Chief Constable of Essex Statement of Accounts for 2012/13. Contents

Transcription

1 Chief Constable of Essex Statement of Accounts for 2012/13 Contents Page 2-3 Page 4 Pages 5-7 Page 8 Page 9 Page 10 Page 11 Foreword to the Accounts Statement of Responsibilities Independent Auditor s Report Movement in Reserves Statement Comprehensive Income and Expenditure Statement Balance Sheet Cash Flow Statement Pages Notes to the Accounts Page14 Page 15 Annual Governance Statement Glossary of Terms 1

2 Foreword to the Accounts for the Chief Constable of Essex Introduction For the purposes of this Statement of Accounts all references made in previous years to the Authority have been replaced with references to the Police and Crime Commissioner (PCC), who is the Local Policing Body for Essex. In addition references made in previous years to the Constabulary have been replaced with references to the Chief Constable. It is vital that the Chief Constable has the right resources to deliver an effective and efficient police service to the people of Essex. Having the right level of funding is a key part of that and each year the PCC sets the budget for policing in the county. The majority of the PCC s funding is provided by Government grant with around one third of gross expenditure in 2012/13 being met by local council tax payers. The key duty of the PCC is to oversee the provision of an efficient and effective police service. The PCC is responsible for producing an annual Crime and Policing Plan and for managing overall expenditure within the budget, although responsibility for day to day financial management is delegated to the Chief Constable within the annual budget set and the financial framework agreed by the PCC. The Police Authority and subsequently the PCC have worked hard with the Chief Constable to deliver policing services that represent good value for money and ensure its financial position remains strong during these challenging economic conditions. In the light of the continuing reduction in grant funding over the medium-term it has needed to have strong financial management controls in place during 2012/13 so as to reduce planned spending to a level that is sustainable in future years. The Chief Constable has a successful record of delivery of sustainable efficiency savings over a number of years and the need to maintain this strong record will be important in the years ahead in view of the reduction in public sector spending. The Chief Constable has a statutory duty to approve and publish a Statement of Accounts covering a 12 month reporting position. These accounts cover the period 1 st April 2012 to 31 st March 2013 and have been compiled in accordance with recommended practice from the Chartered Institute of Public Finance and Accountancy (CIPFA). The format is largely prescribed in the CIPFA Code of Practice on Local Authority Accounting in the United Kingdom. The Accounting Statements In 2011/12 the Police Reform and Social Responsibility Act 2011 was passed and introduced new elected local policing bodies in the form of Police and Crime Commissioners, for each policing area, to replace the previous Police Authorities. At midnight on 21 st November 2012, all property, rights and liabilities which immediately before that time were property, rights and liabilities of the Essex Police Authority were transferred to the Police and Crime Commissioner for Essex as the new PCC for the area. The 2011 Act set-up two corporation soles, the Police and Crime Commissioner and the Chief Constable. The two corporation soles are both schedule 2 bodies under the 1998 Audit Commission Act and so are both required to publish accounts and are subject to audit. Whilst the Chief Constable has day to day control over most of the Police and Crime Commissioner s assets as well as daily direction and control over all police officers and a great majority of police staff, the level of financial and strategic control held by the Police and Crime Commissioner means that on balance, transactions, benefits and liabilities sit within the accounts of the Police and Crime Commissioner and there will be no transactions or balances within the Chief Constable s accounts. This is in accordance with the principles of IAS 18 Revenue recognition. Whilst the change in arrangements was implemented mid-year, as ownership before and after the change was 100% public sector, merger accounting has been applied as set out in Local Authority Accounting (LAAP) bulletin 95 by CIPFA. This approach requires the Chief Constable to account for the new arrangements as if they been in place for 2

