MALDON DISTRICT COUNCIL

STATEMENT OF ACCOUNTS 2011/12

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MALDON DISTRICT COUNCIL

STATEMENT OF ACCOUNTS 2011/2012

Chairman of Finance and Corporate Services Committee

Councillor D M Sismey

Chief Executive

Ms F Marshall C.P.F.A.

Maldon District CouncilFinancial Services

Council OfficesPrinces Road

MaldonCM9 5DL

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MALDON DISTRICT COUNCIL

STATEMENT OF ACCOUNTS 2011/2012

CONTENTS

Page(s)Explanatory Foreword 1-4

Statement of Responsibilities for the Statement of Accounts 5

The Core Accounting Statements: Movement In Reserves Statement 6-7

Comprehensive Income and Expenditure Statement 8

Balance Sheet 9

Cash Flow Statement 10- Notes to the Cash Flow Statement 11

The Collection Fund 12Notes to the Collection Fund 13

Notes to the Core Accounting Statements

1 Accounting Policies 14-222 Prior Year Adjustments 233 Accounting Standards issued but not adopted 244 Assumptions about the future 245 Material Items of Income or Expense 256 Events after the Balance Sheet date 257 Transfers to/from Earmarked Reserves 258 Property, Plant & Equipment valuation 259 Property, Plant & Equipment movement on Balances 26

10 Capital Commitments 2711 Investment Properties 2712 Intangible Assets 2713 Financial Instruments 28-3014 Inventories 3015 Debtors 3016 Long Term Debtors 3017 Cash & Cash Equivalents 3118 Creditors 3119 Usable Reserves 3120 Unusable Reserves 3121 Segmental Reporting 32-3322 Trading Accounts 3423 Agency Services 3424 Members Allowances 3425 Remuneration of Senior Staff 35-3626 Audit and Inspection Costs 3627 Grant Income 3728 Related Party Transactions 3729 Capital Expenditure 3830 Capital Financing 3831 Leases 39-4032 Defined Benefit Pension Scheme 41-4433 Capital Disposals 4534 Local Area Agreement 4535 Contingent Liabilities 4636 Contingent Assets 4637 Glossary 47-50

Annual Governance Statement 51-58Independent Auditor's Report 59-61

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The purpose of the Statement of Accounts and the accompanying information is to give electors, those subject to locally levied taxes and charges, members of the Council, employees and other interested parties clear information about the Council’s finances.It provides information on the cost of providing services in the year, where the funding has come from, and the Council’s assets andliabilities at the year-end.The Statement of Accounts is prepared in accordance with the Code of Practice on Local Authority Accounting in the United Kingdom (the Code) which sets out the proper accounting practices for accounting for transactions of the Council and the presentation of the financial statements. The Code is based on International Financial Reporting Standards (IFRS) and International Public Sector Accounting Standards (IPSAS) interpreted for use by local authorities.

Statement of Accounts and accompanying informationThe Statement of Accounts and the accompanying information comprises various sections which are explained below:

Management commentaryThe management commentary section contained within the explanatory foreword is to offer interested parties an easily understandable guide to the most significant matters reported in the accounts. It provides an explanation in overall terms of the Council’s financial position, and assists in the interpretation of the financial statements. It summarises the major influences affecting the Council’s income and expenditure and cash flow, and information on the financial needs and resources of the Council. Although an integral part of this publication, it accompanies this document and is not formally part of the Statement of Accounts.Statement of responsibilities for the Statement of AccountsThis statement sets out the responsibilities of the Council and the chief financial officer in respect of the proper administration of the financial affairs the Council and for the preparation of the Statement of Accounts.Movement in Reserves StatementThis statement shows the movement in the year on the different reserves held by the Council, analysed into ‘usable reserves’ (ie those that can be applied to fund expenditure or reduce local taxation) and other reserves. The surplus or (deficit) on the provision of services line shows the true economic cost of providing the Council’s services, more details of which are shown in the Comprehensive Income and Expenditure Statement. These are different from the statutory amounts required to be charged to the general fund balance for council tax setting purposes. The net increase / decrease before transfers to earmarked reserves line shows the statutory general fund balance before any discretionary transfers to or from earmarked reserves undertaken by the Council.Comprehensive Income and Expenditure StatementThis statement shows the accounting cost in the year of providing services in accordance with generally accepted accounting practices, rather than the amount to be funded from taxation. Councils raise taxation to cover expenditure in accordance with regulations; this may be different from the accounting cost. The taxation position is shown in the Movement in Reserves Statement.Balance SheetThe Balance Sheet shows the value as at the balance sheet date of the assets and liabilities recognised by the Council. The net assets of the Council (assets less liabilities) are matched by the reserves held by the Council. Reserves are reported in two categories. The first category of reserves are usable reserves, ie those reserves that the Council may use to provide services, subject to the need to maintain a prudent level of reserves and any statutory limitations on their use (for example the capital receipts reserve that may only be used to fund capital expenditure or repay debt). The second category of reserves is those that the Council is not able to use to provide services. This category of reserves includes reserves that hold unrealised gains and losses (for example the revaluation reserve), where amounts would only become available to provide services if the assets are sold; and reserves that hold timing differences shown in the Movement in Reserves Statement line ‘adjustments between accounting basis and funding basis under regulations’.Cash Flow StatementThe Cash Flow Statement shows the changes in cash and cash equivalents of the Council during the reporting period. The statement shows how the Council generates and uses cash and cash equivalents by classifying cash flows as operating, investing and financing activities. The amount of net cash flows arising from operating activities is a key indicator of the extent to which the operations of the Council are funded by way of taxation and grant income or from the recipients of services provided by the Council. Investing activities represent the extent to which cash outflows have been made for resources which are intended to contribute to the Council’s future service delivery.Collection FundThe Collection Fund is an agent’s statement that reflects the statutory obligation for billing authorities to maintain a separate Collection Fund. The statement shows the transactions of the billing authority in relation to the collection from taxpayers and distribution to local authorities and the Government of council tax and non-domestic rates.Notes to the core accounting statementsThe notes to the core accounting statements present information about the basis of preparation of the financial statements and the specific accounting policies used, disclose additional information required by the Code that is not presented elsewhere in the financial statements, and provide information that is not presented elsewhere in the financial statements, but is relevant to an understanding of any of them.

EXPLANATORY FOREWORD

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Independent auditor’s reportThe independent auditor is required to publish an opinion on the financial statements whether they give a true and fair view of the financial position and the expenditure and income of the Council for the year in question. The auditor also has a responsibility to satisfy himself that the Council has put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources by review and examination of the Council’s corporate performance management and financial management arrangements against criteria specified by the Audit Commission.Annual Governance StatementThe Council is required to carry out an annual review of the effectiveness of the system of internal control and to include a report accompanying the Statement of Accounts. This statement explains how the Council has complied with the Code of Corporate Governance during the year and up to the date of the approval for publication of the Statement of Accounts. This accompanies the Statement of Accounts but does not form part of the Statement of Accounts and is therefore not subject to the true and fair statement provided in the Statement of responsibilities for the Statement of Accounts or the Independent auditor’s report.Management commentary - General Fund Revenue Spending The table below compares actual General Fund net expenditure for 2011/12 against the original approved budget on which the Council Tax for the year was set. The structure of income and expenditure headings in the accounts conforms to the Service Reporting Code of Practice for Local Authorities (SeRCOP)The accounts show that £493,000 was put back into the General Fund balance against the £36,000 overspend predicted in the original estimates. A net variance of £528,000.

GENERAL FUND SERVICES Actual Original Variance Variances From Original Budget 2011/12 Budget overspent/

2011/12 (under spent)£000 £000 £000

Central Services to the Public 810 810 0Environmental Services 2,565 2,974 (409)Cultural & Related Services 1,803 1,762 41Housing Services 995 798 197Planning & Development Services 1,451 1,325 126Transport Services (257) (246) (11)Corporate & Democratic Core 1,429 1,358 71Non Distributed costs 70 15 55Net Cost of Services 8,866 8,796 70Gain on the disposal of fixed assets (150) 0 (150)Parish & Town Precepts 996 996 0

(22) (18) (4)

(102) (102) 0Interest on Investments (250) (239) (11)

546 1,106 (560)Net Operating Expenditure 9,884 10,539 (654)

(5,222) (5,222) 0(38) (38) 0

(1,220) (1,027) (193)(2,561) (2,561) 0

96 0 96

(1,432) (1,655) 223(493) 36 (528)

Significant variances shown above include a £317,000 windfall within Environmental Services for Value Added Tax reclaimed from HMRC. Housing Services is shown above as overspending compared to the original budget however this includes £243,000 of Revenue Expenditure Financed From Capital Under Statute (REFFCUS) and is therefore adjusted in the Movement In Reserves Statement (MIRS) so that the General Fund is not effected. Capital disposals are also shown above as a variance however these are also reversed in MIRS so have no effect on the General Fund balance either.The Pensions interest cost and expected return on pensions assets saving shown compared to the original budget is also an item which is adjusted in the MIRS, the full pension disclosures can be found on page 40-43.The £193,000 gain shown against Government Grants is New Homes Bonus which was not included in the original budget due to uncertainty and therefore reflects additional resources for the Council.

Transfer from the Collection Fund in respect of surplus

Surplus on trading undertakings

Pensions interest cost and expected return on pensions assets

Demand on the Collection Fund (Council Tax)

Rental Income from Investment Assets

Net Deficit/(Surplus) for Year

Non-Domestic Rates redistribution

Sources of Finance

Other Earmarked Reserves

Central Government Grants

Net Additional amount required by statute and Non-statutory proper practices to be debited or credited to the General Fund Balance for the

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Financial Activity

The following chart shows proportionately the sources of the Council’s finance.

Services Provided

The following chart shows a breakdown of services provided,by net cost:

Council Tax33%

Non Domestic Rates24%

Revenue Support Grant1%

Investment Interest2%

Fees & Charges21%

Other Income19%

WHERE THE MONEY COMES FROM

Central Services to the Public

9%

Cultural & Related Services

20%

Environmental Services

28%

Housing Services11%

Planning & Development

Services16%

Corporate and Democratic Core

16%

SERVICES PROVIDED

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Revenue PositionThe revenue outturn position is better than anticipated in the revised budget. This saving is largely due to reclaimed VAT on Environmental Services provided since April 1973.

Pension Fund PositionThe pension position has deteriorated during the year, mostly due to a fluctuation in the long term discount rate used by the Council's Pension Actuary when estimating the current cost of future liabilities in the scheme. This change in discount rate has meant the current value of future liabilities has increased. Investment returns remain poor in line with the widereconomic situation, this has contributed further to the deterioration. The actuarial deficit and the expenditure required torectify it are a major financial burden although central government is now looking at ways of controlling this in the longerterm and has a number of pension reforms out to consultation.

Capital PositionA small number of projects are incomplete at year end, so expenditure is lower than anticipated in the capital programme with spending of £1,546,000 compared to a revised budget of £1,863,000. Over half of the capital spending has been metfrom grants with only £713,000 of the Council's capital reserves being applied during the year.

Borrowing and Sources of FinanceThe Council’s policy in the year was to fund capital expenditure from grants and capital receipts and not undertake borrowing. As discussed above capital reserves were used to fund £713,000 of spending, £7,900,000 of Usable CapitalReceipts remain at 31st March 2012 and are therefore available to finance future capital expenditure.

InvestmentsInvestment returns are at an historic low, due to the sustained low level of the Bank of England's base rate. Thissituation was anticipated in the budget. Since the banking crisis in 2007/08 the Council has been very risk averse; credit risk was a primary consideration during the year when placing investments.

