Annual Accounts and Treasury Management Insights
"Discover the importance of annual accounts and treasury management in governmental and corporate settings. Learn about statutory requirements, financial reporting standards, and the role of Financial Reporting Manual in ensuring transparency. Explore the challenges faced by Arm Length Bodies and the contents of Annual Reports. Gain an understanding of the key elements in financial statements and governance statements."
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Presentation Transcript
Accounting & Treasury Management Annual Accounts Accounting Policy Treasury Management 1
ANNUAL REPORT & ACCOUNTS Improve understanding of requirements for ARAc & how it s produced Financial Statements & elements of ARAc 2
Why? Statutory requirement - Government Resources and Accounts Act 2000 (Accounts element), Companies Act (Report element). One of the few opportunities for Parliament and the public to gain an insight into the performance and financial decisions taken by Government Departments. 3
FMPA Responsibilities Ensure information disclosed meets required standards - Financial Reporting Manual (FReM). Manage the relationship with the NAO. Ensure reader can more easily understand information 4
Accounting Boundary 2012/13 Departmental Accounts: 7 Top Level Budgets (TLBs) Executive Agencies Other minor groups incl. advisory & monitoring bodies Consolidation of Arm Length Bodies 2012/13 onwards: Entity TLB Responsible The Royal Hospital Chelsea Land Forces The National Army Museum Land Forces The Council of Reserve Forces and Cadets Associations Land Forces Land Forces ABF The Soldiers Charity (will be reclassified from public sector wef Apr 2013) The Royal Air Force Museum Air Command The National Museum of the Royal Navy Navy Command Commonwealth War Graves Commission HO&CS The Commonwealth War Graves Commission Centre 5
Issues with Arm Length Bodies Some bodies challenging ONS categorisation. Quality of accounts. Timing of publication. 6
ARAc Contents Annual Report (incl Management Commentary & Remuneration Report) Governance Statement C&AG s Certificate & Report Financial Statements Notes to the Accounts 7
Annual Report Balanced, forward looking, performance Consists of: Director s Report Management Commentary Remuneration Report 8
Remuneration Report Salary Bonus Benefits in Kind Pension Pay Multiples 9
Governance Statement Statement of Accounting Officer s Responsibilities Governance Statement How department controlled Assurance Reports, DIA Compliance with the Governance Code Lead NEBM Report on Board s performance Highlights of sub-committees of Board Risks affecting the Control framework 11
Comptroller and Auditor General Certificate of C&AG to House of Commons True and fair view? Intended by Parliament? Accord with regulations? C&AG s Report Qualifications 12
2011-12 ARAc Certification Removal of 2 qualifications Discrepancy between accounting & warehouse records capital spares and inventory + Existence of 0.1bn of BOWMAN radios 2 qualifications on statements remain Valuation of inventory and capital spares associated with platforms taken out of service Failure to fully comply with accounting requirements for determining whether a contract contains a lease New regularity qualification- Outstanding approval for remuneration package for senior board member 13
Financial Statements: 1.Statement of Parliamentary Supply Outturn against Estimate DEL Resource and Capital AME Resource and Capital Non Budget Net Cash requirement Administration 14
2. Statements of Comprehensive Net Expenditure Operating Cost Statement Administration Costs Programme Costs Income Interest Other Comprehensive Net Expenditure Movements in reserves 15
3. Statements of Financial Position Non current assets incl PPE, intangibles Current Assets incl inventory, receivables Current Liabilities incl trade payables due<yr Non current liabilities provisions, other payables Taxpayers and other equity 16
4. Net Cash Requirement 2012/13 2011-12 2012-13 Net Cash Requirement 2012-13 Outturn compared to Estimate: Savings/ (Excess) 000 Outturn 000 Note Estimate 000 Outturn 000 37,608,179 Net Cash Requirement 4 38,651,322 36,838,219 1,813,103 17
5. Statement of Cash Flow Cash outflow on operating activities Cash outflow on investing activities Cash financing Consolidated fund less loans and financing of assets Net = the increase or decrease in cash 18
6. Statement of Changes in Taxpayers Equity Net expenditure cleared to General Fund Movements in assets and liabilities through reserves Movements between reserves Opening balance plus movement = closing balance 19
Notes to the Accounts 1 2 3 6 & 7 Staff and other costs 8 & 9 Income and Interest 10 -19 Details supporting the SoFP 20 -24 Pensions, Capital Commitments, Leases, Service Concession Arrangements, Contingent Liabilities 25 Losses and Special Payments Accounting Policies Budgets and Estimates outturn Reconciliation to Budgets & Estimates 20
Note 25 Losses & Special Payments Reporting to Parliament as soon as possible Advance notification / closed cases Categories: bookkeeping, cash, stores, fruitless payments, constructive losses, claims waived Separate identification of items over 250k 21
Note 25.2 Losses & Special Payments Threshold reporting cases to Parliament - 250k Summary - All Closed Cases (including > 250k): FY 2012-13 Total number Total value 4,030,057 FY 2011-12 Total number Total value FY 2010-11 Total number Total value 25,025 16,355 180,796,000 16,096 289,630,000 22
DEFENCE EQUIPMENT AND SUPPORT Advance Notifications at 31 March 2012, closed in 2012-13 Cancellation of Nimrod MRA4 (Constructive Loss) 3.7bn Costs associated with grounding HMS Astute & Subsequent towing. (Fruitless Payment) 1.6m Early withdrawal of 3 Royal Fleet Auxiliary vessels (Constructive Loss) 187.5m 23
New Advance Notifications in 2012-13 000 1,233,755 Impairment charges from early withdrawal from Germany (constructive loss) Cancellation of Queen Elizabeth Class aircraft carrier conversion programme (constructive loss) Loss of 2 Tornado aircraft after an accident (stores losses) 74,561 23,502 Advanced Notification from 2011-12 Not Closed 1,29b Early withdrawal from service of the fleet of Harrier aircraft (Constructive Loss) 24
Role of the NAO Government Resources and Accounts Act (GRAA) Opinion - true and fair view Prepared in accordance with the GRAA & HMT directions Management commentary consistent financial statements Report the expenditure & income used for purposes intended Whether the Department s Votes A has been exceeded 25
Basis of the NAOs Opinion Proper accounting records have been kept Proper returns received from third parties Information and explanations necessary for the audit Annual Report & Commentary consistent with the financial statements & information obtained during the audit Governance Statement reflects the Department s compliance with HMT s guidance 26
Wider Reporting and Future Changes Whole of Government Accounts True and Fair View Faster Closure Consistent single version of the truth 27
Questions? 28
