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					      Hampshire Police Authority
           Statement of Accounts 2005/06

Contents                                                Page

Treasurer’s Explanatory Foreword                         1
Achievements and Developments                            2
Summary of Revenue and Capital Expenditure and Income    3
Statement of Accounting Policies                         4
Responsibilities for the Statement of Accounts           7
Treasurer's Certificate                                  7
Statement on Internal Control                            8
Auditor's Report                                         12
Summary Revenue Account                                  14
Notes to Summary Revenue Account                         15
Consolidated Balance Sheet                               21
Notes to Consolidated Balance Sheet                      22
Movements in Reserves                                    27
Cash Flow Statement                                      31
Glossary                                                 32
Treasurer's Explanatory Foreword


Introduction     This foreword provides an introduction to Hampshire Police Authority’s Statement of
                 Accounts for 2005/06. It covers three main aspects :
                 * a summary of the various statements which make up the Authority’s accounts;
                 * a summary of the role of the Police Authority and of the achievements and
                    developments during 2005/06;
                 * a summary of the Authority’s financial position relating to both revenue expenditure on
                    services and capital expenditure on new assets over the course of the year.

Summary of       The Police Authority’s accounts for 2005/06 consist of the:
Statement of     *
Accounts            Summary Revenue Account, which covers income and expenditure on all services and
                    is supplemented by a service expenditure analysis in accordance with the Chartered
                    Institute of Public Finance and Accountancy’s Best Value Accounting Code of Practice;
                 * Summary Capital Account which covers expenditure on fixed assets that will be of use
                    to the Authority in future years;
                 * Consolidated Balance Sheet, which sets out the financial position of the Authority on 31
                    March 2006;
                 * Statement of Total Movements on Reserves;
                 * Cash Flow Statement, which summarises the inflows and outflows of cash arising from
                    transactions with third parties for revenue and capital purposes.

                 These accounts are supported by the Statement of Accounting Policies, Statement of
                 Responsibilities for the Statement of Accounts, and an assurance Statement on Internal
                 Control.

The Role of the Hampshire Police Authority is responsible for policing the whole of Hampshire and the Isle
Police          of Wight. In policing terms it is one of the largest non-metropolitan forces in England and
Authority       Wales. This reflects the size of the population and the complexity of the area to be policed.

                 The combined population of Hampshire and the Isle of Wight is approximately 1.8 million.

                 The aim of the Authority is to make Hampshire and the Isle of Wight communities safe
                 The methods of the Authority are:
                 * To safeguard policing by consent
                 * To work with integrity, honesty and openness and perform independently of Hampshire
                    Constabulary
                 * To support and challenge the Constabulary, aiming for their continuous improvement
                 * To develop and maintain effective partnerships with local authorities, public and private
                    agencies, and stakeholders
                 * To guard public interest in policing
                 * To ensure the demands and needs of the public are reflected in policing policies
                 * To maintain ethical standards in policing

                 The Police Authority is committed to implementing the following national priorities:
                 * Reduce overall crime by 15% by 2007/08 and more in high crime areas
                 * Bring more offences to justice in line with the Government's Public Service Agreement
                 * Provide every area in England and Wales with dedicated, visible, accessible and
                    responsive neighbourhood policing teams; and reduce the public perception of anti-
                    social behaviour
                 * Tackle serious and organised crime including through improved intelligence and
                    information sharing between partners
                 * Protect the country from both domestic terrorism and domestic extremism


Hampshire Police Authority                                  1                             Statement of Accounts 2005/06
Achievements and Developments

The Force has been reconfigured as a strategic force and will therefore not be required to merge with
any other forces. This is recognition of the good work and good value for money delivered. However,
the Force is aware that significant investment needs to be input and sustained to deliver the high
standards expected from strategic forces. Although the Force will not be merging, it will seek to work in
partnership with other agencies to deliver highly effective and cost efficient services.

The Force reorganised from 10 geographical Basic Command Units to 6 Operational Command Units
with effect from 1 April 2006. The Force is also establishing Neighbourhood Policing Units to promote
improved links with the community.

The Force has implemented a new Record Management System that will deliver better operational
management information. It is envisaged that this should improve operational performance and offer
future efficiency savings.

Further updates on achievements and developments can be found on the Authority and Constabulary
websites:            www.hampshirepoliceauthority.org
                     www.hampshire.police.uk

Crimes        Year    Recorded Detected           %
                                                                                      31 March 31 March
Violent    2004/05       41,779      20,544      49%         Numbers of:                2005     2006
           2005/06       42,465      18,623      44%         Employees                    6,097    6,198
Burglaries 2004/05       15,552       2,633      17%         Operational Buildings           72       71
           2005/06       16,623       1,961      12%         Vehicles                       963      937
Other      2004/05      115,741      25,404      22%         Dwellings                       72       64
           2005/06      116,205      21,947      19%

In 2005/06, the Authority spent £272.9m against a net expenditure budget of £272.9m on policing
services for the people of Hampshire and the Isle of Wight. The expenditure included an overspend of
£1.1m on pension payments, mainly due to a higher number of officers retiring than forecast, which will
be met by the pension reserve. The Authority will transfer £3.9m to earmarked reserves which includes
£1.9m for devolved budget carry forwards and £2m for areas of expenditure that the Force has already
committed to but not received the goods or services by 31 March 2006. £0.2m will go to the general
reserve.

The entries required to comply with Financial Reporting Standard 17 (FRS17) Retirement Benefits,
results in a -£1,824m FRS17 pension reserve and a net worth of -£1,698m. The large negative FRS17
pension reserve is due to the police pension scheme being an unfunded scheme i.e. with no fund
investments or other assets to offset future liabilities when existing police officers have all retired. The
Home Office has introduced a new police pension scheme for new recruits from 1 April 2006 to help
address this issue. Although these measures should assist to improve the position, forecasts indicate
that the recovery of deficits is likely to be a long term target. Further notes on FRS17 are included in the
notes to the revenue account, balance sheet and statement of movement in reserves.

The Authority took a loan of £2m in January 2006. This is because the capital strategy has identified a
need to borrow funds in the near future and the rate offered in January 2006 of 3.85% was historically
low.

The Force has again exceeded its target for achieving efficiency savings. In 2005/06, £15.2m worth of
efficiency savings were achieved against a target of £8.2m.

The ongoing policy of disposing surplus property, including beat houses and other police houses,
generated capital receipts of £1.9m in 2005/06.




Hampshire Police Authority                                     2                                Statement of Accounts 2005/06
Summary of Revenue and Capital Expenditure and Income

Revenue expenditure and income reflects the
amount spent and received in respect of                   Summary Revenue Income and Expenditure
providing police services in the financial year.
                                                                                           £m       £m
                                                          Expenditure
                                   Expenditure                Employees                    216.7
                                                              Police pensions               49.2
    Other             Capital                                 Other running costs           78.7
   running            charges
                        3%
                                                              Capital charges               10.7
    costs                                                     Total police services                   355.3
     22%
                                                              Financing transactions        -8.9
                                                              Pensions related             -12.1
                                         Employees            Contribution from reserves    -3.0      -24.0
       Police
                                           61%                                                        331.3
      pensions
        14%                                               Income
                                                               Service income              -15.5
                                                               Additional grants           -41.5
                                                               Interest                     -1.4      -58.4

                                        Funding           Amount met from Government
      Council tax                                         grants and local taxpayers                  272.9
      - 2 8 %


                                                               Police grant                          -120.6
   National
   business                                Police grant
                                                               Revenue support grant                  -46.3
   r a t e s                               - 4 4 %             National business rates                -30.8
   - 1 1 %           Revenue
                     support                                   Council tax                            -75.2
                     g r a n t                                                                       -272.9
                     - 1 7 %


Capital Expenditure is incurred in the acquisition   Summary Capital Income and Expenditure
and enhancement of the Authority's assets which
have a life of more than one year. Total expenditure Expenditure                                       £m
in 2005/06 was £11.1m.                                   Land and buildings                             3.0
The Home Office provided a general capital grant of      Vehicles                                       3.7
£3.6m and specific capital grants in support of          Keyworker housing                              0.2
particular projects totalled £0.4m.                      IT & operational equipment                     4.2
                                                                                                       11.1
Capital receipts are the proceeds of the sale of
capital assets. In 2005/06, £1.91m of receipts were Funded by
received from the disposal of police houses, where      Government grant                          -4.0
100% of the proceeds may be reinvested in policing      Capital receipts                          -6.0
and £0.03m from the sale of vehicles.A further          Revenue contributions to capital          -1.1
£4.1m worth of capital receipts reserves has been                                                -11.1
used to fund capital expenditure in 2005/06.
Individual receipts of less than £6,000 have been       Also see note 1 to the balance sheet, page 22.
credited to revenue income.

The Prudential Code allows the Authority to borrow money in order to support capital or revenue
expenditure as long as the Authority is satisfied that the revenue payments incurred from entering into the
loan are prudent, affordable and sustainable. The Authority borrowed £2m in January 2006 to pay for
future capital investment.




Hampshire Police Authority                                      3                           Statement of Accounts 2005/06
Statement of Accounting Policies

General       The accounts have been prepared in accordance with the Code of Practice on Local Authority
Principles    Accounting in the United Kingdom: A Statement of Recommended Practice (2005). This code
              is recognised by statute as representing proper accounting practices. Any significant non-
              compliance is explained in the following notes. The accounts have been compiled by applying
              the most appropriate policies and estimation techniques, taking into account the accounting
              concepts of qualitative characteristics of financial information (i.e. relevance, reliability,
              comparability and understandability), materiality and the pervasive accounting concepts (i.e.
              accruals, going concern and primacy of legislative requirements).