Impact of Current Economic Climate on the Council and the Services it ProvidesThe Medium Term Financial Strategy (MTFS) anticipates the use of the Council's excess revenue reserves (general fund balance over £1m) over a three year period to help manage the major reduction in formula grant. This together with reductions in on-going expenditure and a programme of boosting income aims to rebalance the budget in the medium term, whilst containing increases in Council Tax.

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STATEMENT OF RESPONSIBILITIES FOR THE STATEMENT OF ACCOUNTS

The Council’s Responsibilities

The Council is required to:

(i) make arrangements for the proper administration of its financial affairs and to secure that one of it's officers has the responsibility for the administration of those affairs. In this Council, that officer is the Head of Organisational Development;

(ii) manage its affairs to secure economic, efficient and effective use of resources and safeguard its assets;

(iii) approve the Statement of Accounts.

I certify that these accounts were considered and approved under delegated powers, by the Finance and Corporate Services Committee at the meeting held on 25 September 2012.

On behalf of Maldon District CouncilCouncillor D Sismey

Signed ______________________ Chairman of Finance and Corporate Services CommitteeDate: 25 September 2012

The Section 151 Officer's Responsibilities

The Section 151 Officer is responsible for the preparation of the Council’s Statement of Accounts in accordance with proper practices as set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom (‘the Code’).

In preparing this Statement of Accounts, the Section 151 Officer has:

(i) selected suitable accounting policies and then applied them consistently;(ii) made judgements and estimates that were reasonable and prudent;(iii) complied with the Code.

The Section 151 Officer has also:

(i) kept proper accounting records which were up to date;(ii) taken reasonable steps for the prevention and detection of fraud and other

irregularities.

Certificate of Responsible Financial Officer

I certify that this Statement of Accounts presents a true and fair view of the financial position of theCouncil at 31 March 2012 and its income and expenditure for the year then ended.

Mr P Wyatt F.C.ASigned ______________________ Head of Organisational Development (S151 Officer)

Date: 25 September 2012

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£000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000

Balance at 01 April 2010 Brought Forward (2,250) (705) (306) (8,509) (11,770) (7,833) (21,159) (172) 20,120 (26) 96 (8,973) (20,743)

Movements in reserves during 2010/11

Surplus/(Deficit) on provision of services (1,370) (1,370) (1,370)Other Comprehensive Income & Expenditure

- Revaluation gain on Non Current Assets 0 0- Actuarial Loss charged to I&E reversed to pension reserve 32 (1,754) (1,754)Total Comprehensive Income & Expenditure (1,370) 0 0 0 (1,370) 0 0 0 (1,754) 0 0 (1,754) (3,124)Adjustments relating to the Capital Adjustment AccountReversal of items debited of credited to the Comprehensive Income & Expenditure StatementAmortisation of intangible fixed assets 11 (97) (97) 97 97 0Depreciation of fixed assets 8 (1,212) (1,212) 186 1,026 1,212 0Loss on impairment 0 0 0 0 0Government grants deferred amortisation 0 0 0 0 0Reversal of Capital Grants & Contributions Credited straight to services 8 293 293 (293) (293) 0Revenue Expenditure Funded From Capital Under Statute 28 (545) (545) 545 545 0Net gain on sale of fixed assets 33 20 (181) (161) 50 109 2 161 (0)Insertion of items not debited or credited to the Comprehensive Income & Expenditure Statement

Finance Lease payments 30 13 13 (13) (13) 0Investment Assets fair value gain 10 18 18 (18) (18) 0Capital Expenditure charged in year to the General Fund 0 0 0 0 0Adjustments relating to the Capital Grants Unapplied Account

New Capital Grants Received Reversed to CAA or Capital Grants Unapplied 26 409 (327) 82 (82) (82) 0Utilisation of Capital Grants Unapplied 232 232 (232) (232) 0Adjustments Relating to Capital Receipts

Capital receipts applied 29 352 352 (352) (352) 0Transfer to meet payments to the Housing Receipts Pool (2) 2 0 0 0Deferred Capital Receipts Received 30 (25) (25) 25 25 0Adjustments relating to the Pensions Reserve

Net charges made for retirement benefits in accordance with FRS17 32 911 911 (911) (911) 0Employer's contributions payable to the pension fund and retirement benefits payable direct to pensioners 32 1,289 1,289 (1,289) (1,289) 0Adjustments relating to the Collection Fund Adjustment Account

Transfers to (from) Collection Fund Adjustment Account 25 25 (25) (25) 0Adjustments relating to the Accumulated Absences Account

Employee Benefits Accrued reversal to Accumulated Absences Account 46 46 (46) (46) 0Total adjustments between accounting basis & funding basis under regulations 1,169 0 (96) 149 1,221 236 788 27 (2,200) (25) (46) (1,221) (0)Transfers to/from Earmarked Reserves 52 (52) 0 0 0Increase/Decrease in the year (149) (52) (96) 149 (149) 236 788 27 (3,954) (25) (46) (2,975) (3,124)

Balance at 31 March 2011 Carried Forward (149) (757) (402) (8,361) (11,918) (7,597) (20,372) (145) 16,165 (51) 50 (11,950) (23,868)

MOVEMENT IN RESERVES STATEMENT 2010-11 (restated)

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£000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000

Balance at 01 April 2011 Brought Forward (2,399) (757) (402) (8,361) (11,918) (7,597) (20,372) (145) 16,165 (51) 50 (11,950) (23,868)

Movements in reserves during 2011/12

Surplus/(Deficit) on provision of services 514 514 514Other Comprehensive Income & Expenditure

- Revaluation gain on Non Current Assets 0- Actuarial Loss charged to I&E reversed to pension reserve 32 6,210 6,210Total Comprehensive Income & Expenditure 514 0 0 0 514 0 0 0 6,210 0 0 6,210 6,724Adjustments relating to the Capital Adjustment AccountReversal of items debited of credited to the Comprehensive Income & Expenditure StatementAmortisation of intangible fixed assets 11 (83) (83) 83 83 0Depreciation of fixed assets 8 (1,201) (1,201) 184 1,017 1,201 0Reversal of Capital Grants & Contributions Credited straight to services 8 209 209 (209) (209) 0Revenue Expenditure Funded From Capital Under Statute 28 (510) (510) 510 510 0Net gain on sale of fixed assets 33 150 (292) (142) 19 97 26 142 (0)Insertion of items not debited or credited to the Comprehensive Income & Expenditure Statement

Finance Lease payments 30 13 13 (13) (13) 0Investment Assets fair value gain 10 0 0 0 0 0Capital Expenditure charged in year to the General Fund 0 0 0 0 0Adjustments relating to the Capital Grants Unapplied Account

New Capital Grants Received Reversed to CAA or Capital Grants Unapplied 26 350 350 (350) (350) 0Utilisation of Capital Grants Unapplied 275 275 (275) (275) 0Adjustments Relating to Capital Receipts

Capital receipts applied 29 713 713 (713) (713) 0Transfer to meet payments to the Housing Receipts Pool 0 0 0 0 0Deferred Capital Receipts Received 30 0 0 0Adjustments relating to the Pensions Reserve

Net charges made for retirement benefits in accordance with FRS17 32 (1,281) (1,281) 1,281 1,281 0Employer's contributions payable to the pension fund and retirement benefits payable direct to pensioners 32 1,278 1,278 (1,278) (1,278) 0Adjustments relating to the Collection Fund Adjustment Account

Transfers to (from) Collection Fund Adjustment Account (20) (20) 20 20 0Adjustments relating to the Accumulated Absences Account

Employee Benefits Accrued reversal to Accumulated Absences Account (8) (8) 8 8 0Total adjustments between accounting basis & funding basis under regulations (1,103) 0 275 421 (407) 203 147 26 3 20 8 407 0Transfers to/from Earmarked Reserves 96 (96) 0 0 0Increase/Decrease in the year (493) (96) 275 421 107 203 147 26 6,213 20 8 6,617 6,724

Balance at 31 March 2012 Carried Forward (2,892) (853) (127) (7,940) (11,811) (7,394) (20,225) (119) 22,378 (31) 58 (5,333) (17,144)

MOVEMENT IN RESERVES STATEMENT 2011-12

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2010/11 2010/11 2010/11 2011/12 2011/12 2011/12

Gross Gross Net Gross Gross Net Expenditure Income Expenditure Expenditure Income Expenditure

£000 £000 £000 Note £000 £000 £000

(As restated)

5,498 (4,799) 699 Central Services to the Public 5,517 (4,707) 8102,668 (783) 1,885 Cultural & Related Services 2,573 (770) 1,8034,501 (1,430) 3,071 Environmental Services 4,363 (1,798) 2,565

16,988 (16,020) 968 Housing Services 17,424 (16,429) 9952,330 (711) 1,619 Planning & Development Services 2,046 (595) 1,451

409 (626) (217) Transport Services 391 (648) (257)571 (143) 428 Concessionary Travel 15 (15) 0

1,419 (6) 1,413 Corporate and Democratic Core 1,439 (10) 1,42914 0 14 Non Distributed Costs 70 0 700 (2,650) (2,650) Change in pension benefits valuation basis (past service gain) 32 0

34,398 (27,168) 7,230 NET COST OF SERVICES 33,838 (24,972) 8,866

993 Parish & Town Precepts 9962 Contribution of housing capital receipts to Government Pool 0

(20) Gains on the disposal of fixed assets (150)* 975 OTHER OPERATING EXPENDITURE 847

1 Interest payable and similar charges 1(293) Interest on investments 13,31 (251)

(8) Surplus on trading undertakings 22 (22)971 Pensions interest cost and expected return on pensions assets 546

(105) Rental Income from Investment Assets 11 (102)(18) Gain on Fair value of Investment Assets 11 0548 FINANCING AND INVESTMENT INCOME & EXPENDITURE 172

* (5,238) Council Tax Icome (5,240)(563) Government Grants (not attributable to specific services) (792)

(35)Area Based Grants (Non ring fenced grants should be treated as general revenue grants - not included in cost of services) (428)

(3,877) Non-Domestic Rates (2,561)(410) Capital Grants and Contributions 27 (350)

(10,123) TAXATION AND NON SPECIFIC GRANT INCOME (9,371)(1,370) (SURPLUS) /DEFICIT ON THE PROVISION OF SERVICES 514

(1,754) ACTUARIAL (GAINS)/LOSSES ON PENSION ASSETS/LIABILITIES 32 6,210(1,754) OTHER COMPREHENSIVE INCOME AND EXPENDITURE (SURPLUS) / DEFICIT 6,210

(3,124) TOTAL COMPREHENSIVE INCOME AND EXPENDITURE (SURPLUS) / DEFICIT 6,724

COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT

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Note 31-Mar-12 31-Mar-11 01-Apr-109 NON CURRENT ASSETS £000 £000

Property Plant & Equipment - Land & Buildings 20,353 20,685 * 21,199 - Vehicles Plant & Equipment 1,174 1,106 1,375 - Infrastructure 3,362 3,397 3,693 - Community Assets 624 624 624 - Heritage Assets 95 95 # 95 #

- Surplus Assets 6 6 6PPE Assets Under Construction 0 38 0

11 Investment Property 1,376 1,376 1,35812 Intangible Assets 143 146 24410 Intangible Assets Under Construction 0 46 0

Long Term Investments 0 0 1,05116 Long Term Debtors 586 595 586

TOTAL LONG TERM ASSETS 27,719 28,114 30,231

CURRENT ASSETS13 Short Term Investments 7,025 12,090 7,04814 Inventories 7 8 615 Short Term Debtors 1,297 1,193 1,46217 Cash and Cash Equivalents 6,654 2,833 5,238

