Chief Constable
for the year ended 31st March 2013
Statement of Accounts
of Durham Constabulary
ContentsPage
Explanatory Foreword 1 - 4
Independent Auditor's Report 5 - 7
Statement of Responsibilities 8
Movement in Reserves Statement 9
Comprehensive Income and Expenditure Statement 10
Balance Sheet 11
Cashflow Statement 12
Notes to the Accounts 13 - 21
Pension fund accounts 22 - 24
Glossary 25 - 26
Annual Governance Statement 27 - 41
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013
Explanatory foreward
Introduction
Statement of Accounts
Information and Financial Statements
Following the Police Reform and Social Responsibility Act 2011, the Durham Police Authority was
abolished on 21 November 2012 and replaced with two corporation sole bodies, The Office of the
Durham Police and Crime Commissioner (Police and Crime Commissioner, PCC) and the Chief
Constable of Durham Constabulary (Chief Constable, CC). This set of accounts is the first to show the
financial position of the Chief Constable of Durham Constabulary. The financial position of the PCC and
the consolidated Group of the PCC and CC are set out in the PCC and Group accounts.
Movement in Reserves Statement (page 9): This statement does not show any transactions for the
year ended 31 March 2013 as the CC does not hold any reserves. All reserves are held and managed
by the PCC.
Comprehensive Income and Expenditure Statement (page 10): This discloses the expenditure
incurred in operating the Constabulary for the year.
Balance Sheet (page 11): The CC does not hold any assets, liabilities or reserves, all are held by the
PCC.
Cash Flow Statement (page 12): All payments were made and income received into the Police Fund
which is held by the PCC.
Statement of Responsibilities for the Statement of Accounts (page 8): This sets out the
responsibilities of the Chief Constable and the Chief Constable’s Chief Finance Officer.
The purpose of this foreword is to provide a clear guide to the most significant matters reported in the
Chief Constable’s Accounts. It explains the purpose of the financial statements that follow and
provides a summary of financial activities during 2012/13 and the financial position as at 31 March
2013.
This Statement of Accounts covers the financial year ended 31st March 2013 and has been prepared
in accordance with the provisions of the Accounts and Audit Regulations 2011, in accordance with the
Code of Practice on Local Authority Accounting in the United Kingdom 2012/13 and the Service
Reporting Code of Practice for Local Authorities 2012/13 (SeRCOP), supported by International
Financial Reporting Standards (IFRS).
The Statements required by the Code of Practice on Local Authority Accounting in the United Kingdom
2012/13 (the Code) are detailed below along with the objective of each statement.
The financial statements are as follows:
Independent Auditor's Report to the Chief Constable (pages 5 to 7): The Report of the External
Auditor on Chief Constable’s Accounts for the year ended 31 March 2013.
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 1
Review of the Financial Year 2012/13
Original
BudgetActual
(Overspent) or
Underspent
£'000 £'000 £'000
101,803 101,018 785
4,734 4,481 253
3,056 3,020 36
2,430 2,325 105
7,871 8,585 (714)
23 20 3
119,917 119,449 468
Reduced demand for forensic science services was the main reason for spending within budget.
These costs impacted positively by effective fleet management were within budget.
The main reasons why costs were underspent were related to more effective energy and building
maintenance management and energy prices not increasing as much as expected.
The employee costs are under budget due to the timing of retirement and recruitment of police officers
and vacancies of police staff posts.
The Chief Constable’s spending is planned and controlled by a rigorous budget and financial management
process. The Chief Constable receives resources delegated from the PCC to deliver policing services to the
force area of County Durham and Darlington.
A comparison of actual revenue expenditure compared with budget is shown below together with an
explanation of the major variances.
Regional Collaborations
Transport
Agency Services
Supplies and Services
Support Costs
Gross Expenditure
Premises Related Costs
Transport Related Costs
Explanation of major variances:
Employee Related Costs
Revenue Spending
Employees
Premises
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 2
Cash Flow
Looking Ahead to 2013/14
Significant spend reductions and efficiencies were made to enable services to be delivered within the
allocated budget. Further spend reductions and efficiencies are being planned to manage the further
expected reductions in grant funding as part of the ongoing medium term financial planning process
for 2014/15, 2015/16 and future years.
The financial statements as detailed on pages 8 to 24 have been rounded to the nearest £1,000.
Supplies and Services
The main reasons for expenditure exceeding budget were related to the replacement of computing
equipment and professional fees.
All payments were made and income received into the Police Fund which is held by the PCC so there
were no cashflows within the Chief Constable's accounts.
Looking ahead, the Chief Constable plans to consume resources of £117.6m in 2013/14. The
Government’s four year Spending Review, covering the period 2011/12 to 2014/15 sets out
Government spending plans and the HM Treasury Spending Round 2013 announced in June 2013 set
out spending plans for 2015/16.
As a result of the current Review, the PCC has faced severe reductions in Formula Grant during the
period. The Spending Round announcement in June 2013 continues that trend of reductions in
Formula Grant.
International Accounting Standard 19
The Statement of Accounts also incorporates the effect of pensions liabilities accrued in order to
comply with International Accounting Standard 19 (IAS 19). Rather than accounting for the actual
expenditure on pensions, an assessment must be made by the Actuary of the costs accruing during the
year and this is incorporated within the accounts. The effect of the standard is to account for the
annual increase in pensions’ liability and total liability of both the unfunded and funded schemes as a
result of pension benefits earned by employees at the end of the financial year, which the PCC Group
is potentially committed to pay.
Roundings
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 3
Gary Ridley
Chief Constable's Chief Finance Officer
Acknowledgements
I would like to take this opportunity to thank the officers of the Chief Constable, who have produced
this Statement of Accounts.
Aykley Heads
Durham DH1 5TT
I hope that this document proves to be both informative and of interest to readers. It is important to
try and improve the quality and suitability of information provided and feedback is welcomed. If you
have any suggestions or comments on both the format of the report and its contents, or if you would
like any further information please contact, my office.
Telephone: 0191 375 2108
E-mail: [email protected]
or write to:
The Assistant Chief Officer
Police HQ
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 4
Opinion on the Chief Constable financial statements
Respective responsibilities of the Assistant Chief Officer and auditor
Scope of the audit of the financial statements
Independent Auditor's Report to the Chief Constable of Durham
Constabulary
We have audited the financial statements of the Chief Constable of Durham Constabulary for the year
ended 31 March 2013 under the Audit Commission Act 1998. The financial statements comprise the
Movement in Reserves Statement, the Comprehensive Income and Expenditure Statement, the
Balance Sheet, the Cash Flow Statement, the Police Pension Fund Net Assets Statement and the Police
Pension Fund Account, and the related notes. 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 2012/13.
This report is made solely to the Chief Constable of Durham Constabulary in accordance with Part II of
the Audit Commission Act 1998 and for no other purpose, as set out in paragraph 48 of the Statement
of Responsibilities of Auditors and Audited Bodies published by the Audit Commission in March 2010.
As explained more fully in the Statement of the Assistant Chief Officer’s Responsibilities, the Assistant
Chief Officer 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, 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.
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 body’s circumstances and have been consistently applied
and adequately disclosed; the reasonableness of significant accounting estimates made by the
Assistant Chief Officer; 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. If we become aware of any apparent material
misstatements or inconsistencies we consider the implications for our report.
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 5
Opinion on financial statements
In our opinion the financial statements:
•
•
Opinion on other matters
Matters on which we report by exception
We report to you if:
•
•
•
•
We have nothing to report in these respects.
Other matters on which we are required to conclude
•
•
•
As a result, we have concluded that there are no matters to report.
we exercise any other special powers of the auditor under the Audit Commission Act 1998.
We are required under Section 5 of the Audit Commission Act 1998 to satisfy ourselves that the Chief
Constable of Durham Constabulary has made proper arrangements for securing economy, efficiency
and effectiveness in its use of resources. We have undertaken our audit in accordance with the Code
of Audit Practice and, having regard to the guidance issued by the Audit Commission in November
2012, we have considered the results of the following:
our review of the annual governance statement;
the work of other relevant regulatory bodies or inspectorates, to the extent the results of the
work have an impact on our responsibilities;
our locally determined risk-based work.
we designate under section 11 of the Audit Commission Act 1998 any recommendation as one
that requires the Authority to consider it at a public meeting and to decide what action to take
in response; or
give a true and fair view of the financial position of the Chief Constable of Durham
Constabulary as at 31 March 2013 and of its expenditure and income for the year then ended;
and
have been prepared properly in accordance with the CIPFA/LASAAC Code of Practice on Local
Authority Accounting in the United Kingdom 2012/13.
