criminal injuries compensation authority annual …...the agreed fees for the statutory audit were...

Criminal Injuries Compensation AuthorityAnnual report and accounts 2006-07

Eleventh Report

Criminal Injuries Compensation AuthorityAnnual report and accounts 2006-07Presented to Parliament by the Secretary of State for the Home Departmentand by the Comptroller and Auditor General pursuant to section 6 of theCriminal Injuries Compensation Act 1995.

Ordered by the House of Commons to be printed 26 July 2007

Laid before the Scottish Parliament by the Scottish Ministers July 2007

HC 950 London: The Stationery Office

SE/2007/145 £13.50

© Crown Copyright 2007The text in this document (excluding any Royal Arms and departmental logos) may be reproduced free of charge

in any format or medium providing that it is reproduced accurately and not used in a misleading context.The material must be acknowledged as Crown copyright and the title of the document specified.

Any queries relating to the copyright in this document should be addressed toThe Licensing Division, HMSO, St Clements House, 2-16 Colegate, Norwich, NR3 1BQ.

Fax: 01603 723000 or e-mail: [email protected].

ContentsIntroduction 1

Nature of the Authority’s business and its aims and objectives 1

Machinery of Government change 1

Governance arrangements 2

Register of interests 2

Business focus for the future 2

Change programme 3

History and activities 3

Types of compensation 3

Going concern 4

Employment policies 4

Training and development 4

Information technology 4

Management commentary 5

Operating cost statement 8

Creditor payment policy and performance 9

Remuneration report 9

Statement of Accounting Officer’s responsibilities 12

Statement on internal control 12

The Certificate and Report of the Comptroller and Auditor Generalto the Houses of Parliament and the Scottish Parliament 15

Accounts 17

Notes to the Accounts 20

Since 9 May 2007, responsibility for thesponsorship of the Authority transferred fromthe Home Office to the newly createdMinistry of Justice under Machinery ofGovernment mechanisms. Formal transfer ofthis change is recognised through the

publication of the Winter SupplementaryEstimate, which is expected to be approvedin December 2007. Since 9 May 2007day-to-day management responsibilityhas rested with the Ministry of Justice.

Machinery of Government change

The Authority administers the criminalinjuries compensation scheme throughoutEngland, Scotland and Wales. We paycompensation to people who have been thevictim of a violent crime.

The Authority’s vision is:

� for CICA to lead the way in the criminaljustice field by providing a fast, efficientservice to the victims of violent crime ortheir families.

To achieve this, we aim to:

� process applications as quickly andefficiently as possible whilst investigatingclaims thoroughly;

� treat applicants with sensitivity andcourtesy at all times;

� enhance the service we provide bycommunicating effectively with the generalpublic, our customers (applicants) and our

stakeholders (victim services, healthauthorities, police forces, Office forCriminal Justice Reform, Ministry ofJustice, Scottish Executive, MPs, MSPsand other organisations and individualsCICA deals with);

� continuously develop and support our staffto perform to their full potential;

� be accountable to the public, theGovernment and Parliament for the servicewe provide and the public funds we spend.

At year-end, the Authority employed anaverage of 471 full-time equivalent staffthroughout the year across two offices inLondon and Glasgow. The Authority’s staffin the London office are employed on theterms and conditions of the Home Office.Staff in the Glasgow office are employed onthe terms and conditions of the ScottishExecutive.

Nature of the Authority’s business and its aims andobjectives

This Annual Report and Accounts has beenprepared and published by the CriminalInjuries Compensation Authority (‘theAuthority’). The Accounts have beenprepared in accordance with the AccountsDirection given by the Secretary of State forthe Home Office with the consent of HMTreasury in accordance with section 6 of theCriminal Injuries Compensation Act 1995(the Act). These accounts have beenprepared in accordance with the guidance

set out in the Government FinancialReporting Manual.

The Comptroller and Auditor General is theexternal auditor of the Authority, and isappointed under statute, reporting toParliament and to the Scottish Parliament.The agreed fees for the statutory audit were£84,000 in 2006-07 (2005-06, £68,000). Noremuneration was paid for non-audit work in2006-07 (2005-06, Nil).

Introduction

Criminal Injuries Compensation Authority Annual report 2006-07 1

In July 2006, the Authority, in conjunctionwith the Home Office, agreed to close theLondon Office and relocate all activities toGlasgow. This project will be completed bySeptember 2007, and will:

� transfer existing casework files toGlasgow;

� support London staff to find new postswithin the civil service;

� manage the closure of the London officeand hand back to landlords;

� implement the new organisational structureand recruit caseworkers in Glasgow; and

� manage the physical redesign of theGlasgow office to appropriatelyaccommodate staff in the new structure.

Business focus for the future

No board members held any significantinterests that conflicted with theirmanagement responsibilities.

Register of interests

Since her appointment in August 2006,the Chief Executive has made a numberof changes to the management of theAuthority’s executive functions.

A Board of four Directors led by the ChiefExecutive has been created to manage theday-to-day running of the Authority; namely,J. Drean (Chief Executive), C. Moynehan(Director of Finance), A. Johnstone (Directorof Legal and Policy) and G. Johnston(Director of Casework Operations).

Prior to this date, the executive functionswere led by a Chief Executive based inLondon, supported by a Deputy ChiefExecutive and Senior Solicitor based inGlasgow; namely, H. Webber (ChiefExecutive), E. McKeown (Deputy ChiefExecutive) and A. Johnstone (SeniorSolicitor).

An Audit Committee, chaired by a non-executive member, oversees the strategicprocess for risk management, internalcontrol and corporate governance andfinance. The Audit Committee consists ofthree independent non-executive members.The Chief Executive, Director of Finance,National Audit Office, External and InternalAuditors, attend by invitation.

In order to strengthen the governancestructures, the Chief Executive created threeBoards, each chaired by an independentnon-executive member. These Boards havebeen created to provide assurance to theChief Executive. The individual roles of theBoards are:

� a Performance Board, to challengeDirectors on strategic performance issuessuch as business planning andperformance against targets;

� a Programme Board, to monitor projectsagainst a structured methodology;

� a Policy Board, to challenge Directors onorganisational activities relating to policymatters.

The directors who held office at the date ofapproval of this directors’ report confirm that,so far as they are each aware, there is norelevant audit information of which theAuthority’s auditors are unaware; and eachdirector has taken all the steps that theyought reasonably to have taken as a directorto make themselves aware of any relevantaudit information and to establish that theAuthority’s auditors are aware of thatinformation.

Governance arrangements

2 Criminal Injuries Compensation Authority Annual report 2006-07

Training anddevelopment

Our Training team work with staff, linemanagers and the Training LiaisonCommittee to ensure staff are fully equippedto carry out their role within the organisation.We provide support to key stakeholders,such as Victim Support, through workshopsand presentations about our organisation.

Induction programmes remain our keypriority. Throughout the year we provided

other various job-related and personaldevelopment training opportunities.For example, we provided dedicatedsessions to familiarise staff with theupgraded computer system.

Our ongoing commitment to staff’s personaldevelopment has seen the introduction offurther Career Development activities. Wealso encourage staff to take advantage oflearning outside the work place. Specificwork areas such as Legal, Accountancy,Audit and Communications all benefited from

Information technologyDuring 2005-06 we continued to develop andupgrade the Authority’s IT systems. Themain projects were:

(a) Upgrading the Oracle caseworkingdatabase

The new product was delivered duringNovember 2005.

(b) Government Secure Intranet –Re-accreditation

We became fully accredited to remain onthe GSi network in February 2006.

(c) Moving our IT communication linkfrom BT to Cable & Wireless

We ran a full tender exercise to obtainbest value for money for upgrading thetelecoms link between our three offices.Cable & Wireless won the contract. Wewent live with the new link in March2006.

(d) Secure email with the police

During February 2006 we begandiscussions with the Office for CriminalJustice Reform to explore the potentialfor police forces to return our requestsfor police information by secure email.This project will continue into 2006–07.

(e) Upgrading the Authority’s website

We commenced this project in February2005 and the website was upgraded in 2006.

There are two main types of compensation –personal and fatal injury awards. Thepossible components of personal injuryawards are:� an award based on the tariff of injuries

(with a maximum of £250,000);� loss of earnings or earning capacity,

beyond the first 28 weeks of loss; and� special expenses, provided the incapacity

lasts for 28 weeks or more.