14,982 16,124 13,754LESS CURRENT LIABILITIES

18 Creditors (3,159) (4,195) (3,063)(3,159) (4,195) (3,063)

NET CURRENT ASSETS 11,824 11,929 10,691

30 Long Term Creditors 0 0 (13)

Provisions (16) 0 033 Liability related to Pension Scheme (22,378) (16,165) (20,120)

Capital Grants Receipts in Advance (5) (10) (45)TOTAL LONG TERM LIABILITIES (22,399) (16,175) (20,178)TOTAL ASSETS LESS LIABILITIES 17,144 23,868 20,744

FINANCED BY19 Usable Reserves

- Usable Capital Receipts Reserve (7,940) (8,361) (8,509) - Capital Grants Unapplied Account (127) (402) (306) - Revenue Reserves (3,744) (3,155) (2,955) - Total Usable Reserves (11,811) (11,918) (11,770)

20 Unusable Reserves - Revaluation Reserve (7,394) (7,597) *# (7,833) #

- Capital Adjustment Account (20,225) (20,372) * (21,159) - Deferred Capital Receipts Account (119) (145) (172)

33 - Pensions Reserve 22,378 16,165 20,120 - Collection Fund Adjustment Account (31) (51) (26) - Accumulated Absences Account 58 50 96 - Total Unusable Reserves (5,333) (11,950) (8,974)

TOTAL NET WORTH (17,144) (23,868) (20,744)

* Restated to remove disposal omitted from 2010/11 accounts see page 23# Restated to recognise new category of Assets (Heritage) see page 23

BALANCE SHEET

£000(Restated) (Restated)

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£000 £000(restated)

Net (surplus) or deficit on the provision of services (1,451) 514

Adjustments to net (surplus) or deficit for non-cash movements (note A) (103) (548)

Adjustments for items that are financing or investing activities (note B) 549 582

Net cash (inflows)/outflows from operating activities (1,005) 548

Investing activities

Purchase of property, plant and equipment, investment property and intangibles 345 1,025Purchase of short and long term investments 19,500 20,000Other payments made for investing activities 38 55Proceeds of sale of property, plant and equipment, investment property and intangibles (13) (9)Proceeds of sale of short and long term investments (15,500) (25,000)Other receipts from investing activities (600) (630)

Net cash (inflow)/Ouflows from investing activities 3,770 (4,559)

Financing activities

Repayment of finance lease and on-balance sheet PFI contracts 13 13Repayment of short and long term borrowing 0 0Other payments for financing activities 0 177Cash receipts of short and long term borrowing 0 0Other receipts from financing activities (373) 0

Net cash (inflow)/Ouflows from financing activities (360) 190

Net (increase) or decrease in cash and cash equivalents (note C) 2,405 (3,821)

Cash and cash equivalents at the beginning of the year 5,238 2,833

Cash and cash equivalents at the end of the year 2,833 6,654

2011-12 2010-11

The Cash Flow Statement shows the changes in cash and cash equivalents of the authority during the reporting period. The statement shows how the authority generates and uses cash and cash equivalents by classifying cash flows as operating, investing and financing activities. The amount of net cash flows arising from operating activities is a key indicator of the extent to which the operations of the authority are funded by way of taxation and grant income or from the recipients of services provided by the authority. Investing activities represent the extent to which cash flows have been made from resources which are intended to contribute to the authority's future service delivery.

CASH FLOW STATEMENT

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Note A: adjustments to net (surplus) or deficit for non-cash movements£000 £000 £000 £000

Depreciation, impairments and amortisation (1,309) (1,283)Amounts credited to CIES in respect of donated assets 0 0Carrying amount of non-current assets sold (80) (86)Increase/(decrease) in inventories 1 0Increase/(decrease) in debtors (251) 103(Increase)/decrease in creditors (715) 807(Increase)/decrease in provisions (7) (89)Pension costs 911 (1,281)Pension charges 1,289 1,278Grants applied to the financing of capital expenditure 40 3Revaluation gains on the value of investment properties 18 0

(103) (548)

Note B: adjustments for items that are financing or investing activities£000 £000 £000 £000

Proceeds of sale of property, plant and equipment, investment property and intangibles 179 236Capital grants received 370 346

549 582

Note C: cash & cash equivalent components TOTAL CashCash floats

£000 £000 £000 £000As at 31 Mar 11 2,494 2,494 338 1As at 31 Mar 12 6,104 6,104 549 1Movement in year 3,610 3,610 211 0

Note D: interest paid & received£000 £000 £000 £000

Interest received (298) (316)Interest paid 1 1Net cash (inflow) / outflow (297) (315)

Restated

2011-122010-11

2011-12

2011-12

2010-11

2010-11

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Notes 2010/11 2011/12Income £000 £000 £000 £000

2 Council tax (33,219) (33,262)

Transfers from General FundCouncil Tax benefits (4,219) (4,185)

3 Income from business ratepayers (11,453) (12,146)(48,891) (49,593)

ExpenditurePrecepts

Essex County Council 26,977 27,069Essex Police Authority 3,280 3,291Essex Fire Authority 1,649 1,654Maldon DC & Parishes 5,205 5,222

Redistributed Collection Fund surplusEssex County Council 54 198Essex Police Authority 7 24Essex Fire Authority 3 12Maldon DC 10 38

Business RatesPayment to National Pool 11,138 11,819Costs of Collection 92 91Interest on Overpaid NDR 17 5

Provision (reduction) for Bad and doubtful debts

Non Domestic rates 206 231Council Tax 79 84

Contributions 48,717 49,738

4 (Surplus)/Deficit for the year (174) 145

COLLECTION FUND

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1. COLLECTION FUND PURPOSE

This account reflects the statutory requirements for billing authorities to maintain aseparate Collection Fund, which shows the transactions of the Council inrelation to non-domestic rates and Council Tax and illustrates the way in whichthese have been distributed to precepting authorities and the General Fund.

2. COUNCIL TAX BASE

The Council's tax base i.e. the number of chargeable dwellings in each valuation band(adjusted for dwellings where discounts apply) converted to an equivalent numberof Band D dwellings, was calculated as follows:

Band Chargeable Estimated Ratio to Band DDwellings Properties Band D Equivalent

after discounts Dwellingsexemptions etc

A * N/A 1.75 5/9 1.00A 2,248 1,745.20 6/9 1,163.50B 3,605 3,094.45 7/9 2,406.80C 7,683 6,913.75 8/9 6,145.60D 5,010 4,618.75 9/9 4,618.80E 4,266 4,000.35 11/9 4,889.30F 2,583 2,466.85 13/9 3,563.20G 1,349 1,287.70 15/9 2,146.20H 155 139.50 18/9 279.00

26,899 24,268.30 25,213.40

Less adjustment for collection rate -305.10Council Tax Base 24,908.30

* Band A properties entitled to a disabled relief reduction

3. NON DOMESTIC RATES

Rates are charged on each of the district's 2,294 commercial properties.

Rateable value at 31 March 2012 £34,642,606Multiplier Business Rate Relief 43.3Small Business Rate Relief 42.6

The multiplier is set by Central Government. Income is paid into a national pool and redistributed on the basis of population.

4. COLLECTION FUND BALANCES

31-Mar-11 Movement 31-Mar-12£000 £000 £000

(Surplus) / Deficit (365) 145 (220)

Attributable to: Maldon District Council (31)Essex County Council (160)

Essex Police Authority (19)Essex Fire Service (10)

(220)

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NOTES TO THE CORE ACCOUNTING STATEMENTS

1. ACCOUNTING POLICIESGeneral PrinciplesThe Accounts are drawn up to comply with the Accounts and Audit Regulations 2011 in accordance with properaccounting practices. These practices primarily comprise the Code of Practice on Local Authority Accounting in the United Kingdom 2011/12 and the Best Value Accounting Code of Practice 2011/12, supported by International Financial Reporting Standards (IFRS) and statutory guidance issued under section 12 of the 2011 Act.

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.

Income and ExpenditureBoth revenue and capital accounts are prepared on an income and expenditure basis, which is in accordance with the accruals concept as defined in FRS18.

Cash and Cash EquivalentsCash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are investments repayable without penalty on notice of not more than 24 hours i.e.that are readily convertible to known amounts of cash with insignificant risk of change in value. They are held primarily for the purpose of meeting short term cash commitments.In the Cash Flow Statement, cash and cash equivalents are shown net of bank overdrafts that arerepayable on demand and form an integral part of the Council’s cash management.

Exceptional itemsWhen items of income and expense are material, their nature and amount is disclosed separately, either on the face of the Comprehensive Income and Expenditure Statement or in the notes to the accounts, depending on how significant the items are to an understanding of the Council’s financial performance.

Prior Period Adjustments, Changes in Accounting Policies Estimates and Material ErrorsPrior period adjustments may arise as a result of a change in accounting policies or to correct a material error.Changes in accounting policies are only made when required by proper accounting practices or the change provides more reliable or relevant information about the effect of transactions, other events and conditions on the Council’s financial position or financial performance. Where a change is made, it is applied retrospectively (unless stated otherwise) by adjusting opening balances and comparative amounts for the prior period as if the new policy had always been applied.Changes in accounting estimates are accounted for prospectively, i.e. in the current and future years affected by the changeand do not give rise to a prior period adjustment.Material errors discovered in prior period figures are corrected retrospectively by amending opening balances and comparative amounts for the prior period.

Charges to Revenue for Non-Current AssetsServices, support services and trading accounts are debited with the following amounts to record the cost of holding non current assets during the year:

• depreciation attributable to the assets used by the relevant service• revaluation and impairment losses on assets used by the service where there are no accumulated gains in the Revaluation Reserve against which the losses can be written off against• amortisation of intangible assets attributable to the relevant service.

The Council is not required to raise council tax to fund depreciation, revaluation and impairment losses or amortisation. Depreciation, revaluation and impairment losses and amortisation are replaced by the contribution in the General Fund Balance, by way of an adjusting transaction with the Capital Adjustment Account in the Movement in Reserves Statement for the difference between the two.

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Employee Benefits-Benefits Payable During EmploymentShort-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 and non-monetary benefits for current employees and are recognised as an expense for services in the year in which employees render their services to the Council.

An accrual is made for the cost of holiday entitlements, flexi time and 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 made at the wage and salary rates applicable in the following accounting year, being the period in which the employee takes the benefit. The accrual is charged to Surplus/Deficit on the Provision of Services in the financial year in which the absences are accrued and it is then reversed out through the Movement in Reserves Statement so there is no charge against Council Tax.

-Termination BenefitsTermination benefits are amounts payable as a result of a decision by the Council 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 accrualsbasis to the relevant service line in the Comprehensive Income and Expenditure Statement when the Council is demonstrably committed to the termination of the employment of an officer or group of officers or making an offer to encourage voluntary redundancy. Where termination benefits involve the enhancement of pensions, statutory provisions require the General Fund balance to be charged with the amount payable by the Council to the pension fund or pensioner in the year, not the amount calculated according to the relevant accounting standards. In the Movement in Reserves Statement, appropriations are required to and from the Pensions Reserve to remove the notional debits and credits for pension enhancement termination benefits and replace them with debits for the cash paid to the pension fund and butpensioners and any such amounts payable unpaid at the year end.