In our opinion, the information given in the explanatory foreword for the financial year for which the
financial statements are prepared is consistent with the financial statements.
in our opinion the annual governance statement does not reflect compliance with ‘Delivering
Good Governance in Local Government: a Framework’ published by CIPFA/SOLACE in June
2007 and the December 2012 addendum;
we issue a report in the public interest under section 8 of the Audit Commission Act 1998;
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 6
Certificate
Cameron Waddell CPFA
For and on behalf of Mazars LLP, Appointed Auditors
The Rivergreen Centre
Aykley Heads
Durham, DH1 5TS
We certify that we have completed the audit in accordance with the requirements of the Audit
Commission Act 1998 and the Code of Audit Practice issued by the Audit Commission.
27 September 2013
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 7
Statement of Responsibilities
The Chief Constable's Responsibilities
The Chief Constable is required to:
w
w
w Approve the Statement of Accounts.
The Assistant Chief Officer's Responsibilities
w selected suitable accounting policies and then applied them consistently
w made judgements and estimates that were reasonable and prudent
w complied with the Local Authority Code.
The Assistant Chief Officer has also:
w kept proper accounting records which were up to date
w taken reasonable steps for the prevention and detection of fraud and other
irregularities
Assistant Chief Officer's Certificate
G Ridley
G Ridley MBA CPFA Date 26 March 2013
Assistant Chief Officer
Chief Constable's Certificate
I confirm I have approved these accounts
M Barton
M Barton LL.B. Date 26 March 2013
Make arrangements for the proper administration of his financial affairs and to secure that one
of his officers has the responsibility for the administration of those affairs. In this organisation,
that officer is the Assistant Chief Officer.
Manage his affairs to secure economic, efficient and effective use of resources and safeguard
his assets.
The Assistant Chief Officer is responsible for the preparation of the Chief Constable's Statement of Accounts
in accordance with proper practices as set out in the CIPFA Code of Practice on Local Authority Accounting in
the United Kingdom 2012/13. In preparing this Statement of Accounts, the Assistant Chief Officer has:
I certify that the accounts present a true and fair view of the financial position of the Chief Constable of
Durham as at 31 March 2013 and of his income and expenditure for the year ended 31 March 2013. These
financial statements replace the unaudited financial statements certified by myself on 28 June 2013.
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 8
Years ended Police Earmarked Capital Total Unusable Total
31 March 2012 & Fund GF Receipts Useable Reserves Group
31 March 2013 Balances Reserves Reserves Reserves Reserves
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 March 2011 - - - - - -
Total Comprehensive - - - - - -
Income and Expenditure
Adjustments between - - - - - -
accounting basis & funding
basis under regulations
Net (Increase)/Decrease - - - - - -
before Transfers to Earmarked
Reserves
Transfers to/from Earmarked - - - - - -
Reserves
Balance at 31 March 2012 - - - - - -
Total Comprehensive - - - - - -
Income and Expenditure
Adjustments between - - - - - -
accounting basis & funding
basis under regulations
Net (Increase)/Decrease - - - - - -
before Transfers to Earmarked
Reserves
Transfers to/from Earmarked - - - - - -
Reserves
Balance at 31 March 2013 - - - - - -
Movement in Reserves Statement for the Chief Constable of Durham
Constabulary
This statement shows the movement in the year on the different reserves held by the Chief Constable,
analysed into 'usable reserves' (ie those that can be applied to fund expenditure or reduce local
taxation) and other reserves.
This statement does not show any transactions for the year ended 31 March 2013 as the Chief Constable
does not hold any reserves. All reserves are held and managed by the PCC.
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 9
2011/12 2011/12 2011/12 2012/13 2012/13 2012/13
Restated Restated Restated
Gross Income Net Gross Income Net
Expenditure Expenditure Expenditure Expenditure
£'000 £'000 £'000 £'000 £'000 £'000
53,537 - 53,537 Local Policing 50,098 - 50,098
12,218 - 12,218 Dealing with the Public 11,827 - 11,827
13,209 - 13,209 Criminal Justice Arrangements 13,699 - 13,699
7,346 - 7,346 Road Policing 7,324 - 7,324
5,690 - 5,690 Specialist Operations 5,293 - 5,293
8,108 - 8,108 Intelligence 7,997 - 7,997
27,577 - 27,577 Investigations 28,368 - 28,368
4,554 - 4,554 Investigative Support 4,331 - 4,331
3,905 - 3,905 National Policing 3,069 - 3,069
10 - 10 Corporate and Democratic Core 6 - 6
Non Distributed Costs
450 - 450 Past Service Costs 970 - 970
136,604 - 136,604 Net Cost of Services before Funding 132,982 - 132,982
- (136,604) (136,604) PCC funding for resources consumed (132,982) (132,982)
136,604 (136,604) - Net Cost of Services 132,982 (132,982) -
This statement shows the accounting cost in the year for the Chief Constable of providing services at the
request of the PCC in accordance with generally accepted accounting practices. All costs are paid by the
PCC, the CC deploys assets, police officers and police staff to deliver the Police and Crime Plan. The
transfer of funding results in a nil cost of services in the CC accounts.
Comprehensive Income and Expenditure Statement for the Chief
Constable of Durham Constabulary for the Year Ended 31 March 2013
The 2011/12 figures have been restated to reflect classification changes as detailed in the Service
Reporting Code of Practice for Local Authorities - 2012/13 SeRCOP update”
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 10
£'000 £'000 £'000 £'000
- Property, Plant and Equipment -
- Intangible Assets -
- Total Long Term Assets -
- Assets held for Sale -
- Inventories -
- Short Term Debtors -
- Cash and Cash Equivalents -
- Total Current Assets -
- Short term Creditors -
- Total Current Liabilities -
- Provisions -
- Other Long Term Liabilities -
- Pensions Liability -
- Total Long Term Liabilities -
- Net Assets -
- Useable Reserves -
- Unusable Reserves -
- Total Reserves -
Balance Sheet for the Chief Constable of Durham Constabulary at 31
March 2013
31 March 2012 31 March 2013
The Balance Sheet shows the value as at the Balance Sheet date of the assets and liabilities recognised by
the Chief Constable. The net assets are matched by the reserves held by the Chief Constable.
The Chief Constable does not hold any assets, liabilities and reserves, these are all held by the PCC.
Therefore this statement does not show any balances at 31 March 2013.
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 11
2011/12 2012/13
£'000 £'000
Cash Inflow
- Cash Inflows generated from operating activities -
Cash Outflow
- Cash outflows generated from operating activities -
- Net cash flows from operating activities -
INVESTING ACTIVITIES
- Net cash flows from investing activities -
FINANCING ACTIVITIES
- Net cash flows from financing activities -
- Net increase or decrease in cash and cash equivalent -
- -
Less
- Cash and cash equivalents at the end of the reporting period -
- -
Cashflow Statement for the Chief Constable of Durham Constabulary
for the Year Ended 31 March 2013
The Cashflow Statement shows the changes in cash and cash equivalents of the Chief Constable during
the reporting period.
All payments were made and income received into the Police Fund which is held by the PCC.
OPERATING ACTIVITIES
Cash and cash equivalents at the beginning of the reporting period
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 12
1 ACCOUNTING POLICIES
1.1 General Principles
1.2 Revenue and Expenditure Recognition
1.3 Accruals of Income and Expenditure
w
w
1.4 Cash and Cash Equivalents
Notes to the Financial Statements for the Chief Constable of Durham
for the year to 31 March 2013
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.
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 of the Police and Crime Commissioner.
All cash is held by the Police and Crime Commissioner.
All expenditure is paid for by the Office of the Durham Police and Crime Commissioner, including the
wages of officers and police staff. The PCC is the recipient of all funding. The actual recognition in the
accounts of the two bodies is based on the economic benefit.
Activity is accounted for in the year that it takes place, not simply when cash payments are made or
received. In particular:
The Statement of Accounts summarises the Chief Constable of Durham's transactions for the 2012/13
financial year and the position at the year-end of 31 March 2013. The Chief Constable is required to
prepare an annual Statement of Accounts by the Accounts and Audit Regulations 2011 which require
accounts to be prepared in accordance with proper accounting practices. These practices primarily
comprise the Code of Practice on Local Authority Accounting in the United Kingdom 2012/13 and the
Service Reporting Code of Practice for Local Authorities 2012/13 (SeRCOP), 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.
On 22 November 2012, Durham Police Authority was replaced by two corporation sole bodies, the
Office of the Durham Police and Crime Commissioner and the Chief Constable for Durham
Constabulary. Both bodies are required to prepare separate Statements of Accounts.