For fatal injury awards, where applicationsare made from close relatives of a personwho has died following a violent crime, thepossible components are:� a bereavement award of £5,500 for each

applicant who qualifies, or £11,000 if thereis only one potential applicant;

� compensation for financial loss;� in the case of a child under 18,

compensation for the loss of a parent; and,� funeral expenses.

Applicants unhappy with the Authority’sdecision can request a review and, if stillunhappy with the review decision, canrequest an appeal hearing at the CriminalInjuries Compensation Appeals Panel. Moreinformation on the provisions of the schemecan be found in the ‘Guide to the 2001Compensation Scheme’, available from theAuthority, and on our website atwww.cica.gov.uk.

Types of compensation

The scheme was set up in 1964. Up to1996, awards were set according to whatthe victim would have received in asuccessful civil action against the offender.Since April 1996, the level of compensationhas been determined according to a tariff

set by Parliament. In some situations, theremay be the possibility of additionalcompensation. The maximum award theAuthority can pay in any single case is£500,000. The maximum payment for thetariff injury element is £250,000.

History and activities

The Chief Executive initiated two majorprojects in 2006 to fundamentally review keyfunctions that support the delivery of theAuthority’s vision:

1. A Customer focus project to:� conduct a Customer Survey to test

performance and identify areas forimprovement;

� revise the application form to meet plainEnglish standards;

� develop relationships with intermediariesand partners to improve consistency andefficiency in the pre-application phase;

� audit the website and implementrecommendations;

� research issues arising from the terroristattack 7/7 and develop a major incidentplan.

The Customer Focus project commenced inSeptember 2006 and is expected to becompleted by September 2007.

2. The Casehandling improvement project to:� conduct a rigorous gap analysis between

current performance and best in class toidentify opportunities for improvement;

� develop a plan with options forimplementing recommendations with thegreatest improvement on productivity andservice, whilst managing the compensationcost implications.

Consultants have been engaged to help withthe design and implementation of the newcaseworking model, which is planned to beoperational by April 2008.

Change programme


Information technology

Our training team work with staff and linemanagers to ensure that our people are fullyequipped to carry out their role within theorganisation. We provide support to keystakeholders, such as Victim Support,through workshops and presentations aboutour organisation.

Induction programmes remain our keypriority. Throughout the year we providedother various job-related and personaldevelopment and training opportunities,including management events focusing onperformance management, workshops on

risk management and project managementtraining.

Our ongoing commitment to staff’s personaldevelopment has seen the introduction offurther career development activities. Wealso encourage staff to take advantage oflearning outside the work place. Specificwork areas such as legal, accountancy,audit and communications all benefited fromspecialised training provided by externalproviders. Staff can apply for fundingtowards their own personal studies.

Training and development

We have in place employment policies, whichhelp staff contribute their best to the successof the organisation. Managers receive regularreports on, for example, individualperformance and training. Our annual staffsurvey gives managers across theorganisation information on job satisfaction,performance of senior managers, and training.

The Authority is committed to working in acollaborative way with the Trade Union Sideimproving industrial relations with its people.The Authority takes its health and safetyresponsibilities seriously and workspositively with its people to keep them safein the work place.

Employment policies

At 31 March 2007, the Authority’s balancesheet records net liabilities of £1,187 million(31 March 2006 £1,252 million). This reflectsthe inclusion of liabilities falling due in futureyears, which, to the extent that they are notto be met from the Authority's other sourcesof income, can only be met by future grants-in-aid from the Ministry of Justice. This isbecause, under the normal conventionsapplying to Ministry of Justice control overincome and expenditure, such grant may notbe paid in advance of need.

Grant-in-aid for 2007-08, taking into accountthe amounts required to meet the Authority'sliabilities falling due that year, has alreadybeen included in the Home Office's estimatesfor that year, which have been approvedby Parliament, and there is no reason tobelieve that the Ministry of Justice’s futuresponsorship and future parliamentaryapproval will not be forthcoming. It has beenconsidered appropriate to adopt the goingconcern basis for the preparation of thesefinancial statements.

Going concern


During 2006-2007 we continued to developand upgrade the Authority’s IT systems.The main projects were:� Secure e-mail with the police.� Quick address software.� Upgrading the CICA website.� BlackBerry service.

Secure e-mail with the policeThis project started in February 2006 afterdiscussions with the Office for CriminalJustice Reform. The basis for this was thepossibility of communicating by securee-mail with police forces to try and speed upthe process for the return of our policeenquiry forms. In October 2006 we

Key AchievementsDespite the period of change, CICAcontinued to perform well against its keytargets last year. In 2006-07 the Authority:

� Made 31,485 tariff scheme awards, payingout £172 million, and 38 pre-tariff schemeawards, paying out £19 million;

� Came very close to resolving as manycases (59,096) as we received (60,861).

Volume of applicationsWe received 60,861 new tariff applications.This was a 3.5% per cent reduction on thetotal for 2005-06.

Table 2 on the next page shows the numberof awards and gross value of awards undereach tariff band.

The sums set out are those paid for themost serious injury only. Second and thirdinjury awards and any additional amountsfor loss of earnings or special expenses arenot included in this total.

Where there are two figures under aparticular tariff, this reflects the fact that thetariff was increased in 2001. The first, lowerfigure is that under the 1996 scheme;the second, higher figure is that under the2001 scheme.

Management commentary

commenced a pilot exercise with the policeforces of Devon and Cornwall and GreaterManchester. Devon and Cornwall are nowusing this process and it has proven to bebeneficial to both organisations. After theinitial pilot, Greater Manchester hastemporarily withdrawn as they are undergoinga major internal IT refresh of their systems.We have plans to roll-out this project to otherforces early in the new financial year 2007-08.

Quick address softwareWe entered into discussions with theMetropolitan Police force about how we couldspeed up the return of our initial requests forinformation. We jointly agreed that it would bebeneficial if we could send initial requests forinformation to the individual 32 MetropolitanLondon boroughs rather than a genericmailbox within the force. The information werequest is based on the incident address,rather than the address of the victim. Afterdoing an analysis of available software, wemanaged to find one that was fullycompatible and implemented this changeduring February 2007. The advantages of this

are already apparent and we now hope tolink this process to the secure e-mail project.

Upgrading the CICA websiteThe CICA website was running on the Oracle8i product. Similar to the Oracle 8icaseworking upgrade, we were required toupgrade to Oracle 10g as the earlier softwarewas becoming unsupported. We commencedthis project in February 2006 and the upgradewas completed on schedule in May 2006.

BlackBerry serviceThe purpose of this project was to allow theChief Executive, senior management,lawyers and presenting officers accessto their e-mails from outside the officeenvironment. All these key members of staffspend a substantial amount of time workingaway from the normal office environment.This service allows key members of CICAto be in constant contact with full accessto the CICA e-mail system. This projectcommenced in November 2006 and thesuccessful roll-out of the hardwarecommenced at the end of February 2007.