3 Foreword to the Accounts for the Chief Constable of Essex the whole of 2012/13. This Statement of Accounts for 2012/13 therefore covers the period from 1 st April 2012 to 31 st March These are the first statutory accounts prepared under these new arrangements. The Commissioner sets strategic direction through his Police and Crime Plan and exercising control of funding by delegation to the Chief Constable. This is reflected in accounting terms by the existence of a group relationship between the two corporation soles. Group relationships require the completion of a consolidated group Statement of Accounts in addition to those for the individual entities. However, as all transactions and balances are to be shown in the accounts of the Commissioner, his accounts will effectively be the same as those for the group and so only the group accounts are published. All of the financial transactions incurred during 2012/13 for policing Essex have, therefore, been recognised and recorded within the Police and Crime Commissioner Group Statement of Accounts, a separate document, which setsout the overall group position of the Police and Crime Commissioner Group for the year ending 31 st March The group position Police and Crime Commissioner Group reflects the consolidated accounts of the Police and Crime Commissioner for Essex and its accounting subsidiary the Chief Constable of Essex. It is expected that Essex will progress to Stage 2 transfer at the end of the 2013/14 financial year and so the current arrangements, whereby the Commissioner controls all income and delegates budget for the provision of police services to the Chief Constable, will remain in place for 2013/14. 3

4 The Chief Constable s responsibilities The Chief Constable is required: Statement of Responsibilities for the Statement of Accounts to make arrangements for the proper administration of his financial affairs and to ensure that one of his officers (the Chief Finance Officer of the Chief Constable) has the responsibility for the administration of those affairs to manage his affairs to secure economic, efficient and effective use of resources and safeguard its assets; to approve the Statement of Accounts by 30 September Completion of the Approval Process by the Chief Constable of Essex I confirm that I approve these Statement of Accounts following completion of the audit. Stephen Kavanagh Chief Constable of Essex 26 September 2013 The Chief Finance Officer of the Chief Constable s Responsibilities The Chief Finance Officer of the Chief Constable is responsible for the preparation of the Statement of Accounts for the Chief Constable of Essex in accordance with proper practices as set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in The United Kingdom ( The Code of Practice'). In preparing this Statement of Accounts, the Chief Finance Officer has: selected suitable accounting policies and then applied them consistently; made judgements and estimates that were reasonable and prudent; complied with the Code of Practice. The Chief Finance Officer of the Chief Constable has also: ensured that proper accounting records are kept which are up to date; taken reasonable steps for the prevention and detection of fraud and other irregularities. I certify that this Statement of Accounts have been prepared in accordance with proper accounting practices and provide a true and fair view of the financial position of the Chief Constable at 31 March Deborah A. Martin BA (Hons), CPFA Chief Finance Officer of the Chief Constable 26 September

5 Independent Auditor s Report to the Chief Constable of Essex Opinion on the Chief Constable s financial statements We have audited the financial statements of the Chief Constable of Essex for the year ended 31 March 2013 under the Audit Commission Act The financial statements comprise the Movement in Reserves Statement, the Comprehensive Income and Expenditure Statement, the Balance Sheet, the Cash Flow Statement and the related notes 1 to 3. The financial reporting framework that has been applied in their preparation is applicable law and the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2012/13. This report is made solely to the Chief Constable of Essex, as a body, in accordance with Part II of the Audit Commission Act 1998 and for no other purpose, as set out in paragraph 48 of the Statement of Responsibilities of Auditors and Audited Bodies published by the Audit Commission in March To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Chief Constable of Essex, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of the Chief Finance Officer and auditor As explained more fully in the Statement of the Chief Finance Officer s Responsibilities set out on page 4, the Chief Finance Officer is responsible for the preparation of the Statement of Accounts, which includes the financial statements, in accordance with proper practices as set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2012/13, and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board s Ethical Standards for Auditors. Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Chief Constable of Essex s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Chief Finance Officer; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Statement of Accounts for 2012/13 to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. Opinion on financial statements In our opinion the financial statements: give a true and fair view of the financial position of the Chief Constable of Essex as at 31 March 2013 and of its expenditure and income for the year then ended; and have been prepared properly in accordance with the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2012/13. Opinion on other matters In our opinion, the information given in the Chief Constable of Essex Statement of Accounts for 2012/13 for the financial year for which the financial statements are prepared is consistent with the financial statements. 5