Pensions      Pension costs included in the accounts have been determined in accordance with FRS17
              Retirement Benefits as required by the Code of Practice. The main impact of FRS17 is to
              include within the net cost of services the net pension liability rather than the value of
              contributions made. For the purpose of showing the amount to be met from grant and local
              taxpayers, the net liabiility is replaced by the value of contributions. The net liability is shown
              in the balance sheet.
              Police Pension Scheme (for Police Officers only)
              This is an unfunded scheme. The net cost of pensions is charged to the revenue account.
              Local Government Pension Scheme
              Police staff, subject to certain qualifying criteria, are eligible to join the Local Government
              Pension Scheme. In 2005/06 the Authority paid an employer's contribution into the Hampshire
              Pension Fund representing 15% of pensionable pay. The contribution rate is determined by
              the Fund's actuary based on valuations every three years. At the 31 March 2004 valuation the
              actuary recommended a phased increase in employer contribution rates. The contribution rate
              for 2005/06 was 250% of employees’ contributions. This rate will rise to 275% in 2006/07 and
              295% in 2007/08.
              Additional contributions are payable to cover the cost of any early retirements except those
              due to ill-health. In addition the Authority is responsible for all pension payments relating to
              added years’ benefits, together with the related increases.
              Further details are in the the notes to the revenue account and balance sheet. There is
              additional information in the valuation report and the Hampshire Pension Fund Annual Report.

Service     The Best Value Accounting Code of Practice analysis has been revised and restated as a
Expenditure result of improved costing data available from the Activity Based Costing (ABC) process. The
Analysis    spend on each heading is more consistent with the output from ABC.

Central       The costs of support services are apportioned over all services on a relevant basis e.g
Support       premises costs based on floor areas, personnel costs based on staff and finance costs based
              on budget.

Precept       Precept income is included at the figure precepted on the collection funds of billing authorities
Income        in Hampshire and the Isle of Wight and is not subject to revision.

Specific   Specific grants are included in the accounts on the basis of notification from the Government.
Government Capital grants are credited to the Government grants deferred account and will be released
Grants     over the life of the relevant assets.

Basis of   The Authority is required by law to make a 'minimum revenue provision' for the repayment of
Redemption debt, at 4% of the Authority's capital financing requirement less the 'relevant amount', which is
of Debt    a statutory measure of the Authority’s net indebtedness to fund capital expenditure.



Hampshire Police Authority                                4                           Statement of Accounts 2005/06
Statement of Accounting Policies

Assets         Assets yield benefits to the Authority for a period of more than one year. Assets are shown in the
               balance sheet at their written-down value after taking account of depreciation. All expenditure
               above the de minimis limit of £10,000 (£6,000 for vehicles) on the acquisition, creation or
               enhancement of fixed assets is capitalised on an accruals basis in the accounts.
               Assets are valued on the basis recommended by the Chartered Institute of Public Finance and
               Accountancy in accordance with the Statement of Asset Valuation Principles and Guidance Notes
               issued by the Royal Institution of Chartered Surveyors (RICS). All assets are initially valued at
               the depreciated historic cost until formally revalued. Intangible assets are valued at depreciated
               historical cost. Operational land and buildings are revalued at depreciated replacement cost.
               Houses and dwellings are revalued at their existing use value. Non-operational assets are shown
               at their historic cost. Capital expenditure that enhances the useful life of the asset, but does not
               increase the value of the asset, is charged to the fixed asset restatement account. Assets are
               revalued if their use changes.
               Beat houses and police houses were revalued in 2004/05 in order to comply fully with the
               requirements of Financial Reporting Standard (FRS) 15. All other operational assets were
               revalued during 2001/02. All valuations were undertaken by Hampshire County Council Estates
               The asset register was fully reconciled with the estates and transport register.

Capital        Capital charges are made on all assets except land in accordance with the requirements of the
Charges        Local Authority Accounting Code of Practice. The capital charge consists of a notional interest
               charge and a depreciation charge for each asset.

Notional       The notional interest charge represents the financing cost of the asset. The notional interest
Interest       charge is calculated as a percentage of the asset value. The percentage was set by the Office of
               the Deputy Prime Minister which has since been reorganised.

Depreciation Depreciation is defined as the measure of the wearing out, consumption, or other reduction in the
             useful economic life of a fixed asset. Depreciation is charged on all assets, except land, on a
             straight line basis. Buildings have a half year depreciation in the year of acquisition and sale.
             Vehicles have a full year of depreciation in the year of purchase but are not depreciated in the
             year of sale. This reflects the relative speed of depreciation of buildings and vehicles.

Stocks         Stock accounts are maintained for uniforms, vehicle spares, fuel, vending provision, computer
               consumables, computer equipment and stationery and these are valued at latest buying price.
               This is a departure from SSAP 9, but the differences are not material to the accounts.

Debtors and    The revenue and capital accounts of the Authority are maintained on an income and expenditure
Creditors      basis in accordance with the Code of Practice. That is, sums due to or from the Authority during
               the year are included, whether or not the cash has actually been received or paid in the year. For
               ease of administration, and because their overall value is not material to the accounts, creditors
               of less than £1,000 are dealt with on a cash basis.

Interest       Interest payable on borrowings is accounted for in the year to which it relates, on a basis that
               reflects the overall effect of the loan or investment. Interest receivable is accounted for on the
               same basis. See balance sheet notes 7 and 8.

Investments    Surplus cash is invested in short term deposits to earn interest. Investments on deposit are
               valued at their nominal value. Investment income is recognised on receipt.

Leases         Leases are accounted for in accordance with SSAP 21 and FRS 5 where issues of substance
               over form need to be considered. A finance lease transfers substantially all the risks and rewards
               of ownership of an asset to the lessee. All other leases are operating leases.




Hampshire Police Authority                                   5                              Statement of Accounts 2005/06
Statement of Accounting Policies

Substantial The general reserve represents the surplus of revenue income over expenditure. It can be
Reserves    used to supplement council taxes and grant income in future years, or to meet unforeseen
and         items during the year.
Provisions
            The pensions reserve can be used over years to even out the effect of employer pension
            contributions and lump sum commutation payments. £1.1m was taken from the pension
            reserve to pay for higher than expected lump sum pension costs.

             The FRS17 pension liability is a significant figure of £1,824m which represents the amount
             that the Authority would have to find if all employees were able to claim their pension as at
             31 March 2005. The figure is high for police officers as police pensions are unfunded. A
             new nationally funded police pension scheme will be introduced by the Home Office for all
             new officers from April 2006 to help address this issue.

             The fixed asset restatement account allows assets to be maintained in the accounts at
             current value, rather than historic purchase price.

             The capital financing account contains the amounts which are required by statute to be set
             aside from capital receipts for the repayment of external loans and the amount of capital
             expenditure financed from revenue and capital receipts. It also contains the difference
             between amounts provided for depreciation and that required to be charged to revenue to
             repay the principal element of external loans.

             Government grants deferred reserve holds amounts of government grant that will be used to
             offset the annual capital charges relating to assets purchased using government grant.

             Unapplied grants and contributions holds capital grants that have been received, usually for
             a specific purpose, but have not been applied to finance capital expenditure yet.

             Capital receipts are the proceeds of the sale of capital assets such as the disposal of police
             houses, where 100% of the proceeds may be reinvested in the police estate, and the sale of
             vehicles. Individual receipts of less than £6,000 have been credited to revenue income. The
             reserve has been fully utilised to fund capital purchases in 2005/06.

             Capital (Revenue Contributions) Reserve holds amounts of money that have been taken
             from revenue to fund future capital expenditure.

             Earmarked reserves have also been established to enable budget holders under the
             devolved financial management scheme to carry forward over/underspendings, thereby
             promoting strategic management of budgets within the Constabulary.

Bad debt     The provision for bad and doubtful debts remains at £45,000 at 31 March 2006.

European     During 2005/06, there was no impact on the Police Authority as a result of the European
Currency     Single Currency, the Euro. This will continue to be reviewed during 2006/07.

Trust Fund   The Authority does not administer any trust funds.

VAT          VAT is separately accounted for in accordance with the Statement of Standard Accounting
             Practice (SSAP) 5 and is not included as income or expenditure of the Authority except
             where it is not recoverable.




Hampshire Police Authority                                  6                              Statement of Accounts 2005/06
       Statement of Responsibilities for the Statement of Accounts


       The Police Authority's Responsibilities

            The Police 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 safeguard
                 its assets
            *    approve the Statement of Accounts.

       The Treasurer's Responsibilities

            The Treasurer is responsible for the preparation of the Authority’s Statement of Accounts in
            accordance with the terms of the CIPFA/LASAAC Code of Practice on Local Authority Accounting in
            the United Kingdom (the SORP).

            In preparing this Statement of Accounts, the Treasurer has:
            *     selected suitable accounting policies and applied them consistently;
            *     made judgements and estimates that were reasonable and prudent;
            *     complied with the local authority SORP.
            The Treasurer has also :
            *     kept proper records which were up-to-date;
            *     taken reasonable steps for the prevention and detection of fraud and other irregularities.


       The Chairman of Finance Committee's Statement:


       I certify that the Statement of Accounts for 2005/06          Signed:
       was considered and approved by the Hampshire
       Police Authority's Finance Committee on 20 June
       2006.


                                                                     Date:                    25 September 2006


       The Treasurer's Certificate:

       I certify that the Statement of Accounts for the
       year ended 31 March 2006 required by the                      Signed:
       Accounts and Audit Regulations 2003 are set out on
       the following pages.

       I further certify that the Statement of Accounts
       presents fairly the financial position of the
       Hampshire Police Authority at 31 March 2006                   Date:                    25 September 2006
       and its income and expenditure for the year
       then ended.




Hampshire Police Authority                                      7                                 Statement of Accounts 2005/06
Statement on Internal Control for Hampshire Police Authority 2005/06

1     Scope of responsibility

1.1   Hampshire Police Authority is responsible for ensuring that its business is conducted
      in accordance with the law and proper standards, and that public money is
      safeguarded and properly accounted for, and used economically, efficiently and
      effectively. The Authority also has a duty under the Local Government Act 1999 to
      make arrangements to secure continuous improvement in the way in which its
      functions are exercised, having regard to a combination of economy, efficiency and
      effectiveness.

