Statement of Accounts

Transcription

1 Northamptonshire Police Authority Statement of Accounts 2009/10

2 C O N T E N T S Description Page Statement of Accounts Explanatory Foreword 3 Introduction by the Treasurer 5 Annual Governance Statement 8 Statement of Responsibilities for the Statement of Accounts 15 Independent Auditors Report to Northamptonshire Police Authority (to follow) 17 Accounting Policies 20 Summary Accounts 27 Core Financial Statements: Income & Expenditure Account objective version 30 Income & Expenditure Account subjective version 31 Statement of Movement on the General Fund Balance 32 Statement of Total Recognised Gains and Losses 34 Balance Sheet 35 Cash Flow Statement 37 Notes on the Core Financial Statements 38 Supplementary Financial Statements: Police Pension Fund Account 62 Notes to the Police Pensions Fund Account 63 Glossary of Terms 64 2

3 STATEMENT OF ACCOUNTS 2009/10 EXPLANATORY FOREWORD Introduction The intention of the Statement of Accounts is to give the reader an overall impression of the finances of Northamptonshire Police Authority for the financial year ending 31 March Under provisions contained in Section 15 & 16 as amended of the Audit Commission Act 1998 and the Accounts and Audit Regulations 2003, the Statement of Accounts for 2009/10 was available for inspection from 9.00am Monday, 5th July 2010 to 5.00pm Friday, 16th July 2010 (excluding weekends). The Police Authority s Auditors are KPMG LLP. Background The Police Authority incurs both revenue and capital expenditure. Broadly, revenue expenditure relates to day-to-day running costs, the largest element of this being the Chief Constable s operational policing budget. The revenue expenditure is funded by Central Government Grants, Revenue Support Grant, which is distributed through the Formula Spending Share mechanism, Home Office Grant that is distributed to Police Authorities on a similar formula basis, National Non-Domestic Rates (Business Rates) and Council Tax. Capital expenditure relates broadly to expenditure on assets, which have a life beyond one year, mainly new sites and buildings, building improvement works, major IT systems and vehicles. The capital programme of the Authority is funded through a combination of grant, capital receipts, reserves, revenue contribution and external borrowing. The Authority can also utilise income from the sale of assets to support capital expenditure subject to Government rules and may borrow to finance expenditure under the Prudential Guidelines. To assist the reader an explanation of the various sections contained within the Statement of Accounts is set out below: (a) Introduction by the Treasurer Pages 5-7 This provides a brief background to the Authority s budget for 2009/10, the final outturn position and an assessment of the Authority s future financial prospects. (b) Annual Governance Statement Pages 8-14 The Authority has adopted the Code of Corporate Governance and this statement explains how the Authority has complied with the code and monitored its effectiveness. (c) Statement of Responsibilities for the Statement of Accounts Pages This outlines the Authority s and Treasurer s responsibilities. (d) Independent Auditors Report Pages

4 (e) Accounting Policies Page The Accounts are supported by the Statement of Accounting Policies, which identifies the accounting practices adopted in the preparation of the Accounts. Other notes are provided to explain further the information given. (f) Summary Accounts Pages (g) Income and Expenditure Account Pages This statement is fundamental to the understanding of the Authority s activities, in that it reports the net cost for the year of all the functions for which the Authority is responsible and demonstrates how that cost has been financed from general Government grants and income from local taxpayers. (h) Statement of Movement on the General Fund Balance Page This statement reconciles the Income and Expenditure Account surplus or deficit with the movement on the Authority s General Fund balance over the year. (i) Statement of Total Recognised Gains and Losses Page 34 Not all the gains and losses experienced by the Authority are reflected in the Income and Expenditure Account. This statement brings these other gains and losses together with the outturn on the Income and Expenditure Account to show the total movement in the Authority s net worth for the year. (j) Balance Sheet Page This shows the Authority s financial position at the financial year end and reveals the balances and reserves at the Authority s disposal at that date. It also summaries the fixed and net current assets employed in carrying out the Authority s functions and its long-term liabilities, including those associated with the defined benefit pension schemes operated for its employees. (k) Cash Flow Statement Page 37 This statement summaries the inflows and outflows of cash arising from transactions with third parties for both revenue and capital purposes during the year. (l) Notes on the Core Financial Statements Page Additional information concerning items included within the core financial statements, including additional pensions disclosures as required by FRS17. (m) Police Pension Fund Account Page The amounts received into and paid out of the police pension fund during the year and a statement of the net current assets and liabilities of the scheme. (n) Glossary of Terms Page Wherever possible, the use of technical phraseology has been avoided, however, the Statement of Accounts does contain some accounting and local Government terminology and a glossary is provided which aims to simplify and explain such terminology. 4