Table 1: Applications resolved

2003-04 2004-05 2005-06 2006-07

Tariff and pre-tariff schemes 77,487 66,898 62,073 59,096

Resolutions


Table 2: Awards made by tariff level 2006-07

Level Tariff Claims Review Appeals Total Grosssum Assessment value

1 £1,000 4,272 793 266 5,331 £5,331,0002 £1,250 1,904 207 49 2,160 £2,700,0003 £1,500 5,491 559 122 6,172 £9,258,0004 £1,750 560 58 18 636 £1,113,0005 £2,000 2,912 263 128 3,303 £6,606,0006 £2,500 1,657 288 148 2,093 £5,232,5007 £3,000 9 4 8 21 £63,0007 £3,300 2,420 333 108 2,861 £9,441,3008 £3,500 0 2 2 4 £14,0008 £3,800 1,472 182 61 1,715 £6,517,0009 £4,000 4 2 5 11 £44,0009 £4,400 1,821 391 155 2,367 £10,414,80010 £5,000 11 7 18 36 £180,00010 £5,500 1,108 160 84 1,352 £7,436,00011 £6,000 0 1 1 2 £12,00011 £6,600 269 48 19 336 £2,217,60012 £7,500 33 49 80 162 £1,215,00012 £8,200 597 263 150 1,010 £8,282,00013 £10,000 4 7 10 21 £210,00013 £11,000 665 117 61 843 £9,273,00014 £12,500 0 0 1 1 £12,50014 £13,500 72 42 44 158 £2,133,00015 £15,000 7 7 10 24 £360,00015 £16,500 268 59 28 355 £5,857,50016 £17,500 4 2 4 10 £175,00016 £19,000 37 12 6 55 £1,045,00017 £20,000 10 15 20 45 £900,00017 £22,000 190 26 28 244 £5,368,00018 £25,000 1 0 1 2 £50,00018 £27,000 16 12 7 35 £945,00019 £30,000 1 1 0 2 £60,00019 £33,000 6 3 0 9 £297,00020 £40,000 13 7 6 26 £1,040,00020 £44,000 13 9 7 29 £1,276,00021 £50,000 6 3 1 10 £500,00021 £55,000 4 3 2 9 £495,00022 £75,000 0 0 2 2 £150,00022 £82,000 0 0 0 0 £023 £100,000 0 0 0 0 £023 £110,000 8 0 2 10 £1,100,00024 £175,000 4 0 0 4 £700,00025 £250,000 16 2 1 19 £4,750,000

Total 25,885 3,937 1,663 31,485 £112,774,200


Rates of review and appealAs the table above shows, our continuingefforts to get first decisions right and tobetter communicate our decisions have ledto reduced requests for reviews, and fewerappeals.

The table below shows the number ofapplications turned down by the schemeparagraph under which the refusal was based.For some applications there was more thanone reason for refusal so the total figure in thetable is higher than the total number ofrefused applications.

Time taken to reach decisionsWhilst it is vital that we make the rightdecisions on the applications we receive, werecognise the importance of minimising thetime applicants have to wait for a fairdecision. Table 5 shows the time taken toreach decisions at claims assessment stage.Delays in reaching a decision can be for avariety of reasons, but the most commonreason is the time taken to receiveinformation requested from third parties; forexample, the police, medics, or applicants’representatives.

Table 4: Disallowed claims 2006-07

Scheme Disallowedparagraph Criterion claims

6 Injury sustained before 1 August 1964 237(a) Previous claim for same injury 3307(b) Injury sustained in family setting before October 1979 08(a) Mainly, injury did not result from crime of violence 4,5949 Application did not meet restrictions in the paragraph 23111 Motor vehicle cases, mainly, vehicle not used as a weapon with 325

the intention to injure12 Accidental injury sustained in law enforcement: risk not justifiable 85

or not exceptional13(a) Failure to report without delay to police 1,76013(b) Failure to co-operate with police in bringing assailant to justice 5,13513(c) Failure to co-operate with the Authority 1,72913(d) Conduct before, during or after the incident 3,47813(e) Applicant’s criminal record/character 4,14716(a) Assailant would have benefited from award 8416(b) Award would have been against a minor’s interests 117(a) Assailant in family violence/abuse claim not prosecuted 117(b) Violence between adults in same family – assailant and victim 43

still living in same household18 Claim not submitted within 2 years of incident 58725 Injury not serious enough to qualify for minimum award of £1,000 8,07226 Pre-existing medical condition 564

Total 31,189

Table 3: Tariff scheme review and appeal rates

2003-04 2004-05 2005-06 2006-07

% of claims assessment cases going to review 22.0 21.7 20.6 19.8

% of review cases going to appeal 25.3 21.6 21.2 20.0

Overall appeal rate 5.6 4.7 4.4 4.0


Outstanding appealsAs Table 6 shows, we continued to reducethe number of outstanding appeals.

Outstanding applications

In summary, we resolved very nearly asmany cases as we received, while continuingto make improvements across theorganisation – reducing the number ofoutstanding appeals, and reducing reviewand appeal rates.

Table 6: Outstanding appeals

2003-04 2004-05 2005-06 2006-07

Awaiting appeal 5,174 4,391 3,601 2,575

Table 7: Outstanding appplications

2003-04 2004-05 2005-06 2006-07

Awaiting a first decision 56,142 59,188 60,739 63,785

Awaiting a reviewed decision 9,097 8,708 8,969 9,730

Awaiting applicant’s response toa first or reviewed decision 14,577 12,294 12,380 11,453

Awaiting appeal 5,174 4,391 3,601 2,575

Total 84,990 84,581 85,689 87,543

During 2006-07 net expenditure reducedfrom £165.226 million to £113.340 million, adecrease of £51.886 million. This change isdue to the reduction in the movement of the

tariff schemes provision and the pre-tariffschemes provision. Note 10 in the Notesto the Accounts provides full details of theAuthority’s provisions.

Operating cost statement

Table 5: Time taken to reach claims assessment decisions 2006-07

Period of time from receipt Number of decisions % Cumulative %

Within 2 months 2,676 4.69 4.69

2-4 months 4,805 8.43 13.12

4-6 months 5,780 10.13 23.25

6-8 months 7,306 12.81 36.06

8-10 months 7,975 13.98 50.04

10-12 months 7,356 12.90 62.94

over 12 months 21,139 37.06 100.00

Total 57,037 100.00

Table 5: Time taken to reach claims assessment decisions 2006-07

Period of time from receipt Number of decisions % Cumulative %

Within 2 months 2,676 4.69 4.69

2-4 months 4,805 8.42 13.12

4-6 months 5,780 10.13 23.25

6-8 months 7,306 12.81 36.06

8-10 months 7,975 13.98 50.04

10-12 months 7,356 12.90 62.94

over 12 months 21,139 37.06 100.00

Total 57,037 100.00All permanent members of staff are currentlyon assignment to the Authority and remainemployees of either the Home Office or theScottish Executive.

Remuneration policyRemuneration packages fall under theschemes operated by the Home Officeor the Scottish Executive and followGovernment policy guidelines for publicsector pay.

PensionsAll permanent members of staff are eligiblefor membership of the Civil Service PensionScheme, and ordinary members are eligiblefor the Principal Civil Service PensionScheme (PCSPS). The Home Office or theScottish Executive is responsible for makingcontributions to their pension schemes. Theymake appropriate charges to the Authority,but as the Authority is not responsible fortheir pensions, no details of their pensionentitlements are given in these accounts.

The PCSPS is an unfunded multi-employerdefined benefit scheme, but the Home Officeand the Scottish Executive are unable toidentify their share of its underlying assetsand liabilities. A full actuarial valuation wascarried out at 31 March 2003. Details canbe found in the resource accounts of theCabinet Office; Civil Superannuation(www.civilservice-pensions.gov.uk).

For 2006-07, employer’s contributions of£1,629k (2005-06, £1,486k) were payable tothe PCSPS at one of four rates in the range19.3 to 23.5 per cent (2005-06, 16.2 to

24.6 per cent) of pensionable pay, basedon salary bands. Employer contributions areto be reviewed every four years following afull scheme valuation by the GovernmentActuary. The contribution rates reflectbenefits as they are accrued, not when thecosts are actually incurred, and reflect pastexperience of the scheme.

Employees joining the civil service after1 October 2002 could opt to open apartnership pension account, which is astakeholder pension with an employercontribution. No staff members working forthe Authority had taken this option duringthe financial year 2006-07 and therefore nocontributions were made.

Senior staff disclosuresThe Chief Executive fulfils the role ofAccounting Officer of the Authority. Theemoluments disclosed represent the totalamount paid.

Salary‘Salary’ includes gross salary; performancepay or bonuses; overtime; reserved rights toLondon weighting or London allowances;recruitment and retention allowances andany other allowance to the extent that it issubject to UK taxation.

Benefits in kindNo senior staff received any benefits in kind.

Remuneration report

The Authority follows the Better PaymentPractice Code, and undertakes to pay allinvoices within 28 days of receipt or withinstated credit terms. A sample review ofinvoices paid during 2006-07 indicated that99 per cent (97 per cent in 2005-06) of those

reviewed were paid within 28 days. TheAuthority was not required to pay anyinterest relating to late payment under theterms of the Late Payment of CommercialDebts (Interest) Act 1998.

