THE POLICE AND CRIME COMMISSIONER
FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS
2013/14
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YOKSHIRE
STATEMENT OF ACCOUNTS 2013/14
CONTENTS
PAGE NO
Explanatory Foreword
1
Financial Statements
Statement of Responsibilities
8
Group Movement in Reserves Statement
9
Police and Crime Commissioner’s Movement in Reserves Statement
10
Group Comprehensive Income and Expenditure Statement
11
Police and Crime Commissioner’s Comprehensive Income and Expenditure Statement
12
Group and Police and Crime Commissioner’s Balance Sheet
13
Group and Police and Crime Commissioner’s Cash Flow Statement
14
Notes:
1. Accounting Policies
15
2. Critical judgements in applying accounting policies
29
3. Changes to financial statements
29
4. Assumptions made about the future and other major sources of estimation
uncertainty
31
5. Material items of income and expense
32
6. Adjustments between accounting basis and funding basis under regulation
33
7. Transfers to and from earmarked reserves
37
8. Other operating expenditure
39
9. Financing and investment income and expenditure
39
10. Taxation and non specific grant income
39
11. Property, plant and equipment
40
12. Intangible assets
43
13. Financial instruments
44
14. Nature and extent of risks arising from financial instruments
46
15. Inventories
50
16. Debtors
50
17. Cash and cash equivalents
50
18. Assets held for sale
51
19. Creditors
51
20. Provisions
52
21. Usable reserves
53
22. Other long term liabilities
53
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YOKSHIRE
STATEMENT OF ACCOUNTS 2013/14
CONTENTS
PAGE NO
23. Unusable reserves
54
24. Cash flow statement – adjustments for non-cash movement
58
25. Cash flow statement – operating activities
58
26. Cash flow statement – investing activities
59
27. Cash flow statement – financing activities
59
28. Amounts reported for resource allocation decisions
59
29. Officers’ remuneration
63
30. Termination benefits
66
31. South Yorkshire Joint Secretariat
66
32. External audit costs
67
33. Grant income
68
34. Related parties
69
35. Capital expenditure and financing
70
36. Leases
71
37. Impairment losses
72
38. Defined benefit pension schemes
72
39. Regional working
80
40. Events after the Balance Sheet Date
82
41. Contingent liabilities
82
Police Pension Fund Account and Notes
84
Other Statements
Independent Auditor’s Report
86
Annual Governance Statement
89
Glossary of terms
104
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
EXPLANATORY FOREWORD
1.
Introduction
A significant change in the way in which police services in England and Wales are governed
and held accountable occurred during 2012/13, as a consequence of the Police Reform and
Social Responsibility Act 2011 which received Royal Assent on 15th September, 2011. One
of the key reforms was to replace all Police Authorities with new Police and Crime
Commissioners who came into power on 22 November 2012. At the same time, the Chief
Constables of all forces in England and Wales were established as separate legal entities
and made responsible for their own police force. The primary function of the Chief
Constables is the exercise of operational policing responsibilities under the Police Act 1996.
The main role of Police and Crime Commssioners is to hold their Chief Constable to account
for the exercise of these duties and to ensure that they deliver an efficient and effective
policing service.
On 22 November 2012, when the South Yorkshire Police and Crime Commissioner (the
PCC) came into power, the assets, liabilities and reserves previously belonging to the South
Yorkshire Police Authority were transferred to him and remain under the PCC’s control. The
PCC receives all income and funding and makes all payments for the South Yorkshire Police
Service from the Police Fund. The Chief Constable fulfils his duties under the Act within an
annual budget set by the PCC. A governance framework is in operation which determines
the respective responsibilities of the two bodies.
In previous years, one set of statutory accounts was prepared for the Police Authority and
Force combined. In line with the above changes, there is now a requirement for the Force to
prepare its own statutory accounts from 2012/13 onwards, which are separate from those of
the PCC. The South Yorkshire Group position included within the PCC’s accounts reflect the
consolidated position of both the PCC and the Chief Constable.
The Statement of Accounts is a statutory publication required under the Accounts and Audit
Regulations and prepared in accordance with the Code of Practice on Local Authority
Accounting in the United Kingdom 2013/14 (the Code), published by the Chartered Institute
of Public Finance and Accountancy (CIPFA). The Code specifies the principles and practices
of accounting required to give a true and fair view of the financial position at the end of the
financial year and the transactions during the year.
The information contained in the various statements and notes are of a highly technical
nature and it may be useful to refer to the Glossary on page 104 for further explanation.
2.
Changes to the Accounting Statements
The accounting approach adopted in 2012/13 was based on the principle that the PCC
receives all funding and income, makes all payments for the Group and also controls all the
assets, liabilties and reserves. As a result all financial transactions were presented in the
PCC’s accounts, with nil entries included within the Chief Constable’s financial statements.
The costs of operational policing were reflected in an operating cost statement note within
the Chief Constable’s accounts.
Further guidance has been received which indicates that this accounting approach is no
longer appropriate since the Chief Constable is solely responsible as a principal for directing
operational policing and therefore is not acting as an agent of the PCC in delivering these
services. The implication of this is that the relevant costs of operational policing need to be
recognised in the Chief Constable’s Comprehensive Income and Expenditure Statement
which replaces the operating cost statement note.
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THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
EXPLANATORY FOREWORD
All assets, liabilities and reserves continue to be held by the PCC and therefore are included
in the PCC’s Balance Sheet except for those relating to pensions and accrued employee
benefits which now form part of the Chief Constable’s Balance Sheet.
The change in accounting treatment has been applied retrospectively and the PCC’s
financial statements for 2012/13 have therefore been restated.
3.
Explanation of Financial Statements
The PCC’s Accounts consist of the following Financial Statements for both the Group and for
the PCC as a single entity:

Movement in Reserves Statement
This shows the movement of reserves during the year, analysed into usable and
unusable reserves. Usable reserves can be used by the PCC to fund expenditure or
reduce taxation. Unusable reserves are those that have been created to reconcile the
accounting entries required to comply with the Code with those that must be statutorily
charged to the General Fund Balance for council tax setting purposes. They are not
therefore available to spend in the future.
The Adjustments between the Accounting Basis and Funding Basis under Regulations
within the Statement consolidates all the adjustments needed to convert the Surplus or
Deficit on the Provision of Services in the Comprehensive Income and Expenditure
Statement to the movement in the General Fund Balance for the year.

Comprehensive Income and Expenditure Statement
This statement shows the accounting cost for the year of providing services in
accordance with generally accepted accounting practices. The Surplus or Deficit on the
Provision of Services within the Statement shows the increase or decrease in net worth
of the Group or the PCC as a result of incurring expenses and generating income. The
Other Comprehensive Income and Expenditure shows any changes in net worth which
have not been reflected in the above Surplus or Deficit, for example increases or
decreases as a result of movements in asset values or because of actuarial gains or
losses on pensions assets and liabilties.
The Statement does not match with revenue expenditure to be funded from taxation and
the reconciliation to this taxation position is shown in the Movement in Reserves
Statement.

Balance Sheet
This sets out the financial position of the PCC and the Group and shows the value of
assets and liabilities recognised at 31 March each year. The net assets (assets less
liabilities) are matched by the reserves held by the PCC and the Group, split between
usable and unusable reserves.

Cash Flow Statement
This summarises the movements in cash and cash equivalents during the year. It shows
how cash and cash equivalents are used or generated in operating, investing and
financing activities.
2
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
EXPLANATORY FOREWORD
These Accounts are supported by the Statement of Responsibilities, and the Notes to the
Accounts which include the accounting policies adopted (Note 1). An Annual Governance
Statement is also published with the Accounts which sets out the PCC’s governance
framework and the review of its effectiveness.
4.
Summary of the Financial Year - Revenue Budget
A budget for 2013/14 was approved by the PCC in February 2013. 2013/14 was the third
year of the Government’s four year Comprehensive Spending Review period and the grant
funding reduction in cash terms for the PCC was £3.2m, more than 3% in real terms.
Reductions of around 25%, equating to around £1m, were also applied by the Government
to Community Safety specific grant funding received by the PCC.
The PCC set an increase in Band D Council Tax of £5 per annum in line with the maximum
increase regarded by the Government as not being excessive. The additional income this
generated would partially offset the grant reduction and hence enable the PCC to achieve
one of his policy objectives to maintain existing numbers of frontline police officers and police
community support officers.
The following table sets out the latest budget as compared to the actual expenditure in
2013/14:
Budget
Actual Variation
£000
£000
£000
2,029
2,007
(22)
Hillsborough related expenditure
-
5,889
5,889
Commissioning and Partnerships
4,866
4,498
(368)
Capital financing costs
8,743
5,669
(3,074)
(10,784)
(14,347)
(3,563)
4,854
3,716
(1,138)
Budget delegated to Chief Constable
252,157
248,621
(3,536)
Total Combined Net Expenditure
257,011
252,337
(4,674)
Contribution to/(from)Earmarked Reserves
(1,884)
21,513
23,397
Contribution to/(from) General Reserves
(3,250)
(21,973)
(18,723)
251,877
251,877
-
Office of the Police and Crime PCC
Specific Grants and Investment Interest
Budgets under the control of the PCC
Budget Requirement
The actual combined net expenditure for the year was £252.3m, an underspend of £4.7m
against the latest budget. The most signficant variations were:

The budget for capital financing costs included £4.2m approved by the PCC during the
year to fund capital schemes mainly relating to the Force’s Information Strategy. £2.9m
of this expenditure has slipped into 2014/15 and sums have been earmarked in a capital
reserve to finance this.
3
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
EXPLANATORY FOREWORD

The PCC incurred £5.9m on costs related to the Hillborough Inquest. It is anticipated that
the government will meet a proportion of those costs with the balance to be met from
general reserves.

The additional specific grant income includes an estimated £4.2m Home Office Grant for
Hillsborough related expenditure. This is partially offset by a reduction in other specific
grant receivable (£0.4m) and investment income (£0.2m).

The Chief Constable underspent his delegated budget by £3.6m. Further information
regarding this is included within the Chief Constable’s Statement of Accounts.
The underspend increased the contribution to the reserves held by the PCC by £4.7m and
the opportunity was taken to set up a number of new earmarked reserves which are set out
in more detail in Note 7 in the accounts.
The above figures do not reconcile to the Comprehensive Income and Expenditure
Statement due to presentational differences required by proper accounting practice; however
the contributions of £21.513m to earmarked reserves and £21.973m from general reserves
are reflected in the Movement in Reserves Statement.
The PCC’s net spending was funded as follows:
£000
Budget Requirement
%
251,877
Sources of Finance
Department of Communities and Local Government Funding
Police Grant
Council Tax Freeze Grant
Council Tax Support Grant
Council Tax Income

Barnsley

Doncaster

Rotherham

Sheffield
(84,941)
(110,040)
(1,269)
(9,560) 81.7
(8,384)
(10,152)
(9,277)
(18,254)
Total Financing
5.
£000
(46,067) 18.3
(251,877)
100
Summary of the Financial Year - Capital Expenditure
The PCC spent £6.3m on capital expenditure in 2013/14.
A sum of £1.2m was spent improving existing buildings, which included £0.7m to facilitate
the centralisation of the four Criminal Justice Units. A further £3.2m related to information,
communications and operational equipment.
New vehicles totalling £1.9m were purchased during the year in accordance with the vehicle
replacement programme.
4
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
EXPLANATORY FOREWORD
6.
Capital Financing and Borrowing
Capital expenditure is financed by a combination of government grant, internal resources
such as capital receipts and direct revenue funding, with the balance from external
borrowing. The PCC is able to borrow to fund capital investment provided that he can
demonstrate that it is affordable and prudent in accordance with CIPFA’s Prudential Code.
The PCC approves an annual Treasury Management Strategy which includes requirements
and proposed arrangements for borrowing during the year.
In view of the continuing impact of the banking crisis and economic situation, the PCC’s
strategy was to continue to use internal cash to fund capital expenditure in 2013/14 in order
to reduce cash levels and limit investment risk. No borrowing was therefore undertaken
during the year.
However funding capital expenditure from cash balances is not sustainable in the long term.
The PCC’s total outstanding borrowing from the Public Works Loans Board (PWLB) at 31
March 2014 is £28.7m as compared with the PCC’s underlying need to borrow (capital
financing requirement) of £32.8m. This means that at some point in the future, the PCC is
likely to need to borrow an additional £4.1m to ensure that he retains his liquidity position.
7.
General and Earmarked Reserves
The actual movements in usable reserves are summarised below:
1 April Movement
2013
in Year
£000
£000
31 March
2014
£000
Earmarked Reserves
12,308
21,513
33,821
Capital Grants Unapplied
General Reserves
21
35,781
(21)
(21,973)
13,808
48,110
(481)
47,629
There has been a shift between general reserves and earmarked reserves during the year.
There are a number of specific purposes for which reserves are required by the PCC over
the next few years and by earmarking these, there will be clarity around the future use of
these reserves and minimum general reserves can be maintained more transparently. A
detailed breakdown of the movements in earmarked reserves is included in Note 7.
8.
Retirement Benefits
The PCC participates in three pension schemes which are accounted for in line with
International Accounting Standard (IAS) 19, the requirements of which are further explained
in the Accounting Policies and other notes to the Financial Statements. Most employees are
under the direction and control of the Chief Constable and therefore the commitment to pay
future retirement benefits has been included as a liability on the Chief Constable’s Balance
Sheet to reflect the true accounting position even though these will not be paid until many
years into the future. The liability for the PCC and his directly employed staff is negligible
and therefore is not shown separately in the PCC’s Balance Sheet although all IAS19
related transactions are reflected in the Group financial statements.
The inclusion of this estimated liability of £2,589m is matched by a pensions reserve within
unusable reserves in the Group Balance Sheet. The negative balance on the Pensions
5
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
EXPLANATORY FOREWORD
Reserve therefore measures the beneficial impact to the General Fund of being required to
account for retirement benefits on the basis of cash flow rather than as benefits are earned
by employees.
The inclusion of the pensions reserve on the Balance Sheet has a substantial impact on the
net worth of the Group. However, since statutory provisions require that the amount charged
to the General Fund Balance is that paid to pensions funds rather than that calculated under
accounting standards, the financial position of the PCC and the Group remains healthy, with
usable reserves of £47.6m.
9.
Change in Accounting Policy
There has been a change in accounting policy following the adoption of the June 2011
amendments to IAS19 Employee Benefits. The key changes are related to new classes of
components of defined benefit cost which have been recognised in the Group financial
statements. Firstly, Pensions Interest Cost and Expected Returns on Assets have been
combined and renamed Net Interest Cost. Secondly, Actuarial Gains and Losses have been
renamed Re-measurements and are now split between the effect of changes in financial
assumptions and demographic assumptions in the disclosure notes. The impact of these
changes on the financial statements for 2012/13 is not material and therefore no restatement
is required. However relevant comparative information for 2012/13 has been included in the
disclosure notes.
10.
Regional Working
The PCC and Chief Constable work with the other three Yorkshire and Humber PCCs and
Chief Constables to deliver a number of specific services on a regional basis. The
governance for the regional programme is undertaken by the Regional Collaboration Board
headed by the four PCCs and attended by their respective Chief Constables and Chief
Executives.
Prior to September 2013, regional services were operated on a regional collaboration basis
with the financial administration of regional budgets being led by West Yorkshire. From
September 2013, individual Forces have been assigned responsibility for each functional
area of work. South Yorkshire leads on Regional Procurement and Firearms. All work is fully
funded from contributions made by the four participating PCCs.
In addition, separate collaboration exists between the PCC and Chief Constable and their
counterparties in Humberside. The Forces have combined their Human Resources
departments and Information Systems departments in order to increase capacity and further
reduce costs by standardising processes and support. South Yorkshire and Humberside
collaboration work is overseen by a Joint Collaboration Board headed by the two PCCs,
attended by senior officers of their respective offices and forces and supported by separate
Information Systems and Human Resources Programme Boards.
Further information is included in the Accounting Policies and Notes to the Financial
Statements.
11.
Financial Prospects
6
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
EXPLANATORY FOREWORD
There has been a sustained period of funding reductions during which extensive cost
reduction measures have been introduced in order to not only protect front-line policing
capacity, but also increase investment in some of the PCC’s policy priorities. For example,
during 2013/14 significant additional resources were allocated to combatting Child Sexual
Exploitation.
2014/15 has subsequently seen a further investment of in excess of £2m in services
designed to protect the most vulnerable members of South Yorkshire’s communities.
For the years beyond 2014/15 there is substantial uncertainty regarding the extent of further
reductions in Grant funding. The PCC is continuing to work constructively with the Chief
Constable in the preparation of further cost reduction plans in order to be in a position to
respond strategically to any future reductions which are imposed.
There is no doubt that cost reduction measures have become increasingly difficult to identify
and implement without significantly impacting on front-line policing capacity. Some mitigation
against these difficulties is derived from the PCC’s Reserves Strategy which has seen
reserves generally maintained at a reasonable level in anticipation of a further period of
‘austerity’. This relatively positive aspect of the funding scenario is, however, tempered
somewhat by spending pressures and uncertainties which continue to exist with regard to,
for example, the ongoing Hillsborough Inquiry.
12.
Further information about the accounts is available from:
The Treasurer,
South Yorkshire Police and Crime Commissioner,
18 Regent Street,
Barnsley,
S70 2HG
7
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
STATEMENT OF RESPONSIBILITIES
8
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
GROUP MOVEMENT IN RESERVES STATEMENT
Earmarked
Reserves
Capital
Receipts
Reserve
Capital
Grants
Unapplied
Total Usable
Reserves
Total
Unusable
Reserves
Total
Reserves
Balance at 1 April 2012
General
Fund
Balance
This statement shows the movement in the year on the different reserves held by the Group (the
PCC and the Chief Constable) analysed into ‘usable reserves’ (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 services, more details of which are shown
in the Group Comprehensive Income and Expenditure Statement. This is different from the statutory
amounts required to be charged to the General Fund Balance for council tax setting. The Net
Increase/Decrease before the Transfers to Earmarked Reserves line shows the statutory General
Fund Balance before any discretionary transfers to and from earmarked reserves.
£000
£000
£000
£000
£000
£000
£000
33,526 13,269
-
1,609
48,404
(2,158,605)
(2,110,201)
Movement in reserves during 2012/13
Surplus / (deficit) on the provision of services
Other Comprehensive Income and Expenditure
Total Comprehensive Income and Expenditure
Adjustments between accounting basis and
funding basis under regulations (Note 6)
Net Increase / (Decrease) before Transfers to
Earmarked Reserves
Transfers to/(from) Earmarked Reserves (Note 7)
Increase/(Decrease) in 2012/13
Balance at 31 March 2013 carried forward
(94,181)
-
-
-
(94,181)
-
(94,181)
-
-
-
-
-
(346,136)
(346,136)
(94,181)
-
-
-
(94,181)
(346,136)
(440,317)
95,475
-
- (1,588)
93,887
(93,887)
-
1,294
-
- (1,588)
(294)
(440,023)
(440,317)
961
(961)
-
-
-
-
-
2,255
(961)
- (1,588)
(294)
(440,023)
(440,317)
48,110
(2,598,628)
(2,550,518)
35,781 12,308
-
21
Movement in reserves during 2013/14
Surplus / (deficit) on the provision of services
(114,064)
-
-
- (114,064)
-
(114,064)
-
-
-
-
-
153,183
153,183
Total Comprehensive Income and Expenditure (114,064)
-
-
- (114,064)
153,183
39,119
Adjustments between accounting basis and
funding basis under regulations (Note 6)
113,604
-
-
(21)
113,583
(113,583)
-
(460)
-
-
(21)
(481)
39,600
39,119
Transfers to/(from) Earmarked Reserves (Note 7)
(21,513) 21,513
-
-
-
-
-
Increase/(Decrease) in 2013/14
(21,973) 21,513
-
(21)
(481)
39,600
39,119
13,808 33,821
-
-
47,629
(2,559,028)
(2,511,399)
Other Comprehensive Income and Expenditure
Net Increase / (Decrease) before Transfers to
Earmarked Reserves
Balance at 31 March 2014 carried forward
9
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
THE PCC’S MOVEMENT IN RESERVES STATEMENT
General
Fund
Balance
Earmarked
Reserves
Capital
Receipts
Reserve
Capital
Grants
Unapplied
Total Usable
Reserves
Total
Unusable
Reserves
Total
Reserves
This statement shows the movement in the year on the different reserves held by the PCC,
analysed into ‘usable reserves’ (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 PCC’s services, more details of which are shown in the PCC’s
Comprehensive Income and Expenditure Statement. This is different from the statutory amounts
required to be charged to the General Fund Balance for council tax setting. The Net
Increase/Decrease before the Transfers to Earmarked Reserves line shows the statutory General
Fund Balance before any discretionary transfers to and from earmarked reserves undertaken by the
PCC.
£000
£000
£000
£000
£000
£000
£000
33,526 13,269
-
1,609
48,404
38,349
86,753
(5,091)
-
-
-
(5,091)
-
(5,091)
-
-
-
-
-
28
28
(5,091)
-
-
-
(5,091)
28
(5,063)
Adjustments between accounting basis and
funding basis under regulations (Note 6)
6,385
-
- (1,588)
4,797
(4,797)
-
Net Increase / (Decrease) before Transfers to
Earmarked Reserves
1,294
-
- (1,588)
(294)
(4,769)
(5,063)
961
(961)
-
-
-
-
-
2,255
(961)
- (1,588)
(294)
(4,769)
(5,063)
Balance at 1 April 2012
Movement in reserves during 2012/13
Surplus / (deficit) on the provision of services
Other Comprehensive Income and Expenditure
Total Comprehensive Income and Expenditure
Transfers to/(from) Earmarked Reserves (Note 7)
Increase/(Decrease) in 2012/13
Balance at 31 March 2013 carried forward
35,781 12,308
-
21
48,110
33,580
81,690
Movement in reserves during 2013/14
Surplus / (deficit) on the provision of services
623
-
-
-
623
-
623
-
-
-
-
-
(115)
(115)
623
-
-
-
623
(115)
508
(1,083)
-
-
(21)
(1,104)
1,104
-
(460)
-
-
(21)
(481)
989
508
Transfers to/(from) Earmarked Reserves (Note 7)
(21,513) 21,513
-
-
-
-
-
Increase/(Decrease) in 2013/14
(21,973) 21,513
-
(21)
(481)
989
508
13,808 33,821
-
-
47,629
34,569
82,198
Other Comprehensive Income and Expenditure
Total Comprehensive Income and Expenditure
Adjustments between accounting basis and
funding basis under regulations (Note 6)
Net Increase / (Decrease) before Transfers to
Earmarked Reserves
Balance at 31 March 2014 carried forward
10
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
GROUP COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT
This statement shows the accounting cost in the year of providing services for the Group in
accordance with generally accepted accounting practices, rather than the amount to be funded from
taxation. PCCs raise taxation to cover expenditure in accordance with regulations; this may be
different from the accounting cost. The taxation position is shown in the Group Movement in
Reserves Statement.
2012/13
2013/14
Gross
Expenditure
Gross
Income
Net
Expenditure
Gross
Expenditure
Gross
Income
Net
Expenditure
£000
£000
£000
£000
£000
£000
124,851
18,728
24,430
12,343
28,452
14,611
55,779
8,328
6,153
(11,218)
(468)
(2,316)
(1,832)
(1,315)
(1,116)
(2,635)
(184)
(4,596)
113,633
18,260
22,114
10,511
27,137
13,495
53,144
8,144
1,557
1,886
(1,423)
-
1,886
(1,423)
Local Policing
Dealing with the Public
Criminal Justice Arrangements
Road Policing
Specialist Operations
Intelligence
Investigations
Investigative Support
National Policing
Hillsborough Inquest
Corporate & Democratic Core
Non Distributed Costs
132,927
20,496
24,376
12,509
27,364
14,609
60,002
10,491
4,566
6,757
1,773
538
(8,181)
(797)
(2,640)
(2,405)
(2,056)
(1,472)
(2,838)
(2,527)
(2,513)
(4,200)
-
124,746
19,699
21,736
10,104
25,308
13,137
57,164
7,964
2,053
2,557
1,773
538
294,138
(25,680)
268,458
Cost of Services
316,408
(29,629)
286,779
89
-
89
653
-
653
108,157
(452)
107,705
Financing and investment
income and expenditure
(Note 9)
114,787
(284)
114,503
-
(282,071)
(282,071)
Taxation and non-specific
grant income (Note 10)
-
(287,871)
(287,871)
402,384
(308,203)
94,181
431,848
(317,784)
114,064
(28)
346,164
346,136
440,317
Other Operating Expenditure
(Note 8)
(Surplus) or Deficit on
Provision of Service
(Surplus) or deficit on
revaluation of Property, Plant
and Equipment
Remeasurements of the net
defined benefit liability
Other Comprehensive
Income and Expenditure
Total Comprehensive
Income and Expenditure
11
115
(153,298)
(153,183)
(39,119)
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
THE PCC’S COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT
This statement shows the accounting cost in the year of providing the PCC’s services in accordance
with generally accepted accounting practices, rather than the amount to be funded from taxation.
PCCs raise taxation to cover expenditure in accordance with regulations; this may be different from
the accounting cost. The taxation position is shown in the PCC’s Movement in Reserves Statement.
2012/13 Restated
2013/14
Gross
Expenditure
Gross
Income
Net
Expenditure
Gross
Expenditure
Gross
Income
Net
Expenditure
£000
£000
£000
£000
£000
£000
7,029
657
1,335
722
1,369
632
2,246
375
314
1,670
80
(11,218)
(468)
(2,316)
(1,832)
(1,315)
(1,116)
(2,635)
(184)
(4,596)
-
(4,189)
189
(981)
(1,110)
54
(484)
(389)
191
(4,282)
1,670
80
Local Policing
Dealing with the Public
Criminal Justice Arrangements
Road Policing
Specialist Operations
Intelligence
Investigations
Investigative Support
National Policing
Hillsborough Inquest Costs
Corporate & Democratic Core
Non Distributed Costs
7,467
892
539
506
584
284
1,124
186
88
5,889
1,602
35
(8,181)
(797)
(2,640)
(2,405)
(2,056)
(1,472)
(2,838)
(2,527)
(2,513)
(4,200)
-
(714)
95
(2,101)
(1,899)
(1,472)
(1,188)
(1,714)
(2,341)
(2,425)
1,689
1,602
35
16,429
(25,680)
(9,251)
Cost of services
19,196
(29,629)
(10,433)
295,385
-
295,385
314,581
(29,629)
284,952
653
-
653
1,927
(284)
1,643
-
(287,871)
(287,871)
317,161
(317,784)
(623)
294,754
-
294,754
Intra-group adjustment – funding
provided by the PCC for financial
resources consumed by the Chief
Constable
311,183
(25,680)
285,503
Total Cost of Policing Services
89
-
89
2,022
(452)
1,570
-
(282,071)
(282,071)
313,294
(308,203)
5,091
(28)
(28)
5,063
Other Operating Expenditure
(Note 8)
Financing and investment income
and expenditure
(Note 9)
Taxation and non-specific grant
income (Note 10)
(Surplus) or Deficit on Provision
of Service
(Surplus) or deficit on revaluation
of Property, Plant and Equipment
Other Comprehensive Income
and Expenditure
Total Comprehensive Income
and Expenditure
12
115
115
(508)
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
GROUP AND PCC’S BALANCE SHEET
The Balance Sheet shows the value of the assets and liabilities recognised by the Group and the
PCC. The net assets (assets less liabilities) are matched by the reserves held. Reserves are
reported in two categories. The first category of reserves is usable reserves, that is those reserves
that may be used 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 may only be
used to fund capital expenditure or repay debt). The second category of reserves is those that are
not able to be used 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’.
31 March 2013
Group
PCC
Restated
£000
£000
31 March 2014
Group
£000
£000
71,762
3,721
75,483
71,762 Property, Plant and Equipment (Note 11)
3,721 Intangible Assets (Note 12)
75,483 Long-Term Assets
69,512
3,649
73,161
69,512
3,649
73,161
39,351
78
967
22,190
6,924
69,510
39,351
78
967
22,190
6,924
69,510
26,056
78
809
21,270
26,449
74,662
26,056
78
809
21,270
26,449
74,662
(73)
(34,253)
(536)
(73)
(29,834)
(536)
(371)
(371)
(266)
(266)
(35,499)
(31,080)
(1,139)
(26,761)
(2,595,823)
(2,623,723)
(1,139)
(26,761)
(6,645)
(34,545)
(2,850)
(26,697)
(2,259)
(421)
(134)
(32,361)
(1,558)
(26,868)
(2,634,724)
(2,663,150)
Short-Term Investments (Note 13)
Assets Held for Sale (Note 18)
Inventories (Note 15)
Short-Term Debtors (Note 16)
Cash and Cash Equivalents (Note 13/17)
Current Assets
(2,850) Short-Term Borrowing (Note 13)
(21,629) Short-Term Creditors (Note 19)
(2,259) Provisions (Note 20)
Revenue Grants Receipts in Advance
(421)
(Note 33)
Capital Grants Receipts in Advance
(134)
(Note 33)
(27,293) Current Liabilities
(1,558)
(26,868)
(7,584)
(36,010)
Long-Term Provisions (Note 20)
Long-Term Borrowing (Note 13)
Other Long-Term Liabilities (Note 22)
Long-Term Liabilities
PCC
(2,550,518)
81,690 Net Assets
(2,511,399)
82,198
48,110
(2,598,628)
48,110 Usable Reserves (Note 21)
33,580 Unusable Reserves (Note 23)
47,629
(2,559,028)
47,629
34,569
(2,550,518)
81,690 Total Reserves
(2,511,399)
82,198
13
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
GROUP AND PCC’S CASH FLOW STATEMENT
The Cash Flow Statement shows the changes in cash and cash equivalents of the PCC and Group
during the reporting period. The Statement shows how cash and cash equivalents are generated
and used 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 PCC and Group are funded by way of taxation and grant income or from the
recipients of services provided. Investing activities represent the extent to which cash outflows have
been made for resources which are intended to contribute to future service delivery. Cash flows
arising from financing activities are useful in predicting claims on future cash flows by providers of
capital (that is borrowing) to the PCC.
31 March 2013
31 March 2014
Group
PCC
Restated
Group
PCC
£000
£000
£000
£000
94,181
5,091
114,064
(623)
(127,059)
(12,372)
Adjustments for items included in the net
surplus or deficit on the provision of services
584 that are investing and financing activities
- Proceeds from sale of property
683
683
Net Cash flows from Operating Activities
(Note 25)
(12,312)
(12,312)
(10,580)
(10,580)
3,367
3,367
(101,687)
584
(6,922)
Net (surplus) or deficit on the provision of
services
Adjustments to net surplus or deficit on the
(12,597) provision of services for non-cash movements
(Note 24)
(6,922)
4,015
4,015 Investing Activities (Note 26)
1,171
1,171 Financing Activities (Note 27)
(1,736)
(1,736)
Net Increase or decrease in cash and cash
equivalents
(19,525)
(19,525)
(5,188)
(5,188)
Cash and cash equivalents at the beginning of
the period
(6,924)
(6,924)
(6,924)
(6,924)
Cash and cash equivalents at the end of the
reporting period (Note 17)
(26,449)
(26,449)
14
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
1.
a)
ACCOUNTING POLICIES
General Principles
The Statement of Accounts summarises the transactions of the PCC and the Group for the
2013/14 financial year and the position at the year-end of 31 March 2014. The term ‘Group’
is used to indicate the transactions and policies of the PCC and the Chief Constable of
South Yorkshire Police. The PCC is required to prepare an annual Statement of Accounts in
accordance with proper accounting practices by the Accounts and Audit (England)
Regulations 2011. These practices primarily comprise the Code of Practice on Local
Authority Accounting in the United Kingdom 2013/14 (the Code), and the Service Reporting
Code of Practice 2013/14, supported by International Financial Reporting Standards (IFRS).
The accounting convention adopted in the Statement of Accounts is principally historical
cost, modified by the revaluation of certain categories of non-current assets and financial
instruments.
b)
Relationship between the PCC and the Chief Constable for accounting purposes
The PCC and the Chief Constable are both required to prepare their own statutory accounts.
The South Yorkshire Group position, which reflects the consolidated position of both the
PCC and the Chief Constable, is included within the PCC’s Statement of Accounts.
The PCC is the holder of the Police Fund and all payments for the Group are made by the
PCC from the Fund. The PCC is also the recipient of all funding, including government grant
and precepts and other income and this is paid into the Fund. The Comprehensive Income
and Expenditure Statement for the PCC therefore includes all income received analysed
over the relevant service lines.
The Comprehensive Income and Expenditure Statement for the Chief Constable includes all
the costs of operational policing. An intra-group adjustment is included in both the PCC’s
and Chief Constable’s Comprehensive Income and Expenditure Statement to reflect the
funding provided by the PCC for financial resources consumed by the Chief Constable.
All assets, liabilities and reserves are held by the PCC and are therefore included within the
PCC’s Balance Sheet except for those relating to pensions and accrued employee benefits
which form part of the Chief Constable’s Balance Sheet (see paragraph g for further
explanation). Since the PCC has control over non-current assets, and therefore retains the
long-term risks and rewards of ownership, the charges to revenue for their use is included in
the PCC’s Comprehensive Income and Expenditure Statement, analysed over the relevant
service lines.
c)
Accruals of Income and Expenditure
Activity is accounted for in the year that it takes place, not simply when cash payments are
made or received. In particular:

