ANNEX C
COMMENTARY ON DEPARTMENT YELLOW ACCOUNTS
SCHEDULE 4—CASH
FLOW STATEMENT
C58. The Cash Flow Statement (Schedule 4) provides
information on the way a department has absorbed (and generated)
cash in the period. The Statement is prepared in accordance with
FRS1 (Revised). The Statement analyses the net cash flow on both
operating activities and capital expenditure and shows how the
net cash flow has been financed.
C59. The top part of the Department Yellow Cash
Flow Statement is presented as follows:
|
| 2001-02 | 2000-01
|
| £000 | £000
|
| Net cash outflow from operating activities |
-81,008 | |
| Capital expenditure and financial investment
| -1,767 | |
| Payments to the Consolidated Fund | -1,401
| |
| Financing from Consolidated Fund | 84,069
| |
| Decrease in cash in the period | -107
| |
|
C60. Taking the "Net cash outflow from operating activities",
"Capital expenditure and financial investment" and "Payments
to the consolidated fund" from the figure for "Financing
from the Consolidated Fund" shows the amount (-£107,000)
by which the department's cash at bank and in hand balance will
be reduced.
C61. The next section of the Department Yellow example reconciles
the net operating cost (from Schedule 2) to the operating cash
flows detailed in the top section of this Statement.
|
| £000 | £000
|
|
Reconciliation of operating cost to operating cash flows
Net operating cost
| 86,480 | |
| Adjust for non-cash transactions (see note 3)
| -7,224 | |
| Adjust for movements in working capital other than cash (see note 12)
| -4,029 | |
| Adjust for transfer from provision | 5,781
| |
| Net cash outflow from operating activities |
81,008 | |
|
Note 3 details the non-cash transactions which are incorporated
in the £-7,224,000 figure and Note 12 explains the non-cash
transactions which make up the £-4,029,000 figure.
C62. The third section of the Statement analyses the cash
spent on capital or invested during the period; as follows:
|
| £000 | £000
|
|
Analysis of capital expenditure and financial investment
Purchases of fixed assets
| 1,803 | |
| Proceeds of disposal of fixed assets | -36
| |
|
| |
| 1,767 |
|
| | |
| Loans to other bodies |
| |
| Net cash outflow from investing activities |
1,767 | |
|
C63. The net cash outflow from investing activities that
is generated at the base of this section is shown as a cash payment
under the title "Capital expenditure and financial investment"
in the top section of the Statement.
C64. Finally, the bottom section of the Statement analyses
the cash funding of the Department, as follows:
|
| £000 | £000
|
|
Analysis of financing
From Consolidated Fund
| 84,069 | |
| Decrease in Cash | 107 |
|
| Net Cash Requirement | 84,176
| |
|
C65. This shows that the amount of cash required by the Department
was £84,176,000. This was funded by drawing down £84,069,000
from the Consolidated Fund and by decreasing the cash balance
held at bank and in hand by the department by £107,000. The
cash remaining at bank and in hand at the end of the period is
deemed to be surrendered to the Consolidated Fund. In practice,
this amount is retained in the department's bank account at the
end of the year. The balance of cash that may be issued from the
Consolidated Fund in respect of the new financial year is then
reduced by a corresponding amount to ensure that departments cannot
spend more cash in a period than has been voted by Parliament.
Note 15 in the Department Yellow example provides more detail
as follows:
15. Cash at Bank and in Hand
|
| 2001-02 | 2000-01
|
|
| Balance at 1 April | 2,037
| |
| Net cash inflow: | |
|
| Department | -107
| |
| Payable to the Consolidated Fund |
| |
|
| Balance at 31 March | 1,930
| |
|
| The Office of HM Paymaster General provides a current account banking service. The following balances are held at 31 March:
| | |
| Balances at OPG | 1,654
| |
| Commercial banks and cash in hand |
276 | |
|
| 1,930 |
|
|
The note demonstrates that the cash balance at 31 March
(£2,037,000) was retained by the department. The balance
of cash that may be issued from the Consolidated Fund in respect
of the financial year beginning1 April, as reflected in the resource
Estimate presented in March, is reduced by a corresponding amount.
C66. The net cash requirement is also shown on Schedule
1 under Outturn.
|
