Borough of Poole

BOROUGH OF POOLE STATEMENT OF ANNUAL ACCOUNTS 2015/2016 CONTENTS Page/ Reference Narrative Report by the Head of Financial Services (i) to (vi) The Statement of Responsibilities The Accounting Statements and accompanying notes Movement in Reserves Statement 1 Comprehensive Income and Expenditure Statement 2 Balance Sheet 3 Cash Flow Statement 4 Notes to the Accounts 5 The Housing Revenue Account (HRA) 61 The Collection Fund 66 The Auditor's Report 71 Unaudited Documents Poole Housing Partnership Draft Summary of Accounts 74 Tricuro Draft Summary of Accounts 75 Appendices Appendix A - The Annual Governance Statement Appendix B - Glossary Appendix C - Index DETAILED INDEX OF NOTES TO THE ACCOUNTS NOTE DESCRIPTION PAGE 1 Accounting Policies 5-17 2 Critical judgements in applying accounting policies 18-19 3 Assumptions about the future and other major sources of estimation uncertainty 20 4a Accounting Standards that have been issued but not adopted 21 4b Prior Period Adjustments 21 5 Adjustments between accounting basis and funding basis under regulations 22-24 6 Detail of movement on reserves earmarked and unearmarked 25 7 Amounts reported for resource allocation decisions 26-30 8 Members' allowances paid in year 31 9 External audit costs 31 10 Related party transactions 31 11 Employee remuneration 32-34 12 Disclosure of deployment of dedicated schools grant 34 13 Grants and other contributions 35-37 14 Investment properties - Rental income and expenditure 37 15 Movement of property, plant and equipment 39-41 16 Investment property 42 17 Intangible assets 42 18 Capital expenditure and financing 43 19 Capital financing requirement and provision for repayment of debt 44 20 Significant commitments under capital contracts 44 21 Long term debtors 45 22 Debtors 45 23 Cash and cash equivalents 46 24 Investments - short term and long term 46 25 Creditors and Depositors 47 26 Short term borrowing and long term borrowing 47 27 Financial instruments 48-50 28 Capital grants and other contributions receipts in advance 51 29 Provisions 51-52 30a Revaluation reserve 53 30b Capital adjustment account 53 30c Deferred capital receipts 54 30d Movements in specific revenue reserves held for capital purposes 54 30e Usable capital receipts 54 31 Termination benefits and exit packages 55 32 Retirement benefits 55-58 33 Notes related to cashflow 59 34 Interest in related company and guarantees 60 35 Accounting for schools 60 36 Authorisation of accounts for issue and events after balance sheet date 60 37 Contingent Liabilities 60 NARRATIVE REPORT BY THE HEAD OF FINANCIAL SERVICES 1 INTRODUCTION The Statement of Accounts, which has been prepared in accordance with The Code of Practice on Local Authority Accounting in the United Kingdom 2015/16 (the Code), based on International Financial Reporting Standards (IFRS), shows the financial performance for the activities undertaken by the Borough of Poole. 2 THE STATEMENTS The Statement of Responsibilities for the Statement of Accounts identifies the respective responsibilities of the Authority and the Head of Financial Services for the accounts. The Financial Statements - these comprise the Movements in Reserves, Comprehensive Income and Expenditure, Balance Sheet and Cashflow a) Movements in Reserves Statement This Statement shows the movement in the year on the different reserves held by the authority, analysed into 'usable reserves' (ie those that can be applied to fund expenditure or reduce local taxation) and other reserves. The '(Surplus) or deficit on the provision of services' line shows the true economic cost of providing the authority's services, more details of which are shown in the Comprehensive Income and Expenditure Statement. These are different from the statutory amounts required to be charged to the General Fund Balance and Housing Revenue Account for Council Tax setting and dwellings rent setting purposes. The 'Net increase /Decrease before transfers to earmarked reserves' line shows the statutory General Fund Balance and Housing Revenue Account Balance before any discretionary transfers to or from earmarked reserves undertaken by the Council. b) Comprehensive Income and Expenditure Statement This Statement shows the economic cost in the year of providing services in accordance with generally accepted accounting practices, rather than the amount to be funded from taxation. Authorities raise taxation to cover expenditure in accordance with regulations; this may be different from the accounting cost. The taxation position is shown in the Movement in Reserves Statement. c) Balance Sheet The Balance Sheet shows the value as at the Balance Sheet date of the asset and liabilities recognised by the authority. The net assets of the authority (assets less liabilities) are matched by the reserves held by the authority. Reserves are reported in two categories. The first category of reserves are usable reserves i.e. those reserves that the authority may use to provide services, subject to the need to maintain a prudent level of reserves and any statutory limitations