MPA - statement of accounts

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34Notes to the Financial StatementsThe Authority also operates 4,764 patrol cars,motorbikes and other vehicles (2006-07 4,909), 25boats including inflatables and dinghies (2006-07 –28), a radio network with 30,351 radios (2006-0730,352), 51,343 airwave terminals (2006-07- 41,000)and 3 helicopters (2006-07 - 3).Basis of ValuationA revaluation has been performed on the entireoperational property portfolio as at 1 April 2007, with20% being physically inspected and 80% beingreviewed on a desktop basis. This approach is part ofa rolling programme of revaluations that is conductedby G. L. Hearn Ltd and Drivers Jonas (both membersof the Royal Institute of Chartered Surveyors) ensuringthat all operational land and buildings within the estateare subject to inspection and revaluation at least onceevery five years.The residential portfolio has been subject to arevaluation exercise and a value shown in theaccounts as at 31 March 2008 in line with accountingpolicies. In addition the asset lives of residentialproperties have been extended to 50 years (from 40years) on the advice of the external valuer. This hashad the effect of reducing the depreciation charge by£0.4 million for 2007-08.Buildings under construction are valued on the basisof the associated land value plus the cumulativeconstruction costs incurred at 31 March 2008.Financing Account (CFA). The credit balances of£1,381 million and £63 million on the FARA and CFArespectively at 31 March 2007 have been written off tothe Capital Adjustment Account with a resulting creditbalance of £1,444 million. The Revaluation Reservehas been included in the Balance Sheet with a zeroopening balance. The closing balance on theRevaluation Reserve of £53.9 million at 31 March 2008only shows revaluation gains accumulated since as at1 April 2007.Redundant DepreciationThe redundant depreciation figure totalling £31.6million in the above analysis of movements are equaland opposite amounts arising from the new valuationfor property, which gives a more accurate figure for thevalue of land and buildings. The balances foraccumulated depreciation for these buildings becomeredundant and should not be carried forward in theBalance Sheet, but are written out.Impairment ReviewFinal Impairment reviews were performed at the yearendon Land and Buildings and on Vehicles, Plant andEquipment. No further impairment of capitalexpenditure was identified beyond that which wasidentified during the year either as a result ofthe property revaluation process or as a result ofaccident damage and obsolescence.Short life assets such as vehicles, plant, furniture andequipment are included at depreciated historic cost.Community assets have been included in the balancesheet following valuations placed on them by internaland external valuers. These consist of pictures,vehicles, furniture and museum pieces, which are atpresent in long-term storage, which have been giftedover many years.During the year, transfers of £55.6 million were madefor those assets under construction, which werecompleted and became operating assets.Revaluation ReserveThe Balance Sheet figures for 31 March 2007 havebeen adjusted from those included in the Statement ofAccounts for 2006-07 to accommodate theimplementation of the Revaluation Reserve (seeaccounting policies, page 18). The RevaluationReserve and Capital Adjustment Account replace theFixed Asset Restatement Account (FARA) and CapitalCapital ExpenditureItems of capital expenditure for the year were:2007-08 2006-07£’000 £’000Intangible Assets 3,608 6,229Tangible AssetsLand and Buildings 23,213 44,734Plant and Equipment 184 245Information 51,962 53,214TechnologyVehicles 15,233 19,566Assets under 53,251 28,282constructionSub total 147,451 152,270Deferred Charge 339 2,209Total 147,790 154,479
35Sources of Capital Finance2007-08 2006-07£’000 £’000Capital paymentsto be financed 147,790 154,479Supported Borrowing 19,635 19,635UnsupportedBorrowing 7,464 29,858Other contributions 4,540 9,953Capital grants 37,126 66,236Capital receipts 54,015 12,832Revenue contribution 25,010 15,965Total financing 147,790 154,479All Prudential Code indicators are approved by the fullAuthority prior to the start of the financial year asrequired by statute and are monitored on a monthlybasis throughout the financial year.Future Capital Expenditure CommitmentsCapital expenditure to be incurred in later yearsincludes the following:2008-09 2007-08and later and lateryears years£’000 £’000IT various projects 25,874 8,345Building works 18,177 22,149Vehicles, Plant & 10,494 8,000EquipmentApplication of the Prudential CodeIn carrying out its duties under Part 1 of the LocalGovernment Act 2003 the Authority is required to haveregard to the Prudential Code. The Code wasdeveloped by CIPFA as a professional code of practiceto support local authorities in taking decisions forcapital investment in fixed assets. The key objectivesof the Prudential Code are to ensure, within a clearframework, that the capital investment plans of localauthorities are affordable, prudent and sustainable.The Authorised Limit for 2007-08 was £159.3 million.The Operational Boundary was £138.5 million.B. Intangible Fixed AssetsIntangible Assets consist of software licences andagreements, which have, on average, a usefuleconomic life of three years. During 2007-08 £3.61million was incurred on software licences.C. StocksAtAt31 March 31 March2008 2007£’000 £’000Uniforms 4,098 3,899Transport & Air 1,312 1,151Support UnitHeating Oil 779 1,222Catering goods 391 333Balance 6,580 6,605D. Amounts owed to the AuthorityAtAt31 March 31 March2008 2007£’000 £’000Long Term Debtors:HMCS/NPSrepayment of MPSdebt 10,511 11,129PFI Contribution 6,400 6,720Trade Debtor 100 100Balance 17,011 17,949Other Debtors:Staff Advances 2,475 2,273GovernmentDepartments 62,409 36,694General Debtors 4,100 6,482Other LocalAuthorities 18,514 17,381HMCS/NPS 2,740 6,127Payments in Advanceand Accrued income 72,667 70,400Customs and Excise 11,754 15,629174,659 154,986Less Bad DebtProvision 900 1,006Balance 173,759 153,980HMCS – Her Majesty’s Court Services, NPS - NationalProbation ServiceE. Short Term InvestmentsThis amount represents short term and overnightdeposits with banks and building societies. It includes£40 million of ‘cash on call’, which is not defined as aninvestment for FRS 1 (Cash Flow Statements)purposes.Notes to the Financial Statements
Page 9 and 10: 7Statement of Responsibilities for
Page 11 and 12: 9Within the MPS the corporate strat
Page 13 and 14: 11Within the MPS the risk managemen
Page 15 and 16: 13The practical implementation of t
Page 17 and 18: 15• Internal AuditIn maintaining
Page 19 and 20: 17Governance issuemanagement across
Page 21 and 22: 19kept to manage the accounting pro
Page 23 and 24: 21Land and BuildingsCategoryLandBui
Page 25 and 26: 23Income and Expenditure AccountFin
Page 27 and 28: 25Balance SheetThe Balance Sheet sh
Page 29 and 30: 27Notes to the Financial Statements
Page 31 and 32: 29• Pension reserve movement repr
Page 33 and 34: 3111. S102 Greater London Authority
Page 35: 3318. Minimum Revenue ProvisionThe
Page 39 and 40: 37K. Third Parties’ MoniesThe Aut
Page 41 and 42: 39L. Police Pensions LiabilitiesAs
Page 43 and 44: 41Accommodation strategy/Propertyre
Page 45 and 46: 43Capital Adjustment AccountThe Cap
Page 47 and 48: 45The fair value is more than the c
Page 49 and 50: 47U. Analysis of Net Debt (liquid r
Page 51 and 52: 49GlossaryGlossary of TermsBudgetA

MPA - statement of accounts

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