1.2   In discharging this overall responsibility, the Authority is also responsible for ensuring
      that there is a sound system of internal control which facilitates the effective exercise
      of the Authority’s functions and which includes arrangements for the management of
      risk. In addition, the Chief Constable has a responsibility to ensure internal control
      within the Constabulary.

2     The purpose of the system of internal control

2.1   The system of internal control is designed to manage risk to a reasonable level rather
      than to eliminate all risk of failure to achieve policies, aims and objectives; it can
      therefore only provide reasonable and not absolute assurance of effectiveness. The
      system of internal control is based on an ongoing process designed to identify and
      prioritise the risk to the achievement of the Authority’s policies, aims and objectives,
      to evaluate the likelihood of those risks being realised and the impact should they be
      realised, and to manage them efficiently, effectively and economically.


2.2   The system of internal control has been in place at the Authority for the year ended
      31 March 2006 and up to the date of approval of the annual report and accounts.

3     The internal control environment

3.1   The Police Authority’s objectives are set by the Authority annually. These objectives
      take into account objectives set nationally by the Home Office and inform objectives
      set locally at Force and Basic Command Unit/Department level. The achievement of
      Authority objectives is monitored through the relevant Authority committees. The
      achievement of Force objectives is monitored by the Chief Officers Group (ACPO
      Group), the relevant Force Boards and Committees.

3.2   The Authority has various plans and policies which are approved by the Authority. In
      addition there are formal terms of reference, codes of conduct, Financial Regulations
      and Standing Orders to enhance the control framework.


Hampshire Police Authority                        8                      Statement of Accounts 2005/06
Statement on Internal Control for Hampshire Police Authority 2005/06

3.3   The Force has supplemented these with policies and procedures. Each policy and
      procedure has a designated owner. There is a standard format for all Force policies
      and procedures. All policies and procedures are subject to consultation and must
      state how they are to be monitored and reviewed to ensure that they remain up to
      date. All policies are published on the Force intranet.

3.4   Compliance with Financial Regulations, Standing Orders, policies, procedures, laws
      and regulations is ensured through a variety of internal and external mechanisms
      using controls such as mandatory data entry, validation, clear forms, training,
      supervision, segregation of duties and inspection through self inspection,
      Professional Standards Department, Her Majesty’s Inspector of Constabulary,
      Surveillance Commissioner, Home Office, internal audit, external audit, Her Majesty's
      Revenue and Customs and other professional and government bodies. In addition,
      monitoring reports are made to ensure compliance.

3.5   A strategic risk register has been established to identify, monitor and manage
      significant risks. More detailed risks are identified in each policy and procedure, and
      in each operation order. It is each individual’s responsibility to identify, assess and
      manage risk. Employees are trained in risk assessment. However, it is
      acknowledged that significant further work is required to improve risk management
      such as documenting orgnisational risks, better monitoring of risk, better reporting of
      risk and further risk management training to embed risk management within the
      organisation.

3.6   The Authority and Force work to ensure economy, efficiency and effectiveness
      through the use of Best Value reviews. An Authority Performance Committee exists
      to ensure that reviews are undertaken in accordance with the timetable and that
      recommendations are appropriately considered and actioned.

3.7   The financial management of the Authority is controlled using the processes outlined
      above. The Finance Committee receives financial management reports and
      approves or recommends courses of action to take to ensure probity, stewardship
      and best value. The Force’s Resource Management Board also receives financial
      management reports for information, comment and recommendations.


3.8   Performance is rigorously measured and managed at all levels of the Authority. The
      Performance Committee is a key contributor to monitoring the achievement of the
      Authority’s objectives and challenging Force performance. The Chief Constable
      reviews performance through the Force Performance Review Group.

3.9   The Authority has utilised the CIPFA Rough Guide to compile the necessary
      assurances and evidence to support this statement. Corporate governance and the
      production of this statement is overseen by the Standards and Governance
      Committee.


Hampshire Police Authority                          9                         Statement of Accounts 2005/06
       Statement on Internal Control for Hampshire Police Authority 2005/06

       4     Review of effectiveness

       4.1   The Authority has responsibility for conducting, at least annually, a review of the
             effectiveness of the system of internal control. The review of the effectiveness of
             the system of internal control is informed by the work of the internal auditors and
             the executive managers within the Authority who have responsibility for the
             development and maintenance of the internal control environment, and also by
             comments made by the external auditors and other review agencies and
             inspectorates in their annual audit letter and other reports.

       4.2   The effectiveness of the system of internal control is reviewed through the
             submission of reports to the Police Authority and its committees. Reports are
             submitted by the Force, internal audit, external audit and other external agencies.
             Authority members scrutinise reports submitted and are able to question report
             owners. Members of the Authority have access to all information and may ask for
             additional work to be undertaken where they feel it is necessary. The Standards
             and Governance Committee monitors corporate governance and the effectiveness
             of the system of internal control. In particular, assurance is gained from the
             Treasurer's Annual Audit Opinion report based on the work undertaken by internal
             audit during the course of the year.

       4.3   We have been advised on the implications of the result of the review of the
             effectiveness of the system of internal control by the Standards and Governance
             Committee and plan to address weaknesses and ensure continuous improvement
             of the system is in place.

       5     Significant internal control issues

       5.1   There are no significant control issues, but there are still actions to be carried out
             during the next financial year to strengthen the control framework further. Action
             plans already exist to address the issues identified. Each action plan has a lead
             stakeholder and target dates. Progress against action plans will be monitored by
             the Authority's Standards and Governance Committee. The actions to be taken
             relate to:
                 - risk management
                 - performance data on stop and search

       5.2   Risk management work will be led by Business and Property Services Department.
             A number of developments have been implemented such as the risk register, but
             there is still significant work to be done. Improved systems for monitoring and
             reporting risk need to be introduced and maintained. In addition, further training
             and awareness of risk management needs to be extended in order to embed risk
             management across the organisation.




Hampshire Police Authority                            10                          Statement of Accounts 2005/06
       Statement on Internal Control for Hampshire Police Authority 2005/06

       5.3 The first phase of the Authority's new Records Management System (RMS) was
           implemented in 2005/06. RMS is designed to improve the efficiency and
           effectiveness of performance through the management of information across the
           Force. Police officers and staff have experienced some delays and difficulties
           when processing data on to the system which has resulted in inconsistencies and
           inaccuracies in the data held on the system and some backlogs of data to be
           processed on to the system within Command Units. This was largely addressed in
           2005/06. Full performance information in relation to crime and detections has now
           been provided to the Home Office. However, there remains some areas such as
           stop and search and compliance with the National Crime Recording Standards,
           where further work is required in order to produce reliable data output. The
           provision of this performance data is a high priority for the Force and action is
           already underway to address the issue.


            Signed by:




            Chairman of the Police Authority           Chief Constable


            Date: 25 September 2006                    Date: 25 September 2006




Hampshire Police Authority                        11                        Statement of Accounts 2005/06
Independent auditor's report to Hampshire Police Authority

I have audited the financial statements of Hampshire Police Authority for the year ended 31 March 2006
under the Audit Commission Act 1998, which comprise the Summary Revenue Account, the Consolidated
Balance Sheet, the Statement of Total Movement in Reserves, the Cash Flow Statement, and the related
notes. These financial statements have been prepared under the accounting policies set out within them.

This report is made solely to Hampshire Police Authority in accordance with Part II of the Audit Commission
Act 1998 and for no further purpose, as set out in paragraph 36 of the Statement of Responsibilities of
Auditors and of Audited Bodies prepared by the Audit Commission.
Respective responsibilities of the Chief Finance Officer and auditors
The Chief Finance Officer's responsibilities for preparing the financial statements in accordance with
applicable laws and regulations and the Statement of Recommended Practice on Local Authority
Accounting in the United Kingdom 2005 are set out in the Statement of Responsibilities.
My responsibility is to audit the financial 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 financial statements present fairly the financial position of the
Authority in accordance with applicable laws and regulations and the Statement of Recommended Practice
on Local Authority Accounting in the United Kingdom 2005.
I review whether the statement on internal control reflects compliance with CIPFA's guidance, 'The
Statement on Internal Control in Local Government: Meeting the Requirements of the Accounts and Audit
Regulations 2003' published on 2 April 2004. I report if it does not comply with proper practices specified
by CIPFA or if the statement is misleading or inconsistent with other information I am aware of from my
audit of the financial statements. I am not required to consider, nor have I considered whether the
statement on internal control covers all risks and controls. I am also not required to form an opinion on the
effectiveness of the authority's corporate governance procedures or its risk and control procedures.

I read the other information published with the financial statements, and consider whether it is consistent
with the audited financial statements. This other information comprises only the Explanatory Foreword. I
consider the implications for my report if I become aware of any apparent misstatements or material
inconsistencies with the financial statements. My responsibilities do not extend to any other information.
Basis of audit opinion
I conducted my audit in accordance with the Audit Commission Act 1998, the Code of Audit Practice issued
by the Audit Commission and International Standards on Auditing (UK and Ireland) issued by the Auditing
Practices Board.
An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the
financial statements. It also includes an assessment of the significant estimates and judgements made by
the Authority in the preparation of the financial statements, 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 financial
statements 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 financial
statements.
Opinion
In my opinion the financial statements present fairly, in accordance with applicable laws and regulations
and the Statement of Recommended Practice on Local Authority Accounting in the United Kingdom 2005,
the financial position of the Authority as at 31 March 2006 and its income and expenditure for the year then
ended.


