Statement of Accounts 2011/2012 - Blackburn with Darwen Borough ...

FINANCIAL REPORT 2011/2012
it will be necessary to provide a third Balance Sheet. This will show balances as at the beginning of
the earliest comparative period.
d) Cash Flow Statement for the period
The Cash Flow Statement shows the changes in cash and cash equivalents of the Council during the
reporting period. The statement shows how the Council generates and uses cash and cash
equivalents 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 authority are funded by way of taxation and grant income or from the recipients
of services provided by the Council. Investing activities represent the extent to which cash outflows
have been made for resources which are intended to contribute to the Council’s future service
delivery. Cash flows arising from financing activities are useful in predicting claims on future cash
flows by providers of capital (i.e. borrowing) to the Council.
e) Notes to the accounts
The notes are intended to:
- present information about the basis of preparation of the financial statements and the specific
accounting policies used,
- disclose the information required by the Code of Practice on Local Authority Accounting (the
Code) that is not presented elsewhere in the accounting statements, and
- provide any additional information and explanations that might be needed to make the financial
statements more understandable to interested parties.
The statements described above are required to be given equal status in terms of their presentation,
their positioning in the published document and the presentational emphasis they are given. By
implication, other statements can be given lesser prominence.
2.3 Group Accounts
Local authorities with material interests in subsidiaries, associates and joint ventures are required to
prepare group accounts in addition to their single entity financial statements.
Whilst the Council does have some associate company and joint venture interests, the financial
implications of including these in a set of group accounts is not considered to be material to the
understanding of the financial position of the Council, and group financial statements have not
therefore been produced. Information about these interests is, however, contained within the notes to
the accounts.
2.4 Collection Fund
The Collection Fund Statement is an agent’s statement that reflects the statutory obligation for billing
authorities to maintain a separate Collection Fund in accordance with section 89 of the Local
Government Finance Act 1988 (as amended by the Local Government Finance Act 1992).
The Collection Fund shows the transactions of the billing authority in relation to the collection from
taxpayers and distribution to local authorities and the Government of council tax and non-domestic
rates. There is no requirement for a Collection Fund Balance Sheet since the assets and liabilities
arising from collecting non-domestic rates and council tax belong to the bodies (i.e. major preceptors,
the billing authority and the Government) on behalf of which the billing authority collects those taxes.
2.5 Annual Governance Statement
Regulation 4 of the Accounts and Audit (England) Regulations 2011 requires authorities in England to
conduct a review at least once a year of the effectiveness of its system of internal control. Following
the review authorities are required to approve an annual governance statement and ensure that this
accompanies the statement of accounts.
The annual governance statement is not an accounting statement, and is outside the scope of the
chief financial officer’s true and fair certification and the opinions expressed within the independent
auditor’s report, on pages 2 and 3 of this document,
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