Creditor payment policy and performance



Cash Equivalent Transfer Values (CETV)A Cash Equivalent Transfer Value (CETV) isthe actuarially assessed capitalised value ofthe pension scheme benefits accrued by amember at a particular point in time. Thebenefits valued are the member’s accruedbenefits and any contingent spouse’spension payable from the scheme.

A CETV is a payment made by a pensionscheme or arrangement to secure pensionbenefits in another pension scheme orarrangement when the member leaves ascheme and chooses to transfer the benefitsaccrued in their former scheme.

The pension figures shown relate to thebenefits that the individual has accrued as aconsequence of their total membership of thepension scheme, not just their service in asenior capacity to which disclosure applies.

The CETV figures include the value of anypension benefit in another scheme or

arrangement, which the individual hastransferred to the PCSPS arrangements andfor which the PCSPS Vote has received atransfer payment commensurate to theadditional pension liabilities being assumed.

They also include any additional pensionbenefits accrued to the member as a result oftheir purchasing additional years of pensionservice in the scheme at their own cost.CETVs are calculated within guidelines andframework prescribed by the Institute andFaculty of Actuaries.

The real increase in CETV reflects theincrease effectively funded by the employer.It takes account of the increase in accruedpension due to inflation, contributions paid bythe employee (including the value of anybenefits transferred from another pensionscheme or arrangement) and uses commonmarket valuation factors for the start andend period.

Remunerations and pensions for senior staff 2006-07

£’000 £’000 £’000Total

accruedpension andrelated lumpsum at age

60 at 31March 2007

Employercontribution

topartnership

pensionaccount

Age

37

J. Drean*Chief ExecutiveStart date 20/08/06

40-45

Pension0-2.5

Lump sum0-2.5

Pension20-25

Lump sum0-2.5

59 73 9 0

52

H. Webber* Chief ExecutiveEnd date24/10/06

40-45

Pension0-2.5

Lump sum0-2.5

Pension30-35

Lump sum0-2.5

506 513 11 0

47A. JohnstoneDirector of Legal and Policy

60-65

Pension0-2.5

Lump sum0-2.5

Pension10-15

Lump sum40-45

214 230 14 0

CETV31 March

2006

CETV31 March

2007

Realincrease in

CETV

Salary andpension

Realincrease in

pension andrelated lumpsum at age

60

£’000 £’000 £’000 £’000

53

E. McKeownDeputy ChiefExecutiveEnd date9/03/07**

55-60

Pension0-2.5

Lump sum0-2.5

Pension25-30

Lump sum65-70

432 451 19 0

27

G. Johnston*Director of CaseworkOperationsStart date17/10/06

20-25

Pension0-2.5

Lump sum0-2.5

Pension0-5

Lump sum0-2.5

34 37 2 0

C. MoynehanDirector of FinanceStart date15/01/07***

* Amounts pro-rata** E. McKeown retired on 9 March 2007 under the Scottish Executive flexible early retirement scheme.*** The remuneration and pension for C. Moynehan is accounted for and borne by the Home Office and is covered by the disclosure arrangements which govern the Home Office resource accounts for 2006-07.

Name


Joanne DreanChief Executive and Accounting OfficerCriminal Injuries Compensation Authority13 July 2007

Remunerations and pensions for senior staff 2005-06

£’000 £’000 £’000

Totalaccrued


60 at 31March 2007

Employercontribution

topartnership

pensionaccount

Age

51H. WebberChief Executive

75-80

Pension0-2.5

Lump sum0-2.5

Pension30-35

Lump sum0-2.5

366 506 26 0

46A. JohnstoneSenior Solicitor

60-65

Pension0-2.5

Lump sum0-2.5

Pension15-20

Lump sum40-45

148 214 15 0

52

E. McKeownDeputy ChiefExecutive 55-60

Pension0-2.5

Lump sum0-2.5

Pension25-30

Lump sum65-70

333 432 12 0

CETV31 March

2005

CETV31 March

2006

Realincrease in

CETV

Salary andpension

Realincrease in


60

£’000 £’000 £’000 £’0002005-06

Name


Under Section 6(3) of the Criminal InjuriesCompensation Act 1995 and paragraph 4 ofthe Criminal Injuries Compensation Scheme,the Secretary of State (with the consent ofthe Treasury) has directed the CriminalInjuries Compensation Authority to preparefor each financial year a statement ofaccounts in the form and on the basis setout in the Accounts Direction. The accountsare prepared on an accruals basis and mustgive a true and fair view of the state ofaffairs of the Authority and of its OperatingCost Statement, recognised gains andlosses and cash flows for the financial year.

In preparing the accounts, the AccountingOfficer is required to comply with therequirements of the Government FinancialReporting Manual and in particular to:

� observe the Accounts Direction issued bythe Secretary of State (with the consentof the Treasury), including the relevantaccounting and disclosure requirements,and apply suitable accounting policies ona consistent basis;

� make judgements and estimates on areasonable basis;

� state whether applicable accountingstandards as set out in the GovernmentFinancial Reporting Manual have beenfollowed, and disclose and explain anymaterial departures in the financialstatements; and

� prepare the financial statements on agoing concern basis.

The Home Office has appointed the ChiefExecutive as Accounting Officer of theCriminal Injuries Compensation Authority.The responsibilities of an AccountingOfficer, including responsibility for thepropriety and regularity of the publicfinances for which the Accounting Officer isanswerable, for keeping proper records andfor safeguarding the Criminal InjuriesCompensation Authority’s assets, are setout in the Accounting Officers’ Memorandumissued by the Treasury and published inGovernment Accounting.

Statement of Accounting Officer’s responsibilities

Statement on internal controlScope of responsibilityAs Accounting Officer I am responsible forensuring that the Authority operates andmaintains a system of internal control whichsupports the achievement of its policies,aims and objectives, as agreed with theHome Office and Scottish Executive, andwhich safeguards the public funds andassets for which I am responsible personallyin accordance with the responsibilitiesassigned to me in Government Accounting.

There are two key mechanisms for managingrisk and relations between the Authority andthe sponsor Departments. These include aninter-departmental committee and a projectboard. Through these mechanisms risks areidentified and managed and conveyed to theHome Office Executive Board and itsMinisters. In addition, the Audit Committee

and the Home Office Internal Audit play arole in managing risk.

The purpose of the system ofinternal controlThe system of internal control is designedto manage risk to a reasonable level ratherthan eliminate all risk of failure to achievepolicies, aims and objectives; it can thereforeonly provide reasonable and not absoluteassurance of effectiveness. The system ofinternal control is based on an ongoingprocess designed to identify and prioritisethe risks to the achievement of theAuthority’s policies, aims and objectives, toevaluate the likelihood of those risks beingrealised and the impact should they berealised, and to manage them efficiently,effectively and economically. The systemof internal control has been in place in the


Authority for the year ended 31 March 2007and up to the date of approval of the annualreport and accounts, and accords withTreasury guidance.

Capacity to handle riskAlthough classified as a Non DepartmentalPublic Body by the Cabinet Office, theAuthority does not have a formal Board ornon-executive Chair. Its structure is similarto that of a departmental agency, and isheaded by the Chief Executive who issupported by functional Directors (Finance,Casework Operations, Legal and Policy).The responsibility for managing risk withinthe Authority rests with the Chief Executivewho, with the Directors, reviews the keyexisting and emerging risks facing theAuthority regularly. The Chief Executive isalso advised by the Authority’s AuditCommittee, which oversees theorganisation’s management of risk.

Through an extensive process ofconsultation with staff and considerationby the Directors an organisation-wide riskregister has been produced in which themain risks are rated according to theirlikelihood and their impact on our abilityto achieve our aims and objectives. Theregister also specifies the mitigating actionsfor managing and monitoring each risk andthe risk owner.