Peter Arkell, District Auditor
Audit Commission, North Wing, Southern House, Sparrowgrove, Otterbourne, Winchester, SO21 2RU



Hampshire Police Authority                                 12                                 Statement of Accounts 2005/06
Independent auditor's report to Hampshire Police Authority

Conclusion on arrangements for securing economy, efficiency and effectives 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 to regularly review the adequacy and effectiveness of these arrangements.
Under the Local Government Act 1999, the Authority is required to prepare and publish a best
value performance plan summarising the Authority's assessment of its performance and position
in relation to its statutory duty to make arrangements to ensure continuous improvement in the
way in which its functions are exercised, having regard to a combination of economy, efficiency
and effectiveness.
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 required me to report to
you my conclusion in relation to proper arrangements, having regard to relevant criteria specified
by the Audit Commission for other local government bodies. 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.
I am required by section 7 of the Local Government Act 1999 to carry out an audit of the
authority's best value performance plan and issue a report:
   ● certifying that I have done so;
   ● stating whether I believe that the plan has been prepared and published in accordance
        with the statutory requirements set out in section 6 of the Local Government Act 1999 and
        statutory guidance; and
   ● where relevant, making any recommendations under section 7 of the Local Government
        Act 1999.
Conclusion
I have undertaken my audit in accordance with the Code of Audit Practice and I am satisfied
that, having regard to the criteria for the other local government bodies specified by the Audit
Commission and published in August 2005, in all significant respects, Hampshire Police
Authority made proper arrangements to secure economy, efficiency and effectiveness in its use
of resources for the year ending 31 March 2006.
Best Value Performance Plan
I issued my statutory report on the audit of the Authority's best value performance plan for the
financial year 2005/06 on 25 November 2005. I did not identify any matters to be reported to the
Authority and did not make any recommendations on procedures in relation to the plan.
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.


Peter Arkell, District Auditor
Audit Commission, North Wing, Southern House, Sparrowgrove, Otterbourne, Winchester, SO21
2RU


Hampshire Police Authority                            13                            Statement of Accounts 2005/06
Summary Revenue Account - Best Value Accounting Code of Practice
This Statement summarises the revenue transactions of the Authority. It shows the day-to-day running costs of
all services which are paid for by precepts, government grants and other revenue income. The service analysis

of expenditure and income is based on guidance given by CIPFA in its Best Value Accounting Code of Practice.

    Net                                                  Gross                            Net           Notes
Expenditure                                           Expenditure       Income        Expenditure
  2004/05                                               2005/06         2005/06         2005/06
   £000       Service Expenditure Analysis               £000             £000           £000
   16,241     Crime - Reducing crime                     23,214          -5,052             18,162       (1)
  125,746     Crime - Investigating crime               157,759         -18,843            138,916       (1)
   62,045     Policing in the community -                81,500         -25,625             55,875       (1)
                 Promoting public safety                                                                 (1)
    72,997    Policing in the community -                  87,417        -4,700              82,717      (1)
                 Assistance to the public                                                                (1)
     1,007    National police services undertaken           3,543        -2,667                 876
              locally
     1,095    Corporate and Democratic Core               1,152             -38               1,114      (2)
         0    Non-distributed costs                          60               0                  60      (3)
   279,131    Net Cost of Services                      354,645         -56,925             297,720

       628    Levies to National Police Services               642                              642      (4)
       -67    Surplus from Netley Trading Account                             -85               -85
         0    Movement in Provision of Bad Debts                    0                             0
    -7,819    Asset Management Revenue Account                             -8,170            -8,170      (5)
    -1,585    Investment Income                                            -1,420            -1,420
    81,290    Pensions interest cost and expected            91,290        -4,870            86,420      (3)
              return on pension assets
   351,578    Net Operating Expenditure                    446,577       -71,470            375,107

     3,292    Transfers to Earmarked Reserves                                                -1,842      (6)
       314    Revenue Contributions to Capital                                                1,116
        64    Reconciling Amount for Provision of Loan Repayment                             -1,831      (7)
   -96,201    Contribution from pension reserve                                             -98,505      (3)
   259,047    Amount to be Met From Government Grants                                       274,045
              and Local Taxation

   -48,942    Revenue Support Grant                                                         -46,274
   -24,374    Share of National Business Rates                                              -30,810
  -117,214    Police Grant                                                                 -120,596
   -70,982    Council Tax Precept                                                           -75,269
    -2,465    Net Fund (Surplus)/Deficit                                                      1,096      (6)

              General Reserve
    -4,000    Balance Brought Forward                                                        -6,465

    -6,465    Balance Carried Forward                                                        -5,369




Hampshire Police Authority                            14                            Statement of Accounts 2005/06
Summary Revenue Account - Subjective Analysis

This note restates the revenue transactions on a subjective basis based on guidance given in the CIPFA Best
Value Accounting Code of Practice
                                                                       2004/05        2005/06       Notes
Gross Expenditure                                                       £'000          £'000


    Employees                                                          202,209        216,684         [8]
    Pensions                                                            46,600         49,200         [9]
    Premises                                                             7,995           9,093
   Transport                                                             4,105          4,737
   Travel and Subsistence                                                4,248          4,714
   IT and Communications                                                15,148         14,433
   Supplies and Services                                                25,553         41,886
   Grants                                                                1,983          1,983
   Cost of servicing Police Authority                                    1,286          1,246        [10]
   Capital Charges                                                       8,623         10,669
                          Gross cost of services                       317,750        354,645
Service Income
   Service Income                                                      -20,728         -15,450
   Additional Grants                                                   -17,891         -41,475       [11]
                           Total Service Income                        -38,619         -56,925

Net Cost of Services                                                   279,131        297,720

   Levies to national policing agencies                                    628            642         [4]
   Appropriation from Trading Account                                      -67            -85
   Movement in provision for bad debts                                       0              0
   Asset Management Revenue Account                                     -7,819         -8,170         [5]
   Interest on balances                                                 -1,585         -1,420
   Pensions interest cost and expected return on                        81,290         86,420
   pension assets
Net Operating expenditure                                              351,578        375,107

   Contributions to/(from) reserves                                      3,292         -1,842         [6]
   Revenue contributions to capital                                        314          1,116
   Provision for repayment of external debt                                 64         -1,831         [7]
   Contribution from the pension reserve                               -96,201        -98,505
Net expenditure to be met from grants and taxation                     259,047        274,045

    Revenue Support Grant                                              -48,942        -46,274
    Share of National Business Rates                                   -24,374        -30,810
    Police Grant                                                      -117,214       -120,596
    Council Tax Precept                                                -70,982        -75,269

Net Revenue Account deficit/(surplus)                                   -2,465           1,096        [6]

    Balance Brought Forward                                             -4,000          -6,465

Balance Carried Forward                                                 -6,465          -5,369


                                                                                        Statement of Accounts 2005/06
Hampshire Police Authority                                 15
Notes to the Summary Revenue Account


  [1]   Best Value Accounting Code of Practice Service Expenditure Headings

The service expenditure analysis categories reflect those set out for police services in the Best Value
Accounting Code of Practice (BVACOP) issued by the Chartered Institute of Public Finance and
Accountancy (CIPFA). The categories, known as domains, reflect those used by the Home Office in its
Police Performance Assessment Framework (PPAF). PPAF domains are also used to generate Activity
Based Costing (ABC) data in accordance with the Home Office guidance manual. The requirements of
ABC have led to improved collection of activity analysis from timesheet completion and management
information for driving overhead costs, since 2004/05. These new processes can now be used to
generate more detailed apportionments of costs between the domains. Consequently, the methodology
for generating domain costs has been updated and the 2004/05 output has been restated using the
improved data available.
The changed methodology has the effect of bringing the BVACOP gross expenditure more into line with
expenditure levels output from ABC, however, there will be differences as the classification of activities
within domains vary slightly and the basis for apportioning overheads varies as BVACOP requires
overheads to be apportioned to all recipient services, which requires some circular recharging among
support departments which does not occur to the same extent within ABC.


  [2]   Corporate and Democratic Core

Corporate and Democratic Core (as defined by the Accounting Code of Practice) covers governance
structures of authorities and the infrastructure that enables information required for public accountability
purposes to be provided. For the Authority, Corporate and Democratic Core represents Police Authority
costs excluding grants paid out and internal audit costs which are reapportioned as a support service
cost over the net cost of service. Corporate and Democratic Core also includes an element of the costs
of the senior management of the Constabulary for time spent supporting and reporting to the Police
Authority.


  [3]   FRS17 entries

In accordance with FRS17, the cost of police officer and police staff pensions contributions is replaced
in the net cost of services by the current service cost and past service cost incurred during the year.
The pensions interest cost less the expected return on pension assets is shown within the net operating
expenditure. The aim of these entries is to represent better the financial position of the Authority by
including the estimated retirement benefits earned during the year rather than simply the contribution
payments made. The appropriation from the pension reserve has the effect of removing these FRS17
entries and replacing them with the cost of contributions made by the Authority during the year so that
the amount to be met from grants and taxation is not affected by FRS17. For further analysis of the
values involved see the further notes on pensions and FRS17 in the notes to the revenue account,
balance sheet and movement in reserves.