-Post Employment BenefitsEmployees of the Council are members of the Local Government Pension Scheme, administered by Essex County Council.The Local Government Pension Scheme is accounted for as a defined benefits scheme:• The liabilities of the Essex pension fund attributable to the Council are included in the Balance Sheet on an actuarial basis using the projected unit method – i.e. an assessment of the future payments that will be made in relation to retirement benefits earned to date by employees, based on assumptions about mortality rates, employee turnover rates, etc. and earnings for current employees.• Liabilities are discounted to their value at current prices, using a discount rate of 4.6% (based on the indicative rate of return on high quality corporate bond.)• The assets of Essex pension fund attributable to the Council are included in the Balance Sheet at their fair value:

- quoted securities – current bid price- unquoted securities – professional estimate- unitised securities – current bid price- property – market value.

• The change in the net pensions liability is analysed into seven components:i) current service cost - The increase in liabilities as a result of years of service earned this year. This is allocated in the Comprehensive Income and Expenditure Statement to the services for which the Council employees worked.ii) past service costs - the increase in liabilities arising from current year decisions whose effect relates to years of service earned in earlier years. These are debited to the Surplus/Deficit on the Provision of Services in the Comprehensive Income and Expenditure Statement as part of Non Distributed Costs.iii) interest cost – the expected increase in the present value of liabilities during the year as they move one year closer to being paid. This is debited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statementiv) expected return on assets – the annual investment return on the fund assets attributable to the Council, based on an average of the expected long-term return. This is credited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement.v) gains or losses on settlements and curtailments – the result of actions to relieve the Council of liabilities or events that reduce the expected future service or accrual of benefits of employees. These are debited/credited to the Surplus/Deficit on the Provision of Services in the Comprehensive Income and Expenditure Statement as part of Non Distributed Costs.vi) actuarial gains and losses – changes in the net pensions liability that arise because events have not coincided with assumptions made at the last actuarial valuation or the assumptions have been updated by the actuary. These are credited/debited to the Pensions Reservevii) contributions paid to the Essex pension fund – cash paid as employer’s contributions to the pension fund in settlement of liabilities; not accounted for as an expense for the Council.

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-Post Employment Benefits cont.In relation to retirement benefits, statutory provisions require the General Fund balance to be charged with the amount payable by the Council to the pension fund or directly to pensioners in the year, not the amount calculated according to the relevant accounting standard. This means that there are appropriations to and from the Pensions Reserve to remove the notional debits and credits for retirement benefits and replace them with debits for the cash paid to theThe Pension fund. The negative balance that arises on the Pensions Reserve thereby measures the beneficial impact to the General Fund of being required to account for retirement benefits on the basis of cash flows rather than as benefits areearned by employees.

-Discretionary BenefitsThe Council also has restricted powers to make discretionary awards of retirement benefits in the event of early retirements.Any liabilities estimated to arise as a result of an award to any member of staff are accrued in the year of the decision to make the award and accounted for using the same policies as are applied to the Local Government Pension Scheme.

Events after the Balance Sheet DateEvents after the Balance Sheet date are those events, both favourable and unfavourable, that occur between the end of the reporting period (on 31 March) and the date when the Statement of Accounts are authorised for issue.Two types of post Balance Sheet events can be identified:

• Adjusting events are those that provide evidence of conditions that existed at the Balance SheetDate. Where material, the Statement of Accounts is adjusted to reflect the impact of such events.• Non-adjusting events are those that are indicative of conditions that arose after the Balance SheetDate. The Statement of Accounts is not adjusted to reflect such events, but where a category ofevents would have a material effect, additional disclosure is made in the notes of the nature of theevents and their estimated financial effect.

Events taking place after the date the Statement of Accounts is authorised for issue are not reflected in the Statement of Accounts

Financial Instruments-Financial LiabilitiesThe Council does not have any borrowing. Trade payables (creditors) are disclosed at face value.

-Financial AssetsThe Council’s portfolio of investments consists of fixed term deposits and call accounts. These are classed as Loans and Receivables and are measured at amortised cost. Trade Receivables (Debtors) are classified as Loans & Receivables and aremeasured at cost on the Balance Sheet. The Council does not enter into investments required to be measured at Fair Value through the Comprehensive Income & Expenditure Statement or classified as Available for Sale.

Soft LoansThe de minimis level for soft loans is £20,000 any loans made at below market rate which are de minimis are disclosed in the accounts as long term debtors.

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Government Grants and ContributionsWhether paid on account, by instalments or in arrears, government grants and third party contributions and donations arerecognised as due to the Council when there is reasonable assurance that:

• the Council will comply with the conditions attached to the payments, and• the grants or contributions will be received.

Amounts recognised as due to the Council are not credited to the Comprehensive Income and Expenditure Statement untilconditions attached to the grant or contribution have been satisfied. Monies advanced as grants and contributions for which conditions have not been satisfied are carried in the Balance Sheet as creditors. When conditions are satisfied, the grant or contribution is credited to the relevant service line or Taxation and Non-Specific Grant Income in the Comprehensive Income and Expenditure Statement. Where capital grants are credited to the Comprehensive Income and Expenditure Statement, they are reversed out of the General Fund Balance in the Movement in Reserves Statement. Where the grant has yet to be used to finance capital expenditure, it is posted to the Capital Grants Unapplied reserve. Where it has been applied, it is posted to the Capital Adjustment Account. Amounts in the Capital Grants Unapplied reserve are transferred to the Capital Adjustment Account when they have been applied to fund capital expenditure.

Intangible AssetsExpenditure on non-monetary assets that do not have physical substance but are controlled by the Council as a result of past events (e.g. software licences) are capitalised when it is expected that future economic benefits or service potential will flowfrom the intangible asset to the Council. Intangible assets are measured initially at cost. Amounts are only revalued where the fair value of the assets held by the Council can be determined by reference to an active market. In practice, no intangibleassets are held by the Council which meets this criterion, and they are therefore carried at amortised cost.The depreciable amount of an intangible asset is amortised over its useful life to the relevant service lines in the ComprehensiveIncome and Expenditure Statement. An intangible asset is tested for impairment whenever there is an indication that the asset might be impaired, any losses recognised are posted to the relevant service lines in the Comprehensive Income and ExpenditureStatement. Any gain or loss arising on the disposal or abandonment of an intangible asset is posted to the Other Operating Expenditure line in the Comprehensive Income and Expenditure Statement. Where expenditure on intangible assets qualifies as capital expenditure for statutory purposes, amortisation, impairment losses and disposal gains and losses are not permitted to have an impact on the General Fund Balance. The gains and losses are therefore reversed out of the General Fund Balance in the Movement in Reserves Statement and posted to the Capital Adjustment Account and the Capital Receipts Reserve.

Interests in Companies and Other EntitiesThe Council does not have any material interests in companies and other entities that have the nature of the subsidiaries and does not prepare group accounts

InventoriesInventories are included in the Balance Sheet at cost.

Investment PropertyInvestment properties are those that are used solely to earn rentals and/or for capital appreciation. The definition is not met if the property is used in any way to facilitate the delivery of services or production of goods or if the asset is held for sale.Investment properties are measured initially at cost and subsequently at fair value, based on the amount at which the assetcould be exchanged between knowledgeable parties at arm’s length. Properties are not depreciated but are revalued annuallyaccording to market conditions at the year-end. Gains and losses on revaluation are posted to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement. The same treatment is applied to gainsand losses on disposal.All the councils investment assets are currently leased and fair value estimates are therefore based on the rentals received.If the income from investment property does not change materially during the year the fair value is assumed to remain the same and revaluation considered un-necessary. As a minimum, investment properties, regardless of leases, will be revaluedevery 5 years along with other classes of assets.Rentals received in relation to investment properties are credited to the Financing and Investment Income line. Directly attributable operating expenses related to investment properties are debited to the Financing and Investment Income line.Revaluation and disposal gains and losses are not permitted by statutory arrangements to have an impact on the General FundBalance. The gains and losses are therefore reversed out of the General Fund Balance in the Movement in Reserves Statementand posted to the Capital Adjustment Account and the Capital Receipts Reserve (for the sale proceeds).

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LeasesLeases are classified as finance leases where the terms of the lease transfer substantially all the risks and rewards incidental toownership of the property, plant or equipment from the lessor to the lessee. All other leases are classified as operating leases.Where a lease covers both land and buildings, the land and buildings elements are considered separately for classification.Arrangements that do not have the legal status of a lease but convey a right to use an asset in return for payment are accountedfor under this policy where fulfilment of the arrangement is dependent on the use of specific assets.

Finance Leases - LesseeProperty, Plant and Equipment held under finance leases is recognised on the Balance Sheet at the commencement of the leaseat the lower of its fair value measured at the lease inception and the present value of the minimum lease payments. The assetrecognised is matched by a liability for the obligation to pay the lessor. Initial direct costs of the Council are added to thecarrying amount of the asset. Premiums paid on entry into a lease are applied to writing down the lease liability. Contingentrents are charged as expenses in the periods in which they are incurred.Finance lease payments are apportioned between:

• a charge for the acquisition of the interest in the property, plant or equipment which is applied to write down the lease liability, and• a finance charge which is debited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement.

Property, Plant and Equipment recognised under finance leases is accounted for using the policies applied generally to suchassets, subject to depreciation being charged over the lease term if this is shorter than the asset’s estimated useful life and where ownership of the asset does not transfer to the Council at the end of the lease period.

Operating Leases - LesseeRentals paid under operating leases are charged to the Comprehensive Income and Expenditure Statement as an expense of theservices benefiting from use of the leased property, plant or equipment.

Finance Leases - LessorWhere the Council grants a finance lease over a property or an item of plant or equipment, the relevant asset is written out ofthe Balance Sheet as a disposal. At the commencement of the lease, the carrying amount of the asset in the Balance Sheet (whether Property, Plant and Equipment or Assets Held for Sale) is written off to the Other Operating Expenditure line in theComprehensive Income and Expenditure Statement as part of the gain or loss on disposal. The written-off value is not considered to be a charge against council tax and as such is appropriated to the Capital Adjustment Account from the GeneralFund Balance in the Movement in Reserves Statement.A gain on disposal, representing the Council’s net investment in the lease, is credited to the Other Operating Expenditure line in the Comprehensive Income and Expenditure Statement, matched by a long-term debtor asset in the Balance Sheet. The gainis not permitted by statute to increase the General Fund Balance and is required to be treated as a capital receipt. Where a premium has been received, this is posted out of the General Fund Balance to the Capital Receipts Reserve in the Movement inReserves Statement. Finance lease rentals receivable are apportioned between:

• a charge for the acquisition of the interest in the property which is applied to write down the lease debtor including any premiums received, and• finance income which is credited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement.

Where the amount due in relation to the lease asset is to be settled by the payment of rentals in future financial years, this is posted out of the General Fund Balance to the Deferred Capital Receipts Reserve in the Movement in Reserves Statement. When the future rentals are received, the element for the capital receipt for the disposal of the asset is used to write down the lease debtor. At this point, the deferred capital receipts are transferred to the Usable Capital Receipts Reserve.

Operating Leases - LessorWhere the Council grants an operating lease over a property or an item of plant or equipment, the asset is retained in the Balance Sheet. Rental income is credited to the Comprehensive Income and Expenditure Statement on a straight-line basis over the life of the lease.

Overheads and Support ServicesThe costs of overheads and support services are charged to those that benefit from the supply or service. The total absorption costing principle is used i.e. the full costs are shared between users in proportion to the benefits received, with the exception of:

- Corporate and Democratic Core – costs relating to the Council’s status as a multi-functional democratic organisation such as reporting to elected members;- Non Distributed costs – the cost of discretionary benefits awarded to employees retiring early plus depreciation on non-operational assets and the impairment of assets in accordance with the Best Value Accounting Code of Practice.

These two cost categories are accounted for as separate headings in the Comprehensive Income & Expenditure Statement.