5 Background INTRODUCTION BY THE TREASURER The Police Authority approved a net revenue budget of 118.7m, along with a carry forward of 0.6m, therefore giving a budget of 119.3m for 2009/10. This was funded by 75.5m from government formula grant and 43.8m from council tax. The increase in Government funding was 2.6% in line with inflation, although specific grants totalling over 8m were frozen in cash terms. The council tax of m approved for 2009/10 represented a 4.5% increase. The 2009/10 budget was able to provide for increasing pay and prices costs (including a larger provision for fuel and transport), the cost of increments for police officers and staff and 0.652m investment, counteracted by 0.65m of savings. Overview of Changes The preparation of the Statement of Accounts for 2009/10 included a review of all opening balances in light of the requirement to move to International Financial Reporting Standards (IFRS), that requires full adoption by all Local and Police Authorities for 2010/11. The impact of IFRS for Northamptonshire Police is minimal. The main issues are covered below. The main changes to the accounts include the reversal of the 650,000 employee benefit provision that was entered into the 2008/09 accounts in preparation for IFRS, representing half of the expected liability. The latest recommended practice allows for a notional provision that is reversed through the Statement of Movement on General Fund Balances (SMGFB), creating a notional employee benefits reserve to offset the provision. The provision therefore does not create a real liability for the force. The budget paper presented to the Police Authority on 23 rd February 2010 in paragraph 8.1 highlighted this change in practice and recommended that 450,000 of the original provision be reversed and that 200,000 be put into a reserve to offset potential chargeable increases in the provision in future years. The effect of the reversal was to increase General Reserves by 450,000. The movements are shown in the tables in notes 27 and 33 to the accounts. The Authority had an invested reserve for loan repayment that with the budgeted contribution of 265,000 for 2009/10 took the reserve to 1,060,000. The Authority reviewed the requirement for this reserve, and it was clear that the statutory Minimum Revenue Provision (MRP) was sufficient to provide for future liabilities. It was recommended in the budget paper that these funds be transferred to a new restructuring reserve to be used to cover the costs of redundancy as the force goes through the Operation I Can business transformation programme. 351,000 of this reserve has been used to cover voluntary redundancy costs for 2009/10. These movements are reflected in the table in note 33. The primary statements in the accounts include the new Police Objective Analysis (POA) for the first time. This classifies expenditure according to specific policing functions and has required the restatement of the 2008/09 accounts that previously included just the one heading police services. This analysis has real practical applications in measuring and benchmarking value for money between forces. The Authority carried out full valuation of its Land and Buildings for the 2008/09 accounts to accurately reflect the falls in buildings and land values. 2009/10 has been a year of relative stability and on the advice of our surveyors, it was therefore deemed not necessary to carry out further valuations. The Authority also holds no Available for Sale Assets according to the IFRS definition. In view of the introduction of IFRS, the Authority has built upon its comprehensive lease review within 2008/09 and reviewed all new arrangements, and continues to hold no Finance Leases. Operating leases are shown in full in note 2 to the accounts. The Revenue Outturn The Authority s revised net revenue budget for the year was 119.3m. Actual net spending for the year was 118.7m, resulting in a small under-spend of 0.6m, only 0.5% less than the revised budget, and within expected tolerances. Excluding the 0.45m 5

6 reversal of the Employee Benefit provision into revenue, key variances against the budget were: Area/Department Total Budget Variance (under)/overspend Reason for Variance Northamptonshire West 26, Increased property and vehicle related costs. Dept for Service Improvement 1,943 Delayed internal projects resulted (91) in schemes slipping into 2010/11. Operation Guardian 207 (92) Delays in the operation resulted in reduced expenditure. Delays in the scheme resulted in reduced expenditure. Safer Community Team 125 Infrastructure (50) Transport Department 292 (97) Improved cost recovery increased income into the department. Interest Receivable (207) 45 Reduced interest rates resulting from the economic environment. The Authority s net budget is funded through Revenue Support Grant, Business Rates, Police Grant and Council Tax. The summary accounts at the centre of this document provide more illustrative examples of income, expenditure, investment in assets and the position on cash balances (reserves). Value for Money In 2009/10 operation I Can (Improving Confidence and Affordability in Northamptonshire) entered in its first full phase. Phase 1, looks to identify potential savings of 2.07m within 2010/11, whilst ensuring the Force s structure and processes that support it are fit for purpose and with a core objective of allowing officers to spend a greater proportion of their time on the front line. In 2009/10 the force, together with its partners has met its targets on Anti Social Behaviour, victim satisfaction, most serious violence and has seen a 19.1% reduction in Serious and Acquisitive Crime, that was specifically targeted in the second half of the year under Operation Guardian. Performance and resource usage are being brought closer together with the formation of a Managing Resources Group that consolidates existing input groups, to reduce duplication and allow more balanced and sighted decisions. The Police Pay budget is being centralised for greater corporate control and to allow spare resources to be invested in specific performance areas with the aim of driving out better value for money. Income and Expenditure Account The Income and Expenditure Account (page 30/31) shows the Authority incurring a deficit of m for 2009/10 around 7m less than last year. This deficit is almost entirely attributable to the calculation of increases in theoretical liabilities on the pension fund for police officers. In reality these liabilities for police pensions are covered by the HM Treasury not Northamptonshire Police Authority. Capital Outturn Total capital spending in 2009/10 was 4.123m against the original programme of m, an underspend of 10.6m. The underspend was mainly due to 9.665m variation on the Estates Programme, with 7.75m due to slippage on the new Criminal Justice Centre (CJC) as a result of the constant deferrals in the granting of planning permission. The force continues to examine the affordability of the estates programme, prioritising urgent requirements and looking for opportunities to rationalise through consolidation. The initial rejection of planning permission on the CJC was used by the Authority as an opportunity to review future options. In March the new CJC was redesigned to reduce cell capacity as a result of falling demand. The savings were then used to rationalise other parts of the Police estates. Of the 4.123m, 0.603m was spent on new buildings, including 0.214m on fees for the new CJC, 0.231m on a new Sexual Assault Referral Centre (SARC), and 0.044m on the development of Wootton Hall Park and 0.056m on a new covert premise. Replacement vehicle costs amounted to 1.036m and 1.745m was spent on information technology 6