  [4]   Agency Services                                                          2004/05    2005/06
                                                                                  £'000      £'000
        The Authority paid the      Police National Computer                          558       574
        following levies:
                                    National Public Order Information Unit             70        68
                                                                                      628       642




Hampshire Police Authority                                    16                              Statement of Accounts 2005/06
Notes to the Summary Revenue Account


 [5] Asset Management Revenue Account                                                      2004/05     2005/06
                                                                                            £'000       £'000
The Asset Management Revenue Account
allows the accounts to show the full cost of the   Recharges to Services:                   8,623       10,669
use of assets by the service (shown in Capital     Less: depreciation & impairment         -4,725       -6,446
Charges) while not passing on these charges,         (net of Government grant)              4,180        4,223
which are notional, to taxpayers, by showing       Less:
the equivalent credit here.                        Interest paid to external lenders         -259         -276

                                                   Net credit to Revenue Account            7,819        8,170



 [6] Contributions to/(from) Reserves                                                      2004/05     2005/06
                                                                                            £'000       £'000
                                                   Other Reserves:
The Authority maintains a General Reserve to       Capital (revenue contributions)             907          -791
provide for unforeseen additional costs that       Pensions                                    323        -1,133
may arise during the year. As at 31 March          Insurances                                    0             0
2006 it represents 1.8% of the net cost of         Spend to save                               191          -423
services.
Specific reserves also are maintained to           Earmarked Reserves:
provide for special projects or against likely     Devolved budgets and
additional costs in particular areas such as        special projects                          1,984          453
police pension lump sums or claims against         Netley Business Plan                        -113           52
the Authority.
£52,000 of the £85,000 Netley Business Plan        Total excluding general reserve            3,292       -1,842
trading account surplus was transferred to the
reserve. £32,000 was contributed to capital        General Reserve:
expenditure.                                       Contribution (from)/to                     2,465       -1,096

Further details are provided in the Statement
of Movement in Reserves on pages 27 to 30.         Total including general reserve            5,757       -2,938



 [7] Provision for Repayment of External Debt                                              2004/05     2005/06
                                                                                            £'000       £'000
The Authority has a duty under the Capital
Finance Regulations to make a minimum              Depreciation
provision for debt repayment each year,             (net of Government grant)                 545        2,224
amounting to 4% of its unfunded capital
expenditure, which is a statutory measure of       Less Provision for repayments
the Authority’s net indebtedness to external       to external lenders                       -609         -393
lenders.
                                                      Net credit to Revenue Account           -64        1,831




Hampshire Police Authority                                 17                          Statement of Accounts 2005/06
Notes to the Summary Revenue Account


 [8] Employees
                                                             Salary Bands            Number in Band
                                                                    £               2004/05     2005/06
Employee costs include pay and taxable
allowances paid to officers and staff. It does not          50,000 - 59,999                96         105
include pension contributions. The Code                     60,000 - 69,999                20          34
requires the Authority to report on the number of           70,000 - 79,999                 7           8
employees who received taxable pay and                      80,000 - 89,999                 1           4
benefits totalling more than £50,000 in the year.           90,000 - 99,999                 1           0
This is shown in the table on the right. The               100,000 - 109,999                0           0
bandings are determined by the Code.                       110,000 - 119,999                1           2
                                                           120,000 - 129,999                0           1
                                                           130,000 - 139,999                2           1
                                                           140,000 - 149,999                0           0
                                                                Totals                    128         155



 [9] Pensions (net)                                                                 2004/05     2005/06
                                                                                     £'000       £'000
The table opposite shows the actual value of          Regular Payments                35,580      38,571
pension payments made in the year, less               Lump Sums                       10,339      13,433
contributions received, for police officer pensions   Transfer payments made             477         569
only. In accordance with FRS17, this figure is        Transfer payments received        -892      -1,376
replaced by the actuarial evaluation of the current   Contributions from officers    -12,091     -12,385
service cost within the net cost of services to       Total contributions             33,413      38,812
                                                      Reversal of contributions      -33,413     -38,812
represent the value of benefits earned in the year
                                                      FRS17 current service cost      46,600      49,200
rather than the actual amounts paid. Police staff
                                                      Total                           46,600      49,200
pension costs are included within the employees
heading on the subjective analysis. Both police
officer and staff pension costs are apportioned to
the relevant sevice expenditure area in the
BVACOP analysis.

Retirement benefits (FRS17) entries                    Police pensions              LGPS (police staff)
                                                      2004/05 2005/06               2004/05   2005/06
                                                       £'000     £'000               £'000     £'000
Net Cost of Services
      Current service cost                              46,600    49,200               6,430        7,670
      Past service cost                                      0         0                   0           60
Net Operating Expenditure
      Interest costs                                    79,500     85,100               5,250       6,190
      Expected retun on assets                               0          0              -3,460      -4,870
FRS17 pension reserve contribution                     -92,687    -95,488              -3,514      -3,017
Actual amount charged to grant & taxpayers              33,413     38,812               4,706       6,033

The nature of the schemes is explained in the accounting policies and further information is also given in
the notes to the balance sheet and movements in reserves. Under the projected unit method the current
service cost will increase as the members of the scheme approach retirement. The entires in the
revenue account relating to FRS17 entries are shown in note 3.




Hampshire Police Authority                                   18                            Statement of Accounts 2005/06
Notes to the Summary Revenue Account


[10] Cost of Servicing Police Authority                                            2004/05   2005/06
                                                                                    £'000     £'000
     The costs of running the Police Authority,    Employees                           253       246
     as opposed to the Constabulary, are kept      General running costs
     separately and details of how this cost is    (incl. Westgate Chambers)           268       283
     made up are shown in the table.               Members allowances                  238       254
     Note that the figure is higher than the       Clerk and Treasurer and their
     corporate and democratic core figure on       support teams' costs                115       144
     page 14 as that figure excludes grants        External Audit                       91        80
     paid out, internal audit (included opposite   Grants paid out                     321       239
     under Treasurer’s costs) and includes the     Gross Expenditure                 1,286     1,246
     cost of senior Constabulary staff attending   Income                              -29       -39
     Police Authority meetings.                    Net Expenditure                   1,257     1,207



[11] Additional Grants                                                             2004/05   2005/06
     In 2005/06 the following additional grants were received:                      £'000     £'000

     Chemical, Biological, Radiological and Nuclear (CBRN) - see note below            110    24,896

     Crime Fighting Fund (additional police officers)                                7,155     7,309
     Special priority payments                                                       1,705     2,226
     South East Allowance (cost of living allowance for certain police officers)     1,150     1,297
     Basic Command Unit grant                                                        1,232     1,232
     DNA database cost recovery                                                      1,240     1,113
     Single Non Emergency Number                                                         0       774
     Police Community Support Officers                                                   0       671
     Police National Procurement Centre                                                  0       550
     Terrorist & Allied Matters Grant                                                  190       221
     Rural Fund                                                                        219       219
     Counter terrorism grant                                                           136       211
     Local Criminal Justice Board                                                       88       187
     Healthy Police Initiative                                                         159       164
     Miscellaneous grants                                                            4,507       405
                                                                        Totals:     17,891    41,475

     Hampshire Police Authority acts as a conduit for the Home Office's CBRN centre so that the
     CBRN centre can make use of Hampshire Police Authority's facilities, services and contractual
     arrangements. Grant is received from the Home Office to cover the costs of operating the CBRN
     centre.


[12] Expenditure on publicity

     Section 5 of the Local Government Act 1986 requires the Authority to declare its third party
     expenditure on publicity. This amounted to £555,156 (£688,998 in 2004/05) of which £379,141
     (£450,681 in 2004/05) related to recruitment advertising.




Hampshire Police Authority                              19                         Statement of Accounts 2005/06
Notes to the Summary Revenue Account

[13]       Related Party Transactions

           The Code of Practice requires members of the Authority and certain senior officers to
           declare if there were any related party (i.e. close family or business associates)
           transactions. The returns received stated that no related party transactions took place in
           2005/06.



[14]       Members allowances

           In accordance with the Code of Practice, the amount spent on members allowances in
           2005/06 was £254,261 (£238,000 in 2004/05).



[15]       External audit fees

           In accordance with the Code of Practice, the amount spent on external audit in 2005/06
           was £80,000 (£82,000 in 2004/05). This figure relates entirely to instalments paid for the
           statutory external audit services. No additional services were required for the auditing of
           specific grant claims (£9,000 in 2004/05).


[16]       Leases

           The Police Authority has no finance leases but does have operating leases for several
           buildings. In 2005/06 payments totalling £714,000 for 16 premises (£646,000 for 15
           premises in 2004/05) were made.


[17]       Sponsorship

           The Police Act 1996 and the Code of Practice on Financial Management allow the
           Authority to accept gifts of money, or gifts or loans of other property, if they enable the
           Force to either extend or to enhance the service it would normally be expected to provide.
           The terms on which gifts or loans are accepted may allow commercial sponsorship of
           some police activities. A detailed set of procedures govern the circumstances in which
           such offers may be accepted. Loans or sponsorship received during 2005/06 totalled
           £91,268 (2004/05 £81,479) which is within the threshold of 1% of the annual budget
           beyond which there is a risk of the Authority losing a proportion of its Government grant.


[18]       Group Accounts

           The Authority has many partnership arrangements but is not required to publish group
           accounts as the Authority does not have any interests in any other corporate bodies.




