CHILTERNS CREMATORIUM |
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JOINT COMMITTEE |
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2007-2008 |
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STATEMENT OF ACCOUNTS |
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CONTENTS |
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Page No |
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EXPLANATORY FOREWORD 1 |
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STATEMENT OF RESPONSIBILITIES FOR ACCOUNTS 2 |
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CERTIFICATION AND APPROVAL OF ACCOUNTS 3 |
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STATEMENT OF ACCOUNTING POLICIES 4 - 5 |
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CORE FINANCIAL STATEMENTS:- |
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INCOME AND EXPENDITURE ACCOUNT 6 |
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BALANCE SHEET 7 |
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CASHFLOW STATEMENT 8 |
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NOTES TO CORE FINANCIAL STATEMENTS 9 - 14 |
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AUDITORS’ REPORT 15 |
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1. EXPLANATORY FORWORD |
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Introduction |
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The Accounts for the Chiltern Crematorium Joint Committee for the financial year 1 April 2007 to 31 March 2008 are set out in the following pages. They have been prepared in accordance with the Accounts and Audit Regulations 2003, issued under Sections 23 and 35 of the Local Government Act 1982 and recommended best practice. The accounts for 2006/07 are shown for comparison purposes. |
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This Statement of Accounts is a complete record of the financial activities of the Joint Committee and incorporates the following core financial statements:- |
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A summarised version of the core financial statements has been incorporated into the accounts of Chiltern District Council being the lead authority for the Joint Committee. |
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Overview of Financial Results for 2007/08 |
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The detailed financial results and position for the year end are shown in the statement and show a net operating surplus for the year of £573,789. This compares to a budgeted surplus position of £536,860. The main reason for the improved position is lower than expected expenditure, particularly on maintenance of buildings, and slightly improved income from fees and charges for memorials. After taking into account a revenue contribution to fund capital expenditure incurred during the year and pension fund adjustments the overall reported net surplus is £517,583 to be apportioned between the constituent authorities. |
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Capital Expenditure |
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The capital expenditure of £59,968 was incurred in the year and has been entirely funded from revenue balances (see Note 4 on page 11 for a breakdown). This compares to an estimated spend of £269,169. The major refurbishment and new chapel project is complete but final certificates are still awaited, the 2007/08 unspent budget provision will therefore be carried forward to 2008/09. Due to the revaluation as at 31st March 2007 the amount paid out in 2007/08 relates to the re-valued asset, is not an enhancement and has therefore not been capitalised in the current year. |
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Pension Fund |
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As recommended by the external auditors, the Chilterns Crematorium accounts include FRS17 accounting entries in respect of pension costs. Further details of accounting policy and how pension costs have been treated in the accounts are set out in greater detail within the relevant sections of the accounts. The FRS17 requirements do not impact on the Chilterns Crematorium financial performance but do ensure that its net Pension Fund liability is recognised in the balance sheet. The net liability at 31 March 2008 is £535,197. The financial position of the Chilterns Crematorium remains healthy as the deficit on the pension fund will be made good in the longer term by increased contributions into the fund over the remaining working life of employees. The level of contributions required is assessed by the pension fund actuaries on a triennial basis. The next fund valuation is due at 31 March 2010. The pension fund figures and disclosures for the year are provided by the pension fund actuaries. A notional split has been applied to the figures to reflect the fact that they relate to both Chiltern District Council and Chilterns Crematorium employees. These two bodies are entirely separate and the figures reported in these accounts relate to Chilterns Crematorium staff only. |
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For further information please contact Tina Pearce at Chiltern District Council, Council Offices, King George V Road, Amersham, Bucks HP6 5AW (direct line: 01494 732233 or email tpearce@chiltern.gov.uk). |
STATEMENT OF RESPONSIBILITIES FOR THE STATEMENT OF ACCOUNTS |
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The Treasurer’s responsibilities: |
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The Treasurer, Alison Howes CPFA, in her role as Head of Financial Services at Chiltern District Council is responsible for the preparation of the Statement of Accounts in accordance with regulations and proper practice. The Statement of Accounts is required to “present fairly” the financial position of the Joint Committee. The Treasurer’s responsibility includes keeping proper accounting records, maintaining investments and a positive cash flow and taking reasonable steps to detect fraud and other irregularities. |
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The External Auditor’s responsibilities: |
