ILLUSTRATIVE
OUTTURN STATEMENTS
17. In addition to the illustrative Main
and Supplementary Estimates contained in this Appendix, illustrative
outturn information for MAFF has also been provided. This comprises:
— Schedule 1—Summary of Resource
Outturn.
— Schedule 2—Operating Cost Statement
and Statement of Recognised Gains and Losses.
— Schedule 3—Balance Sheet.
— Schedule 4—Cashflow Statement.
— Schedule 5—Resources by Departmental
Objectives.
— Statement of Accounting Officer Reponsibilities.
— A selection of notes to the accounts,
complementing those in Appendix I, which further demonstrate the
wealth of information that will be available about departmental
activities under RAB.
18. Dry run resource accounts for 1998-99
have been produced by MAFF for TP3 and have been subject to a
dry run audit by the NAO. The accounts were prepared using the
same data as that used in the attached illustration but some figures
and formats used may differ, as a result both of differences in
timing in terms of their production, and of linkages with Estimate
figures which were not included in the dry run resource accounts
but do inform the attached illustration.
19. As noted in Annex A, the NAO's TP3 audit
work identified some outstanding issues in respect of the prepation
of MAFF's dry run resource accounts. In addition, MAFF's Schedule
5 was not complete in time for NAO audit at TP3, and the Schedule
5 included with this illustration is therefore unaudited. The
result is that some of the figures in the illustration may be
subject to review as corrections are made to underlying balances
held in some areas. The figures are, however, sufficiently reliable
to inform this illustration, which is intended to demonstrate
the level and type of information which will be contained in resource
accounts and to show how data will flow through during the year
from resource based Main and Supplementary Estimates to an illustrative
resource account using "real" data for a "real"
department.
20. As with the DSS illustrations at Appendix
I, the prior year figures shown in the accounts are illustrative
and have not been subject to audit, since 1997-98 did not form
part of NAO's TP3 audit programme.
Schedule 1
21. Schedule 1 provides a comparison of
Outturn figures with Estimate figures and identifies any breaches
in Parliamentary limits. In a full set of resource accounts more
detailed comparison data would also be provided in the notes to
the accounts.
22. The variation between non-operating
AinA outturn and Estimate shown in Schedule 1 below indicates
a shortfall in the collection of non-operating income by MAFF
for 1998-99. This arose as a result of MAFF delaying the disposal
of a building beyond the end of the financial year which it had,
at Estimates stage, planned to sell during the year. The concept
of non-operating AinA does not apply under cash accounting and
this shortfall would not therefore have been apparent in the Appropriation
Accounts for 1998-99, although offsetting underspends in cash
expenditure would have been needed to avoid an Excess Vote. If
resource based Supply had been in operation in 1998-99, MAFF would
have needed to find offsetting capital and/or cash savings to
take account of the shortfall in non-operating AinA income, so
as not to breach the net cash requirement voted by Parliament
in Estimates.
23. As noted earlier in this Memorandum,
prior period adjustments are disclosed on the face of Schedule
1 in the form of a specific reference in the explanation of variation
box, and are included as part of current year outturn to ensure
that Parliamentary authority is provided. Consistent with this,
a prior period adjustment has been made in the attached illustrative
Estimate as a result of a £1,624,000 addition to the MAFF
balance sheet in respect of items which should have been included
as at 31 March 1998. This adjustment, which has no cash implications,
relates to a capital expenditure item and therefore has no impact
on the department's resource requirement. Such adjustments are
likely to occur very infrequently once RAB is fully in operation,
though such changes are liable to occur during the early transitional
period as departments identify, record and value all items to
be included on their balance sheets.
Schedule 2
24. Schedule 2 comprises the Operating Cost
Statement (OCS) and Statement of Recognised Gains and Losses (SRGL).
24. As with the DSS illustration, there
are three outturn totals at the foot of the Operating Cost Statements.