Supplies are recorded as expenditure when they are consumed. Where there is a gap
between the date supplies are received and their consumption, they are carried as
inventories on the Balance Sheet.

Expenses in relation to services received (including services provided by employees) are
recorded as expenditure when the services are received rather than when payments are
made.

Fees, charges and rents due for services provided are accounted for as income at the
date that the relevant goods or services are provided.
15
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
d)

Interest payable on borrowings and receivable on investments is accounted for as
expenditure or income respectively on the basis of the effective interest rate for the
relevant financial instrument rather than the cash flows fixed or determined by the
contract.

Where income and expenditure has been recognised but cash has not yet been received
or paid, a debtor or creditor for the relevant amount is recorded in the Balance Sheet.
Where it is doubtful that debts will be settled, the balance of debtors is written down and
a charge made to revenue for the income that might not be collected.
Cash and Cash Equivalents
Cash is represented by cash in hand and demand deposits. Cash Equivalents are shortterm, highly liquid investments with financial institutions that are readily convertible to known
amounts of cash with insignificant risk of change in value. The PCC has classified
investments in Call Accounts and Money Market Funds, which provide instant access with
no penalty, as cash equivalents.
In the Balance Sheet and the Cash Flow Statement, cash and cash equivalents are shown
net of bank overdrafts that are repayable on demand and form an integral part of the PCC’s
cash management.
e)
Prior Period Adjustments, Changes in Accounting Policies and Estimates and Errors
Prior period adjustments may arise as a result of a change in accounting policies or to
correct a material error. Changes in accounting estimates are accounted for prospectively,
that is in the current and future years affected by the change and do not give rise to a prior
period adjustment.
Changes in accounting policies are only made when required by proper accounting practices
or when the change provides more reliable or relevant information about the effect of
transactions, other events and conditions on the PCC’s financial position or financial
performance. Where a change is made, it is applied retrospectively (unless stated
otherwise) by adjusting opening balances and comparative amounts for the prior period as if
the new policy had always been applied.
Material errors discovered in prior period figures are corrected retrospectively by amending
opening balances and comparative amounts for the prior period.
f)
Exceptional Items
When items of income and expenditure are material, their nature and amount is disclosed
separately, either on the face of the Comprehensive Income and Expenditure Statement or
in the Notes to the Accounts, depending on how significant the items are to an
understanding of the PCC’s performance.
g)
Employee Benefits
16
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
Transactions relating to employee benefits are included in the financial statements of either
the PCC or the Chief Constable according to where the direction and control of those
employees lies. The Group financial statements include all employee benefit transactions.
Benefits Payable During Employment
Short-term employee benefits are those due to be settled within 12 months of the year-end.
They include such benefits as salaries, paid annual leave and flexitime, bonuses and nonmonetary benefits (for example cars) for current employees and are recognised as an
expense in the year in which employees render service. An accrual is made for the cost of
holiday entitlements and other forms of leave, such as time off in lieu, earned by employees
but not taken before the year-end which employees can carry forward into the next financial
year. The accrual is made at the salary rates applicable in the following accounting year,
being the period in which the employee takes the benefit. The accrual is charged to the
Surplus or Deficit on the Provision of Services within the Comprehensive Income and
Expenditure Statement and then reversed out through the Movement in Reserves Statement
so that holiday benefits are charged to revenue in the financial year in which the holiday
absence occurs.
Termination Benefits
Termination benefits are amounts payable as a result of a decision to terminate an
employee’s employment before the normal retirement date or of an employee’s decision to
accept voluntary redundancy. These are charged on an accruals basis to the
Comprehensive Income and Expenditure Statement when there is a demonstrable
commitment to the termination of the employment of an employee or group of employees or
to the making of an offer to encourage voluntary redundancy.
When termination benefits involve the enhancement of pensions, statutory provisions
require the General Fund Balance to be charged with the amount payable to the pension
fund or pensioner in the year, not the amount calculated according to the relevant
accounting standards. In the Movement in Reserves Statement, appropriations are required
to and from the Pensions Reserve to remove the notional debits and credits for pension
enhancement termination benefits and replace them with debits for the cash paid to the
pension fund and pensioners and any such amounts payable but unpaid at the year-end.
Retirement Benefits
Employees of the PCC and Chief Constable participate in the following pensions schemes:

The 1987 and 2006 Police Pension Schemes (PPS) for police officers are unfunded
schemes, which means that there are no investment assets built up to meet the pensions
liabilities, and cash has to be generated to meet the actual payments as they fall due.
The PCC is required by legislation to operate a Pension Fund with the amounts that
must be paid into or out of the Pension Fund being specified by regulation. The former
Police Authority set up a Pension Fund on 1 April 2006 from which pensions payments
are made and into which contributions, from the PCC and employees, are received. The
PCC then receives a top-up grant from the Government equal to the sum by which the
amount payable for pensions from the Pension Fund exceeds the amount receivable
from the PCC into the Pension Fund. The Pension Fund is shown separately in the
Accounts.

the Local Government Pension Scheme (LGPS) for Police staff, administered by the
South Yorkshire Pensions Authority, is a funded scheme, which means that the PCC and
17
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
employees pay contributions into a fund, calculated at a level intended to balance the
pensions liabilities with investment assets.
The above schemes provide defined benefits to members (retirement lump sums and
pensions), earned as employees work. They are accounted for in accordance with the
requirements for defined benefits schemes, based on the principle that an organisation
should account for retirement benefits when it is committed to give them, even though this
may be many years into the future.
A pensions asset or liability is recognised in the Balance Sheet, made up of the net position
of retirement liabilities and pension scheme assets. Retirement liabilities are measured on
an actuarial basis using the projected unit method, by assessing the future payments that
will be made in relation to retirement benefits earned to date by employees, based on
assumptions about mortality rates, employee turnover rates and estimations of projected
earnings for current employees. Pension scheme assets (LGPS only) attributable to the
PCC are included at their fair value. There is currently a net pensions liability and this is
matched in the Balance Sheet by a Pensions Reserve.
The change in net pensions liability during the year is analysed into several components:

current service cost – the increase in liabilities as a result of service earned by
employees in the current year. This is charged to services within the Comprehensive
Income and Expenditure Statement.

past service cost – the increase in liabilities arising from current year decisions, the effect
of which relates to service earned in earlier years. This is part of Non Distributed Costs in
the Comprehensive Income and Expenditure Statement.

net interest on the net defined benefit liability – the change during the period in the net
defined benefit liability that arises from the passage of time. This is calculated by
applying the discount rate used to measure the defined benefit obligation at the
beginning of the period to the net defined benefit liability at the beginning of the period,
taking into account any changes in the net defined benefit liability during the period as a
result of contribution and benefit payments. This is charged to the Financing and
Investment Income and Expenditure line within the Comprehensive Income and
Expenditure Statement.

Remeasurements comprising:

o
the return on plan assets (LGPS only) – this excludes amounts included in net
interest on the net defined benefit liability and is charged to the Pensions Reserve as
Other Comprehensive Income and Expenditure.
o
actuarial gains and losses – changes in the net pensions liability that arise because
events have not coincided with assumptions made at the last actuarial valuation or
because the actuaries have updated their assumptions. This is charged to the
Pensions Reserve as Other Comprehensive Income and Expendture.
Contributions paid / benefits paid – cash paid as employer’s contribution by the PCC
either to LGPS or directly to pensioners to reduce the scheme liabilities.
Statutory provisions require that the amount charged to the General Fund Balance is that
payable to pensions funds rather than that calculated under accounting standards. This
means that an appropriation to or from the Pensions Reserve is done within the Movement
in Reserves Statement to replace the notional sums for retirement benefits with the actual
pensions costs. The negative balance on the Pensions Reserve thereby measures the
18
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
beneficial impact to the General Fund of being required to account for retirement benefits on
the basis of cash flow rather than as benefits are earned by employees.
h)
Government Grants and Contributions
Whether paid on account, by instalments or in arrears, Government grants and third party
contributions and donations are recognised as income when there is a reasonable
assurance that:

the PCC will comply with the conditions attached to the grant or contribution

the grants or contributions will be received.
Amounts recognised as due to the PCC are not credited to the Comprehensive Income and
Expenditure Statement until conditions attached to the grant or contribution have been
satisfied. Most grants and contributions will be given with stipulations as to how they are to
be spent and the consequences if resources are not applied in the manner authorised.
Conditions are stipulations that require that the grant or contribution must be returned if not
deployed as specified.
Monies advanced as grants and contributions for which conditions have not been satisfied
are carried in the Balance Sheet as creditors. When conditions are satisfied, the grant or
contribution is credited to the relevant service line (attributable revenue grants and
contributions) or Taxation and Non-Specific Grant Income (non-ringfenced revenue grants
and all capital grants) in the Comprehensive Income and Expenditure Statement.
Where capital grants are credited to the Comprehensive Income and Expenditure
Statement, they are reversed out of the General Fund Balance in the Movement in Reserves
Statement. Where the grant has yet to be used to finance capital expenditure, it is posted to
the Capital Grants Unapplied Reserve. Where it has been applied, it is posted to the Capital
Adjustment Account. Amounts in the Capital Grants Unapplied Reserve are transferred to
the Capital Adjustment Account once they have been applied to fund capital expenditure.
i)
Intangible Assets
Expenditure on assets that do not have physical substance but are identifiable and
controlled by the PCC, such as software licences, are capitalised when it is expected that
future economic benefit or service potential will flow to the PCC for more than one year.
Internally generated assets are capitalised where it is demonstrable that the project is
technically feasible, is intended to be completed and the PCC will be able to generate future
economic benefits or deliver service potential by being able to sell or use the asset.
Intangible assets are measured initially at cost. The depreciable amount of the intangible
asset balance is subsequently amortised over its useful life to the relevant service line in the
Comprehensive Income and Expenditure Statement. Any gain or loss arising from the
disposal of an intangible asset is posted to the Other Operating Expenditure line in the
Comprehensive Income and Expenditure Statement.
Where expenditure on intangible assets qualifies as capital expenditure for statutory
purposes, amortisation and gain or losses on disposal are not permitted to have an impact
on the General Fund Balance and are reversed out in the Movement in Reserves Statement
to the Capital Adjustment Account and the Capital Receipts Reserve (for sale proceeds
greater than £10,000).
19
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
j)
Property, Plant and Equipment
Assets that have physical substance and are held for use in the provision of services or for
administrative purposes and are expected to be used for more than one financial year are
classified as Property, Plant and Equipment.
Recognition
Expenditure on the acquisition, creation or enhancement of Property, Plant and Equipment
is capitalised on an accruals basis, provided that it is probable that the future economic
benefits or service potential associated with the item will flow to the PCC and the cost can
be measured reliably. Expenditure on repairs that maintains but does not add to an asset’s
potential to deliver future economic benefits or service potential is charged as an expense
when it is incurred.
Measurement
Assets are initially measured at cost, comprising the purchase price and any costs directly
attributable to bringing the asset into working condition for its intended use. The PCC does
not capitalise borrowing costs incurred whilst assets are under construction.
Assets are then carried in the Balance Sheet at fair value, determined as the amount that
would be paid for the asset in its existing use (existing use value – EUV), except for:

non-property assets that have short useful lives and/or low values which are measured
at depreciated historical cost basis as a proxy for fair value

assets under construction which are measured at historical cost.
Donated assets are measured initially at fair value. The difference between fair value and
any consideration paid is credited to the Taxation and Non-Specific Grant Income line of the
Comprehensive Income and Expenditure Statement, unless the donation has been made
conditionally. Until conditions are satisfied, the gain is held in the Donated Assets Account.
Where gains are credited to the Comprehensive Income and Expenditure Statement, they
are reversed out of the General Fund Balance to the Capital Adjustment Account in the
Movement in Reserves Statement.
Assets included in the Balance Sheet at fair value are revalued sufficiently regularly to
ensure that their carrying amount is not materially different from their fair value at the yearend, but as a minimum every five years. Increases in valuations are matched by credits to
the Revaluation Reserve to recognise unrealised gains. Exceptionally, gains might be
credited to the Comprehensive Income and Expenditure Statement where they arise from
the reversal of a loss previously charged to a service.
Where decreases in value are identified, they are accounted for as follows:

where there is a balance of revaluation gains for the asset in the Revaluation Reserve,
the carrying amount of the asset is written down against that balance (up to the amount
of the accumulated gains)

where there is no balance in the Revaluation Reserve or an insufficient balance, the
carrying amount of the asset is written down against the relevant service line in the
Comprehensive Income and Expenditure Statement.
The Revaluation Reserve contains revaluation gains recognised since 1 April 2007, the date
of its formal implementation. Gains arising before that date have been consolidated into the
Capital Adjustment Account.
20
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
Impairment
Assets are assessed at each year-end as to whether there is any indication that an asset
may be impaired. Where indication exists and any possible differences are estimated to be
material, the recoverable amount of the asset is estimated and where this is less than the
carrying amount of the asset, an impairment loss is recognised for the shortfall.
Where impairment losses are identified, they are accounted for as follows:

where there is a balance of revaluation gains for the asset in the Revaluation Reserve,
the carrying amount of the asset is written down against the balance (up to the amount of
the accumulated gains)

where there is no balance in the Revaluation Reserve or an insufficient balance, the
carrying amount of the asset is written down against the relevant service line in the
Comprehensive Income and Expenditure Statement.
Where an impairment loss is reversed subsequently, the reversal is credited to the relevant
service line in the Comprehensive Income and Expenditure Statement, up to the amount of
the original loss, adjusted for depreciation that would have been charged if the loss had not
been recognised.
Depreciation
Depreciation is provided on all Property, Plant and Equipment assets by the systematic
allocation of their depreciable amounts over their useful lives. An exception is made for
assets without a determinable finite useful life, such as freehold land, and assets that are not
yet available for use (assets under construction).
Depreciation is calculated on the following bases:

Buildings – straight line allocation over the useful life of the property as estimated by the
valuer

Vehicles, plant, furniture and equipment – straight line allocation over the useful life of
each asset as advised by a suitably qualified officer.
Where an item of Property, Plant and Equipment asset has major components whose cost is
significant in relation to the total cost of the item, the components are depreciated
separately.
Revaluation gains are also depreciated, with an amount equal to the difference between
current value depreciation charged on the assets and the depreciation that would have been
chargeable based on their historical cost being transferred each year from the Revaluation
Reserve to the Capital Adjustment Account.
Disposals and Non-Current Assets Held for Sale
When it becomes probable that the carrying amount of an asset will be recovered principally
through a sale transaction rather than through its continued use, it is reclassified as an Asset
Held for Sale. The asset is revalued immediately before reclassification and then carried at
the lower of this amount and the fair value less costs to sell. Where there is a subsequent
decrease to fair value less costs to sell, the loss is posted to the Other Operating
Expenditure line in the Comprehensive Income and Expenditure Statement. Gains in fair
value are recognised only up to the amount of any previous losses recognised in the Surplus
or Deficit on Provision of Services. Depreciation is not charged on Assets Held for Sale.
21
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
If assets no longer meet the criteria to be classified as Assets Held for Sale, they are
reclassified back to non-current assets and valued at the lower of their carrying amount
before they were classified as held for sale, adjusted for depreciation, amortisation or
revaluations that would have been recognised had they not been classified as Held for Sale,
and their recoverable amount at the date of the decision not to sell.
Assets that are to be abandoned or scrapped are not reclassified as Assets Held for Sale.
When an asset is disposed of or decommissioned, the carrying amount of the asset in the
Balance Sheet (whether Property, Plant and Equipment or Assets Held for Sale) is written
off to the Other Operating Expenditure line in the Comprehensive Income and Expenditure
Statement as part of the gain or loss on disposal. Receipts from disposal (if any) are
credited to the same line in the Comprehensive Income and Expenditure Statement also as
part of the gain or loss on disposal (netted off against the carrying value of the asset at the
time of disposal). Any revaluation gains accumulated for the asset in the Revaluation
Reserve are transferred to the Capital Adjustment Account.
Amounts received from disposals in excess of £10,000 are categorised as capital receipts
and are required to be credited to the Capital Receipts Reserve as part of the Movement in
Reserves Statement. The Capital Receipts Reserve can only be used to either finance new
capital investment or reduce the PCC’s borrowing requirement and when sums are utilised
for this purpose they are transferred to the Capital Adjustment Account.
The written-off value of disposals is not a charge against council tax, as the cost of noncurrent assets is fully provided for under separate arrangements for capital financing.
Amounts are therefore appropriated to the Capital Adjustment Account from the General
Fund Balance in the Movement in Reserves Statement.
k)
Revenue Expenditure Funded from Capital under Statute
Expenditure incurred during the year that may be capitalised under statutory provisions but
does not result in the creation of a non-current asset is charged as expenditure to the
relevant service in the Comprehensive Income and Expenditure Statement in the year.
Where the PCC has determined to meet the cost of this expenditure from existing capital
resources or by borrowing, a transfer from the General Fund Balance to the Capital
Adjustment Account in the Movement in Reserves Statement then reverses out the amounts
charged so there is no impact on the level of council tax.
l)
Charges to Revenue for Non-Current Assets
Services are debited with the following amounts to record the real cost of holding noncurrent assets during the year:

depreciation attributable to the assets used

revaluation and impairment losses on assets used where there are no accumulated
gains in the Revaluation Reserve against which the losses can be written off

amortisation of intangible assets attributable to the service.
The PCC is not required to raise council tax to cover depreciation, revaluation and
impairment losses or amortisations. However he is required to make an annual contribution
from revenue towards the reduction in its overall borrowing requirement (equal to an amount
calculated on a prudent basis determined by the PCC in accordance with statutory
guidance). Depreciation, revaluation and impairment losses and amortisations are therefore
replaced by the contribution in the General Fund Balance, by way of an adjusting transaction
22
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
with the Capital Adjustment Account in the Movement in Reserves Statement for the
difference between the two.
The PCC is also charged with the principal element of Transferred Debt taken over from the
former South Yorkshire County Council, and managed by Rotherham MBC on his behalf.
This charge is included as another adjusting transaction with the Capital Adjustment
Account in the Movement in Reserves Statement.
m) Leases
Leases are classified as finance leases where the terms of the lease transfer substantially
all the risks and rewards incidental to ownership of the property, plant or equipment from the
lessor to the lessee. All other leases are classified as operating leases.
Where a lease covers land and buildings, the land and buildings elements are considered
separately for classification.
Arrangements that do not have the legal status of a lease but convey a right to use an asset
in return for payment are accounted for under this policy where fulfilment of the arrangement
is dependent on the use of specific assets.
The PCC as a Lessee
Finance Leases
Property, Plant and Equipment held under finance leases is recognised on the Balance
Sheet at the commencement of the lease at its fair value measured at the lease’s inception
(or the present value of the minimum lease payments if lower). The asset recognised is
matched by a liability for the obligation to pay the lessor. Initial direct costs are added to the
carrying amount of the asset. Premiums paid on entry into a lease are applied to writing
down the lease liability. Contingent rents are charged as expenses in the periods in which
they are incurred.
Lease payments under finance leases are apportioned between:

a charge for the acquisition of the interest in the Property, Plant and Equipment – applied
to write down the lease liability

a finance charge, which is debited to the Financing and Investment Income and
Expenditure line in the Comprehensive Income and Expenditure Statement.
Property, Plant and Equipment recognised under finance leases is accounted for using the
policies applied generally to such assets, subject to depreciation being charged over the
lease term if this is shorter than the asset’s estimated useful life.
The PCC is not required to raise council tax to cover depreciation or revaluation and
impairment losses arising on leased assets. Instead, a prudent annual contribution is made
from revenue funds towards the deemed capital investment in accordance with statutory
requirements. Depreciation and revaluation and impairment losses are therefore substituted
by a revenue contribution in the General Fund Balance, by way of an adjusting transaction
with the Capital Adjustment Account in the Movement in Reserves Statement for the
difference between the two.
Operating Leases
23
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
Rentals payable under operating leases are charged to the Comprehensive Income and
Expenditure Statement as an expense of the service benefitting from the use of the leased
Property, Plant and Equipment. Charges are made on a straight line basis over the term of
the lease, even if this does not match the pattern of payments (for example there is a rentfree period at the commencement of the lease).
The PCC as a Lessor
Finance Leases
The PCC has not granted any finance leases.
Operating Leases
Where the PCC grants an operating lease over a property or an item of plant or equipment,
the asset is retained in the Balance Sheet and rental income is credited to the
Comprehensive Income and Expenditure Statement. Credits are made on a straight-line
basis over the life of the lease, even if this does not match the pattern of payments (for
example there is a premium paid at the commencement of the lease).
n)
Overheads and Support Services
The costs of overheads and support services are charged to those that benefit from the
supply or service in accordance with the costing principles of the CIPFA’s Service Reporting
Code of Practice. The total absorption costing principle is used, where the full cost of
overheads and support services are shared between users in proportion to the benefits
received, with the exception of:

Corporate and Democratic Core – costs relating to the democratic processes of the PCC
and other corporate costs

Non distributed costs – the cost of discretionary benefits awarded to employees retiring
early and impairment losses chargeable on Assets Held for Sale.
These two cost categories are accounted for as separate headings in the Comprehensive
Income and Expenditure Statement as part of Cost of Services.
o)
Financial Instruments
Financial Liabilities
Financial liabilities are recognised on the Balance Sheet when the PCC becomes a party to
the contractual provisions of a financial instrument and are initially measured at fair value
and carried on the Balance Sheet at their amortised cost. Annual charges to the Financing
and Investment Income and Expenditure line in the Comprehensive Income and Expenditure
Statement for interest payable are based on the carrying amount of the liability, multiplied by
the effective rate of interest for the instrument. The effective interest rate is the rate that
exactly discounts estimated future cash payments over the life of the instrument to the
amount at which it was originally recognised.
For most of the borrowings that the PCC has, this means that the amount presented in the
Balance Sheet is the outstanding principal repayable (plus accrued interest) and interest
charged to the Comprehensive Income and Expenditure Statement is the amount payable
for the year according to the loan agreement.
Gains or losses on the repurchase or early settlement of borrowing are credited or debited to
the Financing and Investment Income and Expenditure line in the Comprehensive Income
and Expenditure Statement in the year of the transaction. However, where repurchase has
24
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
taken place as part of a restructuring of the loan portfolio that involves the modification or
exchange of existing instruments, the premium or discount is respectively deducted from or
added to the amortised cost of the new or modified loan and the write-down to the
Comprehensive Income and Expenditure Statement is spread over the life of the loan by an
adjustment to the effective interest rate.
Where premiums and discounts have been charged to the Comprehensive Income and
Expenditure Statement, regulations allow the impact on the General Fund Balance to be
spread over future years. The PCC has a policy of spreading the gain or loss over the term
of the replacement loan. The reconciliation of amounts charged to the Comprehensive
Income and Expenditure Statement to the net charge required against the General Fund
Balance is managed by a transfer to or from the Financial Instruments Adjustment Account
in the Movement in Reserves Statement.
Financial Assets
The PCC has financial assets classified as loans and receivables which are assets that have
fixed or determinable payments but are not quoted in an active market. Loans and
receivables are recognised on the Balance Sheet when the PCC becomes a party to the
contractual provisions of a financial instrument and are initially measured at fair value. They
are subsequently measured at their amortised cost. Annual credits to the Financing and
Investment Income and Expenditure line in the Comprehensive Income and Expenditure
Statement for interest receivable are based on the carrying amount of the asset multiplied by
the effective interest rate for the instrument. For the loans that the PCC has made, this
means that the amount on the Balance Sheet is the outstanding principal receivable (plus
accrued interest) and the interest credited to the Comprehensive Income and Expenditure
Statement is the amount receivable for the year according to the loan agreement.
p)
Provisions, Contingent Liabilities and Contingent Assets
Provisions
Provisions are made where an event has taken place that gives the PCC a legal or
constructive obligation that probably requires settlement by a transfer of economic benefits,
and a reliable estimate can be made of the amount of the obligation. For instance, the PCC
may be involved in a court case that could eventually result in the making of a settlement or
the payment of compensation.
Provisions are charged as an expense to the appropriate service line in the Comprehensive
Income and Expenditure Statement in the year that the PCC becomes aware of the
obligation, and are measured at the best estimate at the balance sheet date of the
expenditure required to settle the obligation, taking account of relevant risks and
uncertainties.
When payments are eventually made, they are charged to the provision carried in the
Balance Sheet. Provisions are reviewed at the end of each financial year and where it
becomes less probable that a transfer of economic benefits will now be required, or a lower
settlement than anticipated is made, the provision is reversed and credited back to the
relevant service.
Contingent Liabilities
A contingent liability arises where an event has taken place that gives the PCC a possible
obligation whose existence will only be confirmed by the occurrence or otherwise of
uncertain future events not wholly within the control of the PCC. Contingent liabilities also
25
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
arise in circumstances where a provision would otherwise be made but either it is not
probable that an outflow of resources will be required or the amount of the obligation cannot
be measured reliably.
Contingent liabilities are not recognised in the Balance Sheet but disclosed in a note to the
accounts.
Contingent Assets
A contingent asset arises where an event has taken place that gives the PCC a possible
asset whose existence will only be confirmed by the occurrence or otherwise of uncertain
future events not wholly within the control of the PCC.
Contingent assets are not recognised in the Balance Sheet but disclosed in a note to the
accounts where it is probable that there will be an inflow of economic benefits.
q)
Reserves
The PCC sets aside specific amounts as reserves for future policy purposes or to cover
contingencies. Reserves are created by appropriating amounts out of the General Fund
Balance in the Movement in Reserves Statement. When expenditure to be financed from a
reserve is incurred, it is charged to the appropriate service in that year to score against the
Surplus or Deficit on the Provision of Services in the Comprehensive Income and
Expenditure Statement. The reserve is then appropriated back into the General Fund
Balance in the Movement in Reserves Statement so that there is no net charge against
council tax for the expenditure.
Certain other reserves are kept to manage the accounting processes for non-current assets,
financial instruments, retirement and employee benefits and they do not represent usable
resources for the PCC. These reserves are explained elsewhere in the Accounting Policies.
r)
Regional Working
The PCC and Chief Constable engage with the other Yorkshire and Humber PCCs and
Chief Constables to deliver a number of specific services on a regional basis. The
governance of this regional programme is undertaken by a Regional Collaboration Board
headed by the four PCCs and attended by their Chief Executives and the Chief Constables.
Up until September 2013, the financial administration of regional budgets was led by West
Yorkshire Police and Crime Commissioner (WYPCC). From September 2013 onwards, there
has been a change to these arrangements, with each functional area now being delivered
via a Lead Force model.
In addition a separate collaboration exists between the PCC and Chief Constable and their
counterparts in Humberside. South Yorkshire Police and Humberside Police have combined
their Human Resources departments and Information Systems departments in order to
increase capacity and further reduce costs by standardising processes and support. This
collaboration is overseen by a Joint Collaboration Board headed by the two PCCs, and
supported by Programme Boards for each function.
The Group Comprehensive Income and Expenditure Statement incorporates the costs of
regional working together with any income received or recharged. Assets owned by the PCC
but contributing to regional working are retained on the PCC’s Balance Sheet.
More information is included in Note 39.
26
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
s)
Inventories
Inventories are included in the Balance Sheet at the lower of cost and net realisable value.
The cost of inventories is assigned using an average costing formula.
t)
Foreign Currency Translation
Where the PCC has entered into a transaction denominated in a foreign currency, the
transaction is converted into sterling at the exchange rate applicable on the date the
transaction was effective.
u)
VAT
Income and expenditure excludes amounts related to VAT, as all VAT collected is payable
to the HM Revenue and Customs and all VAT paid is recoverable from them. The PCC is
responsible for the submission of a single VAT return covering all of the transactions for the
Group.
v)
Events After the Balance Sheet Date
Events after the Balance Sheet date are those events, both favourable and unfavourable,
that occur between the end of the reporting period and the date when the Statement of
Accounts is authorised for issue. Two types of events can be identified:

those that provide evidence of conditions that existed at the end of the reporting period –
the Statement of Accounts is adjusted to reflect such events

those that are indicative of conditions that arose after the reporting period – the
Statement of Accounts is not adjusted to reflect such events, but where a category of
events would have a material affect, disclosure is made in the notes of the nature of the
events and their estimated financial effect.
Events taking place after the date of authorisation for issue are not reflected in the
Statement of Accounts.
w) Accounting Standards That Have Been Issued But Not Yet Adopted
The Code requires that information is disclosed relating to the impact of any accounting
standards have been issued but have not yet been adopted. The following have been
considered with regard to whether they may result in a change of accounting policy with
effect from 1 April 2014:

IFRS 10 Consolidated Financial Statements
This standard introduces a new definition of control, which is used to determine which
entities are consolidated for the purposes of group accounts.
27
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS

IFRS 11 Joint Arrangements
This standard addresses the accounting for a ‘joint arrangement’ which is defined as a
contractual arrangement over which two or more parties have joint control. These are
classified as either a joint venture or a joint operation.

IFRS 12 Disclosure of Interests in Other Entities
This is a consolidated disclosure standard requiring a range of disclosures about an
entity’s interests in subsidiaries, joint arrangements, associates and unconsolidated
‘structured entities’.
It is not anticipated that the application of the above standards will have a material impact on
the PCC or Group Accounts in 2014/15 although regional accounting arrangements will be
reviewed to ensure compliance.
2.
CRITICAL JUDGEMENTS IN APPLYING ACCOUNTING POLICIES
In applying the accounting policies set out in Note 1, the PCC and Chief Constable have had
to make certain judgements about complex transactions or those involving uncertainty about
future events. The critical judgements made in the Statement of Accounts are:

There is a high degree of uncertainty about the future levels of funding for the PCC.
However the PCC has determined that this uncertainty is not yet sufficient to provide an
indication that the assets of the PCC might be impaired as a result of a need to reduce
levels of service provision.
28
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS

In applying the revised accounting arrangements for the PCC and the Chief Constable, a
number of judgements have been made with regard to the financial statements.
The Chief Constable’s financial statements include:
o
all the operational costs of policing within the Comprehensive Income and
Expenditure Account
o
all IAS19 pensions transactions in the Comprehensive Income and Expenditure
Account and pensions liabilities together with pensions reserve in the Balance
Sheet
o
the accrual for employee benefits and the matching Accumulated Absence
Account in the Balance Sheet.
The PCC’s financial statements include:
3.
o
all other assets, liabilities and reserves within the Balance Sheet
o
no accounting entries relating to IAS19 pensions transactions for the PCC’s staff
who are members of the Local Government Pension Scheme in the financial
statements as this is not regarded as material
o
the charge to revenue for the use of non-current assets, including depreciation,
revaluation and impairment and amortisation of intangible assets within the
Comprehensive Income and Expenditure Account
o
all income within the Comprehensive Income and Expenditure Statement.
CHANGES TO FINANCIAL STATEMENTS
The Financial Statements of the PCC for 2012/13 have been restated following the changes
to the accounting arrangements explained in the Explanatory Foreword and Note 2.
Comprehensive Income and Expenditure Statement
The following changes have been made:

Gross expenditure now includes revenue charges for non-current assets to reflect the
ownership and control of those assets by the PCC. The charges have been allocated
over the service headings in accordance with their use by the Chief Constable

Commissioning and partnership funding expenditure has been reallocated from
Corporate and Democratic Core to Local Policing

Expenditure previously included as relating to levies within Other Operating Expenditure
has been reclassified to Criminal Justice Arrangements within Cost of Services

Financial transactions relating to IAS19 Pensions have been removed from Financing
and investment income and expenditure and Actuarial gains and losses on pensions
assets/liabilities. They are now included within the Chief Constable’s and the Group
Comprehensive Income and Expenditure Statement

The Chief Constable’s expenditure met by the PCC has been amended to reflect the
above changes.
The changes are detailed in the following table (note only amended lines have been shown):
2012/13
29
2012/13
Change
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
£000
Restated
£000
Net Expenditure
Local Policing
Dealing with the Public
Criminal Justice Arrangements
Road Policing
Specialist Operations
Intelligence
Investigations
Investigative Support
National Policing
Corporate & Democratic Core
Non Distributed Costs
Cost of services
(11,218)
(468)
(2,316)
(1,832)
(1,315)
(1,116)
(2,635)
(184)
(4,596)
2,230
38
(23,412)
(4,189)
189
(981)
(1,110)
54
(484)
(389)
191
(4,282)
1670
80
(9,251)
7,029
657
1,335
722
1,369
632
2,246
375
314
(560)
42
14,161
Chief Constable’s expenditure met by the PCC
290,992
294,754
3,762
Total Cost of Policing Services
267,580
285,503
17,923
967
89
(878)
Financing and investment income and expenditure
107,705
1,570
(106,135)
Actuarial (gains)/losses on pensions
assets/liabilities
346,164
-
Other Operating Expenditure
Total changes to PCC’s Comprehensive Income
and Expenditure
(346,164)
(435,254)
Balance Sheet
The Balance Sheet has been restated to exclude amounts relating to IAS19 Pensions
liability and reserve and the accrual for employee benefits and the matching Accumulated
Absence Account which are now included in the Chief Constable’s Balance Sheet.
31 March 2013
31 March 2013
Restated
£000
£000
(21,589)
(21,629)
Change
Current Liabilities
Short-Term Creditors
30
(40)
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
Short-Term Provisions
(7,367)
(2,259)
5,108
(2,634,724)
(7,584)
2,627,140
Long-Term Liabilities
Other Long-Term Liabilities
Net Assets
2,632,208
Reserves
Unusable Reserves
(2,598,628)
Total Reserves
4.
33,580
2,632,208
2,632,208
ASSUMPTIONS MADE ABOUT THE FUTURE AND OTHER MAJOR SOURCES OF
ESTIMATION UNCERTAINTY
The Statement of Accounts contains estimated figures that are based on assumptions made
by the PCC about the future or that are otherwise uncertain. Estimates are made taking into
account historical experience, current trends and other relevant factors. However, because
balances cannot be determined with certainty, actual results could be materially different
from the assumptions and estimates.
The items in the PCC’s and Group Balance Sheet at 31 March 2014 for which there is a
significant risk of material adjustment in the forthcoming year are as follows:
Item
Uncertainties
Effect if Actual Results Differ
from Assumptions
Property,
Plant and
Equipment
Assets are depreciated over useful lives
that are dependent on assumptions
about the level of usage of individual
assets and the repairs that will be
incurred to maintain individual assets in
the future. The current economic
climate makes it uncertain that the PCC
will be able to sustain his current
spending in either maintaining or
replacing his assets, bringing into doubt
the useful lives assigned to assets.
If the useful lives of assets are
reduced then depreciation
increases and the carrying amount
of the assets falls. The reverse
occurs if the useful lives of assets
are increased.
31
It is estimated that the annual
depreciation charge would change
by around £380k for every year that
useful lives increased or decreased.
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
Item
Uncertainties
Effect if Actual Results Differ
from Assumptions
Insurance
Provision
The PCC has made a total provision of
£1.7m for the settlement of outstanding
insurance claims. It is difficult to predict
the final outcome of claims until they
are actually settled.
There is a risk that existing claims
are settled at higher or lower figures
than estimated. In addition, since
insurance claims develop over time,
the requirement to make provisions
could be increased by the
identification in future years of
additional liabilities incurred but not
yet reported.
MMI Ltd are former insurers who
ceased trading in 1992 and with whom
there was a Scheme of Arrangement in
case of insolvency involving a claw
back of claims paid. The PCC received
notification that the Scheme had been
triggered and has paid an initial levy of
£1.5m, equating to 15% of the value of
claims payments, during 2013/14. No
provision has been made for any further
levies at this stage.
Pensions
Liability
Estimation of the net liability to pay
pensions is extremely volatile as it
depends on a number of complex
judgements relating to the discount rate
used, the rate at which salaries are
projected to increase, changes in
retirement ages, mortality rates and
expected returns on pension fund
assets.
Actuaries are engaged to provide the
PCC with expert advice about the
assumptions to be applied for each of
its pension schemes.
5.
The position with regard to MMI Ltd
is being kept under review by the
Administrators and there may be
further levies announced in future.
The PCC has earmarked sums in
an Insurance Reserve to provide
some cover in respect of both of
these risks.
Whilst the effects on the net
pensions liability of changes in
individual assumptions can be
measured, the assumptions interact
in complex ways.
During 2013/14, the PCC’s
actuaries advised that the net
pensions liability has decreased by
approximately £153m as a result of
estimates being corrected and
updating financial and demographic
assumptions. This is reported on
the Group Income and Expenditure
Statement and further information is
provided at Note 38.
MATERIAL ITEMS OF INCOME AND EXPENSE
The Group Comprehensive Income and Expenditure Statement includes the costs incurred
of £6.8m during 2013/14 relating to the Hillsborough Inquests. The PCC has granted
applications for financial assistance under Home Office Circular 43/2001, submitted by firms
of solicitors representing former police officers who have been deemed ‘interested persons’
in the Hillsborough Inquests. These firms submit task lists for prior approval, and then
invoices for payment of reasonable solicitors’ costs, counsels’ fees and disbursements
incurred in connection with representation in the Inquests. To enhance the scrutiny
arrangements already in place, on 4 March 2014, the PCC commissioned an independent
review of arrangements with the firms of solicitors involved. Recommendations have been
made that will be discussed with Home Office officials on 2 July 2014, with the hope that
future arrangements for invoicing, checking and auditing can be approved by the Home
Office.
32
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
The PCC has made a Special Grant Application to the Home Office relating to these costs
and those that are estimated to be incurred in 2014/15. Grant of £4.2m has been included
within the Comprehensive Income and Expenditure Statement relating to 2013/14 on the
understanding that the PCC will be required to find an initial sum from his own reserves. The
Home Office has given a conditional approval to this application.
ADJUSTMENTS BETWEEN ACCOUNTING BASIS AND FUNDING BASIS UNDER
REGULATION
This note details the adjustments that are made to the total comprehensive income and
expenditure recognised by the Group and the PCC in the year in accordance with proper
accounting practice to the resources that are specified by statutory provisions as being
available to the Group and PCC to meet future capital and revenue expenditure.
Capital
Receipts
Reserve
Capital
Grants
Unapplied
2013/14
£000
£000
£000
Movement in
Unusable
Reserves
Usable Reserves
General
Fund
Balance
6.
£000
Adjustments primarily involving the Capital Adjustment
Account:
Reversal of items debited or credited to the Comprehensive
Income and Expenditure Statement:
 Charges for depreciation & impairment of non-current assets
4,905
-
-
(4,905)
672
-
-
(672)
1,480
-
-
(1,480)
(4,311)
-
-
4,311
1,527
-
-
(1,527)
 Statutory provision for the financing of capital investment
(2,350)
-
-
2,350
 Capital expenditure charged against the General Fund
(1,362)
-
-
1,362
(262)
-
-
262
 Capital grants and contributions unapplied credited to the
Comprehensive Income and Expenditure Statement
-
-
-
-
 Application of grants to capital financing transferred to the
Capital Adjustment Account
-
-
(21)
21
(683)
683
-
-
 Revaluation losses on Property, Plant and Equipment
 Amortisation of Intangible Assets
 Capital grants, contributions and donations applied
 Amounts of non-current assets written off on disposal or sale
as part of the gain/loss on disposal to the Comprehensive
Income and Expenditure Statement
Insertion of items not debited or credited to the Comprehensive
Income and Expenditure Statement:
 Capitalised insurance settlements
Adjustments primarily involving the Capital Grants
Unapplied Account:
Adjustments primarily involving the Capital Receipts
Reserve:
 Transfer of cash sale proceeds credited as part of the
33
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
General
Fund
Balance
Capital
Receipts
Reserve
Capital
Grants
Unapplied
2013/14
£000
£000
£000
Movement in
Unusable
Reserves
Usable Reserves
£000
gain/loss on disposal to the Comprehensive Income and
Expenditure Statement
 Use of the Capital Receipts Reserve to finance new capital
expenditure
-
(683)
-
683
(22)
-
-
22
(677)
-
-
677
(1,083)
-
(21)
1,104
 Reversal of items relating to retirement benefits debited or
credited to the Comprehensive Income and Expenditure
Statement
180,587
-
- (180,587)
 Employer’s pensions contributions and direct payments to
pensioners payable in the year
(34,352)
-
-
34,352
 Additional contribution to Pension Account to balance deficit
on the Account
(30,899)
-
-
30,899
(649)
-
-
649
113,604
-
Adjustments primarily involving the Financial Instruments
Adjustment Account:
 Amount by which the finance costs charged to the
Comprehensive Income and Expenditure Statement are
different from the finance costs chargeable in the year in
accordance with statutory requirements
Adjustments primarily involving the Collection Fund
Adjustment Account:
 Amount by which the council tax income credited to the
Comprehensive Income and Expenditure Statement is
different from council tax income calculated for the year in
accordance with statutory requirements
Total Adjustments for PCC
Adjustments primarily involving the Pensions Reserve:
Adjustments primarily involving the Accumulated
Absences Account:
 Amount by which officer remuneration charged to the
Comprehensive Income and Expenditure Statement on an
accruals basis is different from remuneration chargeable in
the year in accordance with statutory requirements
Total Adjustments for Group
M
o
v
e
m
e
n
t
i
n
U
n
u
s
a
b
l
e
R
e
s
e
r
v
e
s
Usable Reserves
(21) (113,583)
34
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
General
Fund
Balance
Capital
Receipts
Reserve
Capital
Grants
Unapplied
2012/13
£000
£000
£000
£000
 Charges for depreciation and impairment of non-current
assets
5,475
-
-
(5,475)
 Revaluation losses on Property, Plant and Equipment
7,460
-
-
(7,460)
 Amortisation of Intangible Assets
1,226
-
-
(1,226)
(3,575)
-
-
3,575
832
-
-
(832)
 Statutory provision for the financing of capital investment
(2,312)
-
-
2,312
 Capital expenditure charged against the General Fund
(1,808)
-
-
1,808
(256)
-
-
256
 Capital grants and contributions unapplied credited to
the Comprehensive Income and Expenditure Statement
-
-
-
-
 Application of grants to capital financing transferred to
the Capital Adjustment Account
-
-
(1,588)
1,588
(584)
584
-
-
 Use of the Capital Receipts Reserve to finance new
capital expenditure
-
(584)
-
584
 Contribution from the Capital Receipts Reserve towards
costs of non-current asset disposals
-
-
-
-
Adjustments primarily involving the Capital
Adjustment Account:
Reversal of items debited or credited to the
Comprehensive Income and Expenditure Statement:
 Capital grants and contributions applied
 Amounts of non-current assets written off on disposal or
sale as part of the gain/loss on disposal to the
Comprehensive Income and Expenditure Statement
Insertion of items not debited or credited to the
Comprehensive Income and Expenditure Statement:
 Capitalised insurance settlements
Adjustments primarily involving the Capital Grants
Unapplied Account:
Adjustments primarily involving the Capital Receipts
Reserve:
 Transfer of cash sale proceeds credited as part of the
gain/loss on disposal to the Comprehensive Income and
Expenditure Statement
Adjustments primarily involving the Financial
Instruments Adjustment Account:
35
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
General
Fund
Balance
Capital
Receipts
Reserve
Capital
Grants
Unapplied
Movement in
Unusable
Reserves
Usable Reserves
£000
£000
£000
£000
(22)
-
-
22
(51)
-
-
51
6,385
-
(1,588)
(4,797)
 Reversal of items relating to retirement benefits debited
or credited to the Comprehensive Income and
Expenditure Statement
157,880
-
-
(157,880)
 Employer’s pensions contributions and direct payments
to pensioners payable in the year
(34,039)
-
-
34,039
 Additional contribution to Pension Account to balance
deficit on the Account
(32,060)
-
-
32,060
 Amount by which officer remuneration charged to the
Comprehensive Income and Expenditure Statement on
an accruals basis is different from remuneration
chargeable in the year in accordance with statutory
requirements
(2,691)
-
-
2,691
Total Adjustments for the Group
95,475
-
(1,588)
(93,887)
2012/13
 Amount by which the finance costs charged to the
Comprehensive Income and Expenditure Statement are
different from the finance costs chargeable in the year in
accordance with statutory requirements
Adjustments primarily involving the Collection Fund
Adjustment Account:
 Amount by which the council tax income credited to the
Comprehensive Income and Expenditure Statement is
different from council tax income calculated for the year
in accordance with statutory requirements
Total Adjustments for the PCC
Adjustments primarily involving the Pensions
Reserve:
Adjustments primarily involving the Accumulated
Absences Account:
7.
TRANSFERS TO AND FROM EARMARKED RESERVES
36
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
This note sets out the amounts set aside from the General Fund in earmarked reserves to
provide financing for future expenditure plans and the amounts posted back from earmarked
reserves to meet General Fund expenditure in 2013/14.
Balance
at 1 April
2012
Transfers
2012/13
Out
In
Balance
at 31
March
2013
Transfers
2013/14
Out
In
Balance
at 31
March
2014
£000
£000
£000
£000
£000
£000
£000
10,694
(745)
-
9,949
-
1,073
11,022
1,239
(859)
1,256
1,636
(394)
-
1,242
 Capital Reserve
-
-
-
-
-
15,759
15,759
 Partnership Reserve
-
-
-
-
-
3,000
3,000
 Innovation Reserve
-
-
-
-
-
2,000
2,000
 Commissioning Reserve
-
-
-
-
-
369
369
78
(78)
-
-
-
250
250
 Regional Working Reserve
126
-
44
170
(39)
-
131
 Revenue Grants Reserve
107
(41)
44
110
(62)
-
48
 Operational Support Service
Reserve
220
-
160
380
(380)
-
-
63
-
-
63
(63)
-
-
742
(742)
-
-
-
-
-
13,269
(2,465)
1,504
12,308
(938)
22,451
33,821
Earmarked Reserves:
 Insurance Reserve
 Devolved Budget Reserve
 Transition Reserve
 Storage Reserve
 Police Community Support
Officers Reserve
Total
Net Transfer in/(out)
(961)
21,513
The purpose of each reserve held is set out below:
Earmarked Reserve
Purpose

Insurance Reserve
This represents sums set aside to fund future potential liabilities
under current insurance arrangements.