The financial statements cover the 12 months to 31 March 2013.
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 13
1.5 Employee Benefits
Benefits Payable During Employment
Termination Benefits
Post Employment Benefits
Employees of the Group are members of two separate pension schemes:w The Police Pension Scheme for Police Officers, which is unfunded
w The Local Government Pensions Scheme, administered by Durham County Council.
The Police Pension Scheme for Police Officers
1.6 Events after the Balance Sheet date
w
w
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 effect, 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.
Short-term employee benefits are those due to be settled within 12 months of the year-end. They
include such benefits as wages and salaries, paid annual leave and paid sick leave, bonuses and non-
monetary benefits for current employees and are recognised as an expense for services in the year in
which employees render service to the Group. An accrual is made by the PCC for the cost of holiday
entitlements (or any form of leave, eg 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 charged to
PCC's Surplus or Deficit on the provision of Services , but 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 are amounts payable as a result of a decision by the PCC to terminate an officer’s
employment before the normal retirement date or an officer’s decision to accept voluntary
redundancy and are charged on an accruals basis to the Net Cost of Services in the Comprehensive
Income and Expenditure Statement when the Group is demonstrably committed to the termination of
the employment of an officer or group of officers or making an offer to encourage voluntary
redundancy.
Both schemes provide defined benefits to members (retirement lump sums and pensions), related to
pay and service earned as employees working for the Group.
This is an unfunded defined benefit final salary scheme meaning that there are no investment assets
built up to meet the pensions liabilities, and cash has to be generated to meet actual pensions
payments as they eventually fall due. If the amounts receivable by the pensions fund for the year are
less than amounts payable, the Durham Police and Crime Commissioner must annually transfer an
amount to meet the deficit to the pension fund. This cost is then met by central government. If
however the pension fund is in surplus for the year, the surplus is required to be transferred from the
pension fund to the Durham Police and Crime Commissioner who then must repay the amount to
central government.
Events after the Balance Sheet date are those events, both favourable and unfavourable, that occur
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 14
1.7 Financial Instruments
1.8 Overheads and Support Services
1.9
1.10 VAT
2 ACCOUNTING STANDARDS ISSUED NOT ADOPTED
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 Service Reporting Code of Practice
2012/13 (SeRCOP). The total absorption costing principle is used – the full cost of overheads and
support services are shared between users in proportion to the benefits received.
The CC does not hold any assets or liabilities, these are held by the PCC and details of the Financial
Instruments are shown in the financial statements of that body.
VAT payable is included as an expense only to the extent that it is not recoverable from Her Majesty’s
Revenue and Customs. VAT receivable is excluded from income.
Government Grants and Contributions
All government grants and contributions are paid to the Durham Police and Crime Commissioner.
In accordance with the Code, the Chief Constable shall disclose information relating to the the impact
of an accounting change that will be required by a new standard that has been issued but not yet
adopted. This requirement applies to accounting standards that come into effect for financial years
commencing on or before 1 January 2013.
IAS 19 Employee Benefits. The revised standard will increase the expenses recognise for funded
benefits. If this was adopted for the year ended 31 March 2013, the Local Government Pension
Scheme expenses recognised for funded benefits would increase from £5,260k to £5,960k. There
would be no effect on the Balance Sheet. The Police Officer Pension fund would remain unchanged.
IAS 1 Presentation of Financial Statements. The main change is a requirement to group items
presented in Other Comprehensive Income on the basis of whether they are potentially reclassifiable
to profit or loss at a future date. The main items which are most likely to require reclassifying are
exchange differences on translating operations, cash flow hedging and available for sale financial
assets, At present the CC does not hold these types of instruments and so this will not impact the
financial statements of the CC.
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 15
3 CRITICAL JUDGEMENTS IN APPLYING ACCOUNTING POLICIES
4 MATERIAL ITEMS OF INCOME AND EXPENSE
5 EVENTS AFTER THE BALANCE DATE
The Chief Constaable's Statement of Accounts was authorised for issue by the Assistant Chief Officer
on 28 June 2013. Events taking place after this date are not reflected in the financial statements or
notes. Where events taking place before this date provided information about conditions existing at
31 March 2013, the figures in the financial statements have been adjusted in all material respects to
reflect the impact of this information.
There are no material items of income and expense which are not already disclosed on the face of the
Comprehensive Income and Expenditure Statement or in the associated notes
In applying the accounting policies set out in Note 1, the Chief Constable has had to make certain
judgements about complex transactions or those involving uncertainty about future events.
Staff Costs. All staff are employed and paid by the PCC. These staff deliver the Police and Crime Plan.
All staff costs and IAS 19 costs are shown in the accounts of the PCC.
Transition Basis. The transition has been accounted for in line with the CIPFA Code of Practice for
Local Authority Accounting 2012/13 and LAAP Bulletin 95 Accounting for the Impact of Police Reform
which suggest that this is accounted for using merger accounting as per FRS 6 Acquisitions and
Mergers. PCC has applied merger accounting from 1 April 2012. This has resulted in the accounts for
the Durham Police and Crime Commissioner, for the Group and for the Chief Constable showing the
financial information from 1 April 2012.
Statutory Accounts. Both the PCC and the CC are separate bodies listed under schedule 2 of the Audit
Commission ct 1998 and so must produce statutory accounts. Both bodies comply with chapter 9 of
the code and so group accounts must be produced also.
Pension Fund Accounts. All payments are made from and receipts made to the Police Fund
administered by the PCC. The CC is responsible for administering the Police Pension Fund in
accordance with the Police Reform and Social Responsibility Act 2011. Therefore the Pension Fund
Accounts have been included in financial statements of the CC and the Group.
Asset and Liability Recognition. Long term control and long term access to the economic benefits
associated with assets such as buildings rests with the PCC. All expenditure is made by the PCC and CC
deploys assets to deliver the Police and Crime Plan. Therefore the assets and liabilities are recognised
on the Balance Sheet of the PCC.
Pension Fund Liability. The PCC as holder of the Police Fund is responsible for the the long term
funding and payment of pension costs to the pension fund. Any funding is received by the PCC. The
pension fund liability is recognised on the Balance Sheet of the PCC.
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 16
6
6.1 Introduction
6.2 Basis of transition
6.3 Accounting Principles
All payments for the group are made by from the Police Fund and all income and funding is received
into it. This includes all staff costs. The PCC is responsible for the funding of pension liabilities.
The Comprehensive Income and Expenditure Statement of the CC shows the accounting cost in the
year for the CC of providing services at the request of the PCC to deliver the Police and Crime Plan.
THE CREATION OF THE OFFICE OF THE DURHAM POLICE AND CRIME COMMISSIONER
AND THE CHIEF CONSTABLE OF DURHAM CONSTABULARY
Following the Police Reform and Social Responsibility Act 2011 (The Act), The Durham Police Authority
was replaced on 22 November 2012 with two corporation sole bodies, The Office of the Durham
Police and Crime Commissioner and the Chief Constable of Durham Constabulary. This set of accounts
is the first to show the financial position of The Chief Constable of Durham Constabulary.
The transition has been accounted for in line with the CIPFA Code of Practice for Local Authority
Accounting 2012/13 and LAAP Bulletin 95 Accounting for the Impact of Police Reform which suggest
that this is accounted for using merger accounting as per FRS 6 Acquisitions and Mergers. The Office of
the Durham Police and Crime Commissioner has applied merger accounting from 1 April 2012. This
has resulted in the accounts for the Durham Police and Crime Commissioner, for the Group and for
the Chief Constable showing the financial information from 1 April 2012.
On 22 November 2012 the assets, liabilities and reserves of the Durham Police Authority were
transferred to the Durham Police and Crime Commissioner. The International Accounting Standards
Board states that assets, liabilities and reserves should be recognised where it is probable that any
future benefit associated with the item will flow to or from the entity. The PCC holds all assets,
liabilities and reserves and is responsible for the police pension liability. Local arrangements confirm
this.
Based on the statutory responsibilities and local arrangements, it has been agreed that all the assets,
liabilities and reserves are recognised on the Balance Sheet of the Durham Police and Crime
Commissioner.