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Property Plant and Equipment (PPE)Expenditure on the acquisition, creation and enhancement of fixed assets is capitalised in accordance with the accruals concept.The Council's de minimis level for capital expenditure is £10,000. Expenditure on PPE is capitalised, provided that the fixed asset yields benefit to the Council and the services it provides for a period of more than one year. This excludes expenditure on routine repairs and maintenance on PPE, which does not enhance the asset and is charged direct to service revenue accounts.Assets are initially measured at cost, comprising:

• the purchase price• any costs attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management• the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

The Council does not have any borrowing costs. The cost of assets acquired other than by purchase is deemed to be its fairvalue, unless the acquisition does not have commercial substance (i.e. it will not lead to a variation in the cash flows of the Council). In the latter case, where an asset is acquired via an exchange, the cost of the acquisition is the carrying amount of theasset given up by the Council.Large assets are divided into their component parts only if the components have materially different useful lives compared to the rest of the asset. This allows depreciation charges for assets to more accurately reflect the consumption of economic benefit which takes place at different rates for each component.Assets are subsequently carried in the Balance Sheet using the following measurement bases:

• Plant, Vehicles, Furniture and Equipment assets, Infrastructure assets and Community assets – Depreciated Historic Cost• Other land and buildings and Surplus Assets – Fair Value, determined as the amount that would bepaid for the asset in its Existing Use (EUV).• Components of buildings - Depreciated Historic Cost

Where there is no market-based evidence of fair value because of the specialist nature of an asset, depreciated replacementcost (DRC) is used as an estimate of Fair Value. Where non-property assets (Plant, Vehicles, Furniture and Equipment assets) that have short useful lives or low values (or both), depreciated historical cost basis is used as a proxy for Fair Value.

Assets included in the Balance Sheet at fair value are revalued sufficiently regularly to ensure that their carrying amount is notmaterially different from their Fair Value at the financial year end, but as a minimum every five years.Increases in valuations are matched by credits to the Revaluation Reserve to recognise unrealised gains. Exceptionally, gains might be credited to the Comprehensive Income and Expenditure Statement where they arise from the reversal of a loss previously charged to a service. Where decreases in value are identified, they are accounted for as follows:

• where there is a balance of revaluation gains for the asset in the Revaluation Reserve, the carryingamount of the asset is written down against that balance (up to the amount of the accumulated gains)• where there is no balance in the Revaluation Reserve or an insufficient balance, the carrying amountof the asset is written down against the relevant service line(s) in the Comprehensive Income andExpenditure Statement.

The Revaluation Reserve contains revaluation gains recognised since 1 April 2007 only, the date of its formal implementation.Gains arising before that date have been consolidated into the Capital Adjustment Account.

ImpairmentAssets are assessed at each financial year end as to whether there is any indication that an asset may be impaired. Where indications exist and any possible differences are estimated to be material, the recoverable amount of the asset is estimated and,where this is less than the carrying amount of the asset, an impairment loss is recognised for the shortfall.Where impairment losses are identified, they are accounted for as follows:

• where there is a balance of revaluation gains for the asset in the Revaluation Reserve, the carrying amount of the asset is written down against that balance (up to the amount of the accumulated gains)• where there is no balance in the Revaluation Reserve or an insufficient balance, the carrying amount of the asset is written down against the relevant service line(s) in the Comprehensive Income and Expenditure Statement.

Where an impairment loss is reversed subsequently, the reversal is credited to the relevant service line(s) in the ComprehensiveIncome and Expenditure Statement, up to the amount of the original loss, adjusted for depreciation that would have been charged if the loss had not been recognised.

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DepreciationDepreciation is provided for on assets with a finite useful life (which can be determined at the time of acquisition orrevaluation) according to the following policy:

- Newly acquired assets are depreciated from the mid-point of the year except for assets in the course of construction which are not depreciated until they are brought into use.

- Where depreciation is provided for, assets are depreciated using the straight line method over the following periods:

• Buildings (where appropriate) 5 - 60 years• Infrastructure 5 - 30 years• Vehicles, Plant & Equipment 3 –10 years• Intangible assets 3 - 7 years

- Land, including car parks, is not depreciated

Assets Held for SaleWhen it becomes probable that the carrying amount of an asset will be recovered principally through a sale transaction rather than through its continuing use, it is reclassified as an Asset Held for Sale. The asset is revalued immediately before reclassification and then carried at the lower of this amount and fair value less costs to sell. Where there is a subsequent decrease to fair value less costs to sell, the loss is posted to the Non Distributed costs line of the Surplus/Deficit on the Provision of Services in the Comprehensive Income and Expenditure Statement. Gains in fair value are recognised only up to the amount of any previous losses recognised in the Surplus/Deficit on Provision of Services. Depreciation is not charged on Assets Held for Sale. If assets no longer meet the criteria to be classified as Assets Held for Sale, they are reclassified back tonon-current assets and valued at the lower of their carrying amount before they were classified as held for sale; adjusted for depreciation, amortisation or revaluations that would have been recognised had they not been classified as Held for Sale, and their recoverable amount at the date of the decision not to sell.Assets that are to be abandoned or scrapped are not reclassified as Assets Held for Sale.

Disposals of Plant, Property and Equipment, Investment Properties and Assets held for SaleWhen an asset is disposed of or decommissioned, the carrying amount of the asset in the Balance Sheet (whether Property, Plant and Equipment or Assets Held for Sale) is written off to the Other Operating Expenditure line in the Comprehensive Income and Expenditure statement as part of the gain or loss on disposal. Receipts from disposals are credited to the same line in the Comprehensive Income and Expenditure Statement also as part of the gain or loss on disposal (i.e. netted off against the carrying value of the asset at the time of disposal). Any revaluation gains accumulated for the asset in the Revaluation Reserve are transferred to the Capital Adjustment Account.All amounts for disposal of assets currently recognised on the balance sheet are categorised as capital receipts. Amounts for other asset disposals in excess of £10,000 are categorised as capital receipts.

Contingent LiabilitiesA contingent liability arises where an event has taken place that gives the Council a possible obligation whose existence will only be confirmed by the occurrence or otherwise or uncertain future events not wholly within the control of the Council. Contingent liabilities also arise in circumstances where a provision would otherwise be made but either it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured reliably.Contingent liabilities are not recognised in the Balance Sheet but disclosed in a note to the accounts.

Contingent AssetsA contingent asset arises where an event has taken place that gives the Council a possible asset whose existence will only be confirmed by the occurrence or otherwise of uncertain future events not wholly within the control of the Council. Contingent assets are not recognised in the Balance Sheet but disclosed in a note to the accounts where it is probable that there will be an inflow of economic benefits or service potential.

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ReservesThe Council has the power to keep reserves for certain purposes by setting aside specific amounts as reserves for future policypurposes or to cover contingencies. Reserves are created by appropriating amounts out of the General Fund Balance in the Movement in Reserves Statement. When expenditure is incurred that is to be financed from a reserve, it is charged to the appropriate service in that year to be included as expenditure in the Surplus / Deficit on the Provision of Services in the Comprehensive Income and Expenditure Statement. The reserve is then appropriated back into the General Fund Balance in the Movement in Reserves Statement so there is no charge against Council Tax for the expenditure incurred. Separate earmarked reserves are held by the Council as follows:

• Efficiency Fund The purpose of this fund is to support future "invest to save initiatives", where existing budgets are insufficient to support the additional spending that maybe required to unlock on-going revenue savings.• Community Grants and Parish Projects Fund This reserve is used when the time limits for payment of grants exceed the financial year in which budget provision is made, necessitating a reserve to be set aside to cover the outstanding liabilities.• Heritage Projects The Council gives grants in support of environmental initiatives and historic buildings. The time limits for payment of these grants exceed the financial year in which budget provision is made, necessitating a reserve to be set aside to cover the outstanding liabilities.• Insurance The Council maintains external insurance policies to cover major risks. In many cases the policies have excess clauses that require the Council to meet the first part of each claim. The Council has established this reserve to cover its liabilities under policy excesses, finance any claims for small risks not insured externally and cover any future liability that may arise from the winding up of Municipal Mutual Insurance.• Repairs & Renewals Fund This reserve is operated to meet major expenditure incurred in maintaining, replacing and renewing the Council’s buildings and facilities.• Revenue Commitments This reserve exists to smooth out the timing differences between monies being earmarked to fund expenditure from the annual revenue budget and the expenditure actually occurring.• Local Plan Development The Council has budgeted for large costs associated with developing what was known as a Local Development Plan. This requirement has been superseded by the developing localism agenda of the new Government and spending has been halted, but the Council will still need a Local Plan for Policy Planning purposes. The Council has decided to set aside the money already budgeted, but unspent, to support the creation of a new plan which is scheduled for completion and introduction in 2014.• Land Charges A grant was received from the Government in 2010/11 to support the possible loss of income on personal search fees that local authorities have been levying under legislation that is now considered to be unsound. Any possible refund liability remains to be resolved, therefore a reserve was set up to hold this money pending a final solution.• Preventing Repossessions A grant was received from the Government in 2011/12 to support work to prevent homes being repossessed this is x expected to be spent in 2012/13• Community Sports Network A grant was received from the Government in 2011/12 to support sports networks this is expected to be spent in 2012/13

Certain reserves are kept by the Council to manage the accounting processes for non-current assets (e.g. Revaluation Reserve and Capital Adjustment Account), retirement benefits (e.g. Pensions Reserve) and employee benefits (e.g. Accumulated Absences Account) and do not represent usable resources for the Council.

Revenue Expenditure Funded from Capital under StatuteExpenditure incurred during the year that may be capitalised under statutory provisions but that does not result in the creation of a non-current asset has been charged as expenditure to the relevant service in the Comprehensive Income and Expenditure Statement in the year. Where the Council has determined to meet the cost of this expenditure from existing capital resources orgovernment Grant, a transfer in the Movement in Reserves Statement from the General Fund Balance to the Capital Adjustment Account then reverses out the amounts charged so that there is no impact on the level of Council Tax.

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Provision for Bad and Doubtful DebtsProvision has been made in the accounts for potential bad and doubtful debts in accordance with thefollowing policy. Known uncollectible debts have been written off against provisions made.

Council TaxYears 1 to 6 based on the previous year’s collection profileModification for any unusual circumstances 100% coverage is provided for debts over 6 years old

Non Domestic Rates Years 1 & 2 based on the previous year’s collection profile 100% coverage is provided for debts over 2 years old

Overpaid Housing Benefit Years 1 to 2 based on previous year’s collection profile 100% coverage is provided for debts over 2 years old

Car Park Penalty NoticesAs there is still no collection profile to base the provision on, prudence dictates the following:

50% provision for 2011/12 debts 100% provision for previous years

Miscellaneous Debts 100% of debts outstanding beyond 255 days

VariationThe above methodologies are the basis of calculating the bad debt provisions. From time to time figures are distorted and un-representative of the true debt position. Finance officers will always apply prudent judgement in arrivingat final bad debt figures. Where there is a departure from the above methodology the reasons will be clearly documented.

Heritage AssetsThe IFRS Code of Practice on Local Authority Accounting in the United Kingdom 2011/12 (the Code) has introduced a changein accounting policy in relation to the treatment of heritage assets held by the Council.Heritage assets are assets that are held by the Council principally for their contribution to knowledge or culture. The Council does not own any historic buildings, however, where items such as statues or museum artefacts are owned these areincluded in the balance sheet based on insurance valuations. Heritage assets are not depreciated as they are considered to have an indeterminable useful life.