6 Independent Auditor s Report to the Chief Constable of Essex Matters on which we report by exception Matters on which we report by exception We report to you if: in our opinion the annual governance statement does not reflect compliance with Delivering Good Governance in Local Government: a Framework published by CIPFA/SOLACE in June 2007; we issue a report in the public interest under section 8 of the Audit Commission Act 1998; we designate under section 11 of the Audit Commission Act 1998 any recommendation as one that requires the Authority to consider it at a public meeting and to decide what action to take in response; or we exercise any other special powers of the auditor under the Audit Commission Act We have nothing to report in these respects. Conclusion on the Chief Constable of Essex s arrangements for securing economy, efficiency and effectiveness in the use of resources We are required under Section 5 of the Audit Commission Act 1998 to satisfy ourselves that the Chief Constable of Essex has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources. We are also required by the Audit Commission s Code of Audit Practice to report any matters that prevent us being satisfied that the audited body has put in place such arrangements. We have undertaken our audit in accordance with the Code of Audit Practice and, having regard to the guidance issued by the Audit Commission, We have considered the results of the following: our review of the Annual Governance Statement; the work of other relevant regulatory bodies or inspectorates, to the extent the results of the work have an impact on our responsibilities; and our locally determined risk-based work. As a result, we have concluded that there are no matters to report. 6

7 Independent Auditor s Report to the Chief Constable of Essex Delay in certification of completion of the audit We cannot formally conclude the audit and issue an audit certificate until we have completed the work necessary to issue our assurance statement in respect of the Police & Crime Commissioner Group Whole of Government Accounts consolidation pack. We are satisfied that this work does not have a material effect on the financial statements or on our value for money conclusion. Debbie Hanson for and on behalf of Ernst & Young LLP, Appointed Auditor Luton 30 September

8 Movement in Reserves Statement for the Chief Constable of Essex This statement shows the movement during the year on the different reserves held by the Chief Constable, analysed into usable reserves (i.e. those that can be applied to fund expenditure or reduce local taxation) and unusable reserves. All balances are held by the Police and Crime Commissioner and so there are no entries in the statement. Held for revenue purposes Usable Reserves Held for capital purposes Future capital funding Capital Receipts Capital Grants Unapplied Total Total Total General Earmarked Usable Unusable Reserves Balance at 1 April (Surplus)/deficit on provision of services (accounting basis) Other Comprehensive Income and Exp Total Comprehensive Income and Expenditure Adjustments between accounting basis and funding basis under regulations Net (Increase)/Decrease before Transfers to Earmarked Reserves Transfers (to)/from Earmarked Reserves (Increase)/Decrease during year (Increase)/Decrease at year end (Increase)/Decrease in Year Balance at 31 March 2012 carried forward Held for revenue purposes Usable Reserves Held for capital purposes Future capital funding Capital Receipts Capital Grants Unapplied Total Total Total General Earmarked Usable Unusable Reserves Balance at 1 April (Surplus)/deficit on provision of services (accounting basis) Other Comprehensive Income and Exp Total Comprehensive Income and Expenditure Adjustments between accounting basis and funding basis under regulations Net (Increase)/Decrease before Transfers to Earmarked Reserves Transfers (to)/from Earmarked Reserves (Increase)/Decrease during year (Increase)/Decrease at year end (Increase)/Decrease in Year Balance at 31 March 2013 carried forward