Devolved Budget
Reserve
Devolved budget holders are allowed to carry forward
underspends up to approved limits to fund expenditure in the
following year.

Capital Reserve
This has been set aside during the year to support the PCC’s
future capital investment programme.

Partnership Reserve
The PCC has committed to support activities carried out by the
District Councils which have an impact on and contribute to
community safety. Funding levels have been set for a period of
three years to be met from this reserve.
37
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
8.
Earmarked Reserve
Purpose

Innovation Reserve
Having successfully made a joint bid with the PCC for
Humberside to the Home Office Innovation Fund, the PCC
determined during 2013/14 to launch his own Innovation
Reserve. A sum of £2m drawn from General Reserves has
been allocated to the Reserve and criteria for its operation are
currently being finalised. These are likely to be very similar in
nature, but on a localised basis, to those of the Home Office
Innovation Fund.

Commissioning
Reserve
Underspends on commissioning are carried forward in this
reserve to be spent in the following financial year.

Transition Reserve
The Office of the Commissioner is currently under review and a
staffing restructure is ongoing following the transfer of a number
of officers from the South Yorkshire Joint Secretariat to be
directly employed by the PCC (see Note 31). The reserve has
been created to provide flexibility during this transition period.

Regional Working
Reserve
This reserve is available to support regional collaborative
working.

Revenue Grants
Reserve
The treatment of revenue grants in accordance with the Code
may result in a mismatch between spending and income. In
order to address this, any grant which has not been used to
fund related expenditure is contributed to this reserve and used
to fund expenditure when it is incurred in future years.

Operational Support
Reserve
This reserve was created to support operational support
spending in future years. It was utilised in 2013/14 to fund
expenditure incurred on the helicopter prior to its transfer to the
National Police Air Service.

Storage Reserve
Sums were set aside in this reserve to fund the revenue costs
of file storage following the closure of West Bar Police Station. It
has now been fully utilised.

Police Community
Support Officers
(PCSOs) Reserve
This reserve was set up to cover the potential claw back of
grant funding by the Home Office as a result of the Force not
maintaining the required number of PCSOs during the year. It
was not required and reversed in 2012/13.
OTHER OPERATING EXPENDITURE
2012/13
2013/14
38
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
£000
£000
89
(Gains) / Losses on the disposal of non-current assets
653
89
Total PCC and Group
653
Police National Computer and Police National Database costs have previously been
included within Other Operating Expenditure in the Comprehensive Income and Expenditure
Statement. Having reviewed these costs in the wider context of all centrally run and charged
systems from the Home Office, it is clear that disclosing them within the Cost of Services as
part of Criminal Justice would better reflect the operational nature of these costs. Costs of
£0.991m for 2013/14 have therefore been recategorised together with the comparative
figure of £0.878m for 2012/13.
9.
FINANCING AND INVESTMENT INCOME AND EXPENDITURE
2012/13
£000
10.
2013/14
£000
2,022
Interest payable and similar charges
1,927
(452)
Interest receivable and similar income
(284)
1,570
Total PCC
1,643
106,135
Pensions interest cost and expected return on pensions assets
112,860
107,705
Total Group
114,503
TAXATION AND NON SPECIFIC GRANT INCOME
2012/13
£000
(53,638)
(90,050)
(102,748)
(32,060)
(3,575)
(282,071)
11.
2013/14
£000
Council tax income
(46,744)
Council tax support funding
Department of Communities and Local Government funding
(Revenue Support Grant and Non Domestic Rates)
Home Office Police grant
(9,560)
(86,210)
(110,040)
Home Office pension grant
(30,899)
Other non-ring fenced government grant
Capital grants and contributions
Total PCC and Group
(107)
(4,311)
(287,871)
PROPERTY, PLANT AND EQUIPMENT
Movement in the PCC and Group balances in 2013/14:
39
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
Land and
Buildings
Vehicles,
Plant,
Furniture &
Equipment
Surplus
Assets
Assets
under
Construction
Total
Property,
Plant &
Equipment
£000
£000
£000
£000
£000
62,105
36,444
97
-
98,646
Additions
1,139
3,824
-
-
4,963
Revaluation increases / (decreases)
recognised in the Revaluation Reserve
(365)
-
-
-
(365)
(1,285)
-
-
-
(1,285)
(12)
(6,257)
-
-
(6,269)
Assets reclassified (to)/from Held for Sale
-
-
-
-
-
Other reclassifications and movements in
cost or valuation
(20)
(195)
-
-
(215)
At 31 March 2014
61,562
33,816
97
-
95,475
Accumulated Depreciation and Impairment
At 1 April 2013
(3,094)
(23,784)
(6)
-
(26,884)
Depreciation charge
(1,267)
(3,420)
(1)
-
(4,688)
Depreciation written out to the Revaluation
Reserve
250
-
-
-
250
Depreciation written out to the Surplus /
Deficit on the Provision of Services
612
-
1
-
613
Impairment losses / (reversals) recognised
in the Surplus / Deficit on the Provision of
Services
-
-
-
-
-
Derecognition – disposals
3
4,743
-
-
4,746
Assets reclassified (to)/from Held for Sale
-
-
-
-
-
Other reclassifications and movements in
depreciation and impairment
-
-
-
-
-
(3,496)
(22,461)
(6)
-
(25,963)
At 31 March 2014
58,066
11,355
91
-
69,512
At 31 March 2013
59,011
12,660
91
-
71,762
Cost or Valuation:
At 1 April 2013
Revaluation increases / (decreases)
recognised in the Surplus / Deficit on the
Provision of Services
Derecognition – disposals
At 31 March 2014
Net Book Value
Comparative Movements in 2012/13:
Land and
40
Vehicles,
Surplus
Assets
Total
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
Buildings
Plant,
Furniture &
Equipment
Assets
under
Construction
Property,
Plant &
Equipment
£000
£000
£000
£000
£000
62,226
35,972
62
3,952
102,212
773
2,804
-
3,838
7,415
(402)
-
50
-
(352)
(7,846)
-
-
-
(7,846)
(58)
(2,060)
-
-
(2,118)
-
-
(334)
-
(334)
7,412
(272)
319
(7,790)
(331)
62,105
36,444
97
-
98,646
Accumulated Depreciation and Impairment
At 1 April 2012
(2,768)
(21,525)
(5)
-
(24,298)
(1,189)
(3,950)
(5)
-
(5,144)
Depreciation written out to the
Revaluation Reserve
380
-
-
-
380
Depreciation written out to the Surplus
/ Deficit on the Provision of Services
423
-
-
-
423
Impairment losses / (reversals)
recognised in the Surplus / Deficit on
the Provision of Services
-
-
-
-
-
Derecognition – disposals
9
1,691
-
-
1,700
Assets reclassified (to) / from Held for
Sale
-
-
55
-
55
51
-
(51)
-
-
(3,094)
(23,784)
(6)
-
(26,884)
Cost or Valuation
At 1 April 2012
Additions
Revaluation increases / (decreases)
recognised in the Revaluation
Reserve
Revaluation increases / (decreases)
recognised in the Surplus / Deficit on
the Provision of Services
Derecognition – disposals
Assets reclassified (to) / from Held for
Sale
Other reclassifications and
movements in cost or valuation
At 31 March 2013
Depreciation charge
Other reclassifications and
movements in depreciation and
impairment
At 31 March 2013
Depreciation
41
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
The following useful lives and depreciation rates have been used in the calculation of
depreciation:

Property – 10 to 72 years

Vehicles, Plant and Equipment – 2 to 30 years
Capital Commitments
At 31 March 2014, the PCC has entered into a number of contracts for the construction,
enhancement or purchase of Property, Plant and Equipment at an estimated cost of
£1.268m. These contracts include £0.218m for vehicle purchases, £0.859m for IT systems
£0.138m relating to building improvements and £0.053m for operational equipment. Similar
commitments at 31 March 2013 were £2.357m.
Revaluations
The PCC carries out a rolling programme that ensures that all Property, Plant and
Equipment required to be measured at fair value is revalued at least every five years. The
valuations are carried out by an external valuer, Valuation Office Agency, District Valuer
Services. The valuations are carried out in accordance with the Royal Institution of
Chartered Surveyors (RICS) Professional Standards (the Red Book). The progress at 31
March 2014 of the PCC’s rolling programme for the revaluation of non-current assets is:
Carried at historical cost
Land &
Buildings
Vehicles &
Equip
Under
Construction
Surplus
Total
£000
£000
£000
£000
£000
427
33,816
-
-
34,243
9,352
-
-
6
9,358
Valued at fair value in:
12.

Current Year

2012/13
15,940
-
-
50
15,990

2011/12
10,252
-
-
-
10,252

2010/11
14,320
-
-
-
14,320

2009/10
11,271
-
-
41
11,312
Total Cost or Valuation
61,562
33,816
-
97
95,475
INTANGIBLE ASSETS
The PCC accounts for software as intangible assets to the extent that the software is not an
integral part of a particular IT system, in which case it is accounted for as part of the
hardware item of Property, Plant and Equipment. The intangible assets include both
purchased licences and internally generated software.
42
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
All software is given a finite useful life, based on assessments of the period that the software
is expected to be of use to the PCC. The useful lives assigned to the major software suites
used by the PCC are:
Internally Generated Assets
Other Assets
3 years
Mobile Information Project
Case Preparation System Development
4 years
Enterprise Content Management
5 years
Data Storage
5 years
Intranet mapping system development
5 years
Oracle Upgrade
7 years
The carrying amount of intangible assets is amortised on a straight line basis. The
amortisation of £1.480m in 2013/14 is charged to the Information Systems Department and
then absorbed as an overhead across all service headings in the Cost of Services. It is not
possible to quantify how much of the amortisation is attributable to each service heading.
The movement on Intangible Asset balances for the PCC and Group during the year is as
follows:
2013/14
Internally
Generated
Other
£000
 Gross carrying amount
 Accumulated amortisation
2012/13
Total
Internally
Generated
Other
Total
£000
£000
£000
£000
£000
1,704
5,699
7,403
1,584
4,409
5,993
(846)
(2,836)
(3,682)
(398)
(2,270)
(2,668)
858
2,863
3,721
1,186
2,139
3,325
185
-
185
140
-
140
 Purchases
-
1,228
1,228
-
1,502
1,502
Disposals
-
(79)
(79)
(20)
(212)
(232)
Amortisation write off on disposal
-
74
74
-
212
212
(474)
(1,006)
(1,480)
(448)
(778)
(1,226)
569
3,080
3,649
858
2,863
3,721
1,889
6,848
8,737
1,704
5,699
7,403
(1,320)
(3,768)
(5,088)
(846)
(2,836)
(3,682)
Balance at start of year
Net carrying amount at 1 April
Additions
 Internal development
Amortisation for the period
Net carrying amount at 31 March
Comprising:
 Gross carrying amount
 Accumulated amortisation
The following item of capitalised software is individually material:
Carrying Amount
Remaining
Amortisation Period
31 March 2014 31 March 2013
£000
43
£000
Years
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
Mobile Information Project
13.
544
1,072
1
FINANCIAL INSTRUMENTS
A financial instrument is any contract that gives rise to a financial asset of one entity and a
financial liability of another. The definition is broad and covers instruments used in treasury
management including the borrowing and lending of money and making of investments.
However it also extends to include such items as trade receivables (debtors) and trade
payables (creditors) but excludes statutory obligations such as the debt transferred from the
former South Yorkshire County Council, managed by Rotherham MBC.
Financial Instruments Balances
The borrowing and investments disclosed in the PCC and Group Balance Sheets are made
up of the following categories of financial instruments:
Long - term
Current
31 March
2014
31 March
2013
31 March
2014
31 March
2013
£000
£000
£000
£000
Loans and receivables
-
-
26,056
39,351
Total Investments
-
-
26,056
39,351
Loans and receivables
-
-
26,449
6,924
Total Cash and Cash Equivalents
-
-
26,449
6,924
Financial assets carried at contract amounts
-
-
1,309
2,563
Total Debtors
-
-
1,309
2,563
Financial liabilities at amortised cost
(26,761)
(26,868)
(73)
(2,850)
Total Borrowing
(26,761)
(26,868)
(73)
(2,850)
Financial liabilities carried at contract amount
-
-
(6,170)
(2,847)
Total Creditors
-
-
(6,170)
(2,847)
Investments
Cash and Cash Equivalents
Debtors
Borrowing
Creditors
Financial Instrument Income, Expense, Gains and Losses
The income, expense, gains and losses recognised in the PCC and Group Comprehensive
Income and Expenditure Statements in relation to Financial Instruments are made up as
follows:
2013/14
44
2012/13
Total
Financial
Liabilities at
Amortised
Cost
Financial
Assets:
Loans and
Receivables
Total
Financial
Assets:
Loans and
Receivables
Financial
Liabilities at
Amortised
Cost
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
£000
£000
£000
£000
£000
£000
(1,404)
-
(1,404)
(1,501)
-
(1,501)
-
284
284
-
452
452
Net Income / Expense
(1,404)
284
(1,120)
(1,501)
452
(1,049)
Net Gain / (Loss) for the year
(1,404)
284
(1,120)
(1,501)
452
(1,049)
Surplus or Deficit on the
Provision of Services
Interest expense
Interest income
The figures included in the above table exclude the interest expense that does not relate to
financial liabilities at amortised cost.
Fair Value of Assets and Liabilities carried at Amortised Cost
Financial Liabilities and Financial Assets represented by loans and receivables are carried in
the Balance Sheet at amortised cost. Their fair value can be assessed by calculating the
present value of the cash flows that will take place over the remaining term of the
instruments.
The fair values of the PCC’s financial liabilities are set out below. The PWLB borrowing has
been calculated by PWLB by using rates for premature repayment of loans on 31 March
2014.
31 March 2014
Financial liabilities – Borrowing
31 March 2013
Carrying
amount
Fair value
Carrying amount
Fair value
£000
£000
£000
£000
26,834
34,080
29,718
39,897
The fair value is higher than the carrying amount for Financial Liabilities because the PCC’s
portfolio of loans includes a number of fixed rate loans where the interest rate payable is
higher than the rates currently available for similar loans at the Balance Sheet date. The
commitment to pay interest at above the current market rate increases the amount that the
PCC would have to pay if the lender requested or agreed to early repayment of the loans.
The fair value of the PCC’s Loans and Receivable financial assets is deemed to
approximate to the value in the Balance Sheet because of the relatively short period to
maturity.
31 March 2014
45
31 March 2013
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
Carrying amount
Fair value
Carrying
amount
Fair value
£000
£000
£000
£000
26,056
26,056
39,351
39,351
Loans and receivables
14.
NATURE AND EXTENT OF RISKS ARISING FROM FINANCIAL INSTRUMENTS
The PCC’s activities expose him to a variety of financial risks:

credit risk – the possibility that other parties might fail to pay amounts due

liquidity risk – the possibility that the PCC might not have funds available to meet his
commitments to make payments

market risk – the possibility that financial loss might arise for the PCC as a result of
changes in such measures as interest rates
The PCC’s overall risk management procedures focus on the unpredictability of financial
markets, and are structured to implement suitable controls to minimise these risks. The
procedures for risk management are set through a legal framework which requires the PCC
to comply with the CIPFA Prudential Code, the CIPFA Code of Practice on Treasury
Management in the Public Services and investment guidance. Overall these procedures
require the PCC to manage risk in the following ways:

by formally adopting the requirements of the CIPFA Treasury Management Code of
Practice

by the adoption of a Treasury Policy Statement and treasury management clauses
within financial regulations

by approving annually in advance prudential and treasury indicators for the following
three years limiting:

o
the PCC’s overall borrowing
o
his maximum and minimum exposures to fixed and variable rates
o
his maximum and minimum exposures to the maturity structure of its debt
o
his maximum annual exposures to investments maturing beyond a year.
by approving an investment strategy for the forthcoming year setting out his criteria for
both investing and selecting investment counterparties in compliance with Government
guidance.
These are reported within the annual Treasury Management Strategy which outlines the
detailed approach to managing risk in relation to the PCC’s financial instrument exposure.
Actual performance is also reported after the end of the year.
The annual Treasury Management Strategy which incorporates the prudential indicators was
approved by the PCC in March 2013. The key issues within the Strategy were:

The Authorised Limit for 2013/14 was set at £50m. This is the maximum limit of external
borrowings or other long-term liabilities.
46
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS

The Operational Boundary was expected to be £42m. This is the expected level of debt
and other long-term liabilities during the year.

The maximum limits on principal sums outstanding in respect of borrowing at fixed and
variable interest rates were set at £55m and £14m respectively based.
These policies are implemented by treasury officers at the South Yorkshire Joint Secretariat
with advice from Sector Treasury Services Limited. There are principles for overall risk
management, as well as policies covering specific areas, such as interest rate risk, credit
risk, and the investment of surplus cash.
Credit Risk
Credit risk arises from the lending of surplus funds to banks, building societies and other
local authorities as well as credit exposures to the PCC’s customers. The risk is minimised
through the Annual Investment Strategy, which requires that deposits are not made with
financial institutions unless they meet identified minimum criteria set by the PCC. The
Annual Investment Strategy also imposes maximum amounts and time limits in respect of
each financial institution. Deposits are not made with financial institutions unless they meet
the minimum requirements of the investment criteria outlined above.
The key areas of the Investment Strategy are that the minimum criteria for investment are
based on the creditworthiness service provided by Sector. This service uses a sophisticated
modelling approach with credit ratings from all three rating agencies (Fitch, Moodys and
Standard and Poors) forming the core element. However it does not rely solely on the
current credit ratings of counterparties but also uses the following as overlays:

Credit watches and credit outlooks from credit rating agencies

Credit Default Swaps spreads to give early warning of likely changes in credit ratings

Sovereign ratings to select counterparties from only the most creditworthy countries.
The PCC’s surplus funds are pooled with those of South Yorkshire Fire and Rescue
Authority and South Yorkshire Integrated Transport Authority for investment which enables
access to a wider range of investments and the sharing of risk. Deposits with institutions
were limited to a maximum of £25m for part nationalised banks and £15m with any other
counterparty for the total investment pool of which the PCC’s share is approximately £10m
and £6m respectively.
The PCC’s maximum exposure to credit risk in relation to its investments cannot be
assessed generally as the risk of any institution failing to make interest payments or repay
the principal sum will be specific to each individual institution. Recent experience has shown
that it is rare for such entities to be unable to meet their commitments. A risk of
irrecoverability applies to all the PCC’s deposits but there was no evidence at the 31 March
2014 that this was likely to crystallise. The PCC therefore expects full repayment on the due
dates of existing deposits.
The PCC does not generally allow credit for customers. The total value of trade debtors at
31 March 2014 is £1.309m (£2.614m at 31 March 2013) of which £0.832m (£1.021m at 31
March 2013) is past its due date, analysed as follows:
31 March
2013
31 March
2014
£000
£000
47
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
911
Less than 3 Months
710
33
3 to 6 Months
30
17
6 to 12 Months
15
60
Over 12 Months
77
1,021
Total
832
The PCC has a historical experience of default of 0.3% in trade debtors, which equates to a
risk of uncollectability of £4k.
Liquidity Risk
The PCC has a comprehensive cash flow management system that seeks to ensure that
cash is available as needed. As the PCC has access to borrow from the Public Works Loan
Board (PWLB), there is no significant risk that the PCC will be unable to raise finance to
meet his commitments under financial instruments. Instead, the risk is that the PCC will be
bound to replenish a significant proportion of his borrowings at a time of unfavourable
interest rates.
The PCC therefore has safeguards in place to ensure that a significant proportion of his
borrowing does not mature for repayment at any one time in the future which reduces the
financial impact of re-borrowing at a time of unfavourable interest rates. The PCC’s policy is
to ensure that not more than 15% of loans are due to mature within any financial year
through a combination of prudent planning of new loans taken out and, where it is economic
to do so, making early repayments.
The maturity analysis of loans outstanding to PWLB as at 31 March 2014 is:
31 March
2013
31 March
2014
£000
£000
Maturing within:
1,350
300
>1 to 5 years
1,350
>5 to 10 years
800
16,640
>10 to 20 years
18,190
7,380
>20 to 30 years
5,330
3,050
>30 to 40 years
3,050
28,720
Total
28,720
The average rate payable by the PCC is 4.6% with rates ranging from 4.05% to 5.1%. The
Amortised Cost of the above loans is £26.756m.
All trade and other payables are due to be paid in less than one year.
Market Risk
The PCC is exposed to significant risk in terms of its exposure to interest rate movements on
its borrowings and investments. Movements in interest rates have a complex impact on the
PCC. For instance, a rise in interest rates would have the following effects:
48
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS

borrowings at variable rates – the interest expense charges to the Comprehensive
Income and Expenditure Statement will rise

borrowings at fixed rates – the fair value of the liabilities will fall

investments at variable rates – the interest income credited to the Comprehensive
Income and Expenditure Statement will rise