The differences between these three totals reflect the different
coverage of Accounts, Estimates and Budgets and, in the case of
MAFF, mainly result from differences in the scoring of non-voted
expenditure, EU receipts and CFERs.
26. As can be seen from the explanatory
note at the foot of the statement, the SRGL includes the impact
of prior year adjustments.
Schedule 3
27. Schedule 3, the Balance Sheet, shows
the assets and liabilities held by MAFF at the year end which
are represented by taxpayers' equity. From the attached illustration
it can be seen that MAFF had net asset holdings of £427,681,000
at 31 March 1999. Further details of the items which make up the
department's asset holdings would be included in the notes to
the accounts.
Schedule 4
28. Schedule 4, the Cashflow Statement,
analyses cash inflows and outflows and changes in balances for
the department for the year. The Statement analyses the net cash
flow in respect of both operating activities and capital expenditure,
and shows how the net cash flow has been financed.
29. Payments of CFERs to the Consolidated
Fund are shown in the cashflow statement. These include CFERs
which were received too late in financial year 1997-98 to be paid
across to the Consolidated Fund but were instead paid across in
1998-99. It can also be seen that some CFERs have been retained
by MAFF at the end of 1998-99, again as a result of their having
arrived in the department too late to have been paid across to
the Consolidated Fund in the year. The receipt and payment of
CFERs has no impact on the amount of cash which comprises the
net cash requirement voted by Parliament and which is required
to fund the department's net outgoings for the year.
30. It is worth noting here that, unlike
CFER income and receipts, the CFER payments shown in the cashflow
statement do not appear in Schedule 1. Also, the "Excess
cash to be CFER'd" item shown in the reconciliation of resources
to net cash requirement in Schedule 1 relates only to excess cash
amounts in departments where income is normally expected to fully
offset expenditure.
Schedule 5
31. Schedule 5 is a statement of resources
by departmental objectives and shows a different allocation of
expenditure to that used in the Operating Cost Statement.
Statement of Accounting Officer Responsibilities
32. A Statement of Accounting Officer Responsibilities
(SAOR) for MAFF has been prepared in line with the illustrative
version shown at Annex C to this Memorandum and is included with
this illustration. However, the SAOR is not fully operational
at this stage as AO responsibilities for resource accounts will
only come fully into force once the Government Resources and Accounts
Bill, currently before Parliament, is passed and Accounts Directions
have been given to departments.
Notes to the Accounts
33. The MAFF illustration provides selected
notes to the outturn statements. A full set of accounting notes
prepared in accordance with the Resource Accounting Manual (RAM)
is included in the set of MAFF resource accounts being submitted
to the Agriculture Select Committee. The notes included with the
attached illustration comprise: Statement of Accounting Policies;
Tangible Fixed Assets; and Reconciliation of Net Operating Cost
to Changes in the General Fund.
34. The Statement of Accounting Policies
sets out the particular accounting policies that MAFF has adopted
to produce the accounts. These policies are in line with the RAM.
35. Each of the further notes included in
the illustration analyses data at both a consolidated Ministry
level and a core department level. The Ministry analysis is in
line with the consolidation used for the main financial Statements
included in the illustration, whilst the Department analysis has
a narrower scope and comprises only transactions which form part
of the core department's activities (ie excluding on-vote Agencies).
36. The Tangible Fixed Assets note provides
information about the assets held by MAFF at the start and end
of the year. This note breaks down the total fixed asset figures
held on the department's balance sheet showing asset groupings
along with changes arising as a result of, for example, revaluations
occurring during the year.
37. The Reconciliation of Net Operating
Cost to Changes in the General Fund shows how the general fund
balance held by MAFF has altered from that held at the last year-end.
The main items that affect the General Fund are the cost of the
department for the year excluding certain notional non-cash costs
such as the cost of capital charge, and the funding from Parliament.
In addition, there are a number of one-off adjustments to correct
errors arising from the previous year and for the transfer of
assets. Details of prior period adjustments made are also provided
in the form of explanatory notes at the foot of both the Ministry
and Department notes.
