Quarter 1 Financial Monitoring Report
Summary
Agency board report number: SEPA 34/23 - July 2023
A detailed paper was presented for consideration and scrutiny at the Audit and Risk Committee on 24th July 2023. The paper was recommended for submission to the Board for approval. Actual results for the period of 1st April 2023 to 30th June 2023 show that SEPA is forecasting a break-even position at the year end. A capital summary showing the £6.2m budget is forecast to be fully spent for the financial year ended 31st March 2024.
The Board is asked to consider the contents of this report and approve.
The Board is asked to note the approach for consideration of risks as outlined above.
- Sponsor: Angela Milloy, Chief Officer, Finance
- Ian Bryce, Deputy Head of Finance
- Ian Bryce, Deputy Head of Finance
- Angela Milloy, Chief Officer, Finance
1st April 2023 to 30th June 2023 – Full Year Forecast v Annual Budget
Key - () overspend
| Scottish Environment Protection Agency (SEPA) - Income and expenditure account 2023-24 | ||||||
|---|---|---|---|---|---|---|
| Period ended 30th June | Year to date | Full year | ||||
| Description | Actual £'000 | Budget £'000 | Var. £'000 | Forecast £'000 | Budget £'000 | Var. £'000 |
| Grant in Aid | 14,000 | 14,000 | 0 | 44,573 | 44,573 | 0 |
| Charging Schemes | 42,411 | 42,599 | (148) | 48,630 | 48,938 | (308) |
| Other income | 297 | 205 | 92 | 2,408 | 2,464 | (56) |
| Total Income | 56,708 | 56,764 | (56) | 95,611 | 95,975 | (364) |
| Staff costs | 15,389 | 16,014 | 625 | 65,887 | 67,589 | 1,702 |
| Other staff costs | 148 | 76 | (72) | 782 | 426 | (356) |
| Transport costs | 202 | 156 | (46) | 1,156 | 938 | (218) |
| Supplies and services | 3,617 | 3,000 | (617) | 18,198 | 17,760 | (438) |
| Property costs | 1,446 | 888 | (559) | 4,381 | 4,055 | (326) |
| Depreciation/impairment | 1,367 | 1,367 | 0 | 5,207 | 5,207 | 0 |
| Total operating costs | 22,169 | 21,501 | (669) | 95,611 | 95,975 | 364 |
| Operating surplus / (Deficit) | 34,539 | 35,263 | (724) | 0 | 0 | 0 |
Net results
It should be noted that the 2023-24 budget was set net of £3m or 3.1% savings by budget reductions in Staff Costs (£2.7m) and Supplies & Services (£0.3m).
Based on early Q1 returns, the full year forecast remains a break-even position with a £0.4m adverse variance from full year budget.
Total income
Total income for the full year is forecast at £95.6m which is a net £0.4m less than full year budget and is due to a reduction in application charges.
Total expenditure
Full year operating costs are £95.6m, which is £0.4m less than budget.
Key highlights
Staff costs
For 2023-24, portfolios are required to meet the budgeted vacancy savings target of £2.7m and these savings have been factored into table 1 above. The forecast is an additional underspend in staff costs of £1.7m. This is an early year forecast and there is work to be done at portfolio level to allow more accurate forecasting.
Supplies & services
These overspends are not expected to remain at currently reported levels and there is work to be done at portfolio level to allow more accurate forecasting.
Property costs
Currently forecasting a £0.3m overspend largely due to increased utility costs with the largest increase against electricity. This is due to increased tariff as consumption rates remain unchanged. The other overspend relates to additional work at various gauging stations.
Capital
Capital expenditure
Table 2 – Capital expenditure
| Budget | YTD Actual | |
|---|---|---|
| Capital GiA | 6,200 | 900 |
| Capital area | Forecast | Actual | Committed | Uncommitted | Main spend types |
|---|---|---|---|---|---|
| Compliance | 166 | 0 | 0 | 166 | Intelligence & investigation system |
| Chemistry | 733 | 0 | 62 | 671 | Equipment replacement |
| Ecology | 145 | 0 | 0 | 145 | Liquid handling robot |
| Environmental quality | 55 | 0 | 10 | 45 | Bathing water signage |
| Facilities | 1,515 | 0 | 0 | 1,515 | Stirling office & Aberdeen lab |
| Hydrology | 1,660 | 16 | 573 | 1,071 | Flood mapping & defences / gauging stations |
| Information systems | 2,208 | 42 | 1,422 | 744 | Digital workstreams & web refresh |
| Capital totals 23/24 | 6,482 | 58 | 2,067 | 4,357 | |
| (Over) / underspend | (282) |
SEPA’s capital budget provided by SG for the year is £6.2m. At Q1 the capital programme is overcommitted by £0.3m, this is to allow for supplier chain slippage or procurement delays.
Civil penalties
SEPA acts as an agent for the Scottish Government in the issuing and collection of civil penalties, we do not receive any additional grant for undertaking this work. New actions totalling £2.25m have been raised this year bringing the total balance to pay to £13.9m.
Balance sheet
The year-end balance sheet is still under construction and therefore is not provided at this time.
Recommendation
The Board is asked to consider the contents of this report and approve.
The Board is asked to note that the Audit and Risk Committee (ARC), discussed the financial risks in detail at its meeting on 24th July 2023.