investments at fixed rates – the fair value of the assets will fall.
Borrowings are not carried at fair value, so nominal gains and losses on fixed rate
borrowings would not impact on the Comprehensive Income and Expenditure Statement.
However, changes in interest payable and receivable on variable rate borrowings and
investments will be posted to the Comprehensive Income and Expenditure Statement.
The PCC has a number of strategies for managing interest rate risk. The PCC’s policy is to
aim to keep a maximum of 25% of his borrowings in variable loan rates. During periods of
falling interest rates, and where economic circumstances make it favourable, fixed rate loans
may be repaid early to limit exposure to losses. The risk of loss is reduced by the fact that a
proportion of government grant payable on financing costs will normally move with the
prevailing interest rates on the PCC’s cost of borrowing and provide compensation for a
proportion of any higher costs.
The PCC’s Treasury Management Strategy provides for the assessment of interest rate
exposure, which will assist in decisions on whether new borrowing taken out should be on a
fixed or variable basis.
The PCC received investment interest of £0.290m for the financial year with an average rate
of 0.5%. A 0.1% change in the interest rate would have resulted in a decrease or increase
in interest of approximately £58k provided that bank balances had remained the same.
Price Risk
The PCC does not invest in equity shares on the markets and therefore is not at significant
risk to price movements.
Foreign Exchange Risk
The PCC has no financial assets or liabilities in foreign currencies and thus has no exposure
to loss arising from movements in exchange rates.
15.
INVENTORIES
The Group and PCC Balance Sheets include the following:
2013/14
49
2012/13
Balance at 1 April
Purchases
Recognised as an expense
in the year
Written off balances
Balance at 31 March
16.
£000
£000
£000
£000
£000
£000
705
262
967
722
90
812
2,927
1,520
4,447
2,719
1,283
4,002
(2,962)
(1,640)
(4,602)
(2,742)
(1,111)
(3,853)
(3)
-
(3)
6
667
142
809
705
6
262
967
DEBTORS
31 March
2013
£000
31 March
2014
£000
7,591
Central government bodies
6,300
Other local authorities
14,264
3,150
-
NHS bodies
-
2
Public corporation and trading funds
8
8,297
22,190
17.
Total
Vehicle
Maintenance
Spares
Consumable
Stores
Total
Consumable
Stores
Vehicle
Maintenance
Spares
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
Other entities and individuals
Total Group and PCC
3,848
21,270
CASH AND CASH EQUIVALENTS
The balance of Cash and Cash Equivalents is made up of the following elements:
31 March
2013
£000
18.
31 March
2014
£000
67
Cash held by the PCC
58
(1,293)
Bank current accounts
193
8,150
Call and money market fund investments
26,198
6,924
Total PCC and Group
26,449
ASSETS HELD FOR SALE
2012/13
2013/14
£000
£000
50
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
231 PCC and Group Balance outstanding at start of the year
278 Assets newly qualified as held for sale
-
(38) Revaluation losses
-
- Assets declassified as held for sale
(393) Assets sold
-
78 PCC and Group Balance outstanding at end of year
19.
78
78
CREDITORS
31 March
2013
£000
31 March
2014
£000
5,629
Central government bodies
7,426
Other local authorities
224
8,350
21,629
5,068
26,697
4,693
12,334
NHS bodies
3
Public corporation and trading funds
14
Other entities and individuals
12,790
Total PCC
29,834
Other entities and individuals
Total Group
4,419
34,253
Cash that is seized by the Force because it is suspected of either having been used, or
intended for use, for the purpose of crime, is held pending a court decision as to whether it
should be returned or awarded under a forfeiture order to the Force or the Treasury. This
seized cash is held in trust for third parties by the PCC and is therefore excluded from the
Balance Sheet. The sum held at 31 March 2014 is £0.915m (£0.970m 31 March 2013).
Included within the above table is an accrual of £4.476m for annual leave and other related
benefits earned by the employees but not taken by 31 March 2014 (£5.109m at 31 March
2013), which was previously classified as a provision (Note 20).
20.
PROVISIONS
Movements in PCC and Group provisions during the year are as follows:
51
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
Balance at 1 April 2013
Additional provisions made in the year
Amounts used in the year
Insurance
Carbon Reduction
Commitment
Total
£000
£000
£000
3,706
111
3,817
427
-
427
(2,458)
(111)
(2,569)
-
-
-
1,675
-
1,675
Unused amounts reversed in the year
Balance at 31 March 2014
Provisions are shown on the Balance Sheet according to when they are likely to be utilised.
Where they will be used within a year they appear as Current Liabilities with the balance
appearing as Long-Term Liabilities.
Insurance Provision
The PCC provides a degree of self-insurance through his insurance provision. Under
insurance policies, the PCC has to meet a proportion of each claim up to a total maximum
level each year. A contribution to the provision is made from revenue to fund this uninsured
liability, in accordance with advice from the PCC’s insurance brokers. Payments are then
made directly from the provision when claims are settled over the next few years.
Carbon Reduction Commitment (CRC) Provision
This provision funds the purchase of CRC allowances which has been fully utilised during
the year.
Employee Benefits Provision
The accrual for annual leave and other related benefits earned by employees but not taken
at 31 March was previously set aside in a provision. This has now been reclassified as a
creditor during the year (see Note 19) and has therefore been removed from the above
table. The accruals are matched by the Accumulated Absences Account (Note 23).
Police Officers Overtime Provision
The cost of overtime due to police officers who have elected to take time off in lieu but are
entitled to payment if time off has not been taken after three months, was previously set
aside in a provision. This has now been reclassified as a creditor during the year (see Note
19) and has therefore been removed from the above table.
21.
USABLE RESERVES
Movements in the PCC and Group usable reserves are detailed below (See also note 7):
52
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
1 April 2013
Earmarked Reserves
£000
Movement
in Year
£000
31 March
2014
£000
12,308
21,513
33,821
21
(21)
-
35,781
(21,973)
13,808
48,110
(481)
47,629
Capital Grants Unapplied
General Reserves
22.
OTHER LONG-TERM LIABILITIES
Other Long-Term Liabilities on the Balance Sheet consist of:
31 March
2013
31 March
2014
£000
£000
6,421
Transferred Debt from former County Council
1,163
Insurance Settlements
7,584
Total PCC
5,745
900
6,645
2,627,140
Pensions Liability
2,589,178
2,634,724
Total Group
2,595,823
Transferred Debt
This consists of debt taken over from the former South Yorkshire County Council, where the
loan management rests with Rotherham MBC. Debt of £0.677m is repayable within the next
twelve months and is included as part of Short-Term Creditors. The interest rate paid in
2013/14 was 7.75% (7.15% in 2012/13).
31 March
2013
31 March
2014
£000
£000
677
Maturity between 1 and 2 Years
745
2,464
Maturity between 2 and 5 Years
2,711
3,280
Maturity between 5 and 10 Years
2,289
6,421
Total
5,745
Insurance Settlements
Structured insurance settlements are written down annually to the Capital Adjustment
Account.
Pensions Liability
53
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
The Pensions Liability represents the net position of retirement liabilities and the pension
scheme assets and is matched by the Pensions Reserve (Note 23).
23.
UNUSABLE RESERVES
31 March
2013
31 March
2014
£000
£000
6,016
26,770
(180)
974
Revaluation Reserve
5,793
Capital Adjustment Account
27,283
Financial Instruments Adjustment Account
(158)
Collection Fund Adjustment Account
1,651
33,580
Total PCC
34,569
(5,068)
Accumulated Absences Account
(4,419)
(2,627,140)
Pensions Reserve
(2,589,178)
(2,598,628)
Total Group
(2,559,028)
Revaluation Reserve
The Revaluation Reserve contains the gains made by the PCC arising from increases in the
value of its Property, Plant and Equipment and Intangible Assets. The balance is reduced
when assets with accumulated gains are:

revalued downwards or impaired and the gains are lost

used in the provision of services and the gains are consumed through depreciation

disposed of and the gains are realised.
The Reserve contains only revaluation gains accumulated since 1 April 2007, the date the
reserve was created. Accumulated gains arising before that date are consolidated into the
balance on the Capital Adjustment Account.
2012/13
£000
6,288
422
2013/14
£000
Balance at 1 April
6,016
Upward revaluations of assets
203
Downward revaluations of assets and impairment losses not charged to
the Surplus or Deficit on the Provision of Services
(318)
28
Surplus or deficit on revaluation of non-current assets not posted to
the Surplus or Deficit on the Provision of Services
(115)
(106)
Difference between fair value depreciation and historical cost depreciation
(105)
(194)
Accumulated gains on assets sold or scrapped
(300)
Amount written off to the Capital Adjustment Account
(108)
6,016
Balance at 31 March
5,793
(394)
54
(3)
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
Capital Adjustment Account
The Capital Adjustment Account absorbs the timing differences arising from the different
arrangements for accounting for the consumption of non-current assets and for financing the
acquisition, construction or enhancement of those assets under statutory provisions. The
Account is debited with the cost of acquisition, construction or enhancement as depreciation,
impairment losses and amortisations are charged to the Comprehensive Income and
Expenditure Statement (with reconciling postings to the Revaluation Reserve to convert fair
value figures to a historical cost basis). The Account is credited with the amounts set aside
by the PCC as finance for the costs of acquisition, construction and enhancement. The
Account also contains revaluation gains accumulated on Property, Plant and Equipment
before 1 April 2007, the date the Revaluation Reserve was created to hold such gains.
2012/13
£000
31,339
2013/14
£000
Balance at 1 April
26,770
Reversal of items relating to capital expenditure debited or credited to the
Comprehensive Income and Expenditure Statement:
(5,475)

Charges for depreciation and impairment of non-current assets
(7,460)

Revaluation losses on Property, Plant and Equipment
(1,226)

Amortisation of Intangible Assets
(1,480)

Amounts of non-current assets written off on disposal or sale as part of
gain/loss on disposal to the Comprehensive Income and Expenditure
Statement
(1,527)
(832)
(14,993)
300
(14,693)
256
(4,905)
(672)
(8,584)
Adjusting amounts written out of the Revaluation Reserve
Net written out amount of the cost of non-current assets consumed in
the year
Capitalised insurance settlements
108
(8,476)
262
Capital financing applied in the year:
584

Use of the Capital Receipts Reserve to finance new capital expenditure

Capital grants, contributions and donations credited to the
Comprehensive Income and Expenditure Statement that have been
applied to capital financing
3,575
1,588
2,313
1,808
4,311

Application of grants to capital financing from the Capital Grants
Unapplied Account

Statutory provision for the financing of capital investment charged
against the General Fund
2,350

Capital expenditure charged against the General Fund
1,362
10,124
26,770
683
21
8,989
Balance at 31 March
27,283
Financial Instruments Adjustment Account
55
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
The Financial Instruments Adjustment Account absorbs the timing differences arising from
the different arrangements for accounting for income and expenses relating to certain
financial instruments and for bearing losses or benefiting from gains per statutory provisions.
The PCC uses the Account to manage premiums paid on the early redemption of loans.
Premiums are debited to the Comprehensive Income and Expenditure Statement when they
are incurred, but reversed out of the General Fund Balance to the Account in the Movement
in Reserves Statement. Over time the expense is posted back to the General Fund balance
in accordance with statutory arrangements for spreading the burden on council tax. In the
PCC’s case, this period is the term of the replacement loan. As a result, the balance on the
Account as at 31 March 2014 will be charged to the General Fund over the next 8 years.
2012/13
£000
(201)
-
2013/14
£000
Balance at 1 April
(180)
Premiums incurred in the year and charged to the Comprehensive
Income and Expenditure Statement
-
21
Proportion of premiums incurred in previous financial years to be
charged against the General Fund Balance in accordance with statutory
requirements
22
21
Amount by which finance costs charged to the Comprehensive
Income and Expenditure Statement are different from finance
costs chargeable in accordance with statutory requirements
22
(180)
Balance at 31 March
(158)
Collection Fund Adjustment Account
The Collection Fund Adjustment Account manages the differences arising from the
recognition of council tax income in the Comprehensive Income and Expenditure Statement
as it falls due from council tax payers compared with the statutory arrangements for paying
across amounts to the General Fund from the Collection Fund.
2012/13
£000
923
51
974
2013/14
£000
Balance at 1 April
974
Amount by which council tax income credited to the Comprehensive
Income and Expenditure Statement is different from council tax income
calculated for the year in accordance with statutory requirements
677
Balance at 31 March
1,651
Pensions Reserve
56
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
The Pensions Reserve absorbs the timing difference arising from the different arrangements
for accounting for post employment benefits and for funding benefits in accordance with
statutory provisions.
Post-employment benefits are accounted for in the Comprehensive Income and Expenditure
Statement as the benefits are earned by employees accruing years of service, updating the
liabilities recognised to reflect inflation, changing assumptions and investment returns on
any resources set aside to meet the costs. However statutory arrangements require benefits
earned to be financed as employer’s contributions to pension funds are made or eventually
direct pensions are paid.
The debit balance on the Pensions Reserve therefore shows a substantial shortfall in the
benefits earned by past and current employees and the resources the PCC has set aside to
meet them. The statutory arrangements will ensure that funding will have been set aside by
the time the benefits come to be paid.
The transactions on the Pensions Reserve are as follows:
2012/13
£000
(2,189,195)
2013/14
£000
(2,627,140)
Balance at 1 April
(346,164)
Actuarial gains or (losses) on the pensions assets and liabilities
(157,880)
Reversal of items relating to retirement benefits debited or credited to
the Surplus or Deficit on the Provision of Services in the
Comprehensive Income and Expenditure Statement
(180,587)
66,099
Employer’s pensions contributions and direct payments to pensioners
payable in the year
65,251
(2,627,140)
Balance at 31 March
153,298
(2,589,178)
Accumulated Absences Account
The Accumulated Absences Account absorbs the differences that would otherwise arise on
the General Fund Balance from accruing for compensated absences earned but not taken in
the year, for example annual leave entitlement carried forward at 31 March. Statutory
arrangements require that the impact on the General Fund Balance is neutralised by
transfers to or from the Account.
2012/13
£000
(7,759)
2,691
-
2,691
(5,068)
24.
2013/14
£000
(5,068)
Balance at 1 April
Settlement or cancellation of accrual made at the end of preceding year
649
Amounts accrued at the end of the current year
-
Amount by which officer remuneration charged to the Comprehensive
Income and Expenditure Statement on an accruals basis is different
from remuneration chargeable in the year in accordance with statutory
requirements
Balance at 31 March
649
(4,419)
CASH FLOW STATEMENT - ADJUSTMENTS FOR NON-CASH MOVEMENT
57
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
The adjustments to the net surplus or deficit on the provision of services for non-cash
movements include the following items:
2012/13
£000
(5,475)
Depreciation
(7,460)
Impairment and downward valuations
(1,226)
Amortisations
(1,480)
(5,165)
Increase / decrease in creditors
(8,218)
Increase / decrease in debtors
(2,735)
5,047
155
(832)
(1,480)
3,575
264
(4,905)
Increase / decrease in inventories
Carrying amount of non-current assets and non-current assets held
for sale, sold or derecognised
(158)
(1,527)
2,142
Capital grants applied
4,311
Other non-cash movements
PCC’s Adjustments to net surplus or deficit on provision of
services for non-cash movements
(91,781)
Movement in pensions liability
(101,687)
(672)
Movement in provisions
(12,597)
2,691
25.
2013/14
£000
Accumulated absences
870
(12,372)
(115,336)
649
Group Adjustments to net surplus or deficit on provision of
services for non-cash movements
(127,059)
CASH FLOW STATEMENT – OPERATING ACTIVITIES
The cash flows for operating activities of £12.312m (£6.922m in 2012/13) include the
following items:
2012/13
£000
26.
2013/14
£000
(415)
Interest received
(404)
2,022
Interest paid
1,927
1,607
Net cash flows from operating activities for PCC and Group
1,523
CASH FLOW STATEMENT – INVESTING ACTIVITIES
58
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
The cash flows for investing activities include the following items:
2012/13
£000
8,981
930
(2,395)
(3,501)
4,015
2013/14
£000
Purchase of Property, Plant and Equipment and Intangible Assets
Purchase of short-term investments
Proceeds from sale of Property, Plant and Equipment and Intangible
Assets
Proceeds from short-term investments
Other receipts from investing activities
Net cash flows from investing activities for PCC and Group
5,994
(13,175)
(373)
(3,026)
(10,580)
CASH FLOW STATEMENT – FINANCING ACTIVITIES
27.
The cash flows for financing activities include the following items:
2012/13
£000
-
Cash receipts of short and long-term borrowing
-
-
Cash payments for the reduction of the outstanding liabilities
relating to finance leases
-
612
Repayments of short and long-term borrowing
559
Other payments for financing activities
1,171
28.
2013/14
£000
Net cash flows from financing activities for PCC and Group
2,752
615
3,367
AMOUNTS REPORTED FOR RESOURCE ALLOCATION DECISIONS
The analysis of income and expenditure by service on the face of the Comprehensive
Income and Expenditure Statement is that specified by the Service Reporting Code of
Practice. However decisions about the resource allocation are taken by the PCC on the
basis of budget reports analysed across budget holders. These reports are prepared on a
different basis from the accounting policies used in the financial statements. In particular:

no charges are made in relation to capital expenditure, whereas depreciation,
revaluation and impairment losses in excess of the balance on the Revaluation Reserve
and amortisations are charged to services in the Comprehensive Income and
Expenditure Statement

the cost of retirement benefits is based on cash flows (payment of employer’s
contributions) rather than current service cost of benefits accrued in the year.
The Group income and expenditure of the PCC and the Chief Constable’s principal budget
holders recorded in the budget reports for the year is as follows:
59
Fees, charges and
other service
income
Total
Regional
working
Support
Services
Criminal
Justice Admin
Dept
Specialist
Crime Services
Operational
Support
Services
Sheffield
District
£000
£000
£000
£000
£000
£000
£000
£000
(284)
(74)
(51)
(206)
(85)
(2,721)
(228)
(317) (1,397) (6,796) (12,159)
-
-
-
-
-
-
(74)
(51)
(206)
(85)
(2,721)
(228)
245 16,685 24,519
18,225
44,020
Government
Grants
(14,063)
Total income
(14,347)
Employee costs
Doncaster
District
Barnsley
District
PCC
2013/14
Rotherham
District
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
36,220 16,118
£000
-
-
-
(14,063)
(317) (1,397) (6,796) (26,222)
11,333 12,458
6,402
186,225
2,170 21,094
5,303
62,959
Other operating
expenses
17,818
1,599
1,281
2,548
Total operating
expenses
18,063 17,718 26,118
19,506
46,568
41,301 21,150
13,503 33,552 11,705
249,184
3,716 17,644 26,067
19,300
46,483
38,580 20,922
13,186 32,155
222,962
Net cost of
services
1,033
5,081
5,032
4,909
£000
£000
£000
£000
£000
£000
£000
£000
(452)
(98)
(124)
(233)
(158)
(3,941)
(641)
(370) (6,220) (4,316) (16,553)
Government
Grants
(14,640)
-
-
-
-
-
-
Total income
(15,092)
(98)
(124)
(233)
(158)
(3,941)
(641)
62 17,114 24,881
18,250
45,290
Fees, charges and
other service
income
Employee costs
38,601 18,691
-
£000
Total
Regional
working
Support
Services
Criminal
Justice Admin
Dept
Specialist
Crime Services
Operational
Support
Services
Sheffield
District
Doncaster
District
PCC
Barnsley
District
2012/13
Restated
Rotherham
District
The equivalent figures for 2012/13 have been restated to include the equivalent figures for
the additional budget holders reported in 2013/14 as shown below:
-
£000
-
£000
(14,640)
(370) (6,220) (4,316) (31,193)
11,622 24,515
4,133
203,159
5,655
2,039 17,622
2,629
47,866
Other operating
expenses
8,625
1,711
1,267
2,600
Total operating
expenses
8,687 18,340 26,592
19,517
47,890
43,093 24,346
13,661 42,137
6,762
251,025
(6,405) 18,242 26,468
19,284
47,732
39,152 23,705
13,291 35,917
2,446
219,832
Net cost of
services
1,226
4,492
Reconciliation of Budget Holder Income and Expenditure to Cost of Services in the
Comprehensive Income and Expenditure Statement
60
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
This reconciliation shows how the figures in the analysis of budget holder income and
expenditure relate to the amounts included in the Comprehensive Income and Expenditure
Statement.
2012/13
2013/14
£000
£000
219,832
Net Expenditure in the Budget Holder Analysis
222,962
25,258
Net Expenditure of services and support services not included in
the analysis
29,375
63,215
Amounts in the Comprehensive Income and Expenditure Statement
not reported to management in the analysis
74,135
(39,847)
Amounts included reported to management not included in the
Comprehensive Income and Expenditure Statement
(39,693)
268,458
Cost of Services in Comprehensive Income and Expenditure
Statement
286,779
Total
Corporate
Amounts
Cost of
Services
Amounts not
included in
Comp Income &
Exp Statement
Amounts not
reported to
management
Budget Holder
Analysis
2013/14
Services not in
Analysis
Reconciliation to Subjective Analysis
£000
£000
£000
£000
£000
£000
£000
(11,875)
(1,540)
-
191
(13,224)
-
(13,224)
(284)
-
-
284
-
(284)
(284)
Income from council tax
-
-
-
-
-
(46,744)
(46,744)
Government grants and
contributions
(14,063)
-
-
107
(13,956) (241,127) (255,083)
Total income
(26,222)
(1,540)
-
582
(27,180) (288,155) (315,335)
Employee costs
186,225
27,325
67,078
(34,352)
246,276
Other service expenses
57,298
3,590
-
(262)
Capital financing costs
5,661
-
-
(5,661)
Depreciation, amortisation and
impairment
-
-
7,057
Gain or loss from disposal of noncurrent assets
-
-
Total operating expenses
249,184
Surplus or deficit on the
provision of services
222,962
Fees, charges and other service
income
Interest income
112,860
359,136
60,626
-
60,626
-
1,927
1,927
-
7,057
--
7,057
-
-
-
653
653
30,915
74,135
(40,275)
313,959
115,440
429,399
29,375
74,135
(39,693)
286,779 (172,715)
114,064
61
Total
Corporate
Amounts
Cost of
Services
Amounts not
included in
Comp Income &
Exp Statement
Amounts not
reported to
management
£000
£000
£000
£000
£000
£000
£000
(16,101)
(1,067)
-
159
(17,009)
-
(17,009)
(452)
-
-
452
-
(452)
(452)
Income from council tax
-
-
-
-
-
(53,638)
(53,638)
Government grants and
contributions
(14,640)
-
-
-
(14,640) (228,433) (243,073)
Total income
(31,193)
(1,067)
-
611
(31,649) (282,523) (314,172)
Employee costs
203,159
24,613
49,054
(34,039)
242,787
41,703
1,712
-
(256)
6,163
-
-
(6,163)
Depreciation, amortisation and
impairment
-
-
14,161
Gain or loss from disposal of noncurrent assets
-
-
Total operating expenses
251,025
Surplus or deficit on the
provision of services
219,832
Fees, charges and other service
income
Interest income
Other service expenses
Interest Payments
29.
Budget Holder
Analysis
2012/13 Comparative Figures
Services not in
Analysis
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
106,135
348,922
43,159
-
43,159
-
2,022
2,022
-
14,161
-
14,161
-
-
-
89
89
26,325
63,215
(40,458)
300,107
108,246
408,353
25,258
63,215
(39,847)
268,458 (174,277)
94,181
OFFICERS’ REMUNERATION
62
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
£
£
Total
£
Pension
Contribution
£
Total
Remuneration
£
Other
Payments
£
Benefits in
Kind
Expenses
2013/14
Salary, Fees
and
Allowances
The remuneration paid to senior officers in 2013/14 is as follows:
£
Police and Crime Commissioner
85,000
-
2,296
-
87,296
9,095
96,391
Deputy Police and Crime
Commissioner
45,000
-
-
-
45,000
4,815
49,815
Chief Executive and Solicitor
(From 20 January 2014)
20,688
-
-
-
20,688
2,214
22,902
Chief Constable – D Crompton
155,406
150
2,266
-
157,822
35,956
193,778
Deputy Chief Constable
129,577
150
2,400
-
132,127
29,663
161,790
Assistant Chief Constable
(From 12 August 2013)
61,846
-
2,232
-
64,078
14,484
78,562
Temporary Assistant Chief Constable
(To 11 August 2013)
30,074
-
-
-
30,074
6,586
36,660
116,867
430
3,714
-
121,011
26,595
147,606
86,049
150
2,075
-
88,274
20,243
108,517
111,400
450
3,034
-
114,884
11,920
126,804
Assistant Chief Constable
Acting Deputy Chief Constable
(Regional Working to 2 January 2014)
Director of Finance
Notes

For the period 1 April to 11 August, a Temporary Assistant Chief Constable post was
created to cover the duties of a vacant Assistant Chief Constable post. The permanent
Assistant Chief Constable joined the Force on 12 August 2013.

The post of Acting Deputy Chief Constable (Regional Working) was being covered on a
secondment basis by a substantive Assistant Chief Constable from South Yorkshire.
This arrangement ceased on 2 January 2014.