Hampshire Police Authority                             20                         Statement of Accounts 2005/06
Consolidated Balance Sheet

This account shows the overall financial position of the Authority at 31 March 2006. The statement
consolidates all recorded assets, liabilities and other balances of the Authority in order to represent its
financial standing.
                                                                    31 March 2005 31 March 2006            Notes
                                                                         £'000              £'000
             Intangible Fixed Assets                                             38                29
             Tangible Fixed Assets
                 Operational Assets
                     Land and buildings                                    101,693            101,132
                     Vehicles and plant                                      8,039              8,956
                     Other                                                   6,694              8,375
                 Non-Operational Assets                                         687               529
                                           Total Fixed Assets              117,151            119,021       [1]
             Long-Term Investments                                                 0                0
             Long-Term Debtors                                                  133               287
                                   Total Long-Term Assets                  117,284            119,308
             Current Assets
                     Stocks                                                     544               875       [2]
                     Debtors etc.                                            6,940             11,036       [3]
                     Short-term investments                                 30,003             22,383       [4]
                     Cash                                                       247               271       [4]
                                        Total Current Assets                37,734             34,565
             Current Liabilities
                     Deposits                                                1,040              1,150       [5]
                     Bank overdrawn                                          4,454              3,903       [4]
                     Creditors                                              14,577             16,693       [6]
                                    Total Current Liabilities               20,071             21,746
             Net Current Assets                                             17,663             12,819

           Long-Term Assets & Net Current Assets                           134,947           132,127

           Long-Term Liabilities
                   Long-term borrowing                                       1,200             3,200       [7]
                   Deferred liabilities                                      3,185             2,974       [8]
                   Liability related to pension schemes                  1,644,379         1,824,024      [12]
             Total Long-Term Liabilities                                 1,648,764         1,830,198
           Total Assets less Liabilities                                -1,513,817        -1,698,071

           Financed by
                  Fixed Asset Restatement Account                           69,142            66,491       [9]
                  Capital Financing Account                                 24,314            29,654       [9]
                  Government Grants Deferred                                10,403            10,156      [10]
                  Unapplied Grants and Contributions                           260               260
                  Capital Receipt Reserve                                    4,113                 0       [9]

                    Capital (Revenue Contributions) Reserve                  4,734             3,943       [9]
                    Pensions Reserve                                         5,842             4,709       [9]
                    Insurance Reserve                                          394               394       [9]
                    Spend to Save Reserve                                      746               323       [9]
                    Earmarked Reserves                                       4,149             4,654       [9]
                    General Reserve                                          6,465             5,369       [9]
                    FRS17 Pensions Reserve                              -1,644,379        -1,824,024      [12]
           Total Equity                                                 -1,513,817        -1,698,071



Hampshire Police Authority                                     21                                Statement of Accounts 2005/06
Notes to Consolidated Balance Sheet

[1] Fixed Assets
Movements in the written-down value of fixed assets during the year are shown below. Reference should also
be made to the Statement of Accounting Policies as it relates to fixed assets (page 5).

                                                 Land       Non-              Vehicles Furniture            Total
                                    Intangible    and    Operational            and        and             Fixed
                                      Assets   Buildings   Assets              Plant    Equipment          Assets
Cost or Valuation                      £'000     £'000      £'000              £'000      £'000             £'000
Balance as at 1 April 2005                  42  104,724          687            17,673      26,079         149,205
Additions                                    0     2,613         341             3,752       4,261           10,967
Disposals                                    0    -1,910           0              -384           0           -2,294
Reclassifications                            0       499        -499                  0          0                0
Revaluations                                 0      -109           0                 -2          0             -111
Balance as at 31 March 2006                 42  105,817          529            21,039      30,340         157,767
Depreciation and impairment
Balance as at 1 April 2005                    4       3,031               0       9,634        19,385       32,054
Charge for the Year                           9       1,686               0       2,171         2,580        6,446
Disposals                                     0         -32               0         278             0          246
Balance as at 31 March 2006                  13       4,685               0      12,083        21,965       38,746
Net Book Value
Balance as at 31 March 2006                  29     101,132            529        8,956          8,375     119,021
Balance as at 31 March 2005                  38     101,693            687        8,039          6,694     117,151

This statement summarises capital expenditure incurred by the Police Authority on significant fixed assets
which will be of use to the Authority in future financial years. Future, as well as current, taxpayers will benefit
from these assets and such costs are therefore not necessarily charged to the revenue account in the year
that the asset is acquired. Within the depreciation and impairment charge there is a £90,000 impairment
(reduction in asset value) due to fire damage to the garage at Hedge End police station.

                                                                                            2004/05       2005/06
                                                                                             £'000         £'000
Capital expenditure for 2005/06 was
£11.147m. The introduction of the Prudential      Capital investment
Code regulations with effect from 2004/05         Land and Buildings                          4,212        2,613
gives local authorities substantially more        Non-operational buildings                     600          341
freedom in deciding what amount of capital        Vehicles                                    2,527        3,752
spend is prudent, affordable and sustainable.     IT & operational equip't                    4,609        4,261
It also means that the financing of capital       Keyworker Housing                             100          180
expenditure now operates on an accruals           Accruals adjustment                           277            0
basis rather than receipts and payments.          Total capital investment                   12,325       11,147

£10.967m of capital expenditure was on fixed      Sources of finance
assets as shown in the additions line of the      Government Grants                           7,724        3,976
table above. The remaining £180k is               Capital Contributions                           0            0
advances for keyworkers housing, treated as       Revenue Contributions                         314        1,116
a long term debtor.                               Capital Receipts                            4,287        6,055
                                                  Total capital financing                    12,325        11,147
Capital Commitments

The Authority has approved a capital programme of £19.8m for 2006/07. As at 31 March 2006 the Authority
had committed capital expenditure of £1.6m to premises, £0.7m to IT and communications, and £2.8m to
vehicles (£5.1m in total).




Hampshire Police Authority                                    22                               Statement of Accounts 2005/06
       Notes to Consolidated Balance Sheet


        [2] Stocks                                                                      31 March    31 March
                                                                                          2005        2006
       Stock is held by the Authority at various locations.                               £'000       £'000
       The uniform stock has increased significantly          Uniform stores                 324          658
       mainly due to the need to retain a greater amount      Vehicle spares                  84            74
       of body armour in stock as body armour is now          Fuel                            95          114
       personal issue. The fuel stock value has               Printing & stationery           24            25
       increased partly due to the increased value of         Other                           17             4
       fuel.                                                                                 544          875



        [3] Debtors and Payments in Advance
                                                                                        31 March    31 March
       Government debtors includes £2.0m VAT                                              2005        2006
       repayable (£1.5m as at 31 March 2005), £0.7m                                       £'000       £'000
       Single Non Emergency Number grant and nil for          Government depts              5,797        5,394
                                                              Local authorities               563          960
       Crime Fighting Fund grant (£1.8m as at 31 March
                                                              Other debtors                   521          588
       2005). Payments in advance have increased due          Payments in advance             104        4,139
       to the early payment of pensions as 1 April 2006       Less bad debt provision         -45          -45
       was a Saturday (£3.4m) and rates bills (£0.6m).                                      6,940      11,036
       The provision for bad debt remains at £45,000.




        [4] Cash and Deposits Repayable on Demand

       Short-term investments consist of surplus cash-                                  31 March    31 March
       flow balances, which are managed by Hampshire                                      2005        2006
       County Council on behalf of the Authority.                                         £'000       £'000
       Interest earned is credited to the Summary      Short term investments             30,003       22,383
       Revenue Account (see page 14).                  Main bank account                   -4,454       -3,903
       The overdrawn balance at the Bank represents    Petty cash                             247          271
       cheques drawn but not yet presented at 31 March                                    25,796       18,751
       2006. Also see the Cash Flow Statement on
       page 31.




        [5] Deposits                                                               31 March         31 March
                                                                                     2005             2006
       Money seized by the police is mainly from anti-                               £'000            £'000
       drugs activities. This money will either be repaid Money seized                   609               787
       with interest or forfeited Under the Police        Police Property Fund Act        62               108
       Property Acts, police authorities may set aside    Other                          146               111
       money received from the sale of stolen goods and Forfeited money                  223               144
       confiscations to make donations to charities.                                   1,040             1,150




Hampshire Police Authority                                      23                            Statement of Accounts 2005/06
Notes to Consolidated Balance Sheet


  [6]   Creditors                                                                     31 March 31 March
                                                                                        2005     2006
Government creditors include £5.3m for HM Revenue &                                     £'000    £'000
Customs in respect of deductions from salaries in March     Government depts              4,608    5,427
2006 not paid over until April 2006 (£4.6m at 31 March      Other local authorities         271    1,318
2005). Other creditors includes £1.3m for compensatory      Other creditors               8,268    7,205
grant owed (£1.6m at 31 March 2005). The increase in        Receipts in advance           1,430    2,743
receipts in advance is due to the increased amount of                                   14,577       16,693
specific funding.




  [7]   Long-Term Borrowing

              Interest Rate            Source of              Outstanding at            Maturity Date
                 Payable                 Loan                 31 March 2006
                                                                  £'000
                 8.50%                   PWLB                      500                     October 2015
                 6.00%                   PWLB                      350                   September 2023
                 4.88%                   PWLB                      350                       March 2025
                 3.85%                   PWLB                     2,000                   February 2036
                                                 Total:           3,200



  [8]   Deferred liabilities

This is the deemed debt to Hampshire County Council of £3.0m (£3.2m as at 31 March 2005). This is
the balance of the remaining debt transferred on the formation of the Police Authority in April 1995.



  [9]   Capital and Revenue Reserves

Details of these reserves are set out in the Statement of Movement in Reserves on page 27.



 [10] Government Grants Deferred                                                 31 March 31 March
                                                                                   2005     2006
This account contains grants received to finance                                   £'000    £'000
capital expenditure. Grant is released to offset       Opening balance             11,647   10,403
depreciation charges generated by the relevant assets Release of grants             -4,180   -4,223
over the life of those assets. An Unapplied Grants and Home Office Capital Grant     2,936    3,976
Contributions account was opened to calculate the
Capital Financing Requirement.                                                     10,403   10,156



 [11] Deferred charges, contingent liabilities and post balance sheet events

There are no deferred charges, contingent liabilities or post balance sheet events.