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2. PRIOR YEAR ADJUSTMENTS

Restated Opening Balances for 1 April 2011In 2010/11 sewage pumping stations were transferred from the Council to Anglia Water. The plant within the pumping stations was accounted for as a disposal however, the building elements were not removed from the accounts. The following adjustments have been made to the 31 March 11 balance sheet to correct this misstatement:

2010/11 Adjustments31 March 2011 Balance Sheet Statements made

£000 £000Non Current Assets 20,766 (81)Capital Adjustment Account (20,403) 31Revaluation Reserve (7,552) 50

Heritage AssetsHeritage Assets is a new class of Non Current Asset required to be disclosed on the balance sheet.The following adjustments have been made to the 1 April 2010 and 31 March 2011 balance sheets relating to Heritage Assets:

2009/10 Adjustments01 April 2010 Balance Sheet Statements made

£000 £000Heritage Assets 0 95Revaluation Reserve (7,738) (95)

2010/11 Adjustments31 March 2011 Balance Sheet Statements made

£000 £000Heritage Assets 0 95Revaluation Reserve (7,552) (95)

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3. ACCOUNTING STANDARDS THAT HAVE BEEN ISSUED BUT NOT YET ADOPTED

Amendments to IFRS7 Financial Instruments:

The adoption of amendments to IFRS 7 by the Code will result in a change in accounting policy.Maldon District Council has no borrowing and investments are currently restricted to short, fixed term deposits or instant access accounts. It is therefore considered unlikely that the IFRS 7 accounting standard will have a material impact on the financial statements of the Council.

4. ASSUMPTIONS ABOUT THE FUTURE AND OTHER MAJOR SOURCES OF ESTIMATION UNCERTAINTYThe Statement of Accounts contains estimated figures that are based on assumptions made by the Council about the future or events that are otherwise uncertain. Estimates are made taking into account historical experience, current trends and other relevant factors. However, because balances cannot be determined with certainty, actual results could be materially different from the assumptions and estimates. The items in the Council’s Balance Sheet at 31 March 2012 for which there is a significant risk of material adjustment in the forthcoming financial year are as follows:

Effect if Actual Results DifferItem Uncertainties from Assumptions

Property, Plant and Assets are depreciated over useful lives that are If the useful life of the property, plant and Equipment dependent on assumptions about the level of equipment assets is reduced, depreciation

repairs and maintenance that will be incurred in increases and the carrying amount of therelation to individual assets. The current assets falls. It is estimated that the annual economic climate provides the uncertainty that depreciation charge would increase by the Council may not be able to sustain its current £0.201 million if the useful lives of the Council’s spending on repairs and maintenance, bringing assets were reduced by 1 year.into doubt the useful lives assigned to assets.

Net Pension Estimation of the net liability to pay pensions The effect on the net pension liability of changesLiability depends on a number of complex judgements in individual assumptions can be measured

relating to the discount rate used, the rate at - A 0.1% p.a. increase in the discount rate which salaries are projected to increase, changes assumption at 31 March 2012 would result in a in retirement ages, mortality rates and expected decrease in the net pension liability of £1mreturns on pension fund assets. A firm of - A 1 year addition to the life expectancy consulting actuaries, Barnett Waddington, is assumption at 31 March 2012 would result in anengaged to provide expert advice regarding the increase in the net pension liability of £1.76massumptions applied in calculating the Council’snet pension liability.

Arrears At 31 March 2012, the Council has included in If collection rates were to deteriorate, an increaseit's accounts a provision for the impairment of in the impairment for doubtful debts of 10% doubtful debts of £688,000. However, in would require the Council to set aside an the current economic climate this allowance additional £163,000 as an allowance.may not be sufficient.

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5. MATERIAL ITEMS OF INCOME OR EXPENSENo other material items of income or expense have occurred that are not already disclosed on the face of the CIES

6. EVENTS AFTER THE BALANCE SHEET DATEThe Statement of Accounts were authorised for issue by the Chief Financial Officer on 25 September 2012.Events taking place after this date are not reflected in the financial statements or notes.There are no items which have arisen after 31 March 2012 that would materially affect these accounts andrequire adjustments to the figures in the financial statements or further disclosure.

7. TRANSFERS (TO)/FROM EARMARKED RESERVES

Balance Transfers out Transfers In Balance Transfers out Transfers In Balance31-Mar-10 2010/11 2010/11 31-Mar-11 2011/12 2011/12 31-Mar-12

£000 £000 £000 £000 £000 £000 £000Efficiency fund (209) (209) 10 (199)Community grants (4) 3 (1) 1 0Parish Projects Fund (62) 49 (13) 13 (23) (23)Community Sports Network 0 0 (5) (5)Heritage projects (33) 8 (6) (31) 19 (11) (23)Insurance claims (78) (78) (78)Repairs & renewals fund (71) (71) (71)Revenue commitments (198) 198 (169) (169) 169 (184) (184)Concessionary travel (50) 50 0 0Local Plan Development 0 (150) (150) (50) (200)Land Charges 0 (34) (34) (34)Preventing Repossessions 0 0 (35) (35)Total Specific Reserves (705) 308 (359) (756) 212 (308) (852)General Fund balance (2,250) 0 (149) (2,399) 0 (493) (2,892)Total Revenue Reserves (2,955) 308 (508) (3,155) 212 (801) (3,744)For policies on earmarked reserves refer to page 21

8. PROPERTY PLANT AND EQUIPMENT VALUATION

The freehold and leasehold properties which comprise the Council's property portfolio have been valued as at 1 April 2009 by an external independent valuer - S.A. Layfield FRICS IRRV Valuer on the under mentioned basis in accordance with the RICS Appraisal and Valuation Manual as published by the Royal Institution of Chartered Surveyors, except that not all the properties were fully inspected. This was neither practicable nor considered by the valuer to be necessary for the purpose of the valuation.The value of plant and machinery that is integral to a building is included in the valuation of the building.Properties regarded by the Council as operational were valued on the basis of open market value for the existing use or, where this could not be assessed because there was no market for the subject asset, the depreciated replacement cost.Properties regarded by the Council as non-operational have been valued on the basis of open market value.Community assets are assets that the Council intends to hold in perpetuity, that have no determinable useful life and that may have restrictions on their disposal. These are valued at historic cost.

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9. PROPERTY, PLANT AND EQUIPMENT MOVEMENT ON BALANCESVehicles Infra- Assets

Movements in 2011/12 Other Land Plant and structure Community Heritage Surplus Under TOTAL

& Buildings Equipment Assets Assets Assets Assets Construction£ £ £ £ £ £ £ £

Cost or Valuation At 1 April 2011 (Restated) 21,567 3,491 5,769 624 95 6 38 31,590

Additions 194 498 258 0 0 0 0 951

Disposals (90) (160) 0 0 0 0 0 (250)

Reclassifications 0 32 6 0 0 0 (38) 0

Revaluations 0 0 0 0 0 0 0 0

Impairments 0 0 0 0 0 0 0 0

At 31 March 2012 21,672 3,861 6,034 624 95 6 0 32,291

Depreciation and impairments At 1 April 2011 (883) (2,384) (2,373) 0 0 0 0 (5,640)

Depreciation for Year (440) (462) (299) 0 0 0 0 (1,201)

Depreciation on Disposals 4 160 0 0 0 0 0 164

At 31 March 2012 (1,319) (2,686) (2,672) 0 0 0 0 (6,677)

Balance Sheet amount at 31 March 2011 20,353 1,174 3,362 624 95 6 0 25,614

Balance Sheet amount at 1 April 2011 20,685 1,106 3,396 624 95 6 38 25,950

Vehicles Infra- Assets

Movements in 2010/11 Other Land Plant and structure Community Heritage Surplus Under TOTAL

(Restated) & Buildings Equipment Assets Assets Assets Assets Construction

£000 £000 £000 £000 £ £000 £000 £000

Cost or Valuation At 1 April 2010 21,641 3,302 5,805 624 95 6 0 31,473

Additions 11 256 20 0 0 0 38 324

Disposals (85) (67) (56) 0 0 0 0 (208)

At 31 March 2011 21,567 3,491 5,769 624 95 6 38 31,590

Depreciation and impairments At 1 April 2010 (442) (1,927) (2,112) 0 0 0 0 (4,481)

Depreciation for Year (444) (467) (302) 0 0 0 0 (1,213)

Depreciation on Disposals 4 9 41 0 0 0 0 54

At 31 March 2011 (882) (2,384) (2,373) 0 0 0 0 (5,639)

Balance Sheet amount at 31 March 2011 20,685 1,106 3,397 624 95 6 38 25,950

Balance Sheet amount at 1 April 2010 21,199 1,375 3,693 624 95 6 0 26,992

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10. CAPITAL COMMITMENTS

At 31 March 2012 the Council had a number of outstanding contracts for the construction or enhancement ofProperty, Plant and Equipment. Similar commitments at 31 March 2011 totalled £144,000.

£000Prom park road and footpath surfacing 10Replacement Car Park fee handling infastructure 4

1411. INVESTMENT PROPERTIES

The following items of income and expense have been accounted for in the financing and investment Income and expenditure line in the Comprehensive Income and Expenditure Statement

2010/11 2011/12£000 £000

Rental Income from Investment property (107) (108)Direct operating expenses arriving from investment property 2 6Net Gain (105) (102)

The Council's ability to realise the values inherent in investment property are restricted by tenants security under the landlords and tenant act 1954 and long lease terms with commercial tenants. The Council also has obligations to maintain the fabric of the buildings along with road ways and drainage on two investment properties.

All investment properties are subject to operating leases which have seen no material change during 2011/12.As fair value of a leased investment is determined based on the income received, no revaluation has been deemed necessary for 2011/12. The following table summarises the fair value of investment properties:

2010/11 2011/12£000 £000

Balance at the start of the year 1,358 1,376Gain from fair value adjustments 18 0Balance at the end of the year 1,376 1,376

12. INTANGIBLE ASSETS

Intangible Assets Software

2010/11 2011-12

£000 £000Cost at 1st April 1,267 1,275Amortisation to 1 April (1,023) (1,082)Balance at 1 April 244 193Purchases 53 33Reclassified 0 0Disposals (8) 0Written off to Revenue (amortisation) (97) (83)Balance at 31 March 192 143

Trade Licensses includes Software which is amortised over 5 yearsAll Software is purchased, there are no internally developed assets.Amortisation is charged to the IT administration Cost Centre and then absorbed as overheads across the serviceheadings in the Comprehensive Income & Expenditure Statement. It is not possible to quantify how much amortisationis attributable to each service heading.

Trade-Licences

Trade-Licences

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13. FINANCIAL INSTRUMENTS

The following categories of financial intruments are carried in the Balance Sheeet

(a) Financial Instrument - Balances The investments disclosed in the balance sheet are measured at Amortised Cost and are analysed across the following categories:

Long Term Current Long Term Current31-Mar-11 31-Mar-11 31-Mar-12 31-Mar-12 Total

£000 £000 £000 £000 £000Financial Liabilities:

(0) (2,145) Trade Payables (Creditors) 0 (1,976) (1,976)(0) (2,145) Total Financial Liabilities 0 (1,976) (1,976)

Financial Assets:0 12,000 Investments 0 7,000 7,0000 90 Accrued Interest 0 25 250 12,090 Total Investments 0 7,025 7,025

595 227Trade Receivables

(Debtors): 586 416 1,002595 12,317 Total Financial Assets 586 7,441 8,027

(b) Financial Instruments - Gains & Losses

The Income & Expenditure recognised in the surplus or deficit on the provision of sevices in relation to financial instruments consists of the following items:

Financial Liabilities

Financial Assets (loans

& receivables)

Financial Liabilities

Financial Assets (loans

& receivables)

2011/12(1) 293 Interest receivable (1) 251

(1) 293 Total (1) 251

(c) Financial Instruments - Fair Values

The Council’s financial assets and financial liabilities are carried in the Balance Sheet at amortised cost. The Code requires the Fair Values of these assets and liabilities to be disclosed for comparison purposes.Fair Value is defined as the amount for which the asset could be exchanged, or a liability settled, between knowledgeable willing parties in an arms length transaction.The Fair Value of a financial instrument on initial recognition is generally the transaction price. In the case of theCouncil’s investments, these consisted entirely of term deposits and accounts with Banks and Building Societies.The contracts of term deposits do not permit premature redemption. None of the investments were impaired (i.e. at risk of default).Where an instrument will mature in the next 12 months, the carrying amount is assumed to approximate to fair value.