9 Comprehensive Income and Expenditure Statement for the Chief Constable of Essex This statement shows the accounting cost in the year of providing services in accordance with generally accepted accounting practices, rather than the amount to be funded from taxation. All transactions in 2012/13 are shown within the accounts of the Police and there are therefore no entries in this statement. An analysis of the Police and Crime Commissioner s financial resources consumed at the request of the Chief Constable is set out in Note 1 to the accounts. 2011/ / / / / /13 Gross Gross Net Gross Gross Net Expenditure Income Expenditure Expenditure Income Expenditure Local Policing Dealing with the Public Criminal Justice Arrangements Road Policing Specialist Operations Specialist Operations - Air Support Intelligence Investigations Investigative Support National Policing Corporate and Democratic Core Non Distributed Costs Cost of Services Other Operating Expenditure Financing and Investment Income and Expenditure Taxation and Non Specific Grant Income (Surplus)/Deficit on Provision of Services Other Comprehensive Income and Expenditure Total Comprehensive Income and Expenditure

10 Balance Sheet for the Chief Constable of Essex The Balance Sheet shows the value at the Balance Sheet date of the assets and liabilities recognised by the Chief Constable. All balances are held by the Police and Crime Commissioner and there are therefore no entries in this statement. 31 March March Long-term assets Property, Plant & Equipment 0 0 Intangible Assets 0 0 Long term debtors 0 0 Long-term assets total 0 0 Current assets Short term investments 0 0 Inventories 0 0 Short term debtors 0 0 Cash and cash equivalents 0 0 Assets held for sale 0 0 Current assets total 0 0 Current liabilities Short term creditors 0 0 Current liabilities total 0 0 Long term liabilities Provisions 0 0 Finance Leases 0 0 Pensions Liabilities 0 0 Capital Grants-Receipts in Advance 0 0 Long term liabilities total 0 0 Net liabilities 0 0 Usable reserves General reserve 0 0 Earmarked revenue reserves 0 0 Usable capital receipts 0 0 Capital grants unapplied 0 0 Usable reserves total 0 0 Unusable reserves Revaluation Reserve 0 0 Capital Adjustment Account 0 0 Pensions Reserve 0 0 Collection Fund Adjustment Account 0 0 Accumulating Compensated Absences Adjustment Account 0 0 Unusable reserves total 0 0 Total reserves 0 0 Deborah A Martin BA (Hons) CPFA Chief Finance Officer of the Chief Constable 26 September

11 Cash Flow Statement for the Chief Constable of Essex The Cash Flow Statement shows the changes in cash equivalents of the Chief Constable during the reporting period. All cash equivalents are held by the Police and Crime Commissioner and so there are no entries in this statement. 2011/ / Cash outflows generated from operating activities Cash paid to and on behalf of employees 0 0 Cash paid to suppliers of goods and services 0 0 Other operating cash payments 0 0 Interest paid 0 0 Sub total 0 0 Cash inflows generated from operating activities Taxation 0 0 Grants 0 0 Sales of goods and rendering of services 0 0 Interest received 0 0 Sub total 0 0 Net cash outflows generated from operating activities 0 0 Purchase of property, plant and equipment and intangible assets 0 0 Proceeds from the sale of property, plant and equipment 0 0 Proceeds from short-term investments 0 0 Net cash (inflow)/outflow from Investing Activities 0 0 Net (increase)/decrease in cash and cash equivalents 0 0 Cash and cash equivalents at the beginning of the reporting period 0 0 Cash and cash equivalents at the end of the reporting period 0 0 Movement in cash equivalents

