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					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
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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
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                                                            £’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.
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STATEMENT OF ACCOUNTS 2009/10
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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.


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STATEMENT OF ACCOUNTS 2009/10
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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
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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.




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STATEMENT OF ACCOUNTS 2009/10
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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
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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.




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STATEMENT OF ACCOUNTS 2009/10
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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
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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
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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
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                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

				
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