The risk and control frameworkThe Authority’s approach to managingrisk is based on a framework of regularmanagement information, administrativeprocedures including the segregation ofduties, a system of delegation andaccountability, and procedural guidanceand benchmarking. In particular, it includes:

� maintaining core guidance documentationfor all staff and standardising proceduresin best practice guidance specific to eachcasework stage;

� regular reviews of casework policy andprocedure by internal policy andstandardisation committees;

� providing a high level of job-specifictraining and coaching, which is reviewedby the Training Liaison Committee;

� setting budgets and targets, separatingduties and specifying authority levels;

� reviews at formal meetings of the Directors(generally 10 every year) of performanceagainst plan and budget and of financial,operational, staffing and training risks,using where possible quantitativeindicators;

� developing and integrating caseworksupport and finance IT systems whichincorporate controls and can produceexception and other reports for monitoringrisk;

� close involvement of internal customersin the development of IT systems andthorough pre-release testing;

� regular meetings of the Authority’sindependent Audit Committee;

� regular formal meetings with the Authority’sHome Office and Scottish Executivesponsors;

� as appropriate, formal project managementdisciplines;

� standard compliance test checks anda programme of special risk-basedinvestigations by our Security and QualityAssurance Section;

� risk-based reviews by the Home OfficeAudit and Assurance Unit.

Audit committeeThe Audit Committee oversees the strategicprocess for risk management, internalcontrol and corporate governance andfinance. The Audit Committee consists ofthree independent members. The ChiefExecutive, Director of Finance, NationalAudit Office, External and Internal Auditors,attend by invitation.


Internal auditThe Home Office Audit and Assurance Unit,which operate to Government standards,provide the Authority’s internal audit service.They submit regular reports and, at leastannually, provide an independent opinionon the adequacy and effectiveness of theAuthority’s system of internal control togetherwith recommendations for improvement. TheChief Executive also receives reports by ourQuality Assurance Section about the resultsof their programme of compliance visits andabout particular risks, which they have beenasked to investigate.

Quality assurance sectionUndertakes standard compliance testingreviews and a programme of special risk-based investigations.

Review of effectivenessAs Accounting Officer, I have responsibilityfor reviewing the effectiveness of the systemof internal control. My review of theeffectiveness of the system of internalcontrol is informed by the work of theinternal auditors and the executive managerswithin the Authority who have responsibilityfor the development and maintenance of theinternal control framework, and commentsmade by the external auditors in theirmanagement letter and other reports. I havebeen advised on the implications of theresult of my review of the effectiveness ofthe system on internal control by the AuditCommittee, and a plan to addressweaknesses and ensure continuousimprovement of the system is in place.


15 Criminal Injuries Compensation Authority Annual report 2006-07Criminal Injuries Compensation Authority Annual report 2006-07 15Criminal Injuries Compensation Authority Annual report 2006-07 15

I certify that I have audited the financialstatements of the Criminal InjuriesCompensation Authority on pages 17 to 34for the year ended 31 March 2007 underSection 6(3) of the Criminal InjuriesCompensation Act 1995. These comprisethe Operating Cost Statement, the BalanceSheet, the Cashflow Statement andStatement of Total Recognised Gains andLosses and the related notes. These financialstatements have been prepared under theaccounting policies set out within them.

Respective responsibilities of theAuthority, Chief Executive/AccountingOfficer and AuditorAs described on page 12, the Authorityand Accounting Officer are responsiblefor preparing the Annual Report, theRemuneration Report and the financialstatements in accordance with the CriminalInjuries Compensation Authority and theTreasury directions made thereunder andfor ensuring the regularity of financialtransactions. These responsibilities are setout in the Statement of the Authority’s andAccounting Officer’s Responsibilities.

My responsibility is to audit the financialstatements in accordance with relevantlegal and regulatory requirements, and withInternational Standards on Auditing (UKand Ireland).

I report to you my opinion as to whether thefinancial statements give a true and fair viewand whether the financial statements andthe part of the Remuneration Report to beaudited have been properly prepared inaccordance with the Criminal InjuriesCompensation Act 1995 and the Treasurydirections made thereunder. I also reportwhether in all material respects theexpenditure and income have been appliedto the purposes intended by Parliament and

the financial transactions conform to theauthorities, which govern them. I alsoreport to you if, in my opinion, the AnnualReport is not consistent with the financialstatements, if the Authority has not keptproper accounting records, if I have notreceived all the information and explanationsI require for my audit, or if informationspecified by relevant authorities regardingremuneration and other transactions isnot disclosed.

I review whether the statement on pages 12to 14 reflects the Authority’s compliance withHM Treasury’s guidance on the Statementon Internal Control, and I report if it does not.I am not required to consider whether theAccounting Officer’s statements on internalcontrol cover all risks and controls, or forman opinion on the effectiveness of theAuthority’s corporate governance proceduresor its risk and control procedures.

I read the other information contained in theAnnual Report, which includes the unauditedpart of the Remuneration Report and theManagement Commentary, and considerwhether it is consistent with the auditedfinancial statements. I consider theimplications for my report if I become awareof any apparent misstatements or materialinconsistencies with the financial statements.My responsibilities do not extend to anyother information.

Basis of audit opinionI conducted my audit in accordance withInternational Standards on Auditing (UK andIreland) issued by the Auditing PracticesBoard. My audit includes examination, ona test basis, of evidence relevant to theamounts, disclosures and regularity offinancial transactions included in the financialstatements and the part of the RemunerationReport to be audited. It also includes an

The Certificate and Report of the Comptroller andAuditor General to the Houses of Parliament and theScottish Parliament


assessment of the significant estimates andjudgments made by the Authority and ChiefExecutive in the preparation of the financialstatements, and of whether the accountingpolicies are most appropriate to theAuthority’s circumstances, consistentlyapplied and adequately disclosed.

I planned and performed my audit so as toobtain all the information and explanationswhich I considered necessary in order toprovide me with sufficient evidence to givereasonable assurance that the financialstatements and the part of the RemunerationReport to be audited are free from materialmisstatement, whether caused by fraud orerror and that in all material respects theexpenditure and income have been appliedto the purposes intended by Parliament andthe financial transactions conform to theauthorities which govern them.

In forming my opinion I also evaluated theoverall adequacy of the presentation ofinformation in the financial statements andthe part of the Remuneration Report to beaudited.

OpinionsIn my opinion:

� the financial statements give a true and fairview, in accordance with Criminal InjuriesCompensation Act 1995 and directionsmade thereunder by the Treasury, of thestate of the Authority’s affairs as at 31March 2007 and of its surplus for the yearthen ended;

� the financial statements and the part of theRemuneration Report to be audited havebeen properly prepared in accordance withthe Criminal Injuries Compensation Act1995 and the Treasury directions madethereunder; and

� in all material respects the expenditure andincome have been applied to the purposesintended by Parliament and the financialtransactions conform to the authoritieswhich govern them.

I have no observations to make on thesefinancial statements.

John BournComptroller and Auditor GeneralNational Audit Office157-197 Buckingham Palace RoadVictoriaLondonSW1W 9SP18 July 2007


The certificate and report of the Comptroller andAuditor General to the Houses of Parliament and theScottish ParliamentOperating Cost Statement for the year ended 31 March 2007

2006-2007 2005-2006Notes £’000 £’000 £’000 £’000

RestatedProgramme ExpenditureTariff and pre-tariff compensation charges

Tariff schemes 137,697 163,514Pre-tariff schemes (4,784) 24,717

132,913 188,231

Administration ExpenditureStaff costs 3 12,983 11,689Administration costs 4 10,650 9,817Dilapidations on leases 10 – 65

23,633 21,571

Total Expenditure 156,546 209,802

Other income 2 1,208 1,645Notional cost of capital 1.6 43,240 43,898Amount repaid to consolidated fund (1,242) (967)

43,206 44,576

Net Expenditure 11 113,340 165,226

All income and expenditure is derived from continuing operations

Statement of Recognised Gains and Losses for the year ended 31 March 2007

2006-2007 2005-2006Notes £’000 £’000 £’000 £’000

RestatedNet loss on revaluation of fixed assets 13 (32) (52)

Total recognised gains and lossesfor the financial year (32) (52)

Recognised Gains and Losses (32)

Prior Year Adjustment 26 –

Recognised Gains and Losses sincethe last financial statements (32)

Accounts

The notes on pages 20 to 34 form part of these accounts.