12 Notes to the Accounts for the Chief Constable of Essex 1) PCC Financial Resources Consumed at the Request of the Chief Constable As set-out in the Explanatory Forward, whilst the Chief Constable has day to day control over most of the Police and Crime Commissioner s assets, daily direction and control over all police officers and a great majority of police staff, the level of financial and strategic control held by the Police and Crime Commissioner means that on balance, transactions, benefits and liabilities sit within the accounts of the Police and Crime Commissioner and there are no transactions or balances within the Chief Constable s accounts. We consider this to be in line with IAS 18 Revenue recognition. In particular: Assets, officers and staff are employed in delivery of the Police and Crime Commissioner s Police and Crime plan through which the Police and Crime Commissioner sets the strategic direction of the Chief Constable. The Police and Crime Commissioner has control of all income and ultimately, therefore, the levels of officers and staff employed. The Police and Crime Commissioner has control of the funding to purchase and receives all income from the disposal of all non-current assets. The Police and Crime Commissioner holds the Police Fund and agrees the Chief Constable s delegated budget determining the resource envelope in which he operates under the Police and Crime Commissioner s Scheme of Governance. The budget is funded from income received by the Police and Crime Commissioner, with any under or overspend falling to him. An explanation of spend during the year against this budget is set-out in the Explanatory Forward. The financial relationship between the Police and Crime Commissioner and the Chief Constable is determined by the scheme of delegation and financial regulations. As such all transactions are undertaken in the Police and Crime Commissioner s name. The following table shows the accounting cost in the year to the Police and Crime Commissioner of financial resources consumed at the request of the Chief Constable in providing policing services. The figures shown are in accordance with generally accepted accounting practices and so differ from the Chief Constable s delegated budget, which does not include transactions that are not chargeable against precept (e.g. capital charges and IAS19 pension transactions). 2011/ /13 Gross Gross Expenditure Expenditure Local Policing 154, ,096 Dealing with the Public 17,391 18,275 Criminal Justice Arrangements 17,699 24,372 Road Policing 21,266 17,770 Specialist Operations 30,662 36,313 Specialist Operations - Air Support Intelligence 6,734 12,120 Investigations 50,502 74,414 Investigative Support 10,136 11,153 National Policing 17,017 20,077 Non Distributed Costs Cost of Services 326, ,836 The 2011/12 figures have been restated due to: a) the reclassification of local investigation staff from Local Policing to Investigations, in line with SERCOP b) the transfer of custody related costs from Local Policing to Criminal Justice Arrangements 12

13 Notes to the Accounts for the Chief Constable of Essex Specialist Operations Air Support represents payments to the National Police Air Service following its creation in October The reduction in Local Policing costs reflects: a) the establishment of a functionally based policing model (Blueprint) in March 2012, with the creation of dedicated teams investigations, intelligence and criminal justice teams b) the overall reduction in police officer numbers between the two years. 2) Significant Accounting Policies The Chief Constable applies the same significant accounting policies as the PCC (see PCC s Statement of Accounts), insofar as these are relevant to his accounts. 3) Officers Remuneration The remuneration for the Chief Constable and Chief Finance Officer of the Chief Constable are disclosed in the PCC s Statement of Accounts. 13

14 Chief Constable of Essex: Annual Governance Statement 2012/13 The Police and Crime Commissioner for Essex and the Chief Constable of Essex have agreed a combined Annual Governance Statement for 2012/13. This statement is set out in the Statement of Accounts for the Police and Crime Commissioner for Essex. 14

15 Glossary of Terms ASSET - An item that has a value, for example, land & buildings, vehicles, equipment, cash. CIPFA The Chartered Institute of Public Finance and Accountancy. accountants working in the public services. This is the main professional body for CORPORATION SOLE A legal entity consisting of a single incorporated office, occupied by a single individual. INTERNATIONAL ACCOUNTING STANDARDS Standards for the preparation and presentation of financial statements, published between 1973 and 2000 by the International Accounting Standards Committee. INTERNATIONAL ACCOUNTING STANDARD 18 An accounting standard that sets out the criteria and treatment for recognising and accounting for revenue. LIABILITY An obligation of an entity arising from past transactions or events, the settlement of which may result in the transfer or use of assets, provision of service statement of the PCC s plans in financial terms. A budget is prepared and approved by the PCC before the start of each financial year and is used to monitor actual expenditure throughout the year. MERGER ACCOUNTING A method of accounting for a business combination. 15