on their use (for example the capital receipts reserve that may only be used to fund capital expenditure or repay debt). The second category of reserves are those that the authority is not able to use to provide services. This category of reserves includes reserves that hold unrealised gains and losses (for example the revaluation reserve), where amounts would only become available to provide services if the assets are sold; and reserves that hold timing differences shown in the Movement in Reserves Statement line “Adjustments between accounting basis and funding basis under regulations". (i) BOROUGH OF POOLE 2015-16 NARRATIVE REPORT BY THE HEAD OF FINANCIAL SERVICES d) Cashflow The Cash Flow statement shows the changes in cash and cash equivalents of the authority during the reporting period. The statement shows how the authority generates and uses cash and cash equivalents by classifying cash flows as; operating, investing and financing activities. The amount of net cash flows arising from operating activities is a key indicator of the extent to which the operations of the authority are funded by way of taxation and grant income or from the recipients of services provided by the authority. Investing activities represent the extent to which cash outflows have been made for resources which are intended to contribute to the authority’s future service delivery. Cash flows arising from financing activities are useful in predicting claims on future cash flows by providers of capital (ie borrowing) to the authority. Notes to the Financial Statements - these are intended to give the reader more information about items contained within the Core Financial Statements. The Housing Revenue Account summarises all income and expenditure in providing local authority council housing and reflects the statutory obligation to maintain a separate account. The Collection Fund shows the level of council tax and non-domestic rates which has been collected by the Authority and the distribution of these funds. 3 COLLECTION FUND Good collection rates were achieved in year for both Council Tax (97.8%) and Non-Domestic Rates (98.6%). The Collection Fund has an accumulated surplus of £1,532k.This comprises two elements one relates to council tax and is an accummulated surplus of £1,189k, the other to business rates and is an accummulated deficit of £343k. Council tax surplus is shared between the Borough of Poole, the Dorset Police and Crime Commissioner and the Dorset Fire Authority. Business rates deficit is shared between Central Government, Borough of Poole and Dorset Fire Authority. 4 THE HOUSING REVENUE ACCOUNT (HRA) The HRA cumulative surplus balance as at 31st March 2016 amounts to £580k. The account reflects the statutory obligation to account separately for social housing provision. It shows the main elements of expenditure and how these are funded by rents and other income. The HRA Accounts consist of an Income and Expenditure Account and a Statement of Movement on the HRA Balance. The HRA income and expenditure account shows a surplus of £24,261k, this is then offset by statutory adjustments to give a final surplus in year of £1k which is then deducted from previous years surpluses of £579k to give the final total surplus of £580k. There is however no impact on taxpayers as the deficit and all other HRA related items are appropriated through the reconciling items statement entries before the General Fund Balance is calculated. 5 ARMS LENGTH MANAGEMENT ORGANISATION AND GROUP ACCOUNTS Poole Housing Partnership Ltd (PHP Ltd) was set up in April 2004 to manage the Council's Housing stock. Transactions with the company are contained within the Housing Revenue Account. The authority has given full consideration to requirements contained within the Code with regard to the production of group accounts. It has considered both the qualitative and quantitative aspects and concluded that group accounts are not required. Tricuro is a group of two companies established under local authority trading principles as a joint venture between Dorset County Council, Bournemouth Borough Council and Poole Borough Council. The shareholder agreement regulates the shares in profit /cost as 70%, 25% and 5% respectively. The Company is principally engaged in the provision of social care provider services for vulnerable adults across Dorset, Bournemouth and Poole. The company was launched on 1 July 2015. Poole's 5% share is shown within the accounts. BOROUGH OF POOLE 2015-16 (ii) NARRATIVE REPORT BY THE HEAD OF FINANCIAL SERVICES 6 CAPITAL EXPENDITURE GENERAL FUND AND HOUSING REVENUE ACCOUNT Total expenditure on capital schemes in 2015/16 was £34,209k (2014/15:£36,323k). This is £11,041k Housing Revenue Account and £23,168k General Fund. The total expenditure was funded by capital grants, capital receipts, revenue and reserve contributions and borrowing. A more detailed analysis of capital expenditure and its financing can be found in the Notes to the Accounts at Note 18. Note 20 details significant commitments under capital contracts.

Load more