 892
Movement in financing and liquid resources (10,049) (8,492) (1,557)
Decrease in net debt (10,040) (7,591) (2,449)
48
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
Police Pension Fund Account for the year ended 31st March 2010
2008/09 2009/10
£000 £000 £000
Contributions receivable
From employer
10,885 - contributions at 24.2% of pensionable pay 11,151
0 - early retirements 0
333 - other (maternity/paternity/sickness, capital 46
charge ill health & the 30+ scheme)
11,218 11,197
4,899 From members 5,005
Transfers in
197 Individual transfers in from other schemes 538
113 Transfer from Avon & Somerset Constabulary 116
310 654
16,427 16,856
Benefits payable
17,664 Pensions 19,061
5,904 Lump sum retirement benefits 4,809
23,568 23,870
Payments to and on account of leavers
28 Refunds of contributions 1
199 Individual transfers out to other schemes 398
227 399
23,795 24,269
(7,368) Sub-total for the year before the transfer from the police authority of the (7,413)
amount equal to the deficit
7,368 Additional funding payable by the police authority to fund the deficit for 7413
the year
0 Surplus (deficit) 0
The Police Pension Fund has no investment assets, and pensions are paid from employer and
employee contributions, plus additional funding from the Authority. As such the net assets figure
brought forward from 2008/09 and carried forward into 2010/11 is nil.
49
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
Police Pension Fund
Notes to the Police Pension Fund Accounts
1. General Description of Fund’s Operations
st
On 1 April 2006 new arrangements came into being for funding and accounting for the
st
uniformed police pension scheme. From 1 April 2006 the Authority retains responsibility for,
and continues to administer and pay police officer pensions. But this is from a separate local
police pensions account, rather than direct from the Income and Expenditure Account. The
pensions account is topped up by the Authority if the contributions are insufficient to meet the
cost of pension payments. The Authority receives a Police Pension Top Up Grant from the
Home Office for an amount equal to the deficit on the Police Pension Fund Account.
It should be noted that the Police Pension Fund has no investment assets, and pensions are
paid from employer and employee contributions, plus additional funding from the Authority.
Employer contributions are based on percentages of pensionable pay set nationally by the
Home Office and subject to triennial revaluation by the Government Actuary’s Department. For
st
the year ended 31 March 2010 the percentage was 24.2%. Under FRS17 the Police Pension
Scheme is classed as a defined benefit scheme. Therefore the risk of shortfall remains with
the Authority. Accordingly the Authority has obtained an actuarial valuation for the scheme.
2. Accounting Policies
a) The Accounts have been prepared to meet the requirements of Regulation 7(1)
(d) of the Accounts and Audit Regulations 2003 which states that police
authorities are obliged to include the police pensions account in their statement of
accounts. They also meet the requirements of the Code of Practice on Local
Authority Accounting in the United Kingdom 2009 – A Statement of
Recommended Practice (SORP).
b) The Accounts have been prepared on an accruals basis.
c) The Accounts do not take account of liabilities to pay pensions and other benefits
in the future. This is reported upon separately in the Actuary’s statement.
50
STATEMENT OF ACCOUNTS 2009/10
______________________________________________________________________________________
Annual Governance Statement
The Annual Governance Statement was approved by the Police Authority’s Audit
Committee on the 24th June 2010 and is available on the Police Authority website.
51