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Grant Thornton are the Joint Committee’s external auditors in their role as the Council’s auditors and it is their responsibility to conduct the audit in such a way that they obtain all the information and explanations they need to give them reasonable reassurance that the Statement of Accounts is free from material misstatement. Their report is shown at the end of the Statement of Accounts. |
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CERTIFICATION OF ACCOUNTS |
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APPROVAL OF ACCOUNTS BY JOINT COMMITTEE |
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The accounts have been approved by the Chilterns Crematorium Joint Committee at its meeting on ---------2008. |
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Chairman |
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Date: |
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STATEMENT OF ACCOUNTING POLICIES |
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General |
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The statement of accounts presented on the following pages has been compiled in accordance with the Chartered Institute of Public Finance’s (CIPFA) Codes of Practice which are recognised by statute as representing proper accounting practices. |
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Basis on which debtors or creditors at the year-end are included in the Balance Sheet |
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All capital transactions have been recorded in the accounts on the basis of receipts and payments during the year. |
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Most revenue transactions are recorded on an income and expenditure basis. Debtors balances, therefore, include sums still due to the Crematorium Joint Committee but not yet received, and creditors balances sums for goods delivered and services received for which payment has not yet been made. In both cases, where precise amounts cannot be determined, estimates are included. |
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There are, however, certain exceptions to the ‘accruals’ principle. The main items are:- |
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The difference between the amounts charged annually to the Revenue Accounts in respect of these items and the amounts that would be charged if they were accrued to 31 March each year is not significant. |
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Nature of Reserves and Provisions |
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The Joint Committee is not legally permitted to maintain funds and operating surpluses are being accumulated to defray future capital expenditure as detailed in the capital programme. |
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Borrowing |
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The Joint Committee repaid all its borrowing in the year 1990/91 and is, therefore, debt free. |
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Fixed Assets |
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All expenditure on the acquisition, creation or enhancement of fixed assets is capitalised. Land and buildings included in the balance sheet were revalued at 31st March 2007. Formal revaluations will be taken at intervals of not more than five years and the next will be carried out prior to 31st March 2012. |
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The crematorium has been valued on a depreciated replacement cost basis and the staff bungalows at open market value for existing use. |
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Depreciation |
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Depreciation is provided for on fixed assets with a finite useful life, including buildings, in accordance with FRS15. A straight-line method is used over the following periods:- |
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Buildings 29 years |
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Bungalows 50 years |
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Plant, Machinery & Equipment 5 – 10 years |
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Charges to the income and expenditure account for the use of assets cover the annual provision for depreciation. These charges are matched by an appropriation of equal amounts from the capital financing account. This ensures that there is no net effect on the distribution of surplus to the Constituent Authorities. |
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Revaluation Reserve |
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This account replaces the Fixed Asset Restatement Account as at 1st April 2007. In accordance with the Statement of Recommended Practice the balance on this account was combined with the balance on the Capital Financing Account to create the new Capital Adjustment Account. There has been no revaluation of assets in the current year and the balance on this account remains zero as at 31st March 2008. |
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Basis of Valuation of Investments |
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These are included at the lesser of the original price or realisable value. |
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Stocks and Works in Progress |
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Stocks and work in progress are normally valued at the lower of cost or realisable value. |
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Apportionment of Surpluses/Deficits |
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Any operating surplus or deficit in any year is apportioned between the Constituent Authorities on the basis of the number of cremations from the area of each authority in comparison to total cremations. The current agreement by all constituent authorities is that any surplus will not be distributed but will be retained by the Joint Committee for use in funding capital expenditure and/or to meet future deficits. |
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Pension Costs |