7 development and replacement. The majority of the ICT expenditure was on replacement programmes with 0.389m on microwave systems that are more cost effective than leased lines and offer the force greater resilience in data transfer, and 0.314m installing networked printers enabled with management information software for the first time. Capital spend was financed from Home Office Capital Grant, other external funding, revenue contributions and a drawdown from the Criminal Justice Centre earmarked reserve. The Authority has not undertaken any borrowing in 2009/10. Reserves and Balances The Authority ended the year with reserves and balances totalling 16.9m (pages 53/54), an increase of 0.3m. The general fund balance has increased by 0.6m to 5.622m through the under-spending on revenue of 0.1m and 0.45m for the reversal of the employee benefits provision. This level of reserves represents 4.6% of our net budget requirement, as against our approved policy of between 2 and 3%. However, this may be considered an exceptional position in the light of future year s grant uncertainty and the pressure to improve levels of confidence and performance whilst increasing value for money. Future Outlook The financial climate has facilitated a no growth agenda with all growth bids scrutinised to ensure only red risk bids are approved. The capital programme continues to be challenged, by looking at estate reprioritisation, space rationalisation and extending asset lives, in an effort to reduce the required revenue contribution and the cost of borrowing. Balancing the budget is dependant upon achieving cashable savings of 2.07m in 2010/11, and includes a draw down on General Reserves of 0.2m. The force has a change programme of 10 work-streams that expect to deliver these savings alongside a core objective of allowing more officers to spend a greater proportion of time on the front line. Policing areas (Basic Command Unit, BCU) and Support Services are responding to this challenge by identifying service changes that could release these savings, without detracting from achieving the Force Strategic Priorities (SP s). Government funding is likely to reduce in real terms from 2011/12 due to the overall Government deficit, and this funds around 70% of the current budget. Along with the announcements on the freezing of Council Tax, this will mean that the future budgets of the Authority will be under pressure. With some 80% of spending being on Police Officers, Police Community Support Officers and police staff pay and pensions, future pay awards will be crucial. The Authority will again be looking for efficiencies to enable the budget to be sustainable in the long-term, and in the short term will be drawing planned prudent amounts from reserves. With regards to capital expenditure, the current three-year capital programme relates mainly to the delivery of the new Criminal Justice Centre, linked into a new estates strategy and further investment in Information Technology. To meet these demands the Authority may begin to use the flexibility offered by the Prudential Borrowing framework, but within the parameters of prudence and affordability. Further Information Every effort has been made to ensure that the information provided in this Statement of Accounts is clear and informative. Should you require further information or you have any comments, please contact the Treasurer, Ms Rosemary Yule at: Northamptonshire Police Authority, 36 Billing Road, Northampton, NN1 5DQ Telephone: rosemaryy@northants-pa.gov.uk Viewing the Authority website at: Rosemary Yule ACMA Treasurer Northamptonshire Police Authority 7

