ANNEX C
COMMENTARY ON DEPARTMENT YELLOW ACCOUNTS
C1. The Department Yellow accounts which have
been included as an Annex to the Resource Accounting Manual have
been compiled in accordance with policies set out in the Manual
itself. The Manual has adopted policies based on Generally Accepted
Accounting Practice (GAAP) adapted where appropriate to take account
of the public sector context. The FRAB have endorsed the Manual.
C2. GAAP calls for four primary financial statements
and prescribes their form and content. Accounts prepared under
GAAP comprise a Profit and Loss Account; a Statement of Total
Recognised Gains and Losses; a Balance Sheet and a Cash Flow Statement.
Resource accounts will include all these statements, although
the Profit and Loss Account is entitled an Operating Cost Statement
and the Statement of Total Recognised Gains and Losses is, instead,
a Statement of Recognised Gains and Losses because it excludes
the net cost of operations. (The Statement of Recognised Gains
and Losses is shown on the same page as the Operating Cost Statement.)
Resource accounts will also include two additional primary statements
— a Summary of Resource Outturn and a Statement of Resources
by Departmental Aims.
C3. The Department Yellow example in this Annex
includes all of the Schedules which will need to be presented
in a department's resource accounts together with Notes to the
Accounts. The Annex first provides a commentary on the Schedules
to help the reader to analyse the data provided in them and to
explain, in non-accounting terms, what the Schedules are attempting
to show.
SCHEDULE
1—SUMMARY OF
RESOURCE OUTTURN
C4. The Summary of Resource Outturn (Schedule
1) provides Parliament with a comparison between the sums voted
in Estimates and the resources and cash actually consumed. The
Schedule is unique to resource accounting and has no equivalent
under GAAP. It will play an important role in resource budgeting
and would become fully applicable if Parliament agrees to the
introduction of resource-based estimates in respect of 2001-02
onwards.
C5. The Schedule shows:
(a) a comparison of outturn against estimate
in respect of voted resource expenditure and the related cash
requirement;
(b) a reconciliation of total resource expenditure
to the cash requirement for both outturn and estimate;
(c) an explanation of variances between estimate
and outturn; and
(d) details of receipts payable to the Consolidated
Fund.
C6. As can be seen from the Department Yellow
example, the top part of the Schedule shows outturn and request
for resources figures for each of the departmental request for
resource lines.
|
| —-2001-02-—
| —2000-01— |
| | |
| | | |
| |
| —Outturn—
| —Request for resources—
| | |
| | |
| | | |
| |
| Gross expenditure
1
| AinA
2 | Net total
3
| Gross
expenditure
4 | AinA
5
| Net RfR
6 | Difference
RfR/outturn
7
| Prior year
outturn
8 |
| £000 | £000
| £000 | £000 | £000
| £000 | £000 | £000
|
|
| Request for Resources 1 | 41,979
| -12,595 | 29,384 |
| -12,595 | 30,324 | 940
| 29,356 |
| Request for Resources 2 | 79,950
| -49,929 | 38,021 |
| -43,168 | 39,927 | 1,906
| 38,466 |
| Request for Resources 3 | 20,440
| — | 20,440 |
| — | 21,125 | 685
| 23,890 |
|
| Total Resources (*) | 142,369
| -54,524 | 87,845 | 147,139
| -55,763 | 91,376 | 3,531
| 91,712 |
|
C7. Columns 1 to 3 in this top part of the Schedule show
outturn figures for Gross Expenditure, Appropriations in Aid (A
in A) and a Net Total, which is Gross Expenditure less A in A.
These figures show actual resource figures for the period.
C8. Columns 4 to 6 show request for resource figures for
Gross Expenditure, A in A and net request for resources at Estimate
stage.
C9. Column 7 shows the difference between the outturn net
total and the net request for resources. This helps the reader
to see how well the department performed in reality against its
projections.
C10. Column 8 shows the provisional outturn for the prior
year for comparative purposes.
C11. Immediately below the top part of the Schedule there
are two lines which show "Non Operating Cost A in A"
and "Net Cash Requirement". These figures are not calculated
from the figures shown in the top section of the Schedule but
are independent of them. They are presented as follows:
|
| —2001-02—
| —2000-01— |
| —Outturn—
| —Request for resources—
| |
| | |
| | | |
| |
| Gross expenditur
e
1
| AinA
2 | Net total
3
| Gross
expenditure
4 | AinA
5
| Net RfR
6 | Difference
RfR/outturn
7
| Prior year
outturn
8 |
| £000 | £000
| £000 | £000 | £000
| £000 | £000 | £000
|
| Non Operating Costs AinA | |
| | |
| -100 | -100 | -75
|
Net Cash Requirement
(Schedule 4) |
| | 84,176 |
| | 88,223 | 4,047
| 86,432 |
|
C12. The "Non operating cost A in A" line shows
expenditure against items which are classified as appropriations
in aid but which are not operating costs. Examples would be the
sale of capital items or repayments of loans. The reader can see
where capital receipts were expected and/or were realised. This
figure would be voted separately from resource budget Appropriations
in Aid.
C13. The "Net cash requirement" line shows the
amount of cash estimated and cash spend by the department to carry
out its functions. These figures are subject to control under
normal Supply procedures. Schedule 4 analyses further cash from
Consolidated Fund issues and from a department's working capital.
C14. The following three totals are key figures shown on
the Schedule and are useful information for anyone wishing to
see how well a department projected its expenditure and how successful
it was in remaining within its budget:
— Non Operating Cost A in A
C15. The next block of figures shown on the Schedule reconciles
the Total Resource figures from the top block to the Net Cash
Requirement figures shown in the second block.
|
| | £000
| £000 | £000 |
| | Outturn
| RfR | Difference |
Reconciliation of resources to cash requirement
Total Resources
| Note | 87,846 | 91,376
| 3,531 |
| Non-cash items | 3 | -7,224
| -6,653 | 571 |
| Movements in working capital | 12
| | | |
| other than cash | | -4,029
| -3,000 | 1,029 |
| Decrease in long term liabilities | 17
| 5,781 | 4,000 | -1,781
|
| Purchase of fixed assets | 9 and 10
| 1,803 | 2,600 | 797
|
| New loans | 9 | 0
| 0 | 0 |
| Disposal of fixed assets | 9
| 0 | -100 | -100
|
| Repayment of loans | 9 |
0 | 0 | 0 |
| |
|
| Non Operating Cost A in A |
| 0 | -100 |
-100 |
| | |
| |
| Net Cash Requirement |
| 8,176 | 88,223
| 4,047 |
|
C16. Explanation of the figures shown can be obtained by
looking at the notes to the accounts. For instance note 3 contains
an explanation of all the non-cash items that apply and note 12
explains the non-cash movements in working capital which have
been taken into account.
C17. The next block of data in the schedule is textual and
provides an explanation of the differences shown in the top block
between request for resources and outturn. As Department Yellow
was an imaginary department and its resource accounts had been
put together for illustrative purposes only, no data is included
in the example. Instead only a skeleton is shown that provides
a framework for "real" departments to follow. The framework
is set out as follows:
Explanation of the variation between request for resources
and outturn
(i)
(ii)
(iii)
(iv)
(v)
(vi)
C18. It is expected that departments would complete this
section to explain any material variations and providing as much
data as necessary for a reader to obtain a clear picture as to
why the difference had occurred.
C19. The bottom block of figures in the Schedule analyses
the income that the department has received and paid to the Consolidated
Fund. The Department Yellow example is set out as follows:
Analysis of income payable to the Consolidated Fund
In addition to appropriations-in-aid the following income relates to the department and is payable to the Consolidated Fund
|
|
| 2001-02 Outturn
| 2001-02 RfR |
| Income | Receipts
| Income | Receipts |
| £000 | £000
| £000 | £000
|
|
| Income for fees not classified as AinA |
1,365 | 1,365 | —
| — |
| Income from the sale of assets not classified as AinA
| 36 | 36 | —
| — |
|
| 1,401 | 1,401
| — | — |
|
C20. This section reflects the existing practice of reporting
Consolidated Fund income. This data is included here to show that
departments receive some income that is not appropriated in aid
but has to be paid to the Consolidated Fund. These receipts are
not shown in the data in the top sections of the Schedule as they
cannot be used by the department and do not, therefore, affect
the amount of resources or cash that they can utilise to achieve
their objectives.
C21. The figures for "income" shown are resource
figures and those for "receipts" are cash. In the Department
Yellow example there is no difference between the two, but that
will not always be the case. In this example there were no timing
differences between the recognition and receipt of income.
C22. Finally, the Schedule contains a footnote which relates
to the "total resources" figure shown at the top of
the page. The footnote reads as follows:
(*) For an analysis of outturn expenditure and appropriation
in aid, see Schedule 2 and Notes to the Accounts 3, 4, 5 and 8.
C23. This note is included to point the reader to other sources
of information that will assist their understanding of the Schedules.
The "total resources" figure in Schedule 1 is shown
in Schedule 2 but is labelled "Net resource outturn".
Notes 3, 4 and 5 help to explain elements that make up the total
figure. Note 8 provides an analysis of net resource outturn and
net operating cost broken down by function.
|