Balance sheet as at 31 March 2007

31 March 2007 31 March 2006Notes £’000 £’000 £’000 £’000

Restated

Fixed assets:Intangible assets 5 21 48Tangible assets 5 1,480 925

1,501 973

Current assets:Debtors 6 1,505 1,410Prepayments 7 934 1,090Cash at bank and in hand 15 20,480 11,371

22,919 13,871

Creditors (amounts falling due withinone year) 8 (8,661) (2,695)

Net current assets 14,258 11,176

Total assets less current liabilities 15,759 12,149

Creditors (amounts falling due aftermore than one year) 9 (1,281) (2,808)

Provisions for liabilities and chargesPre-tariff schemes 10 (174,405) (198,590)Tariff schemes 10 (1,026,000) (1,061,066)Lease dilapidation 10 (1,365) (1,365)

(1,201,770) (1,261,021)

Net liabilities (1,187,292) (1,251,680)

Taxpayers’ equityGeneral fund 11 (1,188,468) (1,252,337)Revaluation reserve 12 374 406Capital reserve 13 802 251

25 (1,187,292) (1,251,680)



Accounts continued.


Accounts continued.

Cashflow statement for the year ended 31 March 2007

2006-07 2005-06Notes £’000 £’000 £’000 £’000

Operating activities RestatedNet cash outflow from operating 16 (210,880) (206,869)activities

Other non-operating incomeOther income 1,155 1,601Amount repaid to consolidated funds (1,242) (967)

(87) 634Returns on investments andservicing of finance

Interest received 53 44

Capital expenditure and financialinvestment

Payment to acquire tangible fixed assets (977) (160)

Net cash inflow (211,891) (206,351)

FinancingFunding 221,000 214,000

Increase in cash 15 9,109 7,649

Analysis of changes in net cashAt 1 At 31April Other March2006 Cashflows changes 2007£’000 £’000 £’000 £’000

Cash in hand, at bank 11,371 9,109 – 20,480




Note 1 Statement of accounting policiesThese financial statements have been prepared in accordance with the 2006-07 GovernmentFinancial Reporting Manual (FReM) issued by HM Treasury. The accounting policiescontained in the FReM follow UK generally accepted accounting practice for companies(UK GAAP) to the extent that it is meaningful and appropriate to the public sector.

Where FReM permits a choice of accounting policy, the accounting policy which has beenjudged to be the most appropriate to the particular circumstances of the Authority for thepurpose of giving a true and fair view has been selected. The Authority’s accounting policieshave been applied consistently in dealing with items considered material in relation tothe accounts.

For the financial year ending 31 March 2007, the Financial Reporting Advisory Board hasagreed amendments to HM Treasury’s FReM. This has resulted in changes of accountingpolicy and to the format of the accounts. The changes in the accounting policy have beenreflected by a prior year adjustment in line with FRS 3 ‘reporting financial performance’.The impact of these changes is disclosed in note 26 to the financial statements.

1.1 Accounting conventionThese accounts have been prepared under the historical cost convention modified to accountfor the revaluation of fixed assets.

The statement of accounts set out on pages 17 to 19 together with the Notes on pages 20 to34 have been prepared on an accruals basis in accordance with the Accounts Direction givenby the Secretary of State for the Home Office, with approval of HM Treasury, in accordancewith the Criminal Injuries Compensation Schemes 1996 and 2001.

At 31 March 2007, the Criminal Injuries Compensation Authority balance sheet records netliabilities of £1,187 million (2006 £1,252 million). This reflects the inclusion of liabilities fallingdue in future years which, to the extent that they are not to be met from the Authority’s othersources of income, may only be met by future funding or funds from the Ministry of Justice.This is because, under the normal conventions applying to Parliamentary control over incomeand expenditure, the funding may not be paid in advance of need.

Funding for 2007-08, taking into account the amounts required to meet the Authority’sliabilities falling due that year, has already been included in the Ministry of Justice’s estimatesfor that year, which have been approved by Parliament, and there is no reason to believe thatthe Ministry of Justice’s future sponsorship and future parliamentary approval will not beforthcoming. It has been considered appropriate to adopt the going concern basis for thepreparation of these financial statements.

1.2 Administration and programme expenditureThe operating cost statement is analysed between administration and programmeexpenditure. The classification of expenditure as administration or programme follows thedefinition of administration costs set out in financial memorandum issued to the Authority bythe Secretary of State for the Home Office.

1.3 FundingMost of the expenditure of the Authority is met from funds advanced by the Home Officewithin an approved allocation. Funds received for revenue expenditure are credited to the

Notes to the Accounts


Notes to the Accounts continued.

general fund in the year to which it relates. Funds used for capital purchases are credited toa government grant reserve. Each year, an amount equal to the depreciation charge on thefixed assets acquired through funding, and any deficit on their revaluation in excess of thebalance on the revaluation reserve, will be released from the government grant reserve to theoperating cost statement.

1.4 Fixed assets

Intangible assetsPurchased computer software licences are capitalised as intangible assets where expenditureof £500 or more is incurred. Intangible assets are valued at current replacement cost byusing the Price Index Numbers for Current Cost Accounting published by the Office forNational Statistics, from the month of acquisition.

Tangible assetsAssets are capitalised as fixed assets if they are intended for use on a continuous basis andtheir original purchase cost, on an individual basis, is £500 or more, or, on a grouped basisis £25,000 or more. Fixed assets are valued at current replacement cost by using the PriceIndex Numbers for Current Cost Accounting published by the Office for National Statistics,from the month of acquisition. All refurbishment costs are valued on an historic cost basis.The residual value of all assets and the depreciation method applied to them is reviewed atthe end of each financial year.

Any surplus on revaluation is credited to the revaluation reserve. A deficit on revaluation isdebited to the operating cost statement if the deficit exceeds the balance on the revaluationreserve.

The Authority has received no donated assets in the current financial year.

1.5 DepreciationDepreciation is provided on all fixed assets on a straight line basis to write off the costor valuation evenly over the asset’s anticipated life as follows.

Software and systems development expenditure on IT systems is written off in the periodin which it is incurred.

Refurbishment costs Remaining term of the lease

Furniture and office equipment Ten years

Computer equipment Three to five years

Software licences Three years



1.6 Capital chargeA charge, reflecting the cost of capital utilised by the Authority, is included in the operatingcosts. The charge is calculated at the real rate set by HM Treasury (currently 3.5 per cent)on the average carrying amount of all assets less liabilities except for:

a) Tangible and intangible assets where the cost of capital charge is based on openingvalues adjusted pro-rata for in-year plus or minus:

� plus additions at cost;

� disposals as valued in the opening balance sheet (plus any subsequent capitalexpenditure prior to disposal);

� impairments at the amount of the reduction of the opening balance sheet value(plus any subsequent capital expenditure);

� depreciation of tangible and amortisaton of intangible assets.

b) Donated assets, where the charge is nil.

1.7 Income from court awardsApart from those relating to applications made before 1 April 1996, which are retained by theAuthority, all recoveries from assailants through civil actions and the criminal courts are paidinto the consolidated fund via the Home Office and Scottish Executive.

1.8 Accounting for retirement benefitsUnder FRS17 the Authority is required to provide for the full long-term pension liabilities ofany qualifying staff not covered under the PCSPS arrangements. All staff working for theAuthority were however covered under the PCSPS arrangements and therefore no liabilityfor long-term pension liabilities is charged to these accounts.

1.9 Operating leasesRentals paid on operating leases for buildings are charged to expenditure as incurred.

1.10 ProvisionsThe Authority provides for legal or constructive obligations which are of uncertain timingor amount at the balance sheet date on the basis of the best estimate of the expenditurerequired to settle the obligation. These obligations consist of provisions for the pre-tariffand tariff schemes and for dilapidations for the building leases.

Pre-tariff schemesThe pre-tariff schemes provision reflects the estimate of all pre-tariff schemes cases at thebalance sheet date. It is compiled following an annual case-by-case assessment by lawyersemployed by the Authority to arrive at the liability, which is then subject to a sampling reviewby members of the independent Criminal Injuries Compensation Appeals Panel. All interimpayments already made are then deducted to arrive at the net liability.





Note 1.10 Provisions continued.

A provision was first set aside in the 2001-02 accounts on the basis of an assessment ofall cases remaining to be settled under the pre-tariff schemes. For the cases remaining,including cases with expected long-term settlement dates, the Authority’s managementconsider that the provision at year end is adequate.

Tariff schemesThe Authority’s accounting policy recognises as liabilities not only the likely total net value ofall applications that are currently under consideration, but also the value of applications thatwe are likely to receive in the future from incidents which occurred before the year end.