8 Joint Annual Governance Statement (AGS) of Northamptonshire Police and Northamptonshire Police Authority Publication of this statement is a legal requirement from 1 st April It is a key corporate document, wider than financial governance alone, and brings together legislative requirements, governance principles and management processes. This joint Annual Governance Statement (AGS) is based on the CIPFA model for a combined Force/Authority approach and is the shared responsibility of the Chair of the Authority, the Chief Executive of the Authority and the Chief Constable. Position as at 31 March 2010 including plans for the financial year 2010/ SCOPE OF RESPONSIBILITIES Northamptonshire Police Authority ( the Authority ) must ensure that its business is conducted legally and that public money is safeguarded, accounted for and used economically, efficiently and effectively. The Authority has a duty under the Local Government Act 1999 to secure continuous improvement in the way it works, having regard to a combination of economy, efficiency and effectiveness. The Authority must put in place proper arrangements for the governance of its affairs and the exercise of its functions. It must ensure that a sound system of internal control is maintained through the year and that risk management arrangements are in place. In March 2008 the Authority approved and adopted a Code of Corporate Governance, which is consistent with the principles of CIPFA/ SORP Framework: Delivering Good Governance in Local Government. A copy is on our website at or can be obtained from The Treasurer, Northamptonshire Police Authority, 36 Billing Road, Northampton NN1 5DQ. This Annual Governance Statement explains how the Authority has complied with the Code and also meets the requirements of Accounts and Audit Regulations in relation to the publication of a statement on internal control. 2. THE PURPOSE OF THE GOVERNANCE FRAMEWORK The governance framework comprises the systems, processes, culture and values through which the Authority works and engages with the local community. It enables the Authority to monitor whether it meets its objectives to secure an efficient and effective local police service, providing value for money. The system of internal control is a significant part of the framework and is designed to manage risk to a reasonable level rather than to eliminate all risk. It can only provide reasonable and not absolute assurance of effectiveness. 8

9 Our system of internal control is designed to: identify and prioritise the risks to achieving the Authority s policies, aims and objectives, evaluate the likelihood and impact of those risks and manage them effectively, efficiently and economically. The governance framework is in place at the Authority at the year-end 31 March 2010 and up to the date of approval of the Statement of Accounts. 3. THE GOVERNANCE FRAMEWORK The Authority and Force work within a tripartite arrangement shared with the Home Office. The Chief Constable is responsible for all operational policing matters, the direction and control of police personnel, and for putting in place proper arrangements for the governance of the Force. The Authority holds the Chief Constable to account for his policing responsibilities and it follows that the Authority must be satisfied that the Force has mechanisms in place for the maintenance of good governance, and that these operate in practice. The Authority s Vision is as follows: To ensure and maintain the best and most cost effective policing for the County of Northamptonshire, meeting the needs of our diverse communities This was fully reviewed by the Police Authority in December 2009 along with the Authority s 3 year Business Plan to meet this vision and objectives. The Governance Framework was reviewed and approved in March It complements the Force Vision, which is: To deliver the best possible quality of policing services to the people of Northamptonshire Objectives and Targets The Local Policing Plan , agreed by the Authority and the Force in March 2010, sets out the medium and long-term strategy for policing the area and the fundamental vision and core values of Northamptonshire Police Force and Authority. This incorporates the Annual Report 2009/10. The Plan contains the policing objectives and targets for the forthcoming year based on consultation with the community, the force and the requirements of the National Policing Plan. It also contains details of achievements against targets in the previous year, incorporating both statutory and local targets. Monitoring Performance Our high level plans are supported by operational plans, which cascade down throughout managerial and supervisory levels of the Force. Monitoring within the Force is through the Chief Officers Group (COG) and the supporting Process Groups each chaired by a Chief Officer: Managing Performance Group is chaired by the Deputy Chief Constable Improving Performance Group is chaired by the Deputy Chief Constable All operational Commanders, Head of Department for Service Improvement, Head of the Force Communications Centre and Head of the Criminal Justice Unit attend these bi-monthly groups, where current issues are tasked to be resolved. 9

10 Managing Finance Group is chaired by the Assistant Chief Officer (Resources), and attended by ACC/DCC, Head of Finance, Head of DSI, Operational Commanders, Departmental Commander and Departmental Representative, Unison and Federation. This body scrutinises the finances of the Force and leads budget planning. Other process groups in existence are Facilities Management Group, Project Management Board, Managing Knowledge Group, Managing Staff Group and Force Confidence Delivery Board and the Strategic Confidence Board. Lead members are from COG. The Police Authority monitors performance, resources, partnership and collaboration, equalities and engagement, standards, personnel matters and overall strategy by receiving regular reports to the following Committees and Groups which exist within the Authority structure: Police Authority overseeing policy and strategy, standing orders, terms of reference, delegated powers, financial regulations, local policing plan, overall strategic budget and council tax Resources Committee - covering internal and external audit, risk management, corporate governance, VFM and HR matters Performance Monitoring Committee scrutinising and challenging Force performance Partnership and Collaboration Committee governance within partnership, pooled and shared service arrangements including within East Midlands region Equalities and Engagement Committee public accountability and engagement across diverse communities Standards Committee scrutiny of Members standards, conduct and behaviour Grants Working Group scrutiny of discretionary payments to third parties Personnel Committee ad hoc recommendations on senior appointments and conditions of service In addition the Crime and Disorder Reduction Partnerships (CDRP) and Independent Lay Visitors Panel exist to ensure community involvement in improving performance in services. Measuring the quality of services for users Quality of service is monitored and reported through the Force Confidence Delivery Board, the Strategic Confidence Board, the Authority's Equalities and Engagement Committee and the Performance Monitoring Committee. Value for Money is scrutinised within Resources Committee. The Force carries out telephone surveys with victims of crime and also undertakes a general public attitude survey, which measures the opinions of members of the public about policing across the County. The Force has also introduced a survey at police station front counters to obtain feedback on the service they have received and there is a Citizen Focus Process Group that is looking at how the Force delivers the service to the public. Individual Safer Community Team s are concentrating on priorities set by their local communities. During October 2009 to January 2010, the Authority and Force together undertook a substantial public consultation exercise on public priorities and spending expectations. 10