Carrying Fair value Carrying Fair value31-Mar-11 31-Mar-11 31-Mar-12 31-Mar-12

£000 £000 £000 £000Financial Assets:

0 0 Long Term Investments 0 012,090 12,090 Short Term Investments 7,025 7,02512,090 12,090 Total Financial Assets 7,025 7,025

2010/11

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13. FINANCIAL INSTRUMENTS CONT. (d) Financial Instruments - Risks

The Council has adopted CIPFA’s Code of Practice on Treasury Management and complies with The Prudential Codeof Capital Finance for Local Authorities.

As part of the adoption of the Treasury Management Code, the Council approves a Treasury Management Strategybefore the commencement of each financial year. The Strategy sets out the parameters for the management of risks associated with Financial Instruments. The Council also produces Treasury Management Practices specifying the practical arrangements to be followed to manage these risks.

The Treasury Management Strategy includes an Annual Investment Strategy in compliance with the Government’s Investment Guidance to local authorities. This Guidance emphasises that priority is to be given to security and liquidity,rather than yield. The Council’s Treasury Strategy, together with its Treasury Management Practices are based on seeking the highest rate of return consistent with the proper levels of security and liquidity.

The main risks covered are:

Credit Risk: The possibility that one party to a financial instrument will fail to meet their contractual obligations, causing a loss to the other party.

Liquidity Risk: The possibility that a party will be unable to raise funds to meet the commitments associated with Financial Instruments.

Market Risk: The possibility that the value of an instrument will fluctuate because of changes in interest rates, market prices etc.

Credit RiskInvestments and DepositsThe Council manages this risk by ensuring that investments are placed with the Debt Management office, other localauthorities or Banks and Building Societies having sufficiently high credit ratings as set out in the Annual Investment Strategy. A limit of £5m is placed on the amount of money that can be invested with a single counterparty.The Council has no historical experience of counterparty default.

The table below summarises the nominal value of the Council’s investment portfolio at the end of each financial year.

Balance Invested Balance Invested

as at as at31-Mar-11 Investments 31-Mar-12

£000s £000sBanks

2,000 Santander UK5,000 Barclays 5,000

Nat West / RBS 5,000 Lloyds / Bank of Scotland 2,000

12,000 Total Banks 7,000

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13. FINANCIAL INSTRUMENTS CONT.LiquidityLiquidity risk is managed by cash flow forecasting of the current financial year, combined with limits on fixed investments for periods of more than a year and an authorised borrowing limit for unforeseen emergencies. Both are specified annually in accordance with the prudential indicator requirements.

Market Risk(1) Interest Rate Risk:The Council is exposed to risk in terms of its exposure to investment interest rate movements. Most investments aremade for fixed periods and therefore changes in market rates during the investment period can lead to the fair value of an investment being higher or lower than its carrying value. Investment decisions through Treasury Managementactivity seek to manage this risk as much as possible by taking a view on investment interest rate trends. Investment deposits are committed only for short term thus minimising this risk

(2) Price risk:The Council does not invest in equity shares or gilts and therefore is not subject to any price risk (i.e. the risk thatthe Council will suffer loss as a result of adverse movements in the price of financial instruments).

(3) Foreign exchange riskThe Council has no financial asset or liabilities denominated in a foreign currency. It therefore has no exposure to loss arising as a result of adverse movements in exchange rates.

14. INVENTORIES

2010/11 2011/12

£000 £000Balance outstanding at start of year 6 8Purchases 60 49Recognised as an expense in the year (58) (50)Balance outstanding at year end 8 7

15. DEBTORS31-Mar-11 31-Mar-12

£000 £000Benefit overpayments 580 723Car & bike loans 10 6Council Tax payers 173 185Council Tax bad debt allowance (112) (119)General bad debt allowance (487) (569)Government departments 315 86Payments in advance 201 240Sundry debtors 513 744

1,193 1,297

16. LONG TERM DEBTORSBalance New Repaid Balance

31-Mar-11 Advances 31-Mar-12£000 £000 £000 £000

Finance Lease 519 (27) 492Charges against Property 76 53 (35) 94

595 53 (62) 586

Consumable Stores

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17. CASH AND CASH EQUIVALENTS

The balance of Cash and Cash Equivalents is made up of the following elements

31-Mar-11 31-Mar-12Cash held by the Council £000 £000Bank Current Accounts 339 550Short term deposits with building societies 2,494 6,104Total Cash and Cash Equivalents 2,833 6,654

18. CREDITORS31-Mar-11 31-Mar-12

£000 £000Council Tax payers 83 86Government departments 1,220 531Other local authorities 298 262Precepting Authorities' share of collection fund surplus 449 304Receipts in advance 328 228Sundry creditors 1,817 1,748

4,195 3,159

19. USABLE RESERVESSee Movement in Reserves Statement.

20. UNUSABLE RESERVESOpening and closing balances for all the Unusable Reserves detailed below are disclosed on the face of the Balance Sheet while full movements for the year are detailed in the Movement In Reserves Statement.

Revaluation Reserve

The revaluation reserve holds individual balances for each asset where an increase in value has occurred. These balances are reduced when the assets are revalued downwards, impaired, used in the provision of services or disposed of and the balance realised. The revaluation reserve only contains gains accumulated since 1 April 2007, the date it was created. Gains before this date are consolidated into the Capital Adjustment Account. This reserve is not available to support spending.

Capital Adjustment Account

The Capital adjustment account contains the difference between amounts provided for depreciation and impairment of assets and the capital expenditure financed from capital receipts. It also contains revaluation gains accumulated prior to 1 April 2007, the date the revaluation reserve was created.The Capital adjustment account is not available to support spending.

Deferred Capital Receipts

This is the principal outstanding on the sale of land at Wycke Hill which is subject to a finance lease.The Council does not treatthis as a usable capital receipt and the cash payment has been received.

Pensions Reserve

The Pensions Reserve is an adjustment account that manages the effects of IAS19 charges made to the comprehensive Income and Expenditure Statement against the statutory requirements for meeting the cost of retirement benefits from local taxes, as well as absorbing the impact of actuarial gains and losses.

Collection Fund Adjustment Account

Replaces the collection fund surplus balance attributable to this Authority and reflects the adjustment needed to allow accounting requirements to be reconciled to statutory requirements.

Accumulated Absences Account

This account holds the balance of leave earned by employees but not taken at 31 March 2012. Statutory arrangements requireleave due to employees to be charged to the Comprehensive Income and Expenditure Statement but not the General Fund.

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21. SEGMENTAL REPORTING

The code requires the Council to analyse financial information within the Comprehensive Income and

Expenditure Statement in accordance with the service analysis set out in the Service Reporting Code of Practice (SeRCOP). The Council has for some time structured its budgets that are for operational management purposesin accordance with SeRCOP and is of insufficient size, to require separate reporting arrangements, therefore an alternative presentation of financial performance is unnecessary to meet the requirements of IFRS 8 - Operating Segments.

Reconciliation of Comprehensive Income & Expenditure Statement toSubjective Analysis of Income and Expenditure used for Operational Management purposes.

2011/12 Service Management

Category & Support Services Central Cultural Environment Housing Planning Transport CDC Non Dist Total£000 £000 £000 £000 £000 £000 £000 £000 £000 £000

Staffing 6,174 70 50 24 44 153 6,515Transport 122 7 7 13 149Goods & Services 1,017 4,360 676 2,806 16,367 323 131 267 56 26,003Capital Charges 219 6 734 267 10 18 0 14 1,268Offices 528 9 5 14 2 36 594Support in 1,869 1,152 1,089 1,230 1,099 1,703 182 974 9,298Total Expenditure 9,929 5,527 2,581 4,374 17,476 2,050 377 1,443 70 43,827Support Out (9,850) 0 (9,850)Fees & Charges (6) (236) (641) (550) (21) (546) (546) (3) 0 (2,549)Other Income (67) (3) (129) (1,181) (595) (32) (86) (7) 0 (2,100)Grants (6) (4,461) (67) (15,812) (16) 0 (20,362)Total Income (9,929) (4,700) (770) (1,798) (16,428) (594) (632) (10) 0 (34,861)Net Cost of Services 0 827 1,811 2,576 1,048 1,456 (255) 1,433 70 8,966

Segmental Analysis of Assets & LiabilitiesNo operational management reporting occurs on a segmental basis.

Services

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21. SEGMENTAL REPORTING cont.

Reconciliation of Comprehensive Income & Expenditure Statement toSubjective Analysis of Income and Expenditure used for Operational Management purposes.

2010/11 Service Management Category & Support Services Central Cultural Environment Housing Planning Transport CDC Non Dist Total

£000 £000 £000 £000 £000 £000 £000 £000 £000 £000Staffing 6,324 0 76 101 0 37 0 152 (2,650) 4,040Transport 176 0 7 8 0 1 0 8 0 200Goods & Services 1,208 4,368 658 2,760 15,884 575 707 265 0 26,425Capital Charges 242 6 728 268 18 0 18 0 14 1,294Offices 378 7 32 18 0 12 2 36 0 485Support in 2,680 1,118 1,167 1,346 1,085 1,705 252 958 0 10,311Total Expenditure 11,008 5,499 2,668 4,501 16,987 2,330 979 1,419 (2,636) 42,755Support Out (10,927) 0 0 0 0 0 0 0 0 (10,927)Fees & Charges (1) (127) (532) (470) (12) (518) (630) (3) 0 (2,293)Other Income (46) (115) (251) (960) (982) (176) (10) (3) 0 (2,543)Grants (34) (4,558) 0 0 (15,025) (17) (128) 0 0 (19,762)Total Income (11,008) (4,800) (783) (1,430) (16,019) (711) (768) (6) 0 (35,525)Net Cost of Services 0 699 1,885 3,071 968 1,619 211 1,413 (2,636) 7,230

In the above subjective analysis Service Management and Support costs are fully charged out to services,this recharge being reflected in the 'support in' line.

Services

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22. TRADING ACCOUNTSThe "trading accounts" line of the Comprehensive Income and Expenditure Statement reflects the net financial performanthe Council's Grounds Maintenance service (which continues to perform responsibilities which originally arose via the award of a contract under the former Compulsory Competitive Tendering legislation). The turnover and (surplus)/deficit of this service was:

Grounds Grounds Maintenance Maintenance

2010/11 2011/12Turnover 84 87Surplus for year 8 22

Income credited to the trading account has been negotiated on a full cost recovery basis.

23. AGENCY SERVICESThe Authority provides a verge cutting service on behalf of Essex County Council

2010/11 2011/12£000 £000

Expenditure incurred in providing agency services 171 35Management fee payable by external bodies (69) (41)Net (surplus)/deficit arising from the arrangement 102 (6)

24 MEMBERS' ALLOWANCESThe total attendance allowances paid to Members were as follows:- 2010/11 2011/12

£000 £000Salaries 150 149Allowances 10 13Expenses 10 13Total 170 175

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25. REMUNERATION OF SENIOR STAFFThe following tables show the remuneration for the Council's senior officers in detail and employees over£50,000 in summary:

2011/12

Job Title Salaries, fees &

allowancesPension

Contributions

Total Remuneration

including Pension Contributions

£'000 £'000 £'000Chief Executive 99 12 111Strategic Director 71 8 79Head of Planning Services (05/03/2012 - 31/03/2012) 4 0 4Head of Planning Services (01/04/2011 - 04/03/2012) 50 6 56Head of Environmental Services 55 7 62Head of Leisure & Community 57 7 64Head of Housing, Revenues & Benefits 31 7 38Head of Financial Services 60 7 67Head of Customer and Democratic Services 57 7 64Head of Organisational Development 62 7 69

2010/11

Job Title Salaries, fees &

allowances Pension

Contributions

Total Remuneration

including Pension Contributions

£'000 £'000 £'000Chief Executive 94 10 104Strategic Director 70 8 78Head of Planning Services 52 6 58Head of Environmental Services 53 6 59Head of Leisure & Community 58 7 65Head of Housing, Revenues & Benefits 56 6 62Head of Financial Services 57 7 64Head of Customer and Democratic Services 55 6 61Head of Organisational Development 60 7 67

For this purpose 'remuneration' means all amounts paid to or receivable by an employee and includes employer pension contributions, sums due by way of expenses allowance (so far as those sums are chargeable to United Kingdom income tax)and the estimated money value of any other benefits received by an employee other than in cash.

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25. REMUNERATION OF SENIOR STAFF CONT.

The number of employees whose remuneration was in excess of £50,000 was as follows :-2010/11 2011/12

£55,000 - £59,999 2 4£60,000 - £64,999 3 3£65,000 - £69,999 2 2£75,000 - £79,999 1 1£100,000 - £105,000 1 0£110,000 - £114,999 0 1

9 11

For this purpose 'remuneration' means all amounts paid to or receivable by an employee including employerpension contributions and including sums due by way of expenses allowance (so far as those sums arechargeable to United Kingdom income tax) and the estimated money value of any other benefits receivedby an employee other than in cash. Part time or temporary posts are included at annualised cost.

25. TERMINATION BENEFITSTermination benefits are amounts payable as a result of either an employer's decision to terminate an employee's employment before the normal retirement date, or an employee's decision to accept voluntaryredundancy in exchange for those benefits.

During the 2011/12 financial year, 2 instances of termination benefits were paid by the Council, totalling£21,597.

26. AUDIT AND INSPECTION COSTS

The following fees relating to external audit and Audit Commission inspection.

2010/11 2011/12£000 £000120 Code of Audit Practice work 10819 Statutory inspection 022 Certification of claims and returns 39161 Total 147

All fees relate to the Statutory Audit and no other services were provided by theexternal auditor.

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27. GRANT INCOME

The Council credited the following Capital and Revenue grants and contributions to the Comprehensive Income and Expenditure Statement Taxation and Non Specific Grant Income

2010/11 2011/12Capital Grants £000 £000Housing Capital Grant 40 0Enterprise Depot Contribution 0 32Big Lottery Fund 0 2Regional Housing Grant 136 0ECC Recycling Grant 0 313ECC Playbuild grant re Brickhouse Farm 38 0ECC Playbuild grant re N Fambridge 48 0ECC Playbuild Re Cherry Garden 45 0Aim High Play Space re Brickhouse 10 0Aim High Play Space re Riverside 10 0PCT Gym Equipment 40 0Access To Work 33 0DEFRA contaminated Land Grant 10 3Total 410 350

Credited to Services 2010/11 2011/12Revenue Grants £000 £000Concessionary Travel DFT Grant 128 -NNDR Admin Grant 92 91NNDR Relief New Burden 8 3Council Tax Grant 4,287 4,254Council Tax Admin Grant 136 113Land Charges Compensation Grant 34 -Housing Benefit Admin Grant 276 267Housing Benefits 14,703 15,179Homelessness Grant 46 100Preventing Repossessions - 35Housing Specified Capital Grant 293 209DCLG Habitat Grant 17 17Other DWP Benefit Grants 33 282nd homes Grant 56Other DCLG Grants 11

Total 20,053 20,363

Capital Grants Receipts in Advance 2010/11 2011/12£000 £000

DEFRA contaminated Land Grant 10 5Total 10 5

28. RELATED PARTY TRANSACTIONSThe Council is required to disclose material transactions with related parties - bodies or individuals that havethe potential to control or influence the Council or be controlled or influenced by the Council. The mostsignificant related party transactions have been with government departments and precepting bodies. Details of financial transactions with these bodies are disclosed in the Comprehensive Income & Expenditure Statement andassociated notes. Other related party transactions occurring during the year are shown below.

Receipts Payments£000 £000

The Council has provided a Grant and support to organisations on which the Council has representatives:Maldon Citizens Advice Bureau 65Cllr Miss A M Beale is a representative on the Management CommitteeCllr Mrs M Thompson is a representative on the Management CommitteeCllr Miss S White is a representative on the Management CommitteeWest Maldon Community Centre 39Cllr D Williams is a representative on the Management CommitteeBrickhouse Farm 59Cllr Mrs B Harker is a representative on the Management Committee Cllr R J S Long is a representative on the Management Committee The Council provides free accommodation in 11 11St Cedds House to S.W.A.N.S, a registered charity

Related Party Transactions

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29. CAPITAL EXPENDITURE FOR THE YEAR ENDED 31 MARCH 2012

Description

Vehicles, Plant & Equip

Intangible Assets

(Software Licences)

Land and Buildings

Infra- structure

Revenue Funded From

Capital by

StatuteRenovation

Loans Total £000 £000 £000 £000 £000 £000 £000Waste Bins,Bags and boxes 172 172River Bailiff Vehicle 14 14Replacement Car Pkg Infrastructure 89 89Playsite Refurbishment Riverside Pk 46 46Playsite Refurbishment Nth Fambridge 48 48Playsite - Brickhouse Farm 22 22PC & Printer Replacements 13 13Maldon Prom Replacement Signage 10 10Kubota Front Rotary Mower 15 15BWLC Planned Maintenance Prog 69 69Waste Collection Depot - Yard 145 145Oakwood & Silver St Resurfacing 44 44Waste Collection Depot - Fencing 38 38Prom Park Road & Footpaths 20 20Changing Rooms Mains Drainage 9 9Prom Power Supply Infrastructure 2 2 Depot - Tractor Shed / Garages 82 82Offices - Windows 76 76 Depot - Welfare Buildings 36 36Website Replacement 9 9Software Infrastructure 24 24Contaminated Land Grant Expenditure 3 3Minor Repair Grants 4 4Home Renovation Loans 54 54Disabled Grants 428 428Regional Housing Grant (Empty Homes Maldon Element) 24 24Housing Assoc Grants 50 50

498 33 194 258 509 54 1,546

30. FINANCING OF CAPITAL EXPENDITURE FOR THE YEAR ENDED 31 MARCH 2012

This was financed as follows: Capital REFFCUS Total£000 £000 £000

Useable Capital receipts applied 558 155 713Government grants 53 351 404Other grants and contributions 426 3 429

1,037 509 1,546

Operational Assets

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31. LEASESAuthority as a LesseeFinance LeasesAssets acquired under finance lease are carried as properties plant and equipment in the balance sheet at the following net amounts

31-Mar-11 31-Mar-12£000 £000

Mini Road Sweeper 14 0

31-Mar-11 31-Mar-12£000 £000

Finance Lease liabilities (Net present value of minimumlease payments)* current 13 0* non-current 0 0Finance costs payable in future years 1 0Minimum lease payments 14 0

31-Mar-11 31-Mar-12 31-Mar-11 31-Mar-12£000 £000 £000 £000

Not later than one year 14 0 14 0Later than one, and not later than five years 0 0 0 0Later than five years 0 0 0 0

14 0 14 0

Operating Leases

Payments the Council is committed to make in 2011/12 have been analysed between those which: 31-Mar-11 31-Mar-12

£000 £000Not later than one year 89 89Later than one year not later than five years 123 104Later than five years 68 56Total 280 249

Rental payments in the year are as follows:31-Mar-11 31-Mar-12

£000 £000Vehicles, Plant and Equipment 53 11Software 85 78

138 89

The minimum lease payments will be payable over the following periods

Minimum Lease payments Finance Lease liabilities

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31. LEASES CONT.Authority as a LessorFinance LeasesThe Council has one finance lease to Gozzet Holdings Ltd for land at Wycke Hill, which has 4 years remaining.The gross investment in the lease made up of minimum lease payments expected to be recovered over the remaining term and the residual value when the lease comes to an end. The minimum lease payments comprise of settlement of the debtor for purchase of the land and interest due to the Councilin future years, whilst the debtor remains outstanding.Rentals receivable in 2011/12 were £63,404 of which £37,362 has been credited to the Comprehensive Income & Expenditure Statement and £26,042 to capital receipts.

The gross investment is made up as follows:31-Mar-11 31-Mar-12

Finance lease debtor (net present value of minimum lease pay £000 £000 - Current 26 27 - Non-Current 519 492Unearned finance income 168 131Gross investment in the lease 713 650

31-Mar-11 31-Mar-12 31-Mar-11 31-Mar-12£000 £000 £000 £000

Not later than one year 63 63 26 27Later than one, and not later than five years 250 587 519 492Later than five years 400 0 0 0

713 650 545 519

Operating Leases

The Council leases out property and equipment under operating leasing for the following

businesses

31-Mar-11 31-Mar-12£000 £000

Not later than one year 310 289Later than one year not later than five years 1,146 1,145Later than five years 8,316 7,846Total 9,772 9,280

- for the provision of community services such as river leases, and roundabout sponsorship

The minimum lease payments will be receiveable over the following periods

Minimum Lease paymentsGross Investment in the Lease

purposes

- for economic development purposes to provide suitable affordable

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32. DEFINED BENEFIT PENSION SCHEME

As part of the terms and conditions of employment of its officers and other employees, the Councilmakes contributions to the cost of post employment benefits. Although these benefits will not actually be payable until employees retire, the Council has a commitment to make the payments and that needs to be disclosed at the time that employees earn their future entitlement.

The Council participates in the Local Government Pension Scheme, administered by Essex County Council. This is a funded defined benefits final salary scheme, meaning that the Council and employees pay contributions into a fund, calculated at a level intended to balance the pensions liabilities with investment assets.

The cost of retirement benefits are recognised in the Net Cost of Services when they are earned by employees, rather than when the benefits are eventually paid as pensions. However, the charge that is required against Council Tax is based on the cash contributions payable in the year, so the real cost of post employment/retirement benefits is reversed out of the General Fund via the Movement in Reserves Statement. The following transactions have been made in the Comprehensive Income and Expenditure Statement and the General Fund Balance via the Movement in Reserves Statement during the year:

Comprehensive Income and Expenditure Statement 2010/11 2011/12Cost of Services: £000 £000 Current Service Cost 767 700 Past Service Gain (2,649) 0 Curtailment Costs 0 34

(1,882) 734Financing and Investment Income & Expenditure Interest Cost of Pension Liabilities 2,495 2,330 Expected Return on Assets in the Scheme (1,524) (1,784)Total Post Employment Benefit Charged to the Surplus or Deficit on the Provision of Services (911) 1,280Other Post Employment Benefit Charged to the Comprehensive Income and Expenditure Statement

Actuarial (Gains)/Losses (1,754) 6,210Total Post Employment Benefit Charged to the Comprehensive Income & Expenditure Statement