The estimates for these have been obtained with specialist actuarial advice.

The actuarial projection methodology, used to estimate the provision for the tariff schemes,involved an examination of the historical claims data together with information on issues thatmay affect the future claim developments. From this work, claim patterns were derived thatmight be expected to apply in the future. Analysis based on these patterns was then usedto project the likely ultimate value of applications already received and of those yet to bereceived in respect of incidents that have already occurred. All interim payments alreadymade are then deducted to arrive at the net liability.

DilapidationsProvisions for dilapidations are recognised in the year in which the Authority recognisesit has a future obligation to transfer economic benefits based on a past event.

1.11 Value Added TaxThe Authority is not eligible to register for VAT and all costs are shown inclusive ofirrecoverable VAT.

1.12 Third party assetsThe retention of compensation awards to certain minors is provided for under paragraph 3 ofthe scheme. The purpose of this action is to ensure that the victim will be the sole beneficiaryof the sum of the award including accrued interest when they reach their majority (18 years ofage). Where appropriate, interim payments are made on an ‘as needs’ basis.




Note 2 Income – other income2006-07 2005-06

£’000 £’000

Civil actions – retainable 49 131Civil actions – non-retainable 583 797Court compensation orders – non-retainable 476 455Bank interest 53 44Other administrative income 47 218

1,208 1,645

Note 3 Employment costsThe Authority is staffed by employees on assignment from either the Scottish Executive orthe Home Office.

Staff costs2006-07 2005-06

£’000 £’000

Salaries and emoluments 8,980 8,310Social security costs 687 633Other pension costs 1,629 1,486Agency staff 1,067 491Overtime payments 620 769

12,983 11,689

Staff numbersThe average number of whole time equivalent persons employed (including seniormanagement) during the year was as follows:

2006-07 2005-06Casework 355 350Administration 69 77Agency staff 47 25

471 452

2006-07 2005-06

Scottish Executive 312 307Home Office 112 120Agency 47 25

471 452




Note 4 Administration costs2006-07 2005-06

£’000 £’000

Accommodation costs 3,882 3,874Audit fees – external * 105 68Audit fees – internal 26 18Furniture and fittings 39 38Information and publications 34 43IT development and maintenance 702 659Medical/dental fees 3,003 2,620Miscellaneous fees 866 497Postage and telephone 608 609Stationery 239 240Training 102 146Travel and subsistence – staff 221 194Travel and subsistence – witnesses – 4Ex-gratia payments 134 70Depreciation 402 521Loss on disposal of fixed assets 15 0Bad debts written-off 203 93Increase in provision for bad debt 69 123

Total administration costs 10,650 9,817

* The external audit fee for 2006-07 was £84,000. The difference of £21,000 relates toadditional audit charges relating to prior years.

Note 5 Fixed assets

Intangible assetsSoftwarelicences Total

£’000 £’000

Costat 1 April 483 483Additions 5 5Revaluations (35) (35)

At 31 March 453 453

Depreciationat 1 April (435) (435)Charged in year (31) (31)

Revaluations 34 34

At 31 March (432) (432)

Net book value at 31 March 2007 21 21

Net book value at 31 March 2006 48 48




Note 5 Fixed assets continued.

Tangible assetsLand & Furniture

buildings IT & fittings Total£’000 £’000 £’000 £’000

Costat 1 April 478 1,708 361 2,547Additions 464 94 414 972Disposals – (259) (17) (276)Revaluations – (112) 3 (109)

At 31 March 942 1,431 761 3,134

Depreciationat 1 April (398) (1,022) (202) (1,622)Charged in year (48) (291) (32) (371)Disposals – 249 12 261Revaluations – 74 4 78

At 31 March (446) (990) (218) (1,654)

Net book value at 31 March 2007 496 441 543 1,480

Net book value at 31 March 2006 80 686 159 925

Total assets

Net book value at 31 March 2007 1,501

Net book value at 31 March 2006 973

Note 6 Debtors: amounts falling due within one year31 March 31 March

2007 2006£’000 £’000

Trade debtors 971 353Court compensation 792 892Civil claims 171 521Other debtors 53 138

1,987 1,904Provision for bad debts (482) (494)

1,505 1,410

Provision for bad debtsOpening balance 494 371Decrease in provision (12) 123

Closing balance 482 494




Note 7 Prepayments31 March 31 March

2007 2006£’000 £’000

Accommodation 712 966IT maintenance 199 104Other 23 20

934 1,090

Note 8 Creditors: amounts falling due within one year31 March 31 March

2007 2006£’000 £’000

Trade creditors 4,768 92Consolidated fund creditors 58 57Other creditors 3 442Other creditors – pre-tariff schemes 110 0Other creditors – tariff schemes 2,646 934Accruals 1,076 1,170

8,661 2,695

Note 9 Creditors: amounts falling due after more than one yearAwards are on occasion held in holding accounts in the name of the applicant prior toappropriate guardianship being determined.

Number of 2006-07 Number of 2005-06accounts £’000 £’000 accounts £’000 £’000

Holding accounts

Opening balance 18 2,808 21 1,177

Deposits in year 1 17 7 2,417Additional deposits toexisting accounts 1 5 – 19Interest received 60 82

82 2,518

Closures 6 1,574 9 794Withdrawals 72Repaid to CICA 1 20 1 4Interest paid to victims 15 17

(1,609) (887)

Closing balance 12 1,281 18 2,808




Note 10 Provisions for liabilities and charges

Pre-tariff Tariff Leaseschemes schemes dilapidation Total

£’000 £’000 £’000 £’000

Balance at 1 April 198,590 1,061,066 1,365 1,261,021Arising during the year 31,461 151,000 – 182,461Reversed unutilised during the year (36,245) (13,303) – (49,548)Utilised during the year (19,401) (172,763) – (192,164)

Balance at 31 March 174,405 1,026,000 1,365 1,201,770

Geographical split for pre-tariff and tariff schemes utilised during the year.

2006-07 2005-06£’000 £’000

Awards relating to victims of crimes of violence occurring in:England and Wales 174,209 162,391Scotland 17,955 21,532

192,164 183,923

The pre-tariff scheme’s provision reflects the Authority’s liabilities in respect of all outstandingcases which remain to be settled from the schemes which existed prior to 1996. Inaccordance with the Authority’s accounting policies, the provision is reviewed annually andreflects the likely settlement values at the year end based on the circumstances of eachapplication at that time. Many of the cases are complex and will take some years before thefinal assessment of compensation can be made. The Authority does not hold any assets inrespect of these liabilities; compensation will be paid from grant-in-aid made available by theHome Office.

The tariff schemes’ provision reflects the Authority’s liabilities under the 1996 and 2001 tariffschemes, in respect of applications received, or likely to be received, from incidents whichoccurred before the year end. In accordance with the Authority’s accounting policies, theprovision has been derived from historical claims data, together with information on issuesthat may affect future claim developments. More than two thirds of applications are assessedand, for qualifying applications, an offer is made within one year of receiving the application.The Authority does not hold any assets in respect of these liabilities; compensation will bepaid from grant-in-aid made available by the Home Office.

A long-term liability of £1,365,000 has been established in the accounts for dilapidationcommitments on all leases. This is based on a prudent estimate provided by the appropriateHome Office department.




Note 11 General fundNotes 2006-07 2005-06

£’000 £’000

Restated

Balance at 1 April (1,252,337) (1,257,627)Prior year adjustment 26 – –

Balance at 1 April as restated (1,252,337) (1,257,627)Net Parliamentary funding 220,000 213,840Net transfer from operating activities

Net expenditure (113,340) (165,226)Non-cash charges

Cost of capital (43,240) (43,898)Transfers from Capital Reserve 449 574

Balance at 31 March (1,188,468) (1,252,337)

Note 12 Revaluation reserve2006-07 2005-06

£’000 £’000

Restated

Balance at 1 April 406 458Prior year adjustment – –Balance at 1 April as restated 406 458Net loss on revaluation during the year (32) (52)

Balance at 31 March 374 406

Note 13 Capital reserve2006-07 2005-06

£’000 £’000

Restated

Balance at 1 April as previously reported 251 665Prior year adjustment – –

Balance at 1 April as restated 251 665Net Parliamentary funding 1,000 160Net loss on revaluation of fixed assets

to General Fund (32) (52)Depreciation charge for year transferred

to General Fund (402) (522)Net book value of fixed asset disposals

transferred to General Fund (15) –

Balance at 31 March 802 251



Note 14 Funding2006-07 2005-06

£’000 £’000

HMG funding receivedCompensation payments – funding received

from Home Office 199,000 194,000Administration – funding from Home Office for

revenue expenditure 21,000 19,840

220,000 213,840Administration – funding from Home Office usedfor capital purchases 1,000 160

221,000 214,000

The HMG funding received included a contribution by theScottish Executive as follows:

Compensation 19,337 18,221Administration 2,541 2,367

21,878 20,588

Note 15 Analysis of changes in cash

Notes 2006-07 2005-06£’000 £’000

Opening balance at Paymaster General Account 7,676 1,602Increase in cash 11,071 6,074

Closing balance at Paymaster General Account 18,747 7,676

Opening balance all other bank accounts and cash 887 941(Decrease) in cash (435) (54)

Closing balance at all other bank accounts and cash 452 887

Awards held on deposit in holding accounts 9 2,808 1,177(Decrease)/Increase in cash 9 (1,527) 1,631

Closing balance 9 1,281 2,808

Total cash balance 20,480 11,371

Total increase in cash 9,109 7,651





Note 16 Reconciliation of the operating surplus to the net cash inflow/(outflow)from operating activities

Notes 2006-07 2005-06£’000 £’000

Net Operating Costs 11 (113,340) (165,226)Loss on disposal of fixed assets 13 15 –Decrease in provision for doubtful debts 6 (12) 123Depreciation 5 402 522(Increase) in debtors 6 (83) (314)Decrease/(Increase) in prepayments 7 156 (634)Increase/(Decrease) in creditors 8 5,966 (2,768)(Decrease)/Increase in awards held on deposit

holding accounts 9 (1,527) 1,631(Decrease)/Increase in pre-tariff schemes provision 10 (24,185) 6,383Increase/(Decrease) in tariff schemes provision 10 (35,066) (2,075)Increase in dilapidations provision 10 – 65Notional cost of capital (43,206) (44,576)

Net cash inflow from operating activities (210,880) (206,869)

Note 17 Third party assetsThe retention of compensation awards to certain minors is provided for under paragraph 3 ofthe scheme. The purpose of this action is to ensure that the victim will be the sole beneficiaryof the sum of the award including accrued interest when they reach their majority (18 yearsof age). Where appropriate, interim payments are made on an ‘as needs’ basis.

The investment policy applied to these investments is to deposit the awards in low-riskcommercial bank accounts. The average rate of interest applied to the investments during thefinancial year was 4.53%.

Number of 2006-07 Number of 2005-06accounts £’000 £’000 accounts £’000 £’000

Retained awardsBalance at 1 April 2,122 23,687 2,411 25,022Deposits in year 181 4,636 231 3,731Additional depositsto existing accounts 128 136Interest received 975 965

5,739 4,832Closures 419 6,500 520 5,593Withdrawals 475 422Repaid to CICA 55Interest paid to victims 91 97

(7,066) (6,167)Clearing account

Balance at 31 March 1,884 22,360 2,122 23,687




Note 18 Capital commitmentsAt 31 March 2007 the Authority had no outstanding capital commitments.

Note 19 Commitments under operating leasesCommitments under operating leases to pay rentals during the year following the year ofthese accounts are given in the table below, analysed according to the period in the whichthe lease expires.

2006-07 2005-06£’000 £’000

Operating leases which expire:Within one year 550 –Between two and five years 108 1,099After five years 1,328 1,125

1,986 2,224

The Authority’s staff are employed on three sites, the main ones in Glasgow and London,with a further file storage facility on a separate site in Kinning Park, Glasgow. The leases onthese properties end in the financial years 2014, 2007 and 2011 respectively for each site.

Note 20 Contingent liabilitiesOn occasion compensation cases, generally at appeal stage under the jurisdiction of theCriminal Injuries Compensation Appeals Panel, go to judicial review. Others may do so inthe future. These could have an impact on the Authority’s future liabilities.

The schemes allow for settled cases to be reopened in certain qualifying circumstancesand no provision has been made for these cases.

Similarly, on occasion judgments under the Human Rights Act may have an impact on theAuthority’s award decisions. All such cases are and will be closely monitored. Because of theuncertainty of the outcome of such cases, the Authority is unable to quantify their effects, andno provision has been made for them.

Note 21 Post balance sheet eventsOn the 9 May 2007, sponsorship responsibility for the Authority transferred from the HomeOffice to the newly created Ministry of Justice under Machinery of Government Arrangements.

Note 22 Related party transactionsThe Home Office and Scottish Executive are related parties to the Authority for their provisionof staff on assignment to the Authority.

During the year ending 31 March 2007, related party transactions were entered into with theCriminal Injuries Compensation Appeals Panel for information technology support servicesand for the cost of judicial reviews. The Authority re-imbursed a total of £86,142 relating tojudicial review expenses incurred by the Criminal Injuries Compensation Appeals Panel andincludes £39,334 accrued at 31 March 2007. The Authority received a total of £15,000 forinformation technology support services to the Panel. We also accrued income of £8,469 foruse of our storage facilities.




Note 23 Losses and special paymentsLosses and special payments up to £1,000 are authorised by the Accounting Officer whileabove this level they are referred and authorised by the Authority’s sponsors, the HomeOffice. Most cases related either to compensation for lost documents or to bad debts relatingto repayments due from applicants in receipt of court compensation payments. Write-offs in2006-07 totalled £203,000.

Note 24 Derivatives and other financial instrumentsFRS 13, Derivatives and other Financial Instruments, requires disclosure of the role whichfinancial instruments have had during the period in creating or changing the risks an entityfaces in undertaking its activities. Because of the non-trading nature of its activities and theway NDPBs are financed, the Authority is not exposed to the degree of financial risk faced bysome business entities. Moreover, financial instruments play a more limited role in creating riskthan would be the case with a typical listed company to which FRS 13 mainly applies.

The Authority has no borrowings and relies on funding of its cash requirements on a resourcebudgeting basis from the Home Office. It is therefore not exposed to liquidity risks. Allmaterial assets and liabilities are denominated in sterling, so it is not exposed to currencyrisk. The fair value of cash is the same as the book value. As permitted by FRS 13, debtorsand creditors which mature or become payable within 12 months from the balance sheet dateare excluded from this note.

The Authority does hold material cash balances on deposit. Allocated holding accounts areincluded in the cash balance on the balance sheet, while funds retained in the applicant’sname are excluded from the Authority’s cash balance and are disclosed by way of a note.Details of all of these funds are set out in note 14 to these accounts. The objective of openingthese individual deposit accounts is to accrue cumulative interest in line with average interestrates each year over the period in which the funds are retained. The investment policyapplied to these investments is to deposit the awards in low-risk commercial bank accounts.No administration fee is charged to the applicant. The average rate of interest applied to theinvestments during the financial year 2006-07 was 4.53 per cent (2005-06 4.28 per cent).

Note 25 Movement in Taxpayers’ equity

2006-07 2005-06£’000 £’000

Restated

Balance at 1 April (1,251,680) (1,256,504)Movement in General Fund 63,869 5,290Movement in Revaluation Reserve (32) (52)Movement in Capital Reserve 551 (414)

Balance at 31 March (1,187,292) (1,251,680)





Note 26 Prior year adjustmentFor the financial year ending 31 March 2007, the Financial Reporting Advisory Board (FRAB)have agreed amendments to Government’s Financial Reporting Manual (FReM) in accordancewith FRS 3. Grants and grants-in-aid received for revenue purposes from the Home Officewere previously accounted for as income. Full implementation of resource accounting requiredby the FReM requires that such amounts shall be considered as contributions from controllingparties giving rise to a financial interest in the residual interest of the body, and hence shouldbe accounted for as financing. A prior year adjustment has been recognised to reflect thechange in accounting policy, including an operating cost statement, which replaces the incomeand expenditure account, and cash drawn down against approved revenue funding is nowcredited to the general fund. These changes have not, however, resulted in any overalladjustment to the net Taxpayers’ equity previously reported.

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