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The accounts have been prepared in accordance with the requirements of FRS17. The current policy under FRS17 reflects a commitment in the longer term to increase contributions to make up any shortfall in attributable net assets in the pension fund. |
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CHILTERNS CREMATORIUM JOINT COMMITTEE |
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Income and Expenditure Account |
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for the year ended 31 March 2008 |
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(document not available) |
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CHILTERNS CREMATORIUM JOINT COMMITTEE |
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Balance Sheet as at 31 March 2008 |
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CHILTERNS CREMATORIUM JOINT COMMITTEE |
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CASHFLOW STATEMENT 31ST MARCH 2008 |
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Notes to the Financial Statements |
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The Chilterns Crematorium staff are employed by Chiltern District Council. As part of the terms and conditions of employment of its officers and other employees, the authority offers retirement benefits. Although these benefits will not actually be payable until employees retire at some point in the future, the authority has a current commitment to make these payments and this has to be disclosed in the accounts. |
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The authority participates in one pension scheme – the Local Government Pension Scheme (LPGS) administered by Buckinghamshire County Council. This is a funded scheme, meaning that the authority and employees pay contributions into a fund, calculated at a level intended to balance the pension liabilities with investment assets in the longer term. |
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We recognise the costs of retirement benefits in revenue expenditure when they are earned by employees rather than when the benefits are eventually paid as pensions. However, the charge we are required to make against net surplus/(deficit) for the year is based on the cash payable in the year, so the real cost of retirement benefits is reversed out of the Income and Expenditure Account after Net Operating Surplus/(Deficit). |
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Transactions Relating to Retirement Benefits |
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The following transactions have been made in the revenue account during the year:- |
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Assets and Liabilities in relation to Retirement Benefits |
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A notional split has been applied to the figures to reflect the fact that both Chiltern District Council and Chilterns Crematorium employees participate in the scheme but as a single authority. The underlying assets and liabilities for retirement benefits attributable to the Chilterns Crematorium only, at 31 March are as follows:- |
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The liabilities show the underlying commitments that the Crematorium has in the long run to pay retirement benefits. The total net liability of £535K has a substantial impact on the net worth of the Crematorium as recorded in the balance sheet. However, statutory arrangements for funding the deficit mean that the financial position of the Crematorium remains healthy as the deficit on the pension fund will be made good by increased contributions over the remaining working life of employees, as assessed by the scheme actuary. The movement during the year is mainly attributable to actuarial gains. |
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Basis for Estimating Assets and Liabilities |
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Liabilities have been assessed on an actuarial basis using an estimate of the pensions that will be payable in future years dependent on assumptions about mortality rates, salary levels etc. The Buckinghamshire County Council scheme has been assessed by Barnet Waddingham LLP, an independent firm of actuaries, estimates being based on the latest full actuarial valuation of the scheme as at 31 March 2007. |
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The main assumptions used in their calculations have been:- |
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For the purpose of calculating the impact of Regulation 3 of the LGPS (Amendment) Regulations 2006 whereby scheme members are able to exchange pension for additional lump sum benefits it has been assumed that 50% of all future retiring members will opt to increase their lump sum at retirement age in exchange for lower pensions. |
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The expected return on assets is based on the long-term future expected investment return for each asset class as at the beginning of the period (i.e. as at 1 April 2006 for the year to 31 March 2007.) The following expected returns have been adopted:- |
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General Debtors represents the value of Cremation income outstanding at 31st March 2008. |
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The net surplus for the year ended 31 March 2008 was £517,583 and this has been apportioned to the constituent District Councils on the basis of the number of cremations from the area of each constituent Council in comparison to total cremations. This is in accordance with the constitution but in a year of high capital expenditure does distort the allocation. |
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The overall cumulative position at the end of the financial year is a surplus of £1,143,099 as shown below: |
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This note shows how the brought forward balances on reserves, the gains and losses for the year and the transfers between reserves have resulted in the carry forward of balances on the reserves. |
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follows:- |
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