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Quarter 2 Financial Monitoring Report for period ending 30th September 2023

Summary

Agency board report number: SEPA 49/23

A detailed paper was presented for consideration and scrutiny at the Audit and Risk Committee on 14th November 2023. The paper was recommended for submission to the Board for approval.

Actual results for the period of 1st April 2023 to 30th September 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.

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 30th September	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	45,270	45,270	0
Charging Schemes	44,285	44,614	(329)	48,571	48,937	(366)
Other income	716	514	202	2,587	2,470	117
Total Income	59,001	59,128	(127)	96,428	96,677	(249)
Staff costs	30,510	32,366	1,856	66,158	67,537	1,379
Other staff costs	378	260	(118)	842	450	(392)
Transport costs	501	460	(41)	1,182	1,081	(101)
Supplies and services	5,800	5,695	(105)	18,547	18,161	(387)
Property costs	2,529	2,602	72	4,503	4,252	(251)
Depreciation/impairment	2,603	2,603	0	5,196	5,196	0
Total operating costs	42,321	43,986	1,664	96,428	96,677	249
Operating surplus / (Deficit)	16,680	15,142	1,538	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).

Based on Q2 returns, the full year forecast remains a break-even position with a £0.25m adverse variance on income being offset by a saving in expenditure.

Total income

Total income for the full year is forecast at £96.4m which is a net £0.25m less than full year budget and is due to a reduction in application charges.

Total expenditure

Full year operating costs are £96.4m, which is £0.25m 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 £1.4m based on current vacancy rates. These savings should be viewed together with Other Staff Costs where a forecast overspend of (£0.4m) is being reported, mainly relating to temporary workers.

Supplies and Services – The reported overspend of (£0.4m) is mainly associated with external legal support and expenses, scientific supplies and consumables.

Property Costs – Currently forecasting a £0.3m overspend largely due to increased utility costs with the largest increase against electricity. This is due to an increased tariff as consumption rates remain unchanged. The other overspend relates to increased dilapidation costs.

Capital

Table 2 – Capital expenditure

	Budget	YTD Actual
Capital GiA	6,200	900

Capital area	Forecast	Actual	Committed	Uncommitted	Main spend types
Compliance	196	0	0	196	Intelligence & investigation system
Circular Economy	36	0	0	36	New radiation equipment
Chemistry	1,243	76	0	1,167	Aberdeen lab refurb & equipment replacement
Ecology	29	4	0	25	Navigation upgrade
Environmental Quality	155	0	10	145	SIB data & bathing water signage
Facilities	1,003	0	5	998	Stirling office
Hydrology	1,569	327	733	509	Flood mapping & defences / gauging stations
Information Systems	2,202	437	782	983	Digital workstreams & web refresh
Capital totals 23/24	6,433	844	1,530	4,059
(Over) / underspend	(233)

SEPA’s capital budget provided by Scottish Government for the year is £6.2m. At Q2 the capital programme is overcommitted by £0.23m, this is to allow for supplier chain slippage or delays to project delivery.

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 of which £1.9m have been paid.

Statement of financial position

The Statement of Financial Position is tabled below. The opening balances are based on the draft 2022-23 financial statements and may be subject to change following completion of the external audit. The external audit commenced on 23rd October 2023.

Table 3 - Statement of financial position

Statement of Financial Position 30 September 2023	Year to 31 March 2023 £'000	Period to 30 September 2023 £'000
Property, plant and equipment	43,578	40,974
Intangible assets	2,390	2,390
Assets under construction	1,167	1,167
Employee retirement benefits	1,501	1,501
Total non current assets	48,636	46,032
Trade and other receivables	3,806	1,959
Cash and cash equivalents	829	16,235
Total current assets	53,271	64,226
Trade and other payables	(10,069)	(4,351)
Provisions	(555)	(514)
Total current liabilities	(10,624)	(4,865)
Total assets less current liabilities	42,647	59,361
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	28,394	45,108
General fund	9,377	26,091
Revaluation reserve	19,017	19,017
Total tax payers equity	28,394	45,108

Recommendation

The Board is asked to consider the contents of this report and approve.