Hampshire Police Authority                                    24                                 Statement of Accounts 2005/06
Notes to Consolidated Balance Sheet


 [12]   FRS17 assets and liabilities

The figures shown in this note are taken from the actuary's disclosure. The net liability shown in this
note differs to the amount shown in the balance sheet as the entries in the revenue account and balance
sheet have had the actuary's estimated contributions figure replaced by the actual figure. The difference
is not material (0.0%), especially as all FRS17 figures are estimates.
The nature of the two schemes operated is explained in the accounting policies. Further information on
retirement benefits is also given in the notes to the revenue account. The total assets and liabilities for
retirement benefits attributable to the Authority were as follows:
                            Local Govt Pension          Police Pension Scheme                Total
                           3/31/2005      3/31/2006     3/31/2005    3/31/2006     3/31/2005 3/31/2006
                              £m             £m            £m           £m             £m             £m
Estimated liabilities          -112.73       -137.60      -1,599.90    -1,777.80 -1,712.63 -1,915.40
Estimated assets                  67.74         90.98          0.00          0.00        67.74         90.98
Net asset/(liability)            -44.99        -46.62     -1,599.90    -1,777.80 -1,644.89 -1,824.42

The liabilities show the commitments that the Authority has in the long-term to pay retirement benefits.
The net liability has a substantial impact on the net worth of the Authority as recorded in the balance
sheet, resulting in a negative overall balance. However, the deficit on the LGPS scheme 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. Therefore, the statutory arrangements for funding the deficit means that the
financial position of the Authority remains sound.
The estimates are provided by the Authority's actuary, Hewitt, Bacon & Woodrow. The most recent full
valuation of the police pension scheme was carried out as at 31 March 2005 and the most recent full
valuation of the police staff (LGPS) scheme was as at 31 March 2004. The actuary has updated the
estimates for FRS17 purposes as at 31 March 2006. Liabilities are valued on an actuarial basis using
the projected unit method which assesses the future liabilities discounted to their present value. The
actuarial valuation is based on estimated figures provided to the actuary before the year ended. The
valuation is based upon the following assumptions for both schemes:
         Rate                                                31 March 2005              31 March 2006
         Discount rate                                                    5.3%pa                   4.9%pa
         Rate of increase in salaries                                     4.4%pa                   4.5%pa
         Rate of increase in pensions in payment                          2.9%pa                   3.0%pa
         Rate of increase in deferred pensions                            2.9%pa                   3.0%pa
         Rate of inflation                                                2.9%pa                   3.0%pa
Changes to the LGPS permit employees retiring on or after 6 April 2006 to take an increase in their lump
sum payment on retirement in exchange for a reduction in their future annual pension. It has been
assumed that 50% of LGPS members retiring after April 2006 will take advantage of this change. This
will reduce the value of the LGPS liability which has been treated as a gain resulting from a change in
assumptions and included within the figures in the Statement of Movement in Reserves (see page 28).
There are no material prepaid or accrued pensions contributions at the balance sheet date. The
Authority does have a separate cash backed pension reserve to smooth out the impact of pension costs
over a number of years.
The police pension scheme has no assets to cover its liabilities. Assets in the Local Government
Pension Scheme are valued at fair value, principally market value for investments, and consist of the
following categories, by proportion of the total assets held by the fund:
         Category             Long term return               31 March 2005              31 March 2006
         Equities                            7.3% pa                         69%                      70%
         Bonds                               4.3% pa                         22%                      21%
         Property                            6.3% pa                          4%                        4%
         Other Assets                        4.6% pa                          5%                        5%
                                                                            100%                     100%




Hampshire Police Authority                                     25                                 Statement of Accounts 2005/06
       Notes to Consolidated Balance Sheet


         [12]    FRS17 assets and liabilities continued…

       The movement in liabilities for the year to 31 March 2006 is as follows:
                                                                                     LGPS     Police
                                                                                      £m        £m
       Liabilities at beginning of year                                               -44.99 -1,599.90
       Movement in year:
                   Operating Charge:
                              Current service cost                                      -7.67     -49.20
                              Past service cost                                         -0.06       0.00
                              Gain/loss on any settlements or curtailments               0.00       0.00
                   Total Operating Charge                                               -7.73     -49.20

                 Contributions (pensions paid less employee contributions)               6.16      38.80

                 Expected return on Pension Fund assets                                  4.87       0.00
                 Interest on pension scheme liabilities                                 -6.19     -85.10
                 Total Finance Income                                                   -1.32     -85.10

                 Actuarial gain/loss                                                     1.26     -82.40

       Liabilities at end of year                                                      -46.62 -1,777.80


       The actuarial gain/loss can be further analysed as follows:
                                                                                     Amount   Amount
                                                                                      (£m)     (£m)
                 Actual return less expected return on assets                           11.67     0.00
                 Experience gains and losses on pension liabilities                      0.02    90.10
                 Changes in assumptions underlying the present value of                -10.43  -172.50
                 pension liabilities
                 Total                                                                   1.26     -82.40

                 Police staff
                 Hampshire Police Authority's standard contribution rate over the accounting period was
                 250% of members' contributions. The contribution rates certified for Hampshire Police
                 Authority at the 31 March 2004 valuation are as follows:
                 April 2005 to March 2006 250% of members' contributions
                 April 2006 to March 2007 275% of members' contributions
                 April 2007 to March 2008 295% of members' contributions



         [13]    Lease commitments
                                                    Annual commitments split by expiry dates     £'000
       As at 31 March 2006, the Authority was       Leases expiring in 2006/07                        95
       committed to making operating lease          Leases expiring between 2007/08 and              135
       payments, all for land and buildings, of     Leases expiring after 2011/12                    471
       £701,000 in 2006/07.                         Total                                            701




Hampshire Police Authority                                   26                            Statement of Accounts 2005/06
Statement of Movements in Reserves


                                      Capital Reserves                 Revenue Reserves
                                                                                                      Total
                                   Unrealised    Realised         Realised       FRS17
                                     £'000        £'000            £'000          £'000               £'000

Balance at 1 April 2005                93,456      14,776           22,330             -1,644,379   -1,513,817

Net Contributions to Revenue                                        -2,938                              -2,938
Revaluation of Fixed Assets               -111                                                            -111
Disposal of Fixed Assets                -2,540      1,942                                                 -598

Financing of Fixed Assets etc.           7,171     -10,278                                             -3,107
Other Transactions (net)                -1,831       3,976                              -179,645     -177,500


Balance at 31 March 2006               96,145      10,416           19,392             -1,824,024   -1,698,071

                          Notes:       [1]         [1]              [2]                    [2]


Notes to Statement of Movements in Reserves


 [1]   Capital reserves
                                                        Capital Reserves
                                          Unrealised                     Realised
                                   Fixed Asset    Capital       Capital     Govt Unapplied            Total
                                   Restatement Financing       Receipts    Grants  Grants
                                     Account      Account       Reserve   Deferred
                                      £'000         £'000        £'000     £'000   £'000             £'000
Balance at 1 April 2005               69,142       24,314         4,113    10,403   260             108,232

Net Contributions to Revenue                                                                              0
Revaluation of Fixed Assets             -111                                                           -111
Disposal of Fixed Assets              -2,540                       1,942                               -598

Financing of Fixed Assets etc.                     7,171           -6,055     -4,223                  -3,107
Other Transactions (net)                          -1,831                       3,976                   2,145

Balance at 31 March 2006              66,491     29,654                   0   10,156       260      106,561




Hampshire Police Authority                                   27                              Statement of Accounts 2004/05
Notes to Statement of Movements in Reserves

    [2]    Revenue reserves

                                         Revenue Reserves
                                        Realised                         FRS17
                   Capital                     Spend                     FRS17       Total
                  Revenue Pensions Insurance     to  Earmarked General Pensions
                   Conts                       Save
                   £'000   £'000     £'000     £'000   £'000    £'000     £'000      £'000
As at 1 Apr 05      4,734    5,842       394     746     4,149   6,465 -1,644,379 -1,622,049

From revenue           200           0          0        0          505         0           0          705

Actuarial gains          0           0          0        0              0       0    -179,645      -179,645
and losses

To revenue            -991     -1,133           0     -423              0   -1,096          0        -3,643

As at 31 Mar 06      3,943      4,709         394     323          4,654    5,369 -1,824,024 -1,804,632

The actuarial gains and losses above represent the movement in the year as a result of the FRS17
disclosure provided by the Authority's actuary. This includes current service cost, interest on pension
liabilities, etc as broken down in note 12 on page 26. Within that total, there is an amount of -£81.14m
also known as 'actuarial gains and losses' which encompasses movements due to changes in actuarial
assumptions or movements due to the actual value being different to the estimated value in the previous
disclosure. This is actuarial gain/loss of -£81.14m is analysed further below.



Actuarial gain/loss
The actuarial gain/loss can be further analysed as follows:
                                                                LGPS (staff)                Police
                                                              Amount Percent         Amount       Percent
                                                               (£m)                   (£m)
Actual return less expected return on assets                     11.67 12.80%             0.00        0.0%
Experience gains and losses on pension liabilities                0.02 0.00%             90.10        5.1%
Changes in assumptions underlying the present value of          -10.43 -7.60%          -172.50       -9.7%
pension liabilities (GAD change)
Total                                                               1.26    0.90%       -82.40        -4.6%



Earmarked Reserves                                                                   31 March     31 March
Specific reserves are also maintained to provide for special projects                  2005         2006
or against likely additional costs in particular areas.                                £'000        £'000

           Devolved Budgets and Special Projects                                         3,914        4,367
           Netley Business Plan                                                            235          287
                                                                                         4,149        4,654




Hampshire Police Authority                                    28                                 Statement of Accounts 2005/06
Notes to Statement of Movements in Reserves


[i]     Movements in realised capital resources                                               Capital Receipts
                                                                                                   £'000
        Amounts receivable in 2005/06                                                                      1,942
        Amounts applied to finance new capital expenditure in 2005/06                                     -6,055
        Total increase/(decrease) in realised capital resources in 2005/06                                -4,113
        Balance brought forward 1 April 2005                                                               4,113
        Balance carried forward 31 March 2006                                                                  0

                                                                                                Fixed Asset
[ii]    Movements in unrealised value of fixed assets                                       Restatement Account
                                                                                                   £'000
        Unrealised gain/(loss) on revaluation of fixed assets 2005/06                                       -102
        Amounts written off for capital expenditure not enhancing value                                       -9
        Impairment losses on fixed assets due to general changes in prices                                     0
        Total increase/(decrease) in unrealised capital resources                                           -111