11 This included focus groups, newspaper and web surveys, feedback via Safer Community Teams and particular targeting of minority, vulnerable and hard to reach groups. An online budget simulator was also used for the first time. The results were presented to the Authority in January 2010 as part of the budget forming process. The Authority together with the Force's Professional Standards Department also sends out surveys to complainants and monitors the feedback obtained. Risk Management The Force and Authority continue to implement and embed risk management arrangements across the organisation. The internal audit plan for 2010/11 reviewed risk management and provided assurances over the processes in place and being established for the management of risk. There is an established risk management policy on the Internet and the Executive Change Board chaired by the Deputy Chief Constable and attended by the Authority Chair, reviews the force risk register. All area and departments maintain their own risk registers. The Authority risk register, and the mitigation of risk, is reviewed by members and officers of Resources Committee and a risk management seminar was undertaken for all Members in March Roles and Responsibilities The Authority and Force ensure that Members, staff and officers work together, with clearly defined functions and roles, to achieve a common purpose. To achieve this, the Authority has: Set out the respective roles, responsibilities and standards required of the Authority s officers, members and Committees within the Business Plan Monitored that we are achieving our Aims both individually through personal development reviews/plans and collectively through Police Authority meetings and seminars Allocated lead members for monitoring specific functions, for example Professional Standards Dept, and reporting back via Committees Determined a Scheme of Delegations (February 2009), Financial Regulations (August 2007), Contract Standing Orders (May 2009) and reserve powers within the Standing Orders (December 2007), including a formal schedule of those matters specifically reserved for collective decision of the Police Authority. These documents take account of relevant legislation and will be updated when required Approved a Code of Conduct (June 2007) which sets out obligations, disclosures of interest, protocol, roles, access to information, conduct at meetings and other aspects of members standard of conduct The Force has in place: A framework of statutory and local delegated powers, procedures and regulations Officers and staff allocated to Authority meetings to present reports and answer questions with the agenda for each meeting planned jointly between the Force and Authority so that relevant issues are covered 11

12 Regular seminars and presentations for the Authority and Force as part of the budget and planning process A designated liaison officer between the Force and the Authority providing a single point of contact. Effective and professional communications for the Force and Authority via the Communications Department including reactively and proactively representing the Authority's interests to the media, the production of Together Northamptonshire a community newspaper produced jointly with the County and PCT, the management of the Force and Authority's website and the organisation and promotion of events Well publicised codes of conducts for both officers and staff with the code of conduct for officers regulated by police regulations and an effective disciplinary process for breaches of Code of Conduct, managed by the Professional Standards Department Compliance The Authority and Force will ensure compliance with relevant laws and regulations, internal policies and procedures, and that expenditure is lawful. The Authority S151 Officer (Treasurer) and the Monitoring Officer (Chief Executive) have legal and professional responsibilities in this respect, assisted by assurances from internal and external audit. The Resources Committee undertakes the core functions of an audit committee as defined by CIPFA and the Standards Committee exists to scrutinise members standards, behaviour and conduct. In 2009/10 the Force received many substantial assurance scores on internal audit reports. It also received a Police Use of Resources (PURE) score of 3/Good on financial management under the Audit Commission assessment published in There are checks and balances built into the financial procedures to ensure that expenditure is lawful, and this is underpinned by financial regulations, which apply to each Member, officer and employee of the Authority. Departmental Heads and the relevant process groups are responsible for ensuring the Force policies and procedures are lawful. The Force has internal procedures managed by Professional Services Department for complaints by both officers and staff, and for members of the public to use. Performance Monitoring Committee will monitor complaints received through the PSD twice yearly. The Force is also regulated by the Independent Police Complaints Commission (IPPC), an external body that has the power to investigate the Force. A Public Interest Disclosure (whistle-blowing) policy is in place to protect any employee who may wish to raise concerns of public interest. Officers and Staff The Force is responsible for determining the conditions of employment and remuneration of Force officers and staff. There are clear local HR policies and procedures as well as national police and staff regulations that determine the officer and staff conditions of employment and remuneration. The Authority is responsible for employment of ACPO officers and the Authority s own staff. These are also governed by both local and national terms and conditions. Members allowances are determined by an independent review panel and remain unchanged for 2009/10. The development needs of members and senior officers/staff in relation to their strategic roles is identified through the Performance and Development Review (PDR) processes and 12