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 17
7 OFFICERS' REMUNERATION
The remuneration paid to the senior staff of the Chief Constable as follows:
31 March 2013 Salary Benefits Allowances Employers Total
in kind Pension
Contributions
£ £ £ £ £
Chief Constable - M Barton (from 4/10/2012) 66,346 2,529 1,794 - 70,669
Chief Constable - TJ Stoddart (to 3/10/2012) 65,946 3,650 7,025 15,959 92,580
Deputy Chief Constable (from 4/10/2012) 54,859 2,842 1,202 13,276 72,179
Deputy Chief Constable (to 3/10/2012) 54,891 2,529 4,109 - 61,529
Assistant Chief Constable (from 4/10/2012) 45,304 2,230 1,201 10,954 59,689
Assistant Chief Constable (to 3/10/2012) 52,924 2,841 - 12,807 68,572
Assistant Chief Officer 94,167 - 4,264 14,502 112,933
31 March 2012 Salary Benefits Allowances Employers Total
in kind Pension
Contributions
£ £ £ £ £
Chief Constable - TJ Stoddart 130,264 7,164 5,980 31,402 174,810
Deputy Chief Constable 109,782 5,058 5,789 - 120,629
Assistant Chief Constable 106,410 4,549 2,403 25,752 139,114
Assistant Chief Officer 91,288 - 4,263 13,740 109,291
£80,000 - £84,999 3 2
£85,000 - £89,999 3 2
£70,000 - £74,999 4 5
£75,000 - £79,999 6 3
£60,000 - £64,999 6 6
£65,000 - £69,999 3 3
£55,000 - £59,999 33 40
The Chief Constable's other employees receiving more than £50,000 remuneration for the year (excluding
employer's pension contributions) were paid the following amounts
Remuneration Band Number of Employees
2011/12 2012/13
£50,000 - £54,999 79 73
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 18
Exit
package
cost band
(including
special
payments)
2011/12 2012/13 2011/12 2012/13 2011/12 2012/13 2011/12 2012/13
£ £
£0-£20,000 - - 9 12 9 12 65,270 124,253
£20,001-
£40,000- - 1 1 1 1 36,600 22,688
£40,001-
£60,000- - 1 1 - 54,505 -
- - 11 13 11 13 156,375 146,941
8 EXTERNAL AUDIT COSTS
9 RELATED PARTIES
Central Government
Central government has effective control over the general operations of the Chief Constable. It is
responsible for providing the statutory framework within which the Chief Constable operates, provides
the majority of its funding in the form of grants which are paid to the Police and Crime Commissioner and
prescribes the terms of many of the transactions that the Group has with other parties. Grants received
by the Group from government departments are included within the Comprehensive Income and
Expenditure Statement of the Police and Crime Commissioner and the Group.
The Chief Constable is required to disclose material transactions with related parties ie bodies or
individuals that have the potential to control or influence or be controlled/influenced by the Chief
Constable. Disclosure of these transactions allows readers to assess the extent to which the Chief
Constable may 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 Chief Constable. Transactions should be
disclosed where material to either the organisation or individual with whom the transaction has been
incurred.
The numbers of exit packages for the Chief Constable with the total cost per band and total cost of the
compulsory and other redundancies are set out in the table below:
Number of
compulsory
redundancies
Number of other
departures agreed
Total number of exit
packages by cost
band
Total cost of exit
packages in each band
The Chief Constable has incurred the following costs in relation to the audit of the Statement of Accounts
£20,000. An additional fee of £500 was charged to facilitate an IAS 19 workshop.
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 19
Other Public Bodies
Officers
10 DEPRECIATION AND AMORTISATION
11 REGIONAL COLLABORATION
The Commissioner has collaborative arrangements with other local Forces as follows:
w Cleveland and Durham Fingerprint Bureau (CDFB)
Contribution for 2012/13 was £328,725 (£339,606 in 2011/12)
w North East Air Support Unit (NEASU)
w Tactical Training Centre (TTC)
Contribution for 2012/13 was £506,116 (£510,924 in 2011/12)
w Regional Intelligence Unit (RIU)
Contribution for 2012/13 was £108,992 (£108,911 in 2011/12)
w Cleveland and Durham Special Operations Unit (CDSOU)
31 March 31 March
2012 2013
£'000 £'000
11,243 11,428
618 686
194 153
12,055 12,267
(6,045) (6,137)
(6,010) (6,130)
0 0
The Office of the Durham Police and Crime Commissioner
The Police and Crime Commissioner for Cleveland
Balance
Employees
Transport
Supplies and Services
Gross Expenditure
Funded by :-
All transactions with other public bodies were made with the PCC and are disclosed in the PCC's
financial statements.
There were no related party transactions involving the Chief Constable, or chief officers of the
Constabulary.
Within the CC's Comprehensive Income and Expenditure Statement, gross service expenditure
includes £4,647k of depreciation and amortisation borne by the PCC relating to the property, plant
and equipment of the PCC.
Contribution for 2012/13 was £571,166 (£622,208 in 2011/12). On 1 April 2013, the assets
The Special Operations Unit was set up during 2011/12 and is collaboration between the
Durham Police and Crime Commissioner and the Police and Crime Commissioner for
Cleveland to deliver roads policing and firearms response.
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 20
12 LEASES
13 DEFINED BENEFIT PENSION SCHEMES
Transactions Relating to Retirement Benefits
2011/12 2012/13 2011/12 2012/13
£'000 £'000 £'000 £'000
3,440 3,630 22,380 21,250
390 30 60 940
5,530 5,700 55,470 51,500
4,840 5,280 77,910 73,690
10,028 (2,810) 15,120 126,360
14,868 2,470 93,030 200,050
Other post employment benefit charged to the CIES
Actuarial gain/loss
Net Charge to the CIES
Expected return on assets in the scheme(4,520) (4,080) - -
Total post employment benefit charged to the
Comprehensive Income and Expenditure Statement
Net Cost of Service
Current service cost
Past service cost
Finance and Investment Income and Expenditure
Interest cost
Operating Leases
In 2007/08 Durham Police Authority acquired ‘Livescan’ under an operating lease relating to the
taking of fingerprints. This has been taken over by the Durham Police and Crime Commissioner.
Rentals amounting to £65,328 have been charged to the Comprehensive Income and Expenditure
Statement during 2012/13 (£65,328 in 2011/12). Future years’ rentals are £65,328 each year for
2013/14 and 2014/15.
The PCC recognises the costs of retirement benefits in the Net Cost of Services part of the
Comprehensive Income and Expenditure Statement when they are earned by employees, rather than
when the benefits are eventually paid as pensions. However, the charge required to be made against
Council Tax is based on the cash payable in the year, so the actual cost of retirement benefits
following transactions have been made in the Comprehensive Income and Expenditure Statement
during the year as follows:
Local Government Police
Pension Scheme Pension Scheme
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 21
PENSION FUND ACCOUNTS
2011/12 2011/12 2012/13 2012/13
£'000 £'000 £'000 £'000
(14,608) (12,540)
(35) (15)
(5,666) (6,073)
(20,309) (18,628)
Transfers in
(57) (893)
(389) (337)
25,730 27,572
9,328 6,419
83 0
35,141 33,991
- -
139 641
14,525 14,774
(14,525) (14,774)
- -
Benefits payable
Pensions
Commutations and lump sum retirement benefits
Lump Sum Death Benefit
Under the new arrangements the Pension Fund is balanced to nil at the end of the year by transferring from
the Police and Crime Commissioner’s Income and Expenditure Account an amount equivalent to the deficit
on the Fund. There are no investment assets relating to the Police Pension Fund.
Reimbursement of unabated pensions of ‘30+’ police officers
From members
Individual transfers in from other schemes
Recharges to other local Authorities
Net recharges
The funding arrangements for the Police Pension Scheme in England and Wales changed from 1 April 2006.
Before 1 April 2006 the scheme did not have a percentage of pensionable pay type of employer’s
contributions: rather each Police Authority was responsible for paying the pensions of its former employees
on a pay-as-you-go basis. Under the current funding arrangements the Scheme remains unfunded but no
longer on a pay-as-you-go basis as far as an individual Police and Crime Commissioner is concerned. The
Police and Crime Commissioner no longer meets the pension outgoings directly: instead they pay an
employer’s pension contribution based on a percentage of pay into the Pension Fund. Each individual
Policeand Crime Commissioner is required to operate a Pension Fund and the amounts that must be paid
into and paid out of the Pension Fund are specified by regulations.
The transactions of the Police Pension Fund are as follows. Net assets are included within the Police and
Crime Commissioner’s Balance Sheet.
Police Officer Pension Fund Account 2012/13
Contributions receivable
From employer
Payments to and on account of leavers
Refund of contributions
Individual transfers out to other schemes
Net amount payable for the year receivable from the Home
Office
Year end balance
Contribution from PCC in respect of deficit on the Police
Pension Fund Account
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 22
PENSION FUND ACCOUNTS cont.