The post of Assistant Chief Constable Corporate Relations is not shown in the above
table or in the comparative table for 2012/13, as it is being covered by the Director of
Human Resources from Humberside Police. South Yorkshire Police pay for 50% of the
employee’s costs.
63
Expenses
Benefits in
Kind
Other
Payments Police
Total
Remuneration
Pension
Contribution
£
£
£
£
£
£
£
Police and Crime Commissioner
(from 22 November 2012)
30,458
-
796
-
31,254
3,259
34,513
Deputy Police and Crime
Commissioner
(from 28 January 2013)
7,984
-
-
-
7,984
854
8,838
Chief Constable – D Crompton
(from 2 April 2012)
152,598
145
1,917
17,576
172,236
35,748
207,984
Deputy Chief Constable
(Retired 12 October 2012)
71,064
160
1,276
-
72,500
-
72,500
Temporary Deputy Chief Constable
(15 Oct 2012 to 6 Jan 2013)
25,319
-
-
25,319
5,892
31,211
Temporary Deputy Chief Constable
(From 7 January 2013)
29,093
21
-
-
29,114
6,806
35,920
Assistant Chief Constable Territorial
Operations
(To 6 January 2013)
87,189
175
5,354
-
92,718
19,641
112,359
Temporary Assistant Chief Constable
Territorial Operations
(From 7 January 2013)
22,255
626
-
-
22,881
5,219
28,100
Assistant Chief Constable Specialist
Operations
(1 Apr to 12 Oct 2012 and 7 Jan to 31
Mar 2013)
87,105
360
5,945
-
93,410
19,641
113,051
Temporary Assistant Chief Constable
Specialist Operations (15 Oct 2012
to 6 Jan 2013)
22,192
777
-
-
22,969
5,219
28,188
Acting Deputy Chief Constable
(Regional Working)
112,577
199
3,079
-
115,855
26,482
142,337
Director of Finance
108,663
487
4,709
-
113,859
11,627
125,486
Comparative Figures for 2012/13
Total
Salary, Fees
and
Allowances
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
Notes

The Assistant Chief Constables for Specialist and Territorial Operations covered the
vacant Deputy Chief Constable’s post from 15th October 2012 to 6th January 2013 and 7
January to 31 March 2013 respectively. Also for these same periods Temporary
Assistant Chief Constable posts were created to cover the duties of the Assistant Chief
Constables whilst they were covering the Deputy Chief Constable post

The post of Acting Deputy Chief Constable (Regional Working) is being covered on a
secondment basis by a substantive Assistant Chief Constable from South Yorkshire.
This arrangement commenced on 18 January 2010.
64
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
Employees (both police officers and staff) of the PCC and the Chief Constable, including the
senior employees identified in the previous table, receiving more than £50,000 remuneration
for the year (excluding employer’s contributions) were paid the following amounts:
2012/13
Number
2013/14
Number
£
168
50,000 -
54,999
151
102
55,000 -
59,999
90
32
60,000 -
64,999
36
15
65,000 -
69,999
10
7
70,000 -
74,999
9
5
75,000 -
79,999
2
10
80,000 -
84,999
8
1
85,000 -
89,999
6
2
90,000 -
94,999
-
3
95,000 -
99,999
2
-
100,000 -
104,999
-
-
105,000 -
109,999
-
1
110,000 -
114,999
1
2
115,000 - 119,999
-
1
120,000 - 124,999
1
-
125,000 - 129,999
-
-
130,000 - 134,999
1
-
135,000 - 139,999
-
-
140,000 - 144,999
-
-
145,000 - 149,999
-
-
150,000 - 154,999
-
-
155,000 - 159,999
1
-
160,000 - 164,999
-
-
165,000 - 169,999
-
1
170,000 - 174,999
-
350
318
The number of exit packages with total cost per band and total cost of the compulsory and
other redundancies are set out in the table below
65
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
Exit Package cost
band
(including
special payments)
Number of
compulsory
redundancies
2012/13
2013/14
Number of other
departures
agreed
Total number of
exit packages
per cost band
Total cost of
exit packages in
each band
2012/13
2012/13
2012/13
2013/14
£000
£000
2013/14
2013/14
£0 - £20,000
-
6
8
54
8
60
71
521
£20,001 - £40,000
-
-
5
22
5
22
192
583
£40,001 - £60,000
-
-
5
6
5
6
248
266
£60,001 - £80,000
-
-
1
5
1
5
62
351
£80,001 - £100,000
-
-
2
1
2
1
177
89
-
6
21
88
21
94
750
1,810
The total costs in the above table include all exit packages that were paid or agreed in each
year.
30.
TERMINATION BENEFITS
Costs shown in Note 29 on exit packages include a number of termination payments. During
2013/14, the actual number of staff whose contracts were terminated as part of the voluntary
early release scheme was 88 at a cost of £1.77m (21 employees at a cost of £0.75m in
2012/13). The exit packages all related to police staff and no police officer termination
payments were made in either year.
31.
SOUTH YORKSHIRE JOINT SECRETARIAT
The South Yorkshire Joint Secretariat (SYJS) is a department of Barnsley MBC with a
primary role to provide independent, impartial financial, legal, policy and administrative
support and advice to the members of the PCC’s office and the other three South Yorkshire
Joint Authorities (Fire and Rescue, Integrated Transport and Pensions Authorities). The
costs of the SYJS are recharged based on the time spent on providing services to each; the
charge to the PCC for 2013/14 was £1.29m (£1.27m in 2012/13).
The SYJS provided certain statutory functions to the former Police Authority and the Chief
Officer of the SYJS served as both the Chief Executive and Treasurer with another officer
performing the role of Deputy Chief Executive, Solicitor and Monitoring Officer. Following
the introduction of Police and Crime Commissioners, the roles of Chief Executive and
Treasurer were separated and the Chief Executive role was filled on an interim basis by an
officer from within the SYJS until 20 January 2014 when the PCC made a direct
appointment to the post of Chief Executive and Solicitor as part of his own office. The
remuneration of this officer is included in Note 29.
From 1 April 2014, relevant officers have been transferred from the SYJS to the direct
employment of the PCC. The Treasurer was made redundant from Barnsley MBC on 31
March 2014.
The remuneration of these officers for 2013/14, including employer pension contribution, is
shown below together with the charge to the PCC:
66
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
2013/14
32.
Salary Compensation
for loss of
office
£
£
Pension
Contribution
Total
Charged to
PCC
£
£
£
Interim Chief Executive and
Monitoring Officer
(to 19 January 2014)
68,091
-
13,346
81,437
81,437
Treasurer
90,629
41,279
9,128
141,036
42,935
Comparative Figures for
2012/13
Salary Compensation
for loss of
office
£
£
Pension
Contribution
Total
Charged to
PCC
£
£
£
Chief Executive &
Treasurer
(1 Apr to 31 Aug 2012)
39,178
-
5,485
44,663
29,469
Deputy Chief Executive,
Solicitor and Monitoring
Officer
(1 April to 31 August 2012)
73,676
-
14,440
88,116
54,626
Interim Chief Executive and
Monitoring Officer
(From 1 Sept 2012)
49,583
-
9,718
59,301
59,301
Treasurer
(From 1 Sept 2012)
61,329
-
12,020
73,349
26,947
EXTERNAL AUDIT COSTS
The following costs have been incurred in relation to services provided by the external
auditors; KPMG with effect from the 2013/14 audit, previously the Audit Commission:
Group
PCC
Group
2012/13
2013/14
£000
£000
83
58
(6)
(4)
1
78
33.
PCC
1
£000
£000
Fees payable with regard to external
audit services carried out by the
appointed auditor for the year
77
52
Audit Commission rebate
(8)
(8)
Fees payable in respect of others
services provided during the year
55
69
GRANT INCOME
67
44
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
The PCC credited the following grants and contributions to the Comprehensive Income and
Expenditure Statement in the year:
2012/13
£000
2013/14
£000
Credited to Taxation and Non Specific Grant Income
(90,050)
DCLG funding (Revenue Support Grant / National Non Domestic Rates)
Council Tax support funding
(102,748)
(32,060)
(9,560)
Police Grant
(110,040)
Home Office Pension Grant
(30,899)
Other non-ring fenced Grants
(2,758)
(817)
(228,433)
(107)
Home Office Capital Grant
(2,474)
Other capital grants
(1,837)
Total
(241,127)
2012/13
£000
(216)
(1,324)
(86,210)
2013/14
£000
Credited to Services
Hillsborough Archive Project / Inquest
(4,200)
Community Safety Fund
(3,187)
South Yorkshire Safety Camera Partnership
(1,285)
(903)
Home Office Dedicated Security Posts
(865)
(759)
Debt Charges
(782)
Community Support Officers
(544)
(325)
Criminal Records Bureau Checks
(424)
(396)
Prevent Funding
(387)
(270)
Anti Social Behaviour
(251)
Victims Support Services
(243)
(233)
Beat Team
(233)
(144)
Drug Intervention Programme
(170)
(332)
Metal Theft Funding
(120)
(116)
Prisons Intelligence
(117)
(251)
Robin Hood Doncaster Sheffield Airport
(94)
(111)
Children and Young Persons Officer funding
(60)
(7,169)
-
(1,020)
Road Safety
South Yorkshire Drug Testing Pilot
(191)
Youth Offending Teams
(836)
Other Miscellanous Grants
(14,596)
(238)
(756)
Total
(13,956)
68
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
The PCC has received a number of grants and contributions that have yet to be recognised
as income as they have conditions attached to them that will require the monies to be
returned to the giver if not met. The balances at the year-end are as follows:
31 March
2013
31 March
2014
£000
£000
Capital Grants Receipts in Advance
(134)
(134)
Mobile Information (National Police Improvement Agency)
(134)
Oracle System Upgrade
(132)
Total PCC and Group
(266)
Revenue Grants Receipts in Advance
(116)
34.
UKHTC Human Trafficking
(116)
(43)
Local Criminal Justice Board
(55)
(24)
Case Preparation System
(25)
National Police Procurement Hub
(25)
(70)
NHS Commissioning
(83)
(143)
Other miscellaneous revenue grants
(92)
(421)
Total PCC and Group
-
(371)
RELATED PARTIES
The PCC is required to disclose material transactions with related parties – bodies or
individuals that have the potential to control or influence the PCC or to be controlled or
influenced by the PCC. Disclosure of these transactions allows an assessment of the extent
to which the PCC might have been constrained in his ability to operate independently or
might have secured the ability to limit another party’s ability to bargain freely with the PCC.
Central Government
Central Government has significant influence over the general operations of the PCC. It is
responsible for providing the statutory framework within which the PCC operates, and
provides the majority of funding in the form of grants and prescribes the terms of many of
the transactions that the PCC has with other parties (for example council tax bills). Grants
received from government departments are set out in Notes 10 and 33.
Officers
Certain officers might also be in a position to influence significantly the policies of the PCC.
No material related party transactions have been identified following consultation with
relevant officers.
69
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
Other Public Bodies (subject to common control by central government)
Rotherham MBC manages the debt taken over from the former South Yorkshire County
Council on behalf of the PCC. Details are set out in Note 22.
South Yorkshire Joint Secretariat, a department of Barnsley MBC, provides advice and
support to the PCC and details are set out in Note 31.
35.
CAPITAL EXPENDITURE AND CAPITAL FINANCING
The total amount of capital expenditure incurred in the year is shown in the table below,
together with the resources that have been used to finance it. Where capital expenditure is
to be financed in future years by charges to revenue as assets are used by the PCC, the
expenditure results in an increase in the Capital Financing Requirement (CFR), a measure
of the capital expenditure incurred historically by the PCC that has yet to be financed.
2012/13
£000
34,829
2013/14
£000
Opening Capital Financing Requirement
34,577
Capital Investment
7,415
Property, Plant and Equipment
4,913
1,642
Intangible Assets
1,413
Sources of Finance
(584)
(5,163)
Capital receipts
(683)
Government grants and contributions
(4,281)
Sums set aside from revenue:
(1,808)

Direct revenue contributions
(1,362)
(1,754)

Minimum Revenue Provision
(1,736)
34,577
Closing Capital Financing Requirement
32,841
Represented by:
(252)
Increase / (Decrease) in underlying need to borrow
70
(1,736)
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
36.
LEASES
PCC as Lessee
Finance Leases
The PCC currently has two properties which have been acquired under finance leases which
are carried as Property, Plant and Equipment in the Balance Sheet with the following net
amounts:
31 March
2013
31 March
2014
£000
£000
3,605
Land and Buildings
3,555
3,605
Total
3,555
The PCC acquired the lease of one property for 999 years and paid a premium of £1.8m in
2008 with an ongoing charge of £200 per annum. In 2011, the PCC acquired the lease of
land for 999 years, paying a premium of £0.125m.
Operating Leases
The PCC currently has operating leases for some properties, computer equipment and a
small number of vehicles. The future minimum lease payments due under non-cancellable
leases in future years are:
31 March
2013
31 March
2014
£000
£000
465
1,129
1
1,595
Not later than one year
411
Later than one year and not later than five years
718
-
Later than five years
Total
1,129
The expenditure charged to the Comprehensive Expenditure and Income Statement during
the year in relation to these leases was £0.465m in 2013/14 (£0.578m in 2012/13)
PCC as Lessor
Finance Leases
The PCC has not granted any finance leases.
71
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
Operating Leases
The following future minimum lease payments are receivable under non-cancellable leases
in future years:
31 March
2013
31 March
2014
£000
£000
8
Not later than one year
-
-
Later than one year and not later than five years
-
8
Total
-
The PCC leased out property to provide a 24 hour telephone helpline to deal with nonemergency crime, community safety and anti-social behavior issues. This lease has now
ceased.
37.
IMPAIRMENT LOSSES
There have been no impairment losses on Property, Plant and Equipment or Intangible
Assets during the year.
38.
DEFINED BENEFIT PENSION SCHEMES
Participation in Pensions Schemes
As part of the terms and conditions of employment of his and the Chief Constable’s
employees, the PCC makes contributions towards the cost of post employment benefits.
Although these benefits will not actually be payable until employees retire, the PCC has a
commitment to make the payments and this needs to be disclosed at the time that
employees earn their future entitlement.
The PCC participates in three pension schemes as explained in the Accounting Policies:
Pension schemes for police officers (PPS 1987 and 2006) and the Local Government
Pension Scheme (LGPS) for support staff, administered by the South Yorkshire Pensions
Authority.
Injury awards are payable irrespective of whether a police officer is a member of the
Pension Scheme and tax rules from 1 April 2006 prevent injury awards from being part of
pension scheme regulations. Injury awards have been moved into a separate Police
Compensation Scheme (PCS) and under the pensions financial arrangements they must be
paid from the PCC’s operating account and not the Pension Fund Account. The injury
awards have been accounted for as part of the pensions adjustments and information
relating to these injury awards are disclosed separately in the following notes.
Transactions relating to Post-employment Benefits
The cost of retirement benefits is recognised in the reported Group Cost of Services when
they are earned by employees, rather than when the benefits are eventually paid as
pensions. However, the charge required against council tax is based on the cash payable in
the year, so the real cost of post-employment / retirement benefits is reversed out of the
General Fund via the Group Movement in Reserves Statement. The following transactions
72
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
have been made in the Group Comprehensive Income and Expenditure Statement and the
General Fund Balance via the Group Movement in Reserves Statement during the year:
2013/14
PPS
1987
PPS
2006
PCS
LGPS
Total
£000
£000
£000
£000
£000
48,030
6,870
1,130
11,194
67,224
Comprehensive Income and Expenditure
Statement
Cost of Services

Current service cost

Past service cost
-
-
30
-
30

Curtailments
-
-
-
473
473
103,310
2,100
3,980
3,470
112,860
151,340
8,970
5,140
15,137
180,587
-
-
-
(6,787)
(6,787)
(260)
(10)
180
4,768
4,678
Financing and Investment Income and
Expenditure

Net interest expense
Total post employment benefit charged to
the Surplus or Deficit on the Provision of
Services
Other post employment benefit charged to
the Comprehensive Income and Expenditure
Statement
Remeasurement of the net defined benefit
liability comprising:

Return on plan assets (excluding the
amount included in the net interest
expense)

Actuarial gains and losses arising on
changes in demographic assumptions

Actuarial gains and losses arising on
changes in financial assumptions
(72,660)
(4,060)
(2,220)
(24,882)
(103,822)

Experience gains and losses
(40,270)
(1,355)
(6,955)
1,213
(47,367)
38,150
3,545
(3,855)
(10,551)
27,289
(151,340)
(8,970)
(5,140)
(15,137)
(180,587)
21,852
3,244
-
7,601
32,697
-
-
1,655
-
1,655
36,298
(5,399)
-
-
30,899
Total post employment benefit charged to
the Comprehensive Income and Expenditure
Account
Movement in Reserves Statement

Reversal of net charges to Surplus or
Deficit for the Provision of Services for
post employment benefits in accordance
with the Code
Actual amount charged against the General
Fund Balance for pensions in the year

Employer’s contribution payable

Retirement benefits payable to pensioners

Additional contribution to Police Pension
Fund Account to balance deficit
73
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
Comparative figures for 2012/13 are:
PPS
1987
PPS
2006
PCS
LGPS
Total
£000
£000
£000
£000
£000
39,130
4,430
980
8,708
53,248
-
-
40
-
40
(1,810)
-
-
267
(1,543)
98,430
1,510
3,920
2,275
106,135
135,750
5,940
4,940
11,250
157,880
 Actuarial (gains) and losses
(approximately equivalent to Remeasurement of
the net defined benefit liability in 2013/14)
310,339
8,907
9,189
17,729
346,164
Total post employment benefit charged to
the Comprehensive Income and Expenditure
Statement
446,089
14,847
14,129
28,979
504,044
(135,750)
(5,940)
(4,940)
(11,250)
(157,880)
22,432
2,844
-
7,164
32,440
-
-
1,599
-
1,599
36,777
(4,717)
-
-
32,060
2012/13
Comprehensive Income and Expenditure
Statement
Cost of Services

Current service cost

Past service cost

Curtailments
Financing and Investment Income and
Expenditure

Interest cost net of expected return on
scheme assets
(approximately equivalent to net interest
expense in 2013/14)
Total post employment benefit charged to
the Surplus or Deficit on the Provision of
Services
Other post employment benefit charged to
the Comprehensive Income and Expenditure
Statement
Movement in Reserves Statement

Reversal of net charges to Surplus or Deficit
for the Provision of Services for post
employment benefits in accordance with the
Code
Actual amount charged against the General
Fund Balance for pensions in the year

Employer’s contribution payable

Retirement benefits payable to pensioners

Additional contribution to Police Pension
Fund Account to balance deficit
74
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
Pensions Assets and Liabilities recognised in the Group Balance Sheet
The amount included in the Balance Sheet arising from the PCC’s obligation in respect of
defined benefit plans is as follows:
PPS
1987
31 March 2014
Present value of defined benefit obligation
PCS
LGPS
£000
£000
£000
£000
2,387,500
50,050
87,300
285,149
-
-
-
(220,821)
2,387,500
50,050
87,300
64,328
Fair value of plan assets
Net liability arising from defined benefit
obligation
PPS
2006
Comparative figures for 2012/13 are:
PPS
1987
31 March 2013
Present value of defined benefit obligation
PCS
LGPS
£000
£000
£000
£000
2,407,500
44,350
92,810
281,701
-
-
-
(199,221)
2,407,500
44,350
92,810
82,480
Fair value of plan assets
Net liability arising from defined benefit
obligation
PPS
2006
Reconciliation of the Movements in the Fair Value of the LGPS (Plan) Assets
31 March
2013
31 March
2014
£000
£000
169,378
Opening fair value of scheme assets at 1 April
199,221
Interest income
(Expected rate of return in 2012/13)
8,893
Remeasurement (gains) and losses - return on plan assets
(Actuarial gains in 2012/13)
6,787
7,164
Contributions from employer
7,601
3,404
Contributions from employees into the scheme
3,404
9,658
13,865
(4,248)
199,221
Benefits paid
(4,875)
Administration expenses
(210)
Closing fair value of scheme assets at 31 March
75
220,821
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
Reconciliation of Present Value of the Scheme Liabilities (Defined Benefit Obligation)
PPS
1987
2013/14
Opening balance at 1 April
Current service cost
Interest cost
Contributions from Scheme participants
PPS
2006
PCS
LGPS
£000
£000
£000
£000
2,407,500
44,350
92,810
281,701
48,030
6,870
1,130
10,984
103,310
2,100
3,980
12,363
11,690
1,530
-
3,404
Remeasurement (gains) and losses

actuarial gains/losses arising from changes
in demographic assumptions
(260)
(10)
180
4,768

actuarial gains/losses arising from changes
in financial assumptions
(72,660)
(4,060)
(2,220)
(24,882)

experience gains and losses
(40,269)
(1,355)
(6,955)
1,213
-
-
30
-
Benefits paid
(69,841)
625
(1,655)
(4,875)
Curtailments
-
-
-
473
2,387,500
50,050
87,300
285,149
Past service cost
Closing balance at 31 March
Comparative figures for 2012/13 are:
PPS
1987
2012/13
Opening balance at 1 April
PPS
2006
PCS
LGPS
£000
£000
£000
£000
2,020,620
27,630
80,280
230,043
Current service cost
39,130
4,430
980
8,708
Interest cost
98,430
1,510
3,920
11,933
Contributions from Scheme participants
11,199
1,230
-
3,404
310,339
8,907
9,189
31,594
-
-
40
-
Benefits paid
(70,408)
643
(1,599)
(4,248)
Curtailments
(1,810)
-
-
267
2,407,500
44,350
92,810
281,701
Remeasurement (gains) and losses
Past service cost
Closing balance at 31 March
Local Government Pension Scheme Assets comprise:
76
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
31 March 2013
£000
31 March 2014
%
£000
%
Equities
42,437
21.3

UK quoted
48,000
21.7
78,419
39.4

Overseas quoted
88,335
40.0
120,856
60.7
136,335
61.7
22,981
10.5
5,790
2.6
13,768
6.2
885
0.4
43,424
19.7
18,499
8.4
3,177
1.4
21,676
9.8
14,908
6.8
14,908
6.8
4,478
2.0
4,478
2.0
220,821
100.0
Bonds
23,002
11.5

UK government indexed
5,116
2.6

Overseas government fixed
13,314
6.7

UK other
1,345
0.7

Overseas other
42,777
21.5
Property
15,525
7.8

UK direct
2,749
1.4

Property funds
18,274
9.2
Alternatives
14,107
7.0
14,107
7.0

Pooled investment vehicles
Cash
3,207
1.6
3,207
1.6
199,221
100.0

Cash accounts
Total scheme assets
All scheme assets have quoted prices in active markets except pooled investment vehicles.
Basis for Estimating Assets and Liabilities
Liabilities have been assessed on an actuarial basis using the projected unit credit method,
which is an estimate of the pensions that will be payable in future years dependent on
assumptions including mortality rates, employee turnover and salary levels. The liabilities of
the Police Pension and Compensation Schemes have been assessed by the Government
Actuary’s Department (GAD). The LGPS fund liabilities have been assessed by Mercer,
using estimates based on the latest full valuation of the scheme as at 31 March 2013.
The significant assumptions used by the actuaries have been:
77
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
2012/13
PPS
2013/14
LGPS
PPS
LGPS
Long-term expected rate of return on assets:
-
7.0%
Equity investments
-
7.0%
-
2.8%
Government bonds
-
3.4%
-
3.9%
Other bonds
-
4.3%
-
5.7%
Property
-
6.2%
-
0.5%
Cash / Liquidity
-
0.5%
Mortality Assumptions:
Longevity at 65 for future pensioners (in years)
25.7
23.7

Men
25.6
25.2
27.9
26.6

Women
28.0
28.3
Longevity at 65 for current pensioners (in years)
23.4
21.8

Men
23.4
22.9
25.8
24.7

Women
25.9
25.5
Financial Assumptions:
2.5%
2.4%
Rate of Inflation (CPI)
2.5%
2.4%
4.7%
4.1%
Rate of Increase in Salaries
4.5%
4.2%
2.5%
2.4%
Rate of Increase in Pensions
2.5%
2.4%
4.3%
4.4%
Rate for Discounting Scheme Liabilities
4.4%
4.6%
The estimation of the defined benefit obligations is sensitive to the actuarial assumptions set
out in the above table. The sensitivity analyses in the following tables have been provided by
the actuaries and have been determined based on reasonably possible changes in
assumptions occuring at the end of the reporting period and assumes for each change that
the assumption analysed changes while other other assumptions remain constant. The
assumptions for longevity, for example, assume that life expectancy increases or decreases
for men and women. In practice, this is unlikely to occur, and changes in some of the
assumptions may be interrelated. The estimations in the sensitivity analysis have followed
the accounting policies for the scheme, that is on an actuarial basis using the projected unit
credit method. The methods and types of assumptions used in preparing the sensitivity
analysis below did not change from those used in the previous period.
Impact on the Defined Benefit Obligation in the Schemes
78
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
PPS
Assumption
Increase / (Decrease)
1987 Scheme
2006 Scheme
£000
£000
Longevity - increase by one year
44,000
700
Rate of increase in salaries – increase by 0.5%
50,000
5,200
Rate of increase in pensions – increase by 0.5%
212,000
4,500
(262,000)
(9,700)
Rate of discounting scheme liabilities – increase by 0.5%
LGPS
Increase / (Decrease)
Assumption
£000
Longevity - increase by one year
5,274
Rate of inflation – increase by 0.5%
33,425
Rate of increase in salaries – increase by 0.5%
11,585
Rate of discounting scheme liabilities – increase by 0.5%
(32,655)
Impact on the PCC’s Cash Flows
The objectives of the LGPS are to keep employer’s contributions at as constant a rate as
possible. The strategy agreed with the actuary is to achieve a funding level of 100% over the
next 22 years. The next triennial valuation is due for 31 March 2016. The contributions in
respect of the Police pension schemes are determined by the government.
The liabilities show the underlying commitments that the PCC has in the long run to pay
employment benefits. The total liability of £2,589.2m has a substantial impact on the net
worth of the PCC as recorded in the Balance Sheet, resulting in a negative overall balance
of £2,511.4m.
However, statutory arrangements for funding the deficit mean that the financial position of
the PCC remains healthy:

the deficit on the LGPS will be made good by increased contributions over the remaining
working life of the employees (ie before payments fall due), as assessed by the scheme
actuary

finance is only required to be raised to cover Police Pensions when the pensions are
actually paid.
The total contributions expected to be made to the LGPS by the PCC in the year to 31
March 2015 is £8.3m. Expected contributions for the Police Pensions Schemes in the year
to 31 March 2015 are £26.3m.
The weighted average duration of the defined benefit obligation for scheme members is:
39.