13 360-degree feedback. Members of the Authority receive an induction programme and regular training through Authority seminars. They also complete a work and development plan, which is reviewed annually with the Chair of the Authority to assess performance. Community Liaison The Authority and Force will establish clear channels of communication with all sections of the community, staff and other stakeholders, ensuring accountability and encouraging open consultation. The Force works closely with all communities through the Safer Community Teams (SCTs) to identify and feedback local priorities. SCT s work with established groups such as Neighbourhood Watch, Tenants and Residents Associations, Parish Councils and aim to identify new and emerging groups and communities. Authority members sit on the SCT community panels to monitor community concerns and to feed any key themes or barriers back to the Authority. Our joint newspaper Together Northamptonshire is sent out three times yearly and the Council Tax/budget leaflet is sent to all 287,000 households. Regular press releases are sent out to communicate the work of the Force and the Authority and to ask for feedback. The Force and Authority are encouraging the public to access our websites, and sections are translated into the most commonly used languages. Complaints can be made via the website and members of the public are asked to "Ask the Chief" questions. The Authority and Force have a joint approach to consultation. The joint consultation plan together with the Force Confidence Delivery Board, the Strategic Confidence Board and the Authority's Equalities and Engagement Committee will continue to develop public engagement activities to improve service delivery. Consultation methods include the Force's ongoing public attitude survey, which captures public opinions at a localised level. The Authority and Force will continue to work with "seldom heard" communities with representation on advisory groups where appropriate. Governance within partnerships is covered by agreements and/or terms of reference, which set out the key responsibilities of each party. The financial requirements for partnerships by either the Force or Authority are covered within the Financial Regulations whilst the Partnership and Collaboration Committee monitors activity and outputs of partnerships throughout the year. Governance on East Midlands regional policing matters is dealt with by the East Midlands Police Authority Joint Committee which is currently chaired by Chair of Northamptonshire Police Authority and includes 2 Members from each of the 5 regional Authorities. 4. REVIEW OF EFFECTIVENESS The Authority has responsibility for conducting, at least annually, a review of the effectiveness of the governance framework, including: the system of internal audit (review of the work of RSMTenon) the system of internal control (annual statement of assurance by RSMTenon and annual audit letter from KPMG LLP) For 2009/10 RSMTenon concluded For the 12 months ended 31 March 2010, based on the work we have undertaken, significant assurance can be given regarding the adequacy and effectiveness of Northamptonshire Police Authority s arrangements for governance, risk management and control The Resources Committee remains responsible for reviewing the Code of Governance and the Performance Monitoring Committee for challenging Force performance and compliance. The Standards Committee is responsible for maintain high standards of 13

14 conduct by Members of the Authority and to assist Members to observe its code of conduct. In 2009/10 arrangements were strengthened whereby the Standards Committee now oversee Member attendance, performance and overall governance and provide an annual report to the Authority. Other improvements include a training plan for all Members and specific training undertaken for Standards Committee Members 5. SIGNIFICANT GOVERNANCE ISSUES There are no significant governance issues outstanding and 2009/10 has seen improvements in governance at the Authority with the review and update of the Governance Framework, the Business Plan and the risk register. Risk management arrangements have also been strengthened at the Force. An internal audit review of Governance published in April 2010 gave substantial assurance to the framework with no recommendations at all, following all risk areas of governance reviewed in detail. However our governance arrangements remain subject to continuous development and we shall continue to seek improvements in the framework. The Audit Commission and Her Majesty s Inspectorate of Constabulary (HMIC) inspected the Police Authority for the first time in December 2009 jointly. In March 2010 the full report was published and the Authority was judged overall as performing adequately in the four inspected areas those being: Setting Strategic Direction & Priorities, Performance Scrutiny, Engaging with Communities and VFM and Productivity. As a result of the inspection eight areas for improvement were identified and the Police Authority approved an Inspection Development Plan in June 2010 setting out actions to progress performance against the areas for improvement. Each major committee of the Police Authority has been working on an area of the Plan identified as their responsibility for the delivery of improvements throughout the year. The final Inspection Development Plan is to be presented to the Police Authority detailing the improvements that have been put in place and will be signed off in December Signed Mrs D Newham JP Chair of Northamptonshire Police Authority Mr Adrian Lee Chief Constable of Northamptonshire Police Force Mrs D Roe Chief Executive of Northamptonshire Police Authority On behalf of the members and senior officers of Northamptonshire Police Authority and Northamptonshire Police Force 14