[iii]   Value of assets sold or disposed of
        Amounts written off fixed asset balances for disposals 2005/06                                    -2,540
        Total movement on reserve in 2005/06                                                              -2,540
        Balance brought forward 1 April 2005                                                              69,142
        Balance carried forward 31 March 2006                                                             66,602
        Add movement in unrealised fixed assets as above                                                    -111
        Reconciles to FARA balance                                                                        66,491


[iv]    Movements in amounts set aside to                                     Capital       Government
        finance capital investment                                           Financing        Grants      Total
                                                                              Account        Deferred
                                                                               £'000           £'000      £'000

Capital receipts set aside in 2005/06:                                                 0
Reserved receipts                                                                      0
Useable receipts applied                                                           6,055
Total capital receipts set aside in 2005/06                                        6,055                   6,055

Revenue resources set aside in 2005/06
-capital expenditure financed from revenue contributions                            1,116
-reconciling amount for provisions for debt repayment                              -1,831
Total revenue receipts set aside in 2005/06                                          -715                   -715

Grant applied to capital investment in 2005/06                                                    3,976
Amounts credited to the asset management revenue account                                         -4,223
Movement on Government Grants Deferred                                                             -247     -247

Total increase/(decrease) in amounts set aside to finance capital                                          5,093
investment

Total movement on reserve in 2005/06                                               5,340           -247
Balance brought forward 1 April 2005                                              24,314         10,403
Balance carried forward 31 March 2006                                             29,654         10,156



Hampshire Police Authority                                 29                         Statement of Accounts 2005/06
       Notes to Statement of Movements in Reserves

       The Accounting Code of Practice requires additional analysis of the total movements on reserves in order
       to comply with the requirements of Financial Reporting Standard 3 with respect to providing a statement
       of total gains and losses.

       Statement of Movement in Reserves                                   2004/05               2005/06
                                                                        £000     £000         £000     £000
       Surplus/(Deficit) for the year
       General fund movement                                             2,465                -1,096
       Other reserves                                                    3,293                -1,842
       Actuarial gains and losses relating to pensions                -375,891              -179,645
       Total increase/(decrease) in revenue resources                            -370,133              -182,583

       Increase/(decrease) in useable capital receipts                  -2,867                -4,113

       Total increase/(decrease) in realised
       Capital resources (note 1)                                                  -2,867                -4,113

       Gains/losses on revaluation of fixed assets                       7,637                  -102
       Amounts written off for capital expenditure not enhancing
       value                                                              -173                    -9
       Impairment losses on fixed assets due to general
       changes in prices                                                     0                     0

       Total increase/(decrease) in unrealised value of                             7,464                 -111
       fixed assets (note 2)

                                         of (note
       Value of assets sold or disposed of (note3)3)                      -888       -888     -2,540     -2,540

       Capital Receipts set aside                                        4,287                6,055
       Revenue Resources set aside                                         378                 -715
       Movement on government grants deferred                             -984                 -247

       Total increase/(decrease) in amounts set aside                               3,681                5,093
       to finance capital investment (note 4)

       Total recognised gains and losses                                         -362,743              -184,254

       Movement in balance sheet                                                 -362,743              -184,254




Hampshire Police Authority                                  30                              Statement of Accounts 2005/06
Cash Flow Statement

This statement shows the movement in cash during the year. It is consolidated and therefore, excludes significant internal
transfers between accounts that do not involve transactions with third parties and excludes non-cash transactions.


Revenue Activities:                        £'000       £'000    Notes [1] Analysis of additional Revenue Grants        £'000
                                                                     See note 11 to the revenue account (p19)          41,365
  Cash Outflows:                                                     Difference of £110,000 is the difference between the
   Employees                             214,987                     accrued amount and the actual cashflow e.g. income
   Pensions                               38,812                     received after 31 March 06 which is accrued to 2005/06.
   Other                                  76,616
   Other                                 330,415                        [2] Reconciliation to Revenue Account
                                                                                                           £'000         £'000
  Cash Inflows:                                                        Deficit for the year                               1,096
   Revenue Support Grant                  -46,274                      Interest paid                                        -276
   Share of Business Rate                 -30,810                      Interest received                                  1,420
   Police Grant                          -120,596                      Changes in:
   Council Tax                            -75,269                           Increase in debtors             4,388
   Service Income:                        -11,172                           Increase in revenue creditors  -2,118
   Additional Grant                       -41,365                [1]                                                         2,270
                                         -325,486
             Net Revenue Activities:                   4,929     [2] Non cash transactions
                                                                     Contributions to reserves                            1,843
Returns on Investments and                                           MRP                                                   -393
Servicing of Finance                                                 Trading account surplus                                 85
    Interest Received                      -1,452                    Revenue contributions to capital                    -1,116
    Interest Paid                             276
    Disposal of Investments                     0                       Net cash outflow from revenue activities             4,929
Net Cash Inflow From Return on             -1,176
    Investment and Servicing of                                        [3] Movements in short term investments           £'000
               Finance:                               -1,176           At 31 March 2005:
                                                                           Short term investments                        30,003
Capital Activities                                                     At 31 March 2006:
 Cash Outflows:                                                            Short term investments                        22,383
   Purchase of Fixed Assets               10,969
   Other capial payments                     180                             Increase in short term investments:         -7,620
  Cash Inflows:                                                        [4] Movements in long term borrowing              £'000
   Sales of Assets                         -1,942
   Contributions                                0                      At 31 March 2005:
   Government Grant                        -4,236                          Deemed debt                                       3,185
                                           -6,178
Net Cash Outflow/(Inflow)                                              At 31 March 2006:
              from Capital Activities:                 4,971               Deemed debt                                       2,974
Management of Liquid Resources
Net Increase/(Decrease) in                                                              Decrease in deemed debt               211
    Short-Term Investments                 -7,620
    Deposits movement                         110     -7,510     [3]
Financing Transactions:                                              [5] Analysis of cash balances         £'000         £'000
    Principal Repayments                      211                    At 31 March 2005:
    New Loans raised                       -2,000                         Bank overdrawn                   -4,454
                                                                          Cash                                247        -4,207
 Net cash outflow from financing transactions:        -1,789     [4] At 31 March 2006:
                                                                          Bank overdrawn                   -3,903
                   Decrease/(Increase) in Cash          -575     [5]      Cash                                271        -3,632
                                                                                    Decrease/(increase) in cash            -575




    Hampshire Police Authority                                    31                                Statement of Accounts 2005/06
Glossary

Agency Services
Services which are performed by or for another authority or public body where the agent is
reimbursed for the cost of work done. The agency costs incurred by the Authority relate to
the National Police Computer and National Public Order Information Unit.

Asset Management Revenue
An account required under the system of capital accounting which allows the revenue
accounts to show the cost of use of assets. All external interest payments are charged to
the account. The account ensures that capital charges have a neutral impact on the
amounts required to be raised from local taxation.

BCU
Basic Command Units (BCUs) were formerly known as divisions. They provide
geographically based policing focused on the community they serve.

Capital Charges
A charge made to the revenue account for capital assets used in the delivery of service.
The charge comprises two elements; a financing charge based on the value that the asset
is held at in the Balance Sheet and a depreciation charge. Depreciation represents the
consumption of an asset due to deterioration etc.

Capital Expenditure
Expenditure on the provision and improvement of assets such as land, buildings, vehicles
and major items of equipment providing benefit to the Authority over a life of more than
one year.

Capital Financing Account
An account which contains amounts set aside from Revenue or from capital receipts to
finance expenditure on fixed assets or for the repayment of external loans and a number
of other capital financing transactions.

Capital Receipts
Money obtained on the sale of a capital asset. Capital receipts can be used to finance
new capital expenditure or to repay loan debt within rules set down by the government, but
they cannot be used to finance revenue expenditure.

Credit Arrangements
An arrangement other than borrowing where the use of a capital asset is obtained and
paid for over a period of more than one year. The main types of credit arrangements are
leases of buildings, land and equipment.




Hampshire Police Authority                   32                     Statement of Accounts 2005/06
       Glossary

       Creditors
       Individuals or organisations to whom the Authority owes money at the end of the financial
       year for work done, goods received or services rendered but for which payment has not
       been made at 31 March.

       Debtors
       Individuals or organisations who owe the Authority money at the end of the financial year.

       Financial Year
       The annual period of accounting (for police authorities 1 April to 31 March).

       Fixed Assets
       Assets that yield benefits to the Authority for a period of more than one year.

       Fixed Asset Restatement Account
       A capital reserve designed to reflect the valuation surplus arising from the difference
       between the book value of fixed assets prior to the implementation of the capital
       Accounting Code of Practice at 1 April 1994 and revalued amounts, adjusted for
       subsequent revaluations and disposals.

       Government Grants
       Part of the cost of the service is paid for by central government. Revenue Support Grant
       (RSG) is a general grant which was paid by the Office of the Deputy Prime Minister in
       2005/06. RSG will be paid by the Department for Communities and Local Government in
       future. Specific grants are paid by the Home Office to the Authority towards both revenue
       and capital expenditure.

       Government Grants Deferred Account
       The amount of money given to the Authority to spend on assets that have a lasting value,
       for example vehicles, land and buildings. The amount is reduced each year as the value of
       the asset reduces due to depreciation.

       Precept
       The levying of a council tax rate by one authority which is collected by another. The
       Authority precepts upon the district/unitary councils’ collection funds for its council tax
       income.

       Revenue Expenditure
       Expenditure to meet the day to day running costs of services including wages and
       salaries, purchase of materials and services and capital financing charges.

       Reserves
       Accumulated sums which are maintained either to be earmarked for specific liabilities (e.g.
       pensions, insurance) or generally held to meet unforeseen or emergency expenditure (e.g.
       General Reserve).




Hampshire Police Authority                            33                          Statement of Accounts 2005/06

				
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