LGPS – 23 years

PPS 1987 – 21 years

PPS 2006 – 38 years.
REGIONAL WORKING
79
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
The PCC and Chief Constable engage with the other Yorkshire and Humber PCCs and
Chief Constables to deliver a number of specific services on a regional basis. The Regional
Collaboration Programme was developed to bring opportunities across many policing
activities whilst retaining local identity and accountability.
Up to September of this year, regional services were operated on a regional collaboration
basis with the financial administration of regional budgets being led by West Yorkshire.
South Yorkshire Police acted as lead employer in order to provide consistent employment
policies and practices. The other Yorkshire and Humber Police PCCs agreed to indemnify
the PCC to ensure that any costs are shared in the event of any employment tribunal or civil
court claims related to regional employment.
From September 2013, a Lead Force model has been adopted for each functional area of
regional collaboration, with the Regional Collaboration Board retaining the governance over
all the arrangements.
As regional lead employer, costs of £4.101m have been incurred up to September 2013 in
relation to the Yorkshire and the Humber regional collaboration work and £1.232m has been
received from the region, leaving £2.869m (£2.79m in 2012/13 for the full financial year) as a
contribution towards regional working within the Group Financial Statements.
West Yorkshire published memorandum accounts for the Regional Collaboration
Programme within their Financial Statements. The memorandum accounts for 2013/14 up to
the end of the collaborative agreement in September show the following information:
2012/13
£000
8,957
502
2,725
545
2013/14
£000
Staff Costs
8,799
Property related expenses
437
Supplies and services
4,090
Transport related expenses
406
12,729
Expenditure
13,732
(11,197)
Contributions
(11,253)
(1,663)
Other income
(2,572)
(12,860)
(131)
Income
(13,825)
Surplus in year
(93)
(2,157)
Humberside Police
(2,024)
(1,504)
North Yorkshire Police
(1,375)
(2,790)
South Yorkshire Police
(2,869)
(4,746)
West Yorkshire Police
(4,986)
(11,197)
Total
(11,254)
From September, South Yorkshire Police is the Lead Force for Regional Procurement and
Firearms and therefore it provides all the financial administration necessary to ensure that
80
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
the costs are properly captured and fully recharged to the four participating PCCs and Chief
Constables.
The summary position for these services for the year from September 2013 is outlined
below.
2012/13
£000
Procurement
2013/14
£000
Firearms
2013/14
£000
867
37
-
Staff Costs
-
Property related expenses
10
-
-
Supplies and services
50
-
-
Transport related expenses
29
-
-
Expenditure
956
37
-
Contributions
(953)
(46)
-
Income
(953)
(46)
-
Deficit/(Surplus) in year
3
(9)
-
Humberside Police
(172)
(8)
-
North Yorkshire Police
(129)
(6)
-
South Yorkshire Police
(243)
(12)
-
West Yorkshire Police
(409)
(20)
-
Total
(953)
(46)
In addition, the PCC has entered into collaborative working arrangements with Humberside
PCC with the creation of two joint services, Human Resources (HR) and Information and
Communication Technology (ICT). Each of these ventures has a collaboration agreement
under Section 22A of the Police Act 1996 covering the main responsibilities. The costs of
each are shared based on the size of the respective budgets, assessed using a measure of
“net revenue expenditure”.
The summary position for each of these services is outlined below:
81
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
Human
Resources
2013/14
£000
Information and
Communication
Technology
2013/14
£000
9,639
3,972
1
-
Supplies and services
301
358
Transport related expenses
328
113
-
223
Expenditure
10,269
4,666
Contributions
(10,138)
(4,666)
Other Income
(131)
-
(10,269)
(4,666)
-
-
Humberside Police
(4,279)
(1,904)
South Yorkshire Police
(5,859)
(2,762)
(10,138)
(4,666)
Staff Costs
Property related expenses
Third Party Costs
Income
Deficit/(Surplus) in year
Total
40.
EVENTS AFTER THE BALANCE SHEET DATE
The Statement of Accounts was authorised for issue by the Interim Treasurer on 30th
September 2014. Events taking place after this date are not reflected in the financial
statements or notes. There are no material events after the balance sheet date that require
the financial statements to be revised.
The financial statements and notes have not been adjusted for the following event which
took place after 31 March 2014. On the 26th August Professor Alexis Jay OBE published the
results of an independent enquiry into Child Sexual Exploitation (CSE) in Rotherham
between 1997 and 2013. This report has resulted in the Chief Constable ordering an
independent investigation into how South Yorkshire Police historically responded to items
disclosed in the report. No financial claims have been received by the PCC or the Chief
Constable and the cost of the independent enquiry have not been assessed.
41.
CONTINGENT LIABILITIES
The PCC has the following contingent liabilities.

The PCC’s former insurance company, MMI Limited, ceased trading in September 1992
and a ‘Scheme of Arrangement’ was agreed in case of insolvency, involving a claw back
of claims paid. The PCC was notified by the Scheme Administrators in 2012/13 that the
Scheme had been triggered and a levy of £1.5m, representing 15% of the value of total
claims payments made to date, was payable in 2013/14. This sum was set aside in the
insurance provision at 31 March 2013 to meet the levy payment. However the position is
82
THE POLICE AND CRIME COMMISSIONER FOR SOUTH YORKSHIRE
STATEMENT OF ACCOUNTS 2013/14
NOTES TO THE ACCOUNTS
reviewed each year and further levies could become payable. The maximum liability is
around £8.6m.

There is still significant uncertainty around the costs that will arise in connection with the
Hillsborough Inquests which began this Spring and are likely to last until next Summer /
Autumn. This uncertainty relates not only to the level of costs that will need to be met in
relation to financial assistance applications to support former officers involved in the
Inquests, but also the extent to which the Home Office will reimburse such funding as a
result of their conditional agreement to the PCC’s Special Grant Application. A dialogue
has commenced with the Home Office on the detail and it is expected that clarity will
emerge over the coming months.
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POLICE PENSION FUND ACCOUNT AND NOTES
2012/13
£000
2013/14
£000
£000
Contributions Receivable
From the PCC
(24,948) 
(327) 
(24,179)
Normal
(916)
Early retirements
(12,429) Officers’ Contributions
(13,214)
(37,704)
(38,309)
(726) Transfers In from Other Schemes
(947)
Benefits Payable
53,174  Pensions
56,047
15,667  Commutations and lump sum retirement benefits
13,547
- 
86
Death benefits
68,841
69,680
Payments to and on account of Leavers
5  Refunds of contributions
7
1,644  Transfers out to other Schemes
32,060 Net Amount Payable for the year
(32,060) Additional Contribution from the PCC
468
475
30,899
(30,899)
- Net Amount Payable / Receivable for Year
-
NET ASSETS STATEMENT
31 MARCH
2013
£000
31 MARCH
2014
£000
Current Assets
-  Contributions due from the PCC
65
-  Contributions due from Officers
36
-  Amount owing from General Fund
39
Current Liabilities
- 
(140)
Unpaid pensions benefits
- TOTAL
-
The payroll date for police officers fell on the 31st March 2013 so there were no assets or
liabilities due or received in advance in the previous year. There is an adjustment for one
day for 2013/14.
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POLICE PENSION FUND ACCOUNT AND NOTES
Notes to the Pension Fund Account
The Police Pension Fund Account is operated in accordance with the Police Pension Fund
Regulations 2007 (SI 2007 No 1932), which specifies the amounts that must be paid into
and out of the Fund. The Chief Constable administers the Fund Account on behalf of the
PCC although no cash is transacted by the Chief Constable, with all payments and receipts
being made by the PCC.
An employer’s contribution is paid into the Fund, together with contributions from employees
who are members of the Police Pensions Schemes. The contribution rates are based on
percentages of pensionable pay, as determined nationally by the Government and subject to
triennial revaluation by the Government Actuary’s Department. The current contribution
rates are 37.7% to 38.2% for the 1987 Scheme (24.2% for the employer and 13.5% to 14%
for employees) and 34.9% to 36.2% for the 2006 Scheme (24.2% for the employer and
10.7% to 12% for employees). Payments are also made into the Fund in respect of ill health
retirements.
The schemes are unfunded which means that there are no investment assets built up to
meet pensions payments. The Pension Fund Account is therefore balanced to nil each year
by a transfer from the PCC’s General Fund which then receives a top-up grant from the
Government if contributions are insufficient to meet the defined pensions benefits payable.
Any surpluses on the Fund are repayable to the Government.
The accounting policies adopted for the Pension Fund follow those set out in the Statement
of Accounting Policies (Note 1). However the Net Assets Statement does not include
liabilities to pay pensions and other benefits after the Balance Sheet date. These are dealt
with within the Group Financial Statements in accordance with the application of
International Accounting Standard 19 - Retirement Benefits.
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INDEPENDENT AUDITOR’S REPORT TO THE COMMISSIONER
Independent auditor’s report to the Police and Crime Commissioner for
South Yorkshire
We have audited the financial statements of the Police and Crime Commissioner for South
Yorkshire for the year ended 31 March 2014 on pages 9 to 85. The financial reporting framework
that has been applied in their preparation is applicable law and the CIPFA/LASAAC Code of
Practice on Local Authority Accounting in the United Kingdom 2013/14.
This report is made solely to the Police and Crime Commissioner in accordance with Part II of the
Audit Commission Act 1998. Our audit work has been undertaken so that we might state to the
Police and Crime Commissioner those matters we are required to state in an auditor’s report and for
no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the Police and Crime Commissioner for our audit work, for this report, or for
the opinions we have formed.
Respective responsibilities of the Interim Treasurer and auditor
As explained more fully in the Statement of the Interim Treasurer’s Responsibilities, the Interim
Treasurer is responsible for the preparation of the Statement of Accounts, which includes the
financial statements, in accordance with proper practices as set out in the CIPFA/LASAAC Code of
Practice on Local Authority Accounting in the United Kingdom 2013/14, and for being satisfied that
they give a true and fair view. Our responsibility is to audit, and express an opinion on, the financial
statements in accordance with applicable law and International Standards on Auditing (UK and
Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical
Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements
sufficient to give reasonable assurance that the financial statements are free from material
misstatement, whether caused by fraud or error. This includes an assessment of whether the
accounting policies are appropriate to the Police and Crime Commissioner’s and the Group’s
circumstances and have been consistently applied and adequately disclosed; the reasonableness of
significant accounting estimates made by the Interim Treasurer; and the overall presentation of the
financial statements.
In addition, we read all the financial and non-financial information in the Explanatory Foreword to
identify material inconsistencies with the audited financial statements and to identify any information
that is apparently materially incorrect based on, or materially inconsistent with, the knowledge
acquired by us in the course of performing the audit. If we become aware of any apparent material
misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion the financial statements:

give a true and fair view of the financial position of the Police and Crime Commissioner and the
Group as at 31 March 2014 and of the Police and Crime Commissioner’s and the Group’s
expenditure and income for the year then ended;

have been prepared properly in accordance with the CIPFA/LASAAC Code of Practice on Local
Authority Accounting in the United Kingdom 2013/14.
Matters on which we are required to report by exception
The Code of Audit Practice 2010 for Local Government Bodies requires us to report to you if:
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INDEPENDENT AUDITOR’S REPORT TO THE COMMISSIONER

the annual governance statement set out on pages 89 to 103 does not reflect compliance with
‘Delivering Good Governance in Local Government: a Framework’ published by
CIPFA/SOLACE in June 2007; or

the information given in the Explanatory Foreword for the financial year for which the financial
statements are prepared is not consistent with the financial statements; or

any matters have been reported in the public interest under section 8 of the Audit Commission
Act 1998 in the course of, or at the conclusion of, the audit; or

any recommendations have been made under section 11 of the Audit Commission Act 1998; or

any other special powers of the auditor have been exercised under the Audit Commission Act
1998.
We have nothing to report in respect of these matters.
Conclusion on the Police and Crime Commissioner for South Yorkshire’s
arrangements for securing economy, efficiency and effectiveness in the use of
resources
The Police and Crime Commissioner’s responsibilities
The Police and Crime Commissioner is responsible for putting in place proper arrangements to
secure economy, efficiency and effectiveness in the use of resources, to ensure proper stewardship
and governance, and to review regularly the adequacy and effectiveness of these arrangements.
Auditor’s responsibilities
We are required under Section 5 of the Audit Commission Act 1998 to satisfy ourselves that the
Police and Crime Commissioner has made proper arrangements for securing economy, efficiency
and effectiveness in the use of resources. The Code of Audit Practice issued by the Audit
Commission requires us to report to you our conclusion relating to proper arrangements, having
regard to relevant criteria specified by the Audit Commission.
We report if significant matters have come to our attention which prevent us from concluding that
the Police and Crime Commissioner has put in place proper arrangements for securing economy,
efficiency and effectiveness in the use of resources. We are not required to consider, nor have we
considered, whether all aspects of the Police and Crime Commissioner’s arrangements for securing
economy, efficiency and effectiveness in the use of resources are operating effectively.
Scope of the review of arrangements for securing economy, efficiency and effectiveness in
the use of resources
We have undertaken our audit in accordance with the Code of Audit Practice, having regard to the
guidance on the specified criteria, published by the Audit Commission October 2013, as to whether
the Police and Crime Commissioner has proper arrangements for:

securing financial resilience; and

challenging how it secures economy, efficiency and effectiveness.
The Audit Commission has determined these two criteria as those necessary for us to consider
under the Code of Audit Practice in satisfying ourselves whether the Police and Crime
Commissioner put in place proper arrangements for securing economy, efficiency and effectiveness
in the use of resources for the year ended 31 March 2014.
We planned our work in accordance with the Code of Audit Practice. Based on our risk assessment,
we undertook such work as we considered necessary to form a view on whether, in all significant
respects, the Police and Crime Commissioner had put in place proper arrangements to secure
economy, efficiency and effectiveness in the use of resources.
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Basis for qualified conclusion
In considering the Police and Crime Commissioner's arrangements for securing financial resilience,
we identified a failure to identify and manage the financial risks to the Police Fund in South
Yorkshire arising from the widespread Child Sexual Exploitation (CSE) problems in Rotherham.
Professor Alexis Jay OBE reported in August 2014 that 1,400 young people may have been victims
of CSE activity in Rotherham between 1997 and 2013. Although no claims have yet been made
against South Yorkshire Police, the Office of the Police and Crime Commissioner has yet to fully
consider and determine the scale of any potential legal claims that may be made, and the impact on
the Police Fund.
Qualified conclusion
On the basis of my work, having regard to the guidance on the specified criteria published by the
Audit Commission in October 2013, with the exception of the matter reported in the basis for
qualified conclusion paragraph above, I am satisfied that in all significant respects the Police and
Crime Commissioner for South Yorkshire put in place proper arrangements to secure economy,
efficiency and effectiveness in its use of resources for the year ending 31 March 2014.
Certificate
We certify that we have completed the audit of the financial statements of the Police and Crime
Commissioner for South Yorkshire in accordance with the requirements of the Audit Commission
Act 1998 and the Code of Audit Practice 2010 for Local Government Bodies issued by the Audit
Commission.
John Graham Prentice
For, and on behalf of, KPMG LLP Appointed Auditor
Chartered Accountants
1, The Embankment, Leeds, LS1 4DW
30 September 2014
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ANNUAL GOVERNANCE STATEMENT 2013/14
1.
Scope of Responsibility
1.1
The South Yorkshire Police and Crime Commissioner (‘the PCC’) is responsible for ensuring
that his business is conducted in accordance with statute and proper standards, and that
public resources are safeguarded and properly accounted for, and are used economically,
efficiently and effectively. The PCC also has a duty under the Local Government Act 1999 to
make arrangements to secure continuous improvement in the way in which its functions are
exercised, having regard to a combination of economy, efficiency and effectiveness (‘best
value’).
1.2
In discharging these overall responsibilities, the PCC is responsible for putting in place
proper arrangements for the governance of his activities, and facilitating the exercise of his
functions, which includes arrangements for ensuring that there is a sound system of internal
control and that arrangements are in place for the management of risk.
1.3
The PCC and the Chief Constable (‘CC’) have adopted a Corporate Governance Framework
which is consistent with the principles of the 2007 Chartered Institute of Public Finance and
Accountancy / Society of Local Authority Chief Executives (CIPFA/SOLANCE) framework
document “Delivering Good Governance in Local Governance” and the subsequent
addendum and guidance note for police issued in 2012. A copy of the framework documents
are available on the PCC’s website
at http://www.southyorkshire-pcc.gov.uk/DocumentLibrary/Policies-Lists-Registers/Code-of-Corporate-Governance.pdf or by writing to the
Chief Executive of the Office of the Police and Crime Commissioner, Regent Street,
Barnsley, South Yorkshire S70 2HG.
1.4
Good governance arrangements are the foundations on which the PCC establishes his
policies and the services he commissions to the communities of South Yorkshire. This said,
governance itself must be responsive to developments in services, expectations. The
Annual Governance Statement is an opportunity for the PCC to demonstrate that the
fundamentals of good governance remain in place, and that they are responding to internal
and external changes.
2.
The Purpose of the Corporate Governance Framework (Framework)
2.1
Governance is about how organisations ensure that they are doing the right things, in the
right way, for the right people, in a timely, inclusive, open and accountable manner. The
Framework comprises the systems, processes, culture and values by which the PCC is
directed and controlled, and the activities through which he accounts to, engages with, and
leads the community. The Framework enables the PCC to monitor the delivery of his Police
and Crime Plan priorities and to assess whether appropriate and cost effective services,
which provide value for money, are being delivered.
2.2
The system of internal control is a significant part of the Framework, and is designed to
manage and reduce risk to a reasonable level. It can, however, provide only reasonable and
not absolute assurance of the effectiveness. The system of internal control is a continuous
process, designed to identify and prioritise risks to the achievement of the Commissioner’s
policies, aims and objectives, to evaluate the likelihood of those risks being realised and the
impact should they happen, and to manage them economically, efficiently and effectively.
2.3
The Framework as set out in this statement has been in place for the year ending 31st March
2014, and up to the date of approval of the annual Statement of Accounts.
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3.
The Corporate Governance Framework (Framework)
3.1
Introduction
The scope of the Framework spans the whole range of the PCC’s responsibilities and
activities. The following sections consider the main components of this Framework and the
associated activities. The PCC’s overall approach is entirely consistent with the principles
highlighted, by the Good Governance Standard for Public Service, which builds on the
‘Nolan principles’ for the conduct of individuals in public life, by setting out six core principles
of good governance for public service organisations. These principles are:
 Focus on outcomes for local people
 Clarity of roles and functions
 Promotion of values and demonstrating these through behaviour
 Informed, transparent decisions and managing risk
 Developing capacity and capability
 Engaging with local people to ensure robust accountability
The above principles underpin the PCC’s arrangements as demonstrated below.
3.2
Arrangements for identifying and communicating the PCC’s vision of purpose and
intended outcomes for the people of South Yorkshire
The PCC’s Strategic Planning Process (‘Process’) is continuous and iterative, allowing for
changes/developments to reflect the changing policing and crime needs for the people and
communities within South Yorkshire. The Process is increasingly complex and dynamic, and
is set against a background of on-going budget cuts, increasingly important regional and
national structures, and the Government’s vision for locally accountable policing and crime
services. The following information is considered as part of the PCC’s Process:






Views of Government and Her Majesty’s Inspectorate of Constabulary
The National Strategic Intelligence Assessment
The Strategic Policing Requirement
The Force’s Strategic Assessment
The results of consultation and engagement activity with the public
Partner needs assessments and priorities
The PCC’s Vision, Mission and Strategic priorities are set out below and within his Police
and Crime Plan 2012/17:
Vision
90
To make South Yorkshire the safest place to live, learn, work and run
businesses
Mission
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3.3
Arrangements for reviewing the PCC’s Vision, Mission and Strategic Priorities, the
implications for the PCC’s governance arrangements.
The PCC’s continuous and iterative Process includes talking with, and listening to, the views
of the diverse communities within South Yorkshire, as well as key partners including the local
authorities and Probation Service. This Process not only informs the PCC’s priorities, but
also enables him to review service quality and assists with holding the CC and other service
providers to account.
The austerity measures put in place by this Government have had a direct effect on the
services and initiatives that the police and partners can deliver. The PCC has agreed to
support activities with key partners, such as Community Safety Partnerships, because the
services they deliver are intertwined in policing matters and community safety issues. Last
year the PCC committed funding for the next 3 years to enable these organisations to
continue to deliver existing and new initiatives which will assist him in delivering his priorities.
The PCC also provides Grants to organisations and community groups which help support
the delivery of his key priorities. Robust monitoring of project outcomes, together with
detailed financial monitoring of funding, provides assurance that all Grant funding is being
utilised in accordance with the Grant Conditions imposed at the time of awarding the Grant.
In March 2014 an Internal Audit report gave the Commissioner a rating of ‘Substantial
assurance’ in relation to the internal control framework surrounding his Grant giving.
During 2014/15 it is the PCC’s intention to continue his active role in the partnership
landscape of South Yorkshire, including refreshing the current partnership arrangements to
ensure they continue to deliver.
As part of a review of the Corporate Governance Framework the PCC, is looking to
strengthen his mechanisms for holding the force, and other service providers to account for
delivering the outcomes identified in the Police and Crime Plan. See Section 3.4 for more
details.
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3.4
Arrangements for measuring the quality of services for users, for ensuring they are
delivered in accordance with the PCC’s objectives and for ensuring that they
represent the best use of resources and value for money.
In addition to the PCC’s consultation and engagement processes, service quality, and failure
in service delivery is also measured by, the number and types of complaints made against
the Force. The PCC is responsible for monitoring the number and types of complaints, and
receives regular information supplied by the Force Professional Standards Department. In
order to gain a rounded view of complaints against South Yorkshire Police, the PCC also
receives updates from the Independent Police Complaints Commissioner (‘IPCC’) and meets
with the Region’s Commissioner who is responsible for providing independent oversight of,
and taking ultimate responsibility for, IPCC investigations, casework and the promotion of
public confidence in the complaints system.
The PCC receives a large amount of correspondence from members of the public, a large
number of which is in relation to the policing service they receive.
South Yorkshire Police carry out a User Satisfaction Survey which is a monthly telephone
survey that monitors satisfaction from victims of crime. The survey is a Home Office
requirement and the data informs service improvements locally. For example, Track my
Crime was initially proposed as a result of low ‘follow-up’ scores in the satisfaction survey,
which has consistently been the poor performer comparatively when looking at all aspects of
the survey.
Staff from the Office of the Police and Crime Commissioner (‘OPCC’) attend a number of
partnership meetings and force internal meetings and the PCC receives regular updates on
progress being made against his priorities.
The PCC has an Efficiency Advisory Panel which consists of representatives from the South
Yorkshire businesses community, and assists the PCC in considering how more might be
done for less, whilst meeting increasing expectations in policing and crime services.
The Yorkshire and the Humber PCCs and the Regional CCs are jointly responsible for
ensuring that the supply of goods, services, and works are procured in accordance with
relevant legislation, and in the most cost effective manner.
Value for Money (VfM) profiles are produced annually by HMIC and these facilitate
comparison between South Yorkshire Police and other Forces. These profiles have helped
to identify areas of activity where cost improvements may be delivered. South Yorkshire
Police have for several years been following a programme of continuous improvements,
based around evaluating processes and structures to identify and deliver efficiencies and
cost reductions.
Work is currently taking place to provide the PCC with a robust mechanism for interrogating
force and partners agencies’ contributions to the achievement of his priorities. The aims and
key principles of the framework are:

Focus on long-term, sustainable improvements
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


3.5
Ensure reasons for change are, where appropriate, informed by research and
evaluation
Provide a mechanism to hold the force and partners to account for the legacy of their
decisions
Ensure that learning informs future resourcing decisions
Arrangements for defining and documenting the roles and responsibilities of the CC
and statutory officers and establishing clear delegation arrangements and protocols
for effective communication.
The Policing Protocol Order 2011, which has been issued by the Home Secretary, sets out
the framework within which the PCC is expected to work with the CC and Police and Crime
Panel. The purpose of the Order is to enhance policing for local communities and clarify the
functions of the respective parties.
To recognise that the PCC and CC are corporations’ sole under the Police Reform and
Social Responsibility Act, 2011, they have jointly agreed a Corporate Governance
Framework (Framework) based on a model developed by the Association of Police and
Crime Commissioners Chief Executive (APACE). The Framework describes how they will
govern as corporations’ sole, both jointly and separately. The Framework consists of:

A Statement of Corporate Governance – setting out the Statutory Framework
and its local application.

A Code of Corporate Governance – setting out how the core principles will be
implemented.

A Scheme of Corporate Governance – defining the parameters within which the
Corporation Soles will conduct their business.

Separate policies and procedures for each Corporation Sole, with protocols where
they operate jointly.