15 STATEMENT OF RESPONSIBILITIES FOR THE STATEMENT OF ACCOUNTS The Police Authority s Responsibilities The Police Authority is responsible for ensuring that financial management of the police service is adequate and effective and that a sound system of internal control is in place including arrangements for risk management. The Police Authority must make arrangements for the proper administration of its financial affairs and to ensure that one of its officers, namely the Treasurer, has the responsibility for that administration. The Chair of the Authority also has a specific responsibility to sign the Statement of Accounts following approval at the appropriate meeting. The Treasurer s Responsibilities The Treasurer is responsible for the preparation of the Authority s Statement of Accounts in line with statutory best practice set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in Great Britain ( the Code ) and the Accounts and Audit Regulations The accounts are required to present fairly the financial position of the Authority at the accounting date and its income and expenditure for the year ended 31 March 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; and complied with the Local Authority SORP The Treasurer has also: kept proper accounting records which are up to date; and taken reasonable steps for the prevention and detection of fraud and other irregularities. The Role of the Chief Constable The Chief Constable, assisted and advised by the Assistant Chief Officer (Resources), is responsible for day-to-day financial management of the Force and for ensuring that the Force stays within its approved revenue and capital budgets, in accordance with the financial framework agreed by the Police Authority. Northamptonshire Police Financial Services staff under the supervision of, and with the assistance of the Treasurer, carries out the preparation of the accounts and liaises with the external auditors, KPMG LLP, during the audit process. Treasurer s Certificate I certify that the Statement of Accounts presents fairly the financial position of the Northamptonshire Police Authority as at 31 March 2010 and its Income and Expenditure for the year then ended. Rosemary Yule BSc ACMA Treasurer to Northamptonshire Police Authority Date: 22 June

16 Chair of the Police Authority Certificate I certify that the Statement of Accounts have been approved by the Police Authority, at a meeting on 29 June 2010, in accordance with Section 3 of the Accounts and Audit Regulations Mrs Deirdre Newham JP Chair of Northamptonshire Police Authority Date: 29 June

17 Independent auditor s report to the Members of Northamptonshire Police Authority Opinion on the financial statements We have audited the accounting statements, the police pension fund accounting statements and related notes of Northamptonshire Police Authority for the year ended 31 March 2010 under the Audit Commission Act The accounting statements comprise the Authority Income and Expenditure Account, the Statement of Movement on the General Fund Balance, the Authority Balance Sheet, the Authority Statement of Total Recognised Gains and Losses, the Authority Cash Flow Statement. The Police pension fund accounting statements comprise the Fund Account and the Net Assets Statement. The accounting statements and the police pension fund accounting statements have been prepared under the accounting policies. This report is made solely to Northamptonshire Police Authority, as a body, in accordance with Part II of the Audit Commission Act Our audit work has been undertaken so that we might state to Northamptonshire Police Authority, as a body, those matters we are required to state to them in an auditor s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Northamptonshire Police Authority, as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of the Treasurer and Auditor The Treasurer s responsibilities for preparing the financial statements, including the police pension fund accounting statements, in accordance with relevant legal and regulatory requirements and the Code of Practice on Local Authority Accounting in the United Kingdom 2009 are set out in the Statement of Responsibilities for the Statement of Accounts. Our responsibility is to audit the accounting statements the police pension fund accounting statements and related notes in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). We report to you our opinion as to whether the accounting statements, the police pension fund accounting statements and related notes give an true and fair view, in accordance with the relevant legal and regulatory requirements and the Code of Practice on Local Authority Accounting in the United Kingdom 2009: the financial position of the Authority and its income and expenditure for the year; and the financial transactions of its police pension fund during the year and the amount and disposition of the fund s assets and liabilities, other than liabilities to pay pensions and other benefits after the end of the scheme year. We review whether the governance statement reflects compliance with Delivering Good Governance in Local Government: A Framework published by CIPFA/SOLACE in June We report if it does not comply with proper practices specified by CIPFA/SOLACE or if the statement is misleading or inconsistent with other information we are aware of from our audit of the financial statements. We are not required to consider, nor have we considered, whether the governance statement covers all risks and controls. Neither are we required to form an opinion on the effectiveness of the Authority s corporate governance procedures or its risk and control procedures. We read other information published with the accounting statements, the police pension fund accounting statements and related notes and consider whether it is consistent with 17