As at
31 March
2012
As at
31 March
2013
£'000 £'000
Current Assets
3,862 Short Term Debtors 2,136
Current Liabilities
-87 Payables -1
-3,775 Cash -2,135
- Net Current Assets/Liabilities -
0 0
1 Basis of Preparation
2 Accounting Policies
Benefits
The financial statements do not take account of liabilities to pay pensions and other benefits which fall due
after the end of the financial year.
The pension fund accounts have been prepared in accordance with the CIPFA Code of Practice on local
Authority Accounting in the United Kingdom 2012/13.
The principal accounting policies are as follows:
Police Officer Pension Fund Asset Statement
The Police and Crime commissioner is also required to make payments into the Pension Fund in respect of
ill-health retirements when they are granted.
In accordance with the accruals concept benefits are accounted for in the year in which they become due
for payment.
Transfer Values
Transfer values are those sums paid payable by or receivable from, other pension schemes for individuals
only and relate to periods of previous pensionable employment. Transfers are accounted for on a receipts
and payments basis.
Contributions
Contributions represent the total amount receivable from the Police and Crime Commissioner and
pensionable employees. The contributions are made at rates determined by the Government Actuaries
Department. The Employer’s contributions are set at a nationally applied rate of 24.2% pensionable pay.
For 2012/13 the employee’s contributions are dependant on salary: 12.25 or 12.5% for the Police Officers
Pension Scheme 1987 and 10.1,10.5 or 10.75% for the Police Officers Pension Scheme 2006.
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 23
PENSION FUND ACCOUNTS cont.
Net Current Assets
The carrying amounts of current assets is shown below:-
As at
31 March
2012
As at
31 March
2013
£'000 £'000
Debtors
3,862 2,136
- -
3,862 2,136
Net Current Liabilities
As at
31 March
2012
As at
31 March
2013
£'000 £'000
Payables
(64) -
(23) (1)
Others - -
(87) (1)
Government Departments
Local Authorities
Government Departments
Local Authorities
Current Assets and Liabilities
The current assets and liabilities are measured at fair value and carried at their amortised cost.
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 24
GLOSSARY
Accruals
The concept that income and expenditure are recognised as they are earned or incurred, not as money
happens to be received or paid.
Budget
The Commissioner’s plans and policies expressed in financial terms.
Cash
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on
notice of not more than 24 hours.
Cash Equivalents
Cash equivalents are investments that mature within three months or less from the date of acquisition and
that are readily convertible to known amounts of cash with insignificant risk of change in value.
Chartered Institute of Public Finance and Accountancy (CIPFA)
The principal accountancy body dealing with local authority finance.
CIPFA Service Reporting Code of Practice (SeRCOP)
Replaced the previous Best Value Accounting Code of Practice. SeRCOP provides a consistent framework
for reporting local authority,including police authority,data.
Collection Funds
Funds administered by Durham County Council and Darlington Borough Council in which individuals’
Council Tax payments are paid. The Commissioner raises precepts on the funds to finance part of net
revenue expenditure.
Collection Fund Adjustment Account
The account through which to implement the accruals basis for recording the precept without affecting the
bottom line for taxpayers.
Contingency
The sum of money set aside to meet unforeseen expenditure or liability.
Council Tax
The local tax levied on householders, based on the relative market values of property, which helps to fund
local services.
Current Assets
Items that can be readily converted into cash.
Current Liabilities
Items that are due immediately or in the short-term.
Debtors
Persons or bodies who owe sums to the Commissioner.
Earmarked Reserves
These represent monies set aside that can only be used for a specific purpose.
Employee Benefits
Short-term employee benefits are those due to be settled within 12 months of the year end. They include
salary, paid annual leave, paid sick leave, bonuses and non-monetary benefits for current employees and
are recognised as an expense in the year in which the employee renders service to the Commissioner. An
accrual is made for the cost of the benefit earned by an employee but not taken before the year end. The
accrual is charged to the surplus or deficit on the provision of Services, but then reversed out through the
Movement in Reserves Statement.
Interest Income
The money earned from the investment of surplus cash.
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 25
International Financial Reporting Standards (IFRS)
TheCommissioner’s financial statements have been prepared in accordance with the following statutory
accounting standards adopted by the International Accounting Standards Board (IASB):
International Financial Reporting Standards (IFRS)
International Accounting Standards (IAS)
Interpretations of the International Financial Reporting Interpretations Committee (IFRIC)
Interpretations of the Standing Interpretations Committee (SIC)
National Non-Domestic Rates (NNDR)
The business rate in the pound is the same for all non-domestic ratepayers and is set annually by the
government. Income from business rates goes into a central government pool that is then distributed to
authorities according to resident population.
Net Book Value
The amount at which fixed assets are included in the balance sheet, ie their historical cost or current value
less the cumulative amounts provided for depreciation.
Outturn
The actual amount spent in the financial year.
PayablesPersons or bodies to whom sums are owed by the Authority.Payments in Advance
These represent payments prior to 31st March for supplies and services received after 1st April.
Receipts in Advance
These represent income received prior to 31st March for supplies and services provided after 1st April.
Retirement Benefits
All forms of consideration given by an employer in exchange for services rendered by employees that are
payable after the completion of employment.
Revenue Expenditure and Income
Expenditure and income arising from the day to day operation of the Commissioner’s service.
Revenue Support Grant (RSG)
General government grant to assist in financing the overall net cost of services.
Running Expenses
All expenses other than those relating to employees and the financing costs of capital expenditure (capital
financing costs and revenue contributions). Running expenses include expenditure on maintenance of
buildings, consumable supplies, transport etc.
Termination Benefits
Amounts payable as a result of a decision to terminate an officer’s employment before the normal
retirement date or an officer’s decision to accept voluntary redundancy. They are charged on an accruals
basis to the Net Cost of Service in the Comprehensive Income and Expenditure Statement.
UK GAAP – Generally Accepted Accounting Standards
As IFRS is primarily drafted for the commercial sector and therefore does not address all accounting issues
relevant to local government in the UK, the Code prescribes a hierarchy of alternative standards on which
the accounting treatment and disclosures should be based where appropriate. The hierarchy comprises:
Financial Reporting Standards (FRS)
Statements of Standard Accounting Practice (SSAP)
Pronouncements of the Urgent Issues Task Force (UITF)
The Chief Constable of Durham Constabulary Statement of Accounts 31 March 2013 Page 26
CHIEF CONSTABLE OF DURHAM ANNUAL GOVERNANCE STATEMENT 2012/13
ANNUAL GOVERNANCE STATEMENT 1. SCOPE OF RESPONSIBILITY Durham Constabulary is responsible for ensuring that its business is conducted in accordance with the financial governance arrangements outlined in the Financial Management Code of Practice for the Police Service of England and Wales (2012). The police service also has a statutory duty to secure value for money in the use of public funds. In discharging this overall responsibility, Durham Constabulary is responsible for putting in place proper arrangements for the governance of its affairs and facilitating the exercise of its functions, which includes the management of risk. Durham Constabulary established a Corporate Governance Framework through which the Chief Constable can be assured that the Force’s systems, policies and people are operating in a way that is driving the delivery of agreed corporate objectives, are focused on the key risks to the delivery of those objectives and are economic, efficient and effective. This statement meets the requirements of regulation 4(3) of the Accounts and Audit (England) Regulations 2011 in relation to the publication of an Annual Governance Statement (AGS). 2. THE PURPOSE OF THE GOVERNANCE FRAMEWORK The governance framework comprises the systems, processes, culture and values, by which the Force is directed and controlled and the activities through which it accounts to and engages with and leads its community. It enables the Force to monitor the achievement of its strategic objectives and to consider whether those objectives have led to the delivery of appropriate, cost-effective services, including achieving value for money. The system of internal control is a significant part of that framework and is designed to manage risk to a reasonable level. It cannot eliminate all risk of failure to achieve policies, aims and objectives. It can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an ongoing process designed to identify and prioritise the risks to the achievement of the Force’s policies, aims and objectives, to evaluate the likelihood and potential impact of those risks being realised and to manage them efficiently, effectively and economically. The governance framework has been in place at Durham Constabulary for the year ended 31 March 2013 and up to the date of the approval of the statement of accounts. 3. THE GOVERNANCE FRAMEWORK The Chief Constable is responsible for operational policing matters, the direction and control of police personnel, and for putting in place proper arrangements for the governance of the Force. Durham Police Authority was required to hold the Chief Constable to account for the exercise of those functions and those of the persons under his direction and control. Following the introduction of the Police Reform & Social
Responsibility Act 2011, Durham Police Authority was replaced by the Police and Crime Commissioner for Durham on 22 November 2012, therefore this statement makes reference to governance, where appropriate, under both arrangements. The features of the control environment that existed under the Durham Police Authority prior to the transfer of Strategic Governance responsibilities to the Commissioner are set out at Appendix A. The AGS provides a summary of the extent to which the Force meets the six principles of good governance as identified in the revised Delivering Good Governance in Local Government: Guidance Note for Police (2012).