A Memorandum of Understanding detailing roles and responsibilities.
A copy of these documents can
http://www.southyorkshire-pcc.gov.uk.
be
obtained
from
the
PCC’s
website
at
These enactments also enable, in broad terms, the proposed transfer of various statutory
responsibilities relating to assets, liabilities and staff from the PCC to the CC. The
collaborative and partnership working landscape in South Yorkshire is diverse and complex.
The most effective and efficient option for providing services to support the PCC’s role and
that of the CC is likely to vary from function to function, and will be dependent on
opportunities for collaboration with partners, including other police forces. The PCC has
retained staff from; Finance; Legal Services; and Media and Marketing; as well as those who
work in my office.
The PCC has adopted and implemented Financial Regulations. These Regulations have
been drawn up so as to ensure that the financial affairs of both the PCC and the CC are
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conducted properly, and in compliance with all relevant statutes, regulations, codes of
practice and best professional practice.
The Treasurer is a Statutory Officer and a key member of the PCC’s management team.
Improvements to the Corporate Governance Framework for the PCC and CC are currently
being made to ensure the framework is more streamline and accountable, see Section 5 for
more details.
The PCC adopted the Police Authority Officer/member protocol. This is currently being
reviewed as part of the improvements to the Corporate Governance Framework.
The PCC appointed a permanent Chief Executive and Solicitor on 20 January 2014, to
support him in delivering his Police and Crime Plan priorities and exercising his statutory
and other functions. This is a combined role which not only creates efficiencies around the
PCC’s access to legal advice, but ensures the Chief Executive has enhanced skills as the
PCC’s ‘Monitoring Officer’ and can also inform better policy-making and decision-making.
Year-end Officer Assurance Statements are obtained from all senior staff, which formally
recognise their individual responsibilities, and highlight any in year governance issues.
3.6
Arrangements for developing, communicating and embedding codes of conduct,
defining the standards of behaviour for members and staff.
The Policing Protocol 2011 requires all parties to abide by the seven principles of public life,
which are central to the conduct and behaviour of all. The PCC and Deputy Police and
Crime Commissioner have a Code of Conduct which supports the Policing Protocol.
The Force has comprehensive and robust internal procedures in place which include: staff
codes of conduct and many Professional Standards Department led initiatives covering: AntiFraud
and
Corruption
(including
“whistle-blower”)
measures,
secondary
employment/business interests, gifts and hospitality registration arrangements, guidance on
media relations and mechanisms for monitoring supplier and contractor relationships. The
Department is assisted in this work by a network of Integrity champions – there being a
requirement for each district and department to name a senior officer to support integrity
related initiatives at a local level.
The PCC has regular one-to-one meetings with the Head of Professional Standards, and
additional work is taking place towards formal reporting in line with the new governance
arrangements and meeting structure.
Prior to 1 April 2014, with the exception of 5 individuals; all officers from the OPCC were
employees of the South Yorkshire Joint Secretariat. As such, these officers were required to
comply with Barnsley Metropolitan Borough Council’s (‘BMBC’) policies and procedures
including Codes of Conduct. From 1 April 2014, as a result of a TUPE transfer, all OPCC
staff became employed by the PCC, and the OPCC, is now going through a process of
change, to determine which of the policies and procedures of the Force will be adopted by
the OPCC.
The PCC has a complaints process and this is published on his website at
http://www.southyorkshire-pcc.gov.uk/Feedback/Complaints.aspx
The Chief Executive and Solicitor has the role of Monitoring Officer.
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The FIRST principles were established by the Force in 1999. In conjunction with the
College of Policing's Code of Ethics, the principles are being re-launched to promote high
standards of professional behaviour while delivering a quality service.
The principles are:





Fairness
Integrity
Respect
Standards (previously ‘Sincerity’)
Trust
The PCC with the full support of the CC, is setting up an Independent Ethics Panel to open
up to scrutiny, and public debate, the transparency of decision-making and standards of
ethical behaviour within South Yorkshire Police.
3.7
Arrangements for the review of the effectiveness of the PCC’s Decision-Making
Framework including delegation arrangements, decision making in partnerships and
robustness of data quality.
The PCC’s Decision-Making Framework is part of the Corporate Governance Framework the
PCC. To further strengthen openness and transparency these governance arrangements
have been reviewed, and a revised Decision-Making Framework is in place.
The Framework applies to decision-making by the PCC, and those exercising delegated
authority on behalf of the PCC. This Framework informs the Police and Crime Panel in its
role to scrutinise the decisions and actions of the Commissioner.
The elected Local Policing Bodies (Specified Information) Order 2011 sets out the
requirements of the PCC to publish information about decision-making. Work has been
ongoing throughout 2013/14 to obtain compliance and an action plan was developed to
assist with this.
The Commissioner has a Partnership Protocol which clearly sets out officer authority, and
robust briefings arrangements for all officers representing the OPCC are also in place.
3.8
Arrangements for the review of the effectiveness of the framework for identifying and
managing risks and demonstrating clear accountability.
The PCC and the CC have a joint Risk Management Framework and Strategy which is
reviewed annually. The Strategy establishes that the PCC and CC have separate risk
registers and action plans, and separate procedures are in place in the OPCC and Force to
identify potential strategic risks.
The PCC and CC have established a Joint Independent Audit Committee (JIAC) which
receives regular reports regarding the Strategic Risk Registers.
The need to continually monitor, challenge, and review risk registers and associated action
plans, to ensure their currency, completeness, and effectiveness was identified as a
significant governance issue in last year’s Annual Governance Statement. Whilst much
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progress has been made (see below), there continues to be a need to further refine existing
systems and processes.
A “Risk Summit” was held on 4 February 2014 involving senior representatives of the OPPC
and Force, along with the JIAC’s themed lead for Risk. At this “Summit” it was decided to
take a fundamental step back, and challenge both corporations’ sole strategic approaches to
risk/opportunity management, appetite and tolerance for risk, and how opportunities and risk
are used to inform key business decisions. The Chief Executive, with the assistance of the
Director of Finance, is working with the PCC and the Force’s Senior Command Team to
complete this work.
It was agreed to develop and agree a consistent approach to the identification, and
management of, those strategic risks currently defined. The following improvements in
approach have been/are being made:
3.9

A revised template/format for the Opportunity/Risk Registers has been developed to
include the direction of travel of the risk, timescales for completion of the “Planned
Control Measures” and a more logical sequencing of columns.

The scoring mechanism for Opportunities and Risks is based on the 4x4 matrices.

All risks common to both the PCC/OPCC and Force will be identified and described using
the same terminology within each risk register. It is also proposed that common risks
appear first and in the same order on both risk registers.
Arrangements to ensure that effective counter fraud and anti-corruption arrangements
are developed and maintained.
Prior to 1 April 2014, officers within the OPCC were employees of Barnsley Council and as
such were required to comply with BMBC’s policies and procedures, including whistleblowing.
The PCC and CC have engaged a joint Internal Audit service which provides an assurance
function and reports to the JIAC. In general, most of the testing and compliance work
undertaken by Internal Audit is verifying the control environment, to ensure that controls are
effective and robust, to prevent, detect, or deter error, fraud and corruption and thereby
protect the integrity of the officers and staff using the systems and processes.
There are some aspects of the Internal Audit Plans for both the Force and the PCC that
target areas that are perceived as vulnerable to fraud and corruption, or where the integrity
of officers or staff using/participating in processes, could be called into question. Such areas
can, and are, identified through the risk management process and/or a fraud and corruption
vulnerability assessment.
The Force has comprehensive and robust internal procedures in place which include: staff
codes of conduct and many Professional Standards Department led initiatives including an
Anti-Fraud and Corruption Policy (including “whistle-blower” arrangements), a mechanism for
overseeing secondary employment/business interests and a register of Gifts, Gratuities and
Hospitality. Each of these is supported by detailed policies and procedural guidance. The
Anti-Fraud and Corruption Policy are also to be incorporate in the revised Joint Corporate
Governance Framework.
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3.10
Arrangements to ensure the effective management of change and transformation.
In the October 2010 spending review, the Government announced that central funding to the
police service in England and Wales would be reduced in real terms by 20% in the four years
between March 2011 and March 2015. This meant there was a requirement on the PCC and
the Force to adapt to a new policing landscape.
The Force has a well established “Diamond” process, originally created a year prior to the
Comprehensive Spending Review of 2010. The current “Diamond 2 – Transforming the
Business” programme, led by the Deputy Chief Constable, operates to the original objective
of reviewing service delivery, to develop proposals to restructure departments and
operational units, to improve operational efficiency at reduced cost. The PCC receives
regular updates on the current “Diamond” review both at his one-to-one’s with the CC, at his
Governance Advisory Board and through his staff attending the Board.
Progress in this area has also been assessed in detail by Her Majesty’s Inspectorate of
Constabulary (HMIC) as part of its “Valuing the Police” inspection programme and the PCC
has regular meetings with HMIC. During 2014/15 Valuing the Police 4 will examine forces
progress in responding to the spending review and in particular their progress over the last
twelve months
A District Review has occurred and recommendations are being implemented. This will give
the force the flexibility it needs to deliver policing in the future, by concentrating resources in
the right places. The model concentrates the strength of resources on the frontline,
reinforcing my commitment to local policing through large, multi-skilled teams that will
provide higher levels of service delivery to the public. This is balanced by the collaborative
delivery of many areas of protective services and business support at a local and regional
level, with a streamlined core of specialist services at the centre.
The PCC also holds regular finance meetings with Senior Managers from the Force.
The PCC’s Efficiency Advisory Panel also provides additional scrutiny and challenge.
3.11
Arrangements to ensure that the PCC’s financial management arrangements conform
with the governance requirements of the CIPFA Statement on the role of the Chief
Financial Officer in Local Government.
The Treasurer is a key member of the PCC’s Leadership team, helping to develop and
implement strategy and resources to deliver the PCC’s strategic objectives sustainably, and
in the public interest. He is actively involved in and able to bring influence to bear, on all
material business decisions, to ensure immediate and longer term implications,
opportunities, and risk are fully considered, and aligned with the PCC’s financial strategy.
He leads the promotion and delivery by the PCC of good financial management so that
public money is safeguarded at all times and used appropriately, economically, efficiently
and effectively.
The Treasurer leads and directs the finance function and is professionally qualified and
suitably experienced.
The PCC’s Chief Executive and Solicitor is currently reviewing the level and scope of
financial support to the PCC in addition to the Treasurer, given that the PCC retained finance
staff at Stage 2 transfer (see section 3.5 for more detail).
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3.12
Arrangements to ensure that the PCC’s assurance arrangements conform with the
governance requirements of the Role of Head of Internal Audit.
The Head of Internal Audit role is being fulfilled by the Head of Internal Audit & Risk
Management – BMBC.
To perform this role the Head of Internal Audit is a senior manager with regular and open
engagement with the PCC, his senior management team and with the Joint Independent
Audit Committee. He leads and directs an internal audit service that is resourced to be fit for
purpose and is professionally qualified and suitably experienced.
3.13
Arrangements to ensure that effective arrangements are in place for the discharge of
the Monitoring Officer function and the Chief Executive.
The broad context for the PCC’s governance and internal control environment is provided by
the Corporate Governance Framework, which gives comprehensive information on how the
OPPC and South Yorkshire Police is organised, its decision making process, and how
probity and due process are promoted. This includes the work of the statutory officers,
namely the Chief Executive, the Monitoring Officer and the Section 151 Officer.
The role of Monitoring Officer was the responsibility of the Commissioner’s Interim Chief
Executive. From January 2014 this role is now undertaken by the Commissioner’s Chief
Executive and Solicitor, who commissioned a review of the Commissioner’s governance
arrangements on taking up office.
The Statutory Officers are members of the Management Team.
meetings are held on a regular basis.
3.14
Management Team
Arrangements to undertake the core functions of an audit committee, as defined in
CIPFA’s Audit Committee Practical Guidance for Local Authorities.
The PCC and CC have established a JIAC, comprising of five independent members, who
are responsible for enhancing public trust and confidence in the governance of the OPPC
and South Yorkshire Police. The Committee also assists the Commissioner in discharging
statutory responsibilities in holding the Force to account.
The Committee has received regular reports relating to its remit, covering issues arising from
the work of Internal Audit, updates on the risk management process, anti-fraud and
corruption work, financial management reports and performance management, plus reports
from the External Auditors including updates on the progress in implementing
recommendations made.
As part of its governance remit, the JIAC will consider this Statement and as necessary
provide comments to the PCC. In addition, the Committee will monitor the implementation of
any emerging developments or improvements, recommended through the review process.
Members of the Audit Committee undertake an annual assessment as well as the general
performance of the Committee. This is good practice and expected by the latest CIPFA
guidance.
3.15
Arrangements to ensure compliance with relevant laws and regulations, internal
policies and procedures and that expenditure is lawful.
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The PCC’s Chief Executive has the role of Monitoring Officer. It is the function of the
Monitoring Officer to ensure compliance with established policies, procedures, laws and
regulations and to oversee its arrangements in relation to ethical standards and complaints.
All reports and decisions take account of a range of control factors including risks, legal and
financial implications and policy and performance implications.
3.16
Arrangements for identifying the development needs of officers, supported by
appropriate training.
An interim structure has been in place since the PCC took up office on 22 November 2012
and for the totality of the year this Statement refers to. During that time role profiles were
not updated and as such there were no formal mechanisms for identifying the development
needs of officers. The interim Structure did not provide the capacity or the capability to
support the PCC in fulfilling his statutory responsibilities and this position was highlighted as
both a governance issue and a risk.
The PCC appointed a permanent Chief Executive and Solicitor who commenced
employment on 20 January 2014. A revised structure has been determined, along with new
role profiles, and staff will move to their new roles by mid July 2014.
3.17
Arrangements to establish clear channels of communication with all sectors of the
community and other stakeholders, ensuring accountability and encouraging open
consultation.
The PCC is the voice of the people within South Yorkshire communities, giving people a say
in deciding the police and crime priorities.
The PCC has a Community Engagement and Consultation Strategy, which sets out how he
will fulfil his statutory responsibilities of engaging with the public, partners and key
stakeholders, and for obtaining the views of victims of crime about matters concerning the
policing area.
The Policing Protocol 2011 requires all parties to abide by the seven principles of public life,
and these will be central to the conduct and behaviour of all. The PCC and Deputy
Commissioner have a Code of Conduct which supports the Policing Protocol.
The PCC has a complaints processes and this is published on his website at
http://www.southyorkshire-pcc.gov.uk/Feedback/Complaints.aspx.
Additionally, should
maladministration be alleged, an aggrieved person may appeal either through their local
councillor or directly to the Ombudsman.
3.18
Arrangements to enhance the accountability of service delivery and the effectiveness
of other public service providers.
The PCC has a Governance Advisory Board (GAB), to support decision-making and have
strategic relevance to inform his policy direction. The PCC receives monthly performance
reports at the GAB and these reports are published on the PCC’s website.
The PCC and CC also meet on a regular basis where they, amongst other things, discuss
progress against the Police and Crime Plan objectives.
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The PCC produced his first Annual Report in line with statutory requirements, which is also
published
on
the
Commissioner’s
website
at
http://www.southyorkshirepcc.gov.uk/Document-Library/Annual-Report-201213.pdf.
The PCC’s 2013/14 Annual
Report is currently being prepared in conjunction with his Annual Governance Statement.
Collaboration is an important element in the delivery of the PCC’s Police and Crime Plan,
and the PCC intends to continue with many of the arrangements he has inherited. However,
together with the other three PCCs in the region, the PCC initiated a review into the current
regional programme, to ensure that the current and future arrangements deliver the best
services and best value for money to the people of South Yorkshire.
3.19
Arrangements to incorporate good governance arrangements in respect of
partnerships and other joint working.
The PCC has a Partnership Protocol which clearly sets out officer authority and robust
briefings arrangements for all officers representing the OPCC are also in place.
Improvements to the Corporate Governance Framework for the PCC and CC are currently
being made to ensure the framework is more streamline and accountable.
Work is ongoing to develop a new performance framework which will look wider than just
policing and incorporate partners.
4.
Review of Effectiveness
The PCC has a responsibility for conducting at least annually, a review of the effectiveness
of the governance framework, including systems of internal control and arrangements for
internal audit. The review is informed by the work of senior officers within the OPCC that
have a responsibility for the development and maintenance of the governance environment,
and takes into account the progress made in delivering the governance improvements
identified in the 2012/13 Annual Governance Statement.
Police and Crime Commissioner: the PCC is responsible for determining the overall
governance framework for the OPCC and Force. This underwent a significant review in
2013/14 which culminated in Home Office approval, in April 2014, of the Stage 2 staff
transfer scheme which has seen the Commissioner retained staff from; Procurement;
Finance; Facilities Management; Legal Services; Media and Marketing; Deputy Police and
Crime Commissioner; Chief Executive and Solicitor; Staff on secondment to the OPCC.
Chief Constable: the CC is responsible for maintaining the corporate governance
arrangements for the Force. He is assisted in this by those officers who form part of his
Senior Command Team.
Governance Advisory Board: this body is chaired by the PCC and its membership includes
the Deputy Police and Crime Commissioner, chief officers of both the Force and the OPCC.
Meetings are held monthly.
Treasurer: this post holder is the PCC’s Chief Finance Officer, a professionally qualified
accountant with a statutory responsibility to ensure the proper financial administration of the
PCC and a personal fiduciary responsibility to the local council taxpayers.
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Senior Officers: Officer Assurance Certificates have been completed by all officers who,
during 2013/14 served at a senior level. Any concerns are fully considered and reflected in
the “Significant Governance Issues”.
Joint Independent Audit Committee of South Yorkshire’s Police and Crime Commissioner
and Chief Constable: the PCC and the CC have established a permanent JIAC comprising
five members appointed following public advertisement. This body meets at least 4 times a
year and receives regular reports from the Head of Internal Audit and other senior OPCC
and Force officers.
Internal Audit: in line with the Home Office Financial Management Code of Practice for the
Police Service of England and Wales, the Force and OPCC have established a shared
internal audit service managed by BMBC’s Head of Internal Audit and Risk Management.
The Head of Internal Audit is required to prepare an annual assurance opinion regarding the
results of audit work. The assurance statement for 2013/14 is reproduced below:
“2013/14 was the first full audit year under the new governance arrangements. As such
there was an element of letting the arrangements bed down and consequently there were
relatively few specific pieces of Internal Audit work.
In total 7 reports were issued of which 4 received a substantial assurance opinion and 3 an
adequate opinion. Within those reports, 16 recommendations were made of which 14 were
classified as significant (medium priority) and 2 as merits attention (low priority). Based upon
the coverage of work undertaken and the results, I am able to give the Police and Crime
Commissioner an overall adequate assurance opinion regarding the internal control, risk and
governance arrangements in place.
It is acknowledged that the overall governance structure and detailed arrangements were
still evolving during the year and it will be important therefore for 2014/15 that the new and
revised policies and procedures being implemented are embedded quickly. Internal Audit
work is planned to review these new arrangements and provide assurance thereon.
I look forward to working with the Commissioner and his senior staff during 2014/15 in
supporting the effective, efficient and economic delivery of the Police and Crime Plan”.
In addition to the work undertaken by the above bodies and individuals, assurances in
relation to governance are provided by:
Her Majesty’s Inspectorate of Constabulary (HMIC) Inspections: responsibility for responding
to issues raised in HMIC inspections lies with the Force. In 2013/14 the force examined in
April 2013 as part of the national “Valuing the People 3” initiative 2013 aimed at assessing
individual force responses to managing performance whilst operating with reduced resources
as a consequence of the Comprehensive Spending review. It was subsequently reinspected in November, 2013. In June 2014 HMIC undertook a three day inspection as part
of its “Leadership, Integrity and Anti-Corruption” work.
External Audit: KPMG are auditors for the PCC and the CC. In their Annual Audit letter
2012/13 they issued an unqualified opinion on the PCC’s and CC’s statutory accounts and
unqualified value for money conclusion.
They also reviewed the 2012/13 Annual
Governance Statement which they concluded was consistent with their own understanding.
5.
Significant Governance Issues
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5.1
The review of Internal Control 2013/14 has raised no significant financial or other internal
control issues to be considered. However, further challenge and review needs to be
undertaken in some areas.
5.2
Whilst considerable work has been completed around the Corporate Governance
Framework further work is required to embed this and strengthen accountability and
transparency arrangements, including the setting up of an Independent Ethics Panel.
Consideration should be given to reviewing the effectiveness of these new arrangements in
the next 12 months.
5.3
Further consideration should be given to the capacity and capability of the OPCC to support
the PCC to properly fulfil his statutory responsibilities.
5.4
Consideration should be given around the PCC’s governance and assurance structure but it
is recognised that the Chief Executive’s ongoing review will deal with these issues.
5.5
Whilst considerable progress has been made in relation to the issues raised in the 2012/13
Annual Governance Statement, and associated Governance Improvement Plan, the work
required is that of a longer-term nature and consequently remains in progress. The issues
previously identified have therefore been carried forward into the 2013/14 and these are set
out below:






Governance framework, including regional structures, systems and processes
Capacity & capability of the OPCC
Information assurance compliance
Performance and assurance framework
Management of strategic risks and opportunities
Stage 2 remaining issues, including the requirement to have plans in place re
collaboration
5.6
On the 26 August Professor Alexis Jay OBE published the results of an independent enquiry
into Child Sexual Exploitation in Rotherham between 1997 and 2013. As mentioned in
South Yorkshire Police’s Annual Governance Statement, this report has resulted in the Chief
Constable ordering an independent investigation into how South Yorkshire Police historically
responded to items disclosed in the report. Once this investigation is complete the PCC will
be in a position to consider any potential financial consequences.
6.
Statement of the Commissioner and Chief Executive and Solicitor
We propose over the coming year, 2014/15, to take steps to address the above matters to
further enhance our governance arrangements. We are satisfied that these steps will
address the need for improvements identified in the review of effectiveness , and we will
monitor their implementation and operation during the course of the year via the PCC’s
Management Team Meetings and feed this into the next annual review.
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Signature
Signature
Steve Pick
Police and Crime Commissioner
Erika Redfearn
Head of Strategic Development and
Assurance (Deputising for the Chief
Executive and Solicitor)
Date:
Date: 24.09.14
24.09.14
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GLOSSARY OF TERMS
Accrual
The concept that income and expenditure is recognised as it is earned or incurred, not as cash
is received or paid.
Actuarial Gain or Loss
The change in actuarial deficits or surpluses that arise because either events have not
coincided with the actuarial assumptions made for the last valuation (experience gains or
losses), or because the actuarial assumptions have changed.
Amortisation
The writing down of an asset over a period of time in order to charge the revenue account for
the usage of the asset.
Assets
Items of worth which are measurable in monetary terms. Current assets are ones that change
in value on a day to day basis whereas fixed assets are assets which yield benefit to the PCC
for a period of more than one year.
Budget
A statement defining in financial terms the PCC’s plans over a specified period. The budget is
prepared as part of the process for setting the precept.
Capital Expenditure
Spending on the acquisition of assets or spending which adds to and not merely maintains the
value of an existing asset.
Capital Financing Requirement
This measures the underlying need to borrow for capital purposes.
Capital Receipt
Proceeds from the disposal of land or other capital assets which may be used to reduce debt
or to finance capital expenditure, but cannot be used to support revenue expenditure.
Chartered Institute of Public Finance and Accountancy (CIPFA)
The accounting body that provides accounting guidance to the public sector. The guidance
provided by CIPFA is defined as proper accounting practice and has statutory backing.
Contingent Liability
A possible liability at the balance sheet date which will only be confirmed following the
outcome of uncertain future events.
Corporate and Democratic Core
The costs associated with corporate policy making and member based activities, together with
costs relating to corporate management, public accountability and treasury management.
Creditor
Amounts owed by the PCC for works done and goods or services received for which actual
payments had not been made by the end of the financial year.
Current Service Cost (Pensions)
This measures the increase in the present value of pensions liabilities generated in the
financial year by employees. It is an estimate of the true economic cost of employing people in
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GLOSSARY OF TERMS
the financial year, earning service that will eventually entitle them to the receipt of a lump sum
and pension when they retire.
Debtor
Amounts due to the PCC for works done and goods or services supplied for which actual
payments had not been received by the end of the financial year.
Defined Benefit Pension Scheme
Retirement benefits are defined independently of the contributions payable and benefits are
not directly related to the investments of the scheme. The scheme may be funded or unfunded.
Depreciation
The measure of the wearing out, consumption or other reduction in the useful life of a fixed
asset arising from age, wear and tear, deterioration or obsolescence.
Earmarked Reserves
Amounts set aside for a specific purpose in one financial year and carried forward to meet
expenditure in future years
Expected Rate of Return on Pensions Assets
This is a measure of the average rate of return expected on the investment assets held by the
scheme for the year. It is not intended to reflect the actual realised return on the scheme, but a
longer-term measure, based on the value of assets at the start of the year and an expected
return factor.
Finance Lease
A lease that transfers all the risks and rewards of ownership of a fixed asset to the lessee.
Assets held in this way by the PCC appear on the PCC’s balance sheet and are accounted for
as property, plant and equipment.
Financial Instrument
This is any contract that gives rise to a financial asset of one entity and a financial liability of
another. The term covers both financial assets such as loans receivable and liabilities such as
borrowings.
General Fund Balance
The General Fund Balance is the description given in the Code to those reserves held by the
PCC that are not earmarked for specific purposes and is more commonly described as
General Reserves.
Government Grants
Assistance by Government and inter-governmental agencies and similar bodies in the form of
cash or transfers of assets to an PCC in return for past or future compliance with certain
conditions relating to the activities of the PCC.
Gross Book Value
The value of an asset before deducting depreciation and impairment.
Impairment
A reduction in the value of a fixed asset below its carrying amount on the balance sheet.
Intangible Fixed Assets
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GLOSSARY OF TERMS
These are fixed assets such as software licences that do not have physical substance, but are
identifiable and controlled through legal or custody rights.
Interest Costs (Pensions)
The expected increase in the present value of liabilities during the year as they move one year
closer to being paid.
Liabilities
Amounts due to individuals or organisations which will have to be paid at some point in the
future. Current liabilities are usually payable within one year of the balance sheet date.
Minimum Revenue Provision
The statutory minimum amount that must be set aside from revenue each year to repay debt.
A prudent level is set by the PCC
Net Book Value
The amount at which fixed assets are included in the balance sheet, that is their historical or
current value less the cumulative amounts provided for depreciation.
Operating Leases
A lease where substantially all the risks and rewards of ownership of a fixed asset remain with
the lessor.
Outturn
Actual income and expenditure for the financial year.
Past Service Cost (Pensions)
These costs represent the increase in liabilities arising from decisions taken in the current year
to improve retirement benefits, but whose financial effect is derived from years of service
earned in earlier years.
Precept
An amount of money levied by one body (the precepting body) which is collected by another
authority (the collecting authority) as part of the council tax. The PCC is the precepting body
and the four South Yorkshire District Councils are the collecting authorities.
Provisions
Sums set aside to cover a liability that is likely to be incurred, but the amounts or date on which
the cost will arise is uncertain.
Prudential Code
Local authorities are required to comply with the Prudential Code for Capital Finance in Local
Authorities, published by CIPPA, in order to ensure that their capital investment plans are
prudent, affordable and sustainable.
Public Works Loans Board
A Government controlled agency that provides a source of borrowing for public authorities.
Reserves
A reserve is an amount set aside for a specific future purpose in one financial year and carried
forward to meet expenditure in future years.
Revenue Expenditure
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Expenditure on day to day running costs incurred by the PCC in the provision of services
Treasury Management
The management of the PCC’s investments and cash flows, its banking, money market and
capital market transactions; the effective control of the risks associated with those activities;
and the pursuit of optimum performance consistent with those risks.
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