18 the audited accounting statements, the police pension fund accounting statements and related notes. This other information comprises the Explanatory Foreword. We consider the implications for my report if we become aware of any apparent misstatements or material inconsistencies with the accounting statements, the police pension fund accounting statements and related notes. Our responsibilities do not extend to any other information. Basis of audit opinion We conducted our audit in accordance with the Audit Commission Act 1998, the Code of Audit Practice issued by the Audit Commission and International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the accounting statements, the police pension fund accounting statements and related notes. It also includes an assessment of the significant estimates and judgments made by the Authority in the preparation of the accounting statements, the police pension fund accounting statements and related notes, and of whether the accounting policies are appropriate to the Authority s circumstances, consistently applied and adequately disclosed. We planned and performed my audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the accounting statements, the police pension fund accounting statements and related notes are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the accounting statements, the police pension fund accounting statements and related notes. Opinion In our opinion: The accounting statements and related notes give a true and fair view, in accordance with relevant legal and regulatory requirements and the Code of Practice on Local Authority Accounting in the United Kingdom 2009, of the financial position of the Authority as at 31 March 2010 and its income and expenditure for the year then ended; and The police pension fund accounting statements give a true and fair view, in accordance with the Code of Practice on Local Authority Accounting in the United Kingdom 2009, of the financial transactions of the police pension fund during the year ended 31 March 2010 and the amount and disposition of the fund s assets and liabilities as at 31 March 2010, other than liabilities to pay pensions and other benefits after the end of the scheme year. Saverio Della Rocca (Senior Statutory Auditor) for and on behalf of KPMG LLP Chartered Accountants 1 Snowhill Birmingham United Kingdom B4 6GU 30 September

19 Conclusion on arrangements for securing economy, efficiency and effectiveness in the use of resources Authority s Responsibilities The Authority is responsible for putting in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources, to ensure proper stewardship and governance and regularly to review the adequacy and effectiveness of these arrangements. Auditor s Responsibilities We are required by the Audit Commission Act 1998 to be satisfied that proper arrangements have been made by the Authority for securing economy, efficiency and effectiveness in its use of resources. The Code of Audit Practice issued by the Audit Commission requires us to report to you our conclusion in relation to proper arrangements, having regard to relevant criteria specified by the Audit Commission for principal local authorities and police authorities. We report if significant matters have come to my attention which prevent us from concluding that the Authority has made such proper arrangements. We are not required to consider, nor have we considered, whether all aspects of the Authority s arrangements for securing economy, efficiency and effectiveness in its use of resources are operating effectively. Conclusion We have undertaken our audit in accordance with the Code of Audit Practice and having regard to the criteria for principal local authorities and police authorities specified by the Audit Commission and published in May 2008 and updated in February We are satisfied that, in all significant respects, Northamptonshire Police Authority made proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year ending 31 March Certificate We certify that we 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. Saverio Della Rocca (Senior Statutory Auditor) for and on behalf of KPMG LLP Chartered Accountants 1 Snowhill Birmingham United Kingdom B4 6GU 30 September

20 ACCOUNTING POLICIES GENERAL PRINCIPLES The accounts have been prepared in accordance with the 2009 Code of Practice on Local Authority Accounting: A Statement of Recommended Practice (SORP) issued by the Chartered Institute of Public Finance and Accountancy (CIPFA), and the CIPFA guidance notes on Statements of Standard Accounting Practice (SSAPs) and Financial Reporting Standards (FRS) and with regard to the introduction of International Financial Reporting Standards (IFRS) and related International Accounting Standards (IAS) relevant to Police Authorities. Any exceptions are disclosed below. The SORP 2009 made various changes to the Statement of Accounts 2009/10. The changes affecting this Authority s Accounts are: 1. The Authority has adopted accounting for local taxes that bring the Authority in line with UK GAAP, SORP and future IFRS requirements. This change is reflected within both the 2008/09 and 2009/10 financial statements. The requirement is for the Authority to recognise its share of Debtors, Creditors, Impairments and Surpluses or Deficits on Council Tax Collection Funds that had previously been represented within the precepting Authority. Note 37 details the transactions for the prior period restatement. The resulting transactions within 2008/09 and 2009/10 are reflected within all Primary Statements and subsidiary notes. 2. The Authority has adopted the requirement to reflect the proportion of long term liabilities due to be settled within 12 months of the Balance Sheet date within current liabilities. 3. In accordance with SORP 2009, the Authority has opted to voluntarily disclose its Expenditure on Publicity. 4. In accordance with LAAP Bulletin 85 April 2010 and also 2009 SORP, the Authority has amended its Employee Renumeration note (Note 5). The Authority is required to disclose remunerations in bands of 5,000, previously 10,000 excluding Senior Employees, who are now reported separately. Those Senior Employees*, who's salary is above 50,000, but below 150,000, are to be disclosed by job title and their renumeration split by category. Senior Employees, whose salary is above 150,000, are also required to be disclosed by name and job title. * any person having responsibility for the management of the relevant body, to the extent that the person has power to direct or control the major activities of the body, in particular activities involving the expenditure of money, whether solely or collectively with other persons. In Preparation for International Standards The Authority has fully adopted the requirements of FRS 18 and IAS 19 for Employee Benefits, with a provision for the Annual Leave and Time Off In Lieu being made. 20