Quarter 3 Financial Monitoring Report for period ending 31st December 2023
Summary
Agency board report number: SEPA 03/24
A detailed paper was presented for consideration and scrutiny at the Special Audit and Risk Committee on 13 February 2024. The paper was recommended for submission to the Board for approval.
Actual results for the period of 1 April 2023 to 31 December 2023 show that SEPA is forecasting a break-even position in revenue at the year end.
A capital summary showing the £6.2m budget is forecasting an underspend of £0.3m for the financial year ended 31 March 2024.
For approval.
For Public session of the Board.
Angela Milloy, Chief Officer Finance, Modernisation & Digital
- Ian Bryce, Deputy Head of Finance
- Rosaleen Burke, Head of Finance
Income and expenditure account 2023 - 2024
Table 1 – 1st April 2023 to 31st December 2023 – full year forecast v annual budget
Key - () overspend
| Scottish Environment Protection Agency (SEPA) - Income and expenditure account 2023-24 | ||||||
|---|---|---|---|---|---|---|
| Period ended 31st December | Year to date | Full year | ||||
| Description | Actual £'000 | Budget £'000 | Var. £'000 | Forecast £'000 | Budget £'000 | Var. £'000 |
| Grant in Aid | 19,000 | 19,000 | 0 | 45,444 | 45,444 | 0 |
| Charging Schemes | 45,797 | 46,624 | (827) | 48,692 | 48,937 | (245) |
| Other income | 1,620 | 1,325 | 2,656 | 2,509 | 147 | |
| Total Income | 66,471 | 66,949 | (827) | 96,792 | 96,890 | (98) |
| Staff costs | 46,025 | 48,318 | 2,293 | 67,620 | 68,331 | 711 |
| Other staff costs | 631 | 363 | (268) | 1,037 | 520 | (517) |
| Transport costs | 806 | 743 | (63) | 1,368 | 1,285 | (83) |
| Supplies and services | 8,165 | 8,224 | 59 | 17,020 | 17,328 | 308 |
| Property costs | 3,346 | 3,133 | (214) | 4,551 | 4,230 | (321) |
| Depreciation/impairment | 3,905 | 3,905 | 0 | 5,196 | 5,196 | 0 |
| Total operating costs | 62,878 | 64,686 | 1,807 | 96,792 | 96,890 | 98 |
| Operating surplus / (Deficit) | 3,539 | 2,263 | 1,276 | 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 and Services (£0.3m). These savings have been achieved.
Based on Quarter 3 results (Q3 – April 2023-December 2023), the full year forecast remains a break-even position with a £0.1m adverse variance on income being offset by a saving in expenditure.
Total income
Total income for the full year is forecast at £96.8m which is £0.1m less than budget. Lower than budgeted application income is being offset by higher than budgeted subsistence income and bank interest.
Total expenditure
Full year operating costs are £96.8m, which is £0.1m 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 achieved and accounted for in table 1 above. The forecast is reporting an additional underspend in Staff Costs of £0.7m based on current vacancy rates. These savings should be viewed together with Other Staff Costs where a forecast overspend of (£0.5m) is being reported, mainly relating to temporary workers.
Supplies and services – The full year forecast is currently reporting an underspend of £0.3m. There are several offsetting variances, the most significant of which relates to less bad debt being written off than budgeted (£281k less). The balance of movements in the remaining accounts within Supplies and Services net each other out.
Property costs – Currently forecasting a £0.3m overspend largely due to increased utility costs with the largest increase against electricity due to higher levels of usage and increased tariffs.
Capital
Table 2 – Capital expenditure
| Period ending 31st December | Budget | |
|---|---|---|
| Capital grant in aid | 6,200 | |
| Capital area | Forecast | Total committed |
| Compliance | 16 | 0 |
| Circular Economy | 36 | 36 |
| Chemistry | 1,502 | 819 |
| Ecology | 91 | 4 |
| Environmental Quality | 152 | 51 |
| Facilities | 331 | 76 |
| Hydrology | 1,744 | 1,424 |
| Information Systems | 2,028 | 1,482 |
| Total | 5,900 | 3,892 |
| (Over) / underspend | 300 | |
SEPA’s capital budget provided by Scottish Government for the year is £6.2m. At Quarter 3 (Q3), the capital programme is forecasting an underspend of £0.3m. At the time of writing 80% of the budget is committed with 2 months until end of financial year. This underspend is due to alternative, more affordable solutions being sourced for the Stirling Office.
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 £4.8m have been raised this year of which £2m have been paid.
Statement of financial position
Table 3 - Statement of financial position
| Statement of Financial Position 31 December 2023 | Year to 31 March 2023 £'000 | Year to 31 December 2023 £'000 |
|---|---|---|
| Property, plant and equipment | 42,929 | 39,057 |
| Intangible assets | 2,390 | 2,390 |
| Assets under construction | 1,167 | 1,167 |
| Employee retirement benefits | 1,501 | 1,501 |
| Total non current assets | 48,020 | 44,115 |
| Trade and other receivables | 3,806 | 1,181 |
| Cash and cash equivalents | 829 | 4,620 |
| Total current assets | 52,655 | 49,916 |
| Trade and other payables | (10,069) | (3,834) |
| Provisions | (555) | (462) |
| Total current liabilities | (10,624) | (4,296) |
| Total assets less current liabilities | 42,031 | 45,620 |
| Provisions for liabilities and charges >1 year | (5,325) | (5,325) |
| Future lease payments | (8,928) | (8,928) |
| Total non current liabilities | (14,253) | (14,253) |
| Total assets less total liabilities | 27,778 | 31,367 |
| General fund | 9,359 | 12,948 |
| Revaluation reserve | 18,419 | 18,419 |
| Total tax payers equity | 27,778 | 31,367 |
Recommendation
The Board is asked to consider the contents of this report and approve.