Principle 1 Focusing upon the purpose of the PCC and the Force, and on outcomes for the community, and creating and implementing a vision for the local area To achieve this, the Chief Constable:-
• set out the Durham Constabulary’s vision and purpose in accordance with the Police and Crime Plan which sets out policing priorities to be delivered and which is reviewed annually
• decides how the quality of service for users is to be measured and ensures that the information needed to review service quality effectively and regularly is available;
• provides a commitment to the public to deliver excellent policing to inspire confidence and deliver high satisfaction to victims and local communities in accordance with the Force’s Aiming for Excellence philosophy and through 3 key themes of protecting neighbourhoods, tackling criminals and solving problems around the clock.
• works in partnership with Durham University to better understand the drivers of public confidence in relation to reducing crime and Anti Social Behaviour, improve PACT awareness and feeling informed
• engages with the public to better understand and address issues that have a negative impact on communities
• has a robust performance framework that ensures the Chief Constable is informed of progress against key performance targets.
• has effective arrangements in place to ensure the Constabulary performs to high standards and to identify and deal with failure in service delivery;
• established a Medium Term Financial Plan supported by robust, sustainable multi-year budgets
• continuously improves processes to ensure that the information needed to review performance in achieving value for money effectively and regularly is available;
• has reviewed many of the Force’s key functions and departments and embedded the new force operating model to ensure the delivery of effective policing with reduced numbers of staff. Frontline policing services are prioritised to ensure changes made will provide a maintained or improved service to the communities of County Durham and Darlington in future years – HMIC Policing in austerity: One year on
• compares performance against peer data as provided within the HMIC VFM profile – Valuing the Police 3 and seeks improvement where best practice is identified; and
• has a robust complaints process in place.
Principle 2 Leaders, officers and partners working together to achieve a common purpose with clearly defined functions and roles To achieve this, the Chief Constable:-
• monitors the efficient and effective management of human, financial and environmental resources. Clear examples of this have been the Estates Programme which has a heavy focus on reducing the impact upon the environment, adopting modern working methods and renewing key IT systems eg Blue Delta and Red Sigma.
• reviewed and implemented a new governance structure in relation to change management and improvement, termed the Service Improvement Programme. This recognised the need to sustain improvement in service delivery to the public, particularly in relation to public confidence indicators, whilst demonstrating value for money in the context of shrinking budgets.
• promotes an ethos of continuous improvement across the force in order to reduce organisational costs and improve performance. In practice this is driven through the Continuous Improvement Programme Board which commissions activities and oversees outcomes from the Strategic Programme Boards of Citizens Journey, Futures and Efficient Use of Resources. Each board is chaired by a Force Executive Officer;
• Individual programmes contain business cases to ensure value for money, programme and project plans to ensure effective resource management, quality measures; and projected benefits for communities.
• utilises “Plan on a Page” a well established strategic planning approach which combines the vision, business plan, performance and risk all within one document. Strategic business risks are discussed and debated at the monthly Force Management Group where a determination is made as to their level and the plan updated. As a minimum this is done across all business areas every three months, but may be done more dynamically as a new risk remerges. The plan utilises a balanced scorecard approach and links all the business areas within force, and the requirement to achieve value for money. Operational risks are overseen at the monthly Force Threat and Risk meeting which is the highest level operational meeting under the National Intelligence Model in Force.
• actively pursues joint working opportunities at a local, regional and national level, which has resulted in a number of policing services being delivered in collaboration with other forces or organizations; and
• ensures when working in partnership that the arrangements for governance and accountability for performance and financial administration are clearly articulated and disseminated;
Principle 3 Promoting values for the Force and demonstrating the values of good governance through upholding high standards of conduct and behaviour To achieve this, the Chief Constable:-
• has a detailed organisational structure, with clearly defined responsibilities and terms of reference, which are monitored and updated when required;
• has established clear roles and responsibilities for each of his senior officers. There is a formal Constabulary accountability/performance management framework and
each officer is subject to the Constabulary Personal Development Review procedures.
• ensures that officers and staff carry out their respective roles in a climate of openness, support and respect;
• has developed standards of conduct and personal behaviour which are defined and communicated through appropriate codes of conduct and protocols;
• is implementing recommendations contained within the HMIC public interest report – Without Fear or Favour that looked at police relationships with media and other parties, information disclosure, hospitality and gratuities, business interests procurement and contracts, and those of the follow up report - Revisting police relationships.
• has delivered Leading through Standards of Professionalism training via its Professional Standards Department to Officers and staff.
• has adopted a policy on counter fraud and corruption which clearly sets out the procedures to be operated and which is designed to encourage prevention, promote detection and identify a clear pathway for the investigation of fraudulent and/or corrupt practices or behaviour.
• has appropriate and long established Whistle-blowing arrangements and processes in place within the Constabulary; and
• has established procedures for dealing with and investigating complaints which are in line with national guidelines.
Principle 4 Taking informed and transparent decisions, which are subject to effective scrutiny and managing risk
To achieve this, the Chief Constable:-
• develops and maintains effective mechanisms for documenting evidence for decisions and recording the criteria, rationale and considerations;
• develops and maintains effective arrangements to challenge and scrutinise the Constabulary’s own performance and compliance with other requirements;
• provides objective and timely information which is necessary to take balanced and informed decisions;
• ensures that risk management is embedded and is used effectively to inform and focus decision making
• ensures the Constabulary has effective, transparent and accessible arrangements in place for dealing with complaints;
• ensures the Constabulary reviews and revises as appropriate its key governance documents, i.e. financial regulations and contract procedure rules;
• provides the PCC and External Audit with Revenue and Capital Monitoring reports on a regular basis; and
• worked with the PCC to establish a Joint Audit Committee. Principle 5 Developing the capacity and capability of all to be effective in their roles To achieve this, the Chief Constable:-
• has established clear roles and responsibilities for each of the Constabulary’s senior officers. There is a formal Constabulary accountability/performance management
framework and each officer is subject to the Constabulary Personal Development Review procedures.
• has robust performance management arrangements within the Constabulary which enables each officer’s needs, training and development requirements to be identified. The framework enables officers to work with their line managers to agree the appropriate actions to address their needs and regular reviews of progress are held
• ensures that all police staff are issued with contracts of employment, each role is covered by a job description, all of which are processed through the Constabulary job evaluation scheme to determine the appropriate remuneration for the role. All changes to terms and conditions of contracts or to job descriptions are negotiated through the police staff group.
• Police Officers are servants of the Crown, their terms and conditions are provided for under national police regulations. The Constabulary has a range of policies to support the implementation of the national regulations, and any changes to these policies are negotiated/subject to consultation through the Personnel User Group.
• takes into account previous training and experience when considering officer postings;
• considers succession planning of key roles within departments;
• ensures that PDRs / CPD is carried out; and
• ensures that key training is provided to Officers and staff including First Aid Training and Personal Safety Training.
Principle 6 Engaging with local people and other stakeholders to ensure robust public accountability
To achieve this, the Chief Constable:-
• holds regular meetings with local communities through the Police and Communities Together (PACT) initiative which offers the community a chance to be heard, to discuss issues that affect communities, to agree local action to tackle these issues and agree priorities.
• works with partner organisations through the Safe Durham Partnership to tackle crime, disorder, anti-social behaviour, substance misuse, other behaviour adversely affecting the local environment and to reduce re-offending as required by the Crime and Disorder Act 1998 and amended by the Police and Justice Act 2006 .
• The Safe Durham Partnership has developed a Partnership Plan as part of its statutory responsibility to develop a three year plan to tackle priorities identified from the County Durham Joint Strategic Assessment and public consultation.
• regularly publishes information on the Constabulary’s work and achievements
• undertakes a local Public Confidence Survey highlighting public confidence levels and concerns at a local level about policing in their neighbourhood.
• created the ring back bureau to engage directly with the victims of crime and keep them informed;
• is working with a group of volunteers who are undergoing training to develop a restorative approach to tackling crime and anti-social behaviour within the community. The volunteers are mostly local people who are giving their time to act as facilitators, bringing together victims and offenders to talk about the impact of an incident and what can be done to put things right.
• undertakes a victim satisfaction survey which provides the Force with information about the quality of service they have received from the Police service; and
• holds regular meetings through Neighbourhood Policing teams with the public to discuss local policing priorities and activities to focus work upon. Feedback from these meetings are also included as part of the Force’s priority setting process.
4. REVIEW OF EFFECTIVENESS Durham Constabulary has responsibility for conducting, at least annually, a review of the effectiveness of the governance framework, including the system of internal control. The review of effectiveness is informed by the work of the executive managers within the Force who have responsibility for the development and maintenance of the governance environment, the Annual Report of the Head of Internal Audit, and also by comments made by the external auditors and other review agencies and inspectorates. Based on Internal Audit work undertaken during 2012/13, the Head of Internal Audit has issued a Substantial overall assurance opinion on the adequacy and effectiveness of internal control operating across the Constabulary in 2012/13. This significant opinion ranking provides assurance that there is a sound system of control. However, there are some minor weaknesses, which may put some of the system objectives at risk, details of which are reported within the Head of Internal Audit’s progress reports. During the year the following Internal Audit Reports were provided: Finance Audit and Resources Committee Internal Audit Plan 2012/13 Analysis of Internal Audit Rejected Recommendations Fraud and Corruption Draft Annual Governance Statement 2011/12 (included as Report of Treasurer) Review of the effectiveness of Internal Audit (included as Report of the Treasurer and Chief Constable) Annual Internal Audit Report 2011/12 Risk Based Internal Audit Approach and Assurance Mapping Report on Force Business Continuity Planning Arrangements Annual Governance Statement 2011/12 (included as Report of Treasurer) Police Authority Internal Audit Progress Report 01 April 2012 to 30 September 2012 Fraud and Corruption - National Fraud Initiative 2012/13 Members’ Assurance Statement Annual Governance Statement 2011/12 (included as Report of Treasurer) Executive Board Progress Report 01 April 2012 to 31 December 2012 Progress Report 01 April 2012 to 31 March 2013
Internal Audit Plan 2013/14 (included as part of Joint Report of Treasurer and Assistant Chief Officer re provision of Internal Audit Services)
5. SIGNIFICANT GOVERNANCE ISSUES The Chief Constable is fully committed to the principles of corporate governance, and has worked closely with the Police and Crime Commissioner who took office in November 2012 to develop / enhance arrangements in place. Following the production of the Annual Governance Statement for 2011/12, an action plan was produced that contained 2 recommendations relating to the Force. Progress made in implementing each of these has been tracked during the year and formed the starting point of the work to produce the 2012/13 Annual Governance Statement. The following matters, identified in preparing the Statement and relevant at the time of its adoption, are considered to be significant. The announcements in respect of the next Comprehensive Spending Review have indicated that the headline figures for Government Departmental savings for the forthcoming financial years will continue to see funding reductions, coupled with limitations on raising Council Tax. This will prove increasingly challenging to the Force in terms of sustaining ongoing service delivery and will require a continuous review of officer and staffing structures and ongoing scrutiny of all non-staffing budgets. The Force will need to work closely with the PCC to ensure that savings are achieved and funding streams maximised to ensure that the budget remains in balance. The Police Reform and Social Responsibility Act 2011 requires the PCC to submit proposals to the Home Secretary in respect of the Stage 2 transfer of staff and assets to the Chief Constable as a separate Corporation Sole. There are significant unintended accounting consequences which are yet to be resolved by Central Government which would have significant budgetary implications if unresolved. It is imperative that officers work together and with the Police and Crime Commissioners’ Treasurers’ Society to ensure that this is resolved before Stage 2 is effective. Collaboration will continue to be addressed pro-actively in terms of collaborating with other forces, and other organisations. The coalition government have placed an increased emphasis on collaboration within the Police Service, and this is reflected in the PCC’s governance structure in relation to collaboration. I propose to address the above matters to further enhance my governance arrangements and will monitor the implementation and operation of these improvements over the course of the year. Signed: --------------------------------------------
Mike Barton Chief Constable of Durham Date:
------------------------------------------------
APPENDIX A
THE GOVERNANCE FRAMEWORK AS OPERATED WITHIN DURHAM POLICE AUTHORITY PRIOR TO THE TRANSFER OF STRATEGIC GOVERNANCE RESPONSIBILITIES TO THE POLICE AND CRIME COMMISSIONER Although the Chief Constable is responsible for operational policing matters, the direction and control of police personnel, and for putting in place proper arrangements for the governance of the Force, the Authority is required to hold him to account for the exercise of those functions and those of the persons under his direction and control. It therefore follows that the Authority must satisfy itself that the Force has appropriate mechanisms in place for the maintenance of good governance, and that these operate in practice. The key elements of the systems and processes that comprise the governance arrangements in place for the Authority and Force include:
Identifying and communicating the Authority’s vision of its purpose and intended outcomes for citizens and service users To achieve this, the Authority:-
• promotes its mission, vision and values;
• is working to ensure that the work the Authority and Constabulary undertake in partnership with others is underpinned by a common vision;
• decides how the quality of service for users is to be measured and ensures that the information needed to review service quality effectively and regularly is available;
• continuously improves processes to ensure that the information needed to review performance in achieving value for money effectively and regularly is available;
• considers the environmental impact of policies, plans and decisions;
• has effective arrangements in place to ensure the Constabulary performs to high standards and to identify and deal with failure in service delivery;
• established a 5 year Medium Term Financial Plan supported by multi-year budgets;
• based its 2011/12 Business Plan around the 6 principles of Good Governance and the delivery of the Authority’s vision and outcomes and has approved a business plan monitoring scheme; and
• widely communicates its vision in all statutory reports and plans as well as on the Durham Police Authority website and on all marketing communications.
Reviewing the Authority’s vision and its implications for governance arrangements
To achieve this, the Authority:-
• revised its Committee Structure in June 2010 to continue to align to the Authority’s vision and strategic outcomes and recognise the Authority’s reducing resources in the lead up to the introduction of elected Police and Crime Commissioners in November 2012.
Setting objectives and targets outlined in the Annual Policing Plan, including decision making structures
The setting of objectives and SMART (specific, measurable, achievable, realistic and timely) targets is addressed through the Business Planning and Productivity Committee which is tasked by the Authority to lead on the development of the Annual Policing Plan. The Committee determines the appropriate indicators to measure performance against local policing priorities as determined through the Joint Strategic Assessment with partners and a comprehensive consultation programme with local people. Performance against the targets is then monitored through the Authority’s Effective Policing Delivery Committee.
Monitoring performance against operational, financial and other strategic plans, including how key issues are identified and tasked At a strategic level, the Authority’s well established and continuously improving Committee Governance structure has established a robust framework for consideration of Statutory Financial Statements and other published performance information. In addition regular reports are considered by the Finance, Audit and Resources Committee to monitor the efficient and effective management of human, financial and environmental resources. Clear examples of this in the last two years have been the redundancy programme introduced to address the necessary budget reductions and the Estates Programme which has a heavy focus on reducing the Authority’s impact upon the environment. The Government White Paper ‘Protecting the Public: Supporting the Police to Succeed’ and the report of the High Level Working Group on Value for Money identified a number of implications for the future of forces in particular in terms of performance management. The Force is a strong performer in key areas and particularly in relation to public confidence indicators. However, the challenge recognised was the need to sustain improvement in service delivery to members of the public whilst demonstrating value for money in the context of shrinking budgets. In response, Durham Constabulary has reviewed and implemented a new governance structure in relation to change management and improvement, termed the Service Improvement Programme. A Service Improvement Programme Plan has been developed as part of work commissioned by the Executive relating to Performance Management arrangements and forms part of the Force Programme Board’s structure. The Service Improvement Programme Plan links to the Force vision and aims to drive improvement through strategic development and operational improvement within a robust accountability framework. The overarching outcomes sought by the programme are to achieve improvement aimed at the delivery of excellent services which demonstrate value for money within a balanced budget. The programme board structure which supports delivery of this is based upon the three areas of efficiency, effectiveness and economy.
Each board is chaired by a Force Executive Officer with the oversight, scrutiny and corporate review function undertaken by the overarching Value for Money Board.
In addition, the Authority:-
• provides training to Members and Authority officers as part of its commitment to implement the Office of Government Commerce’s Managing Successful Programmes methodology which addresses all aspects of programme planning, delivery and benefits realisation; and
• oversees the Constabulary’s Change Programme through the Authority’s Business Planning and Productivity Committee with clear interfaces into the Authority’s Finance, Audit and Resources Committee and Effective Policing Delivery Committee.
Measuring the quality of services for users, to ensure they are delivered in accordance with the Authority’s objectives and represent the best use of resources
Citizen focus and value for money are cross-cutting themes embedded into the Authority’s business through both its vision and supporting governance structures and processes. For example, the Authority through its Committees and Panels plays a critical programme assurance role in relation to the Constabulary through the scrutiny of:
• stakeholder involvement and engagement processes;
• business cases to ensure value for money;
• programme and project plans to ensure effective resource management;
• quality measures; and
• projected benefits for communities.
Risk management processes by which risks are identified and mitigated in Force and Authority
To achieve this the Constabulary:-
• has introduced a new “Plan on a Page” strategic planning approach which combines the vision, business plan, performance and risk all within one document. Strategic business risks are discussed and debated at the monthly Force Management Group where a determination is made as to their level and the plan updated. As a minimum this is done across all business areas every three months, but may be done more dynamically as a new risk remerges. The plan utilises a balanced scorecard approach and links all the business areas within force, and the requirement to achieve value for money. Operational risks are overseen at the monthly Force Threat and Risk meeting which is the highest level operational meeting under the National Intelligence Model in Force.
• reports to the Authority’s Finance, Audit and Resources Committee on risk issues.
In addition, the Authority:-
• through its governance of Protective Services, has adopted a risk based informed approach;
• risk assesses all reports that go through the Authority’s own committee structures; and
• has developed arrangements to identify and manage risks relating to its own activities and has an established risk register; and
• is working with the Force to ensure that common risks are identified and managed from both organisations respective perspectives.
Defining and documenting the roles and responsibilities of the Authority and Force and the senior Members and officers within each, setting out clear delegation arrangements and protocols for effective communication, and arrangements for challenging and scrutinising Force activity To achieve this, the Authority:-
• ensures there is a clear understanding of the respective roles and responsibilities of the Authority, its Members and officers and reviews the effectiveness of these roles and responsibilities;
• has a detailed organisational structure, with clearly defined responsibilities and terms of reference, which are monitored and updated when required;
• works with the Constabulary as well as its stakeholders and communities to develop and deliver against clearly defined strategic plans, priorities and targets to drive improvements in policing services;
• ensures when working in partnership that the arrangements for governance and accountability for performance and financial administration are clearly articulated and disseminated; and
• has Member and Officer Protocols, a Code of Corporate Governance and a protocol governing the relationship between the Authority and its Constabulary.
In addition, the Constabulary has established clear roles and responsibilities for each of its senior officers. There is a formal Constabulary accountability/performance management framework and each officer is subject to the Constabulary Personal Development Review procedures.
Developing, communicating and embedding codes of conduct, defining the standards of behaviour for Members, officers and staff
To achieve this, the Authority:-
• ensures that Members and officers of the Authority carry out their respective roles in a climate of openness, support and respect; and
• has developed standards of conduct and personal behaviour expected between Members, Authority officers and staff and officers of the Constabulary which are defined and communicated through appropriate codes of conduct and protocols.
Reviewing and updating standing orders, standing financial instructions, a scheme of delegation, contract/procurement regulations, and supporting procedure notes/manuals, which clearly define how decisions are taken and the processes and controls required to manage risks
To achieve this, the Authority:-
• develops and maintains effective mechanisms for documenting evidence for decisions and recording the criteria, rationale and considerations;
• develops and maintains effective arrangements to challenge and scrutinise the Constabulary’s performance and compliance with other requirements;
• ensures that it works with the Constabulary to obtain objective and timely information which is necessary to take balanced and informed decisions;
• ensures that risk management is embedded both within the Authority and Constabulary and is used effectively to inform and focus its decision making, scrutiny and monitoring work;
• ensures that both the Authority and Constabulary have effective, transparent and accessible arrangements in place for dealing with complaints; and
• reviews and revises as appropriate its key governance documents, i.e. the standing orders, financial regulations and contract procedure rules.
Ensuring the Authority’s financial management arrangements conform with the governance requirements of the CIPFA Statement on the Role of the Chief Financial Officer in a Police Authority (2010) The Treasurer to the Police Authority is professionally qualified and suitably experienced. He plays a key role in providing a strategic insight to the direction and control of Police Authority and Constabulary business decisions affecting financial resources. He ensures compliance with financial standards and gives due consideration to both the risk to and economic, efficient and effective use of resources. He works closely with the Chief Constable and Force in ensuring the Finance function provided is fit for purpose and that the management of the Authority’s resources is robust.
Undertaking the core functions of an audit committee, as identified in CIPFA’s Audit Committees – Practical Guidance for Local Authorities The Authority’s Finance, Audit and Resources Committee has responsibility for monitoring and reviewing the risk, control and governance processes and associated assurance processes to ensure internal control systems are effective and that policies and practices are in compliance with statutory and other regulations and guidance. This includes considering the work of External Audit, Internal Audit and Risk Management and making recommendations concerning the Authority’s relevant governance arrangements.
Ensuring compliance with relevant laws and regulations, internal policies and procedures, and that expenditure is lawful
The Authority’s two independent Statutory Officers have responsibility for its legal and financial services and secure support in the provision of these services through arrangements with Durham County Council and the Constabulary. Compliance issues are addressed through robust standing orders, financial regulations and procedural rules.
Whistle-blowing arrangements and processes for receiving and investigating complaints from the public
The Constabulary has a long established confidential reporting policy. The Authority has also developed its own confidential reporting code.
There are well established procedures within the Authority and Constabulary for dealing with and investigating complaints which are in line with national guidelines. Complaints are monitored through the Authority’s Complaints Committee.
Determining the conditions of employment and remuneration of officers and staff
There are robust arrangements in place including a Chief Officers’ Appointments Committee and Human Resources Sub-Committee. Conditions of Employment and remuneration issues have been dealt with during 2011/12 on a day by day basis by the respective HR teams in the Constabulary and County Council.
In addition, the Constabulary issues contracts of employment to all police staff, each role is covered by a job description, all of which are processed through the Constabulary job evaluation scheme to determine the appropriate remuneration for the role. All changes to terms and conditions of contracts or to job descriptions are negotiated through the police staff group.
Police Officers are servants of the Crown, their terms and conditions are provided for under national police regulations. The Constabulary has a range of policies to support the implementation of the national regulations, and any changes to these policies are negotiated/subject to consultation through the Personnel User Group.
Identifying the development needs of Members and senior officers in relation to their strategic roles, supported by appropriate training To achieve this, the Authority:-
• ensures that Members and officers have the resources and support necessary to perform effectively in their roles and functions subject to overall affordability;
• provides induction programmes tailored to individual needs as well as opportunities for Members and officers to update their knowledge on an ongoing basis;
• ensures there are effective arrangements designed to encourage individuals from all sections of the community to engage with, contribute to, and participate in the work of the Authority; and
• issues a skills assessment questionnaire to all new Members of the Authority to inform the Authority’s developing Training Strategy.
The Constabulary also has robust performance management arrangements which are supported by its Personal Development Review Framework. This framework enables each officer’s needs, training and development requirements to be identified. The framework enables officers to work with their line managers to agree the appropriate actions to address their needs and regular reviews of progress are held.
Establishing clear channels of communication with all sections of the community and other stakeholders, ensuring accountability and encouraging open consultation
To achieve this, the Authority:-
• makes clear to all staff, the community and stakeholders, what they are accountable for and to whom;
• ensures arrangements are in place to enable the Authority to engage and consult effectively with partners, stakeholders and all sections of the community, recognising that different sections of the community have different priorities and different information needs;
• ensures that processes for taking decisions about matters where there are competing demands from different sections of the community openly recognise and address those differences;
• holds meetings in public, in a wide range of community settings, making appropriate arrangements for agenda items that for good reasons require confidentiality;
• regularly publishes information on the Authority’s and Constabulary’s work, achievements and satisfaction of users; and
• has invested in dedicated staffing capacity in communications and community engagement. A Communications Strategy and Joint Community Engagement Strategy between the Force and the Authority has also been approved by the Authority.
Incorporating good governance arrangements in respect of partnerships and other group working as identified by the Audit Commission’s report on the governance of partnerships, and reflecting these in the Authority’s overall governance arrangements
The Authority has invested in dedicated capacity to support its own role in partnership working. A Partnership Strategy has been developed which enables the Authority to effectively participate and evaluate the outputs and outcomes of partnership working through its Partnership and Engagement Committee. Governance requirements of the CIPFA Statement on the Role of the Chief Financial Officer in a Police Authority (2010) The Authority is fully compliant with the principles outlined in the CIPFA Statement on the Role of the Chief Financial Officer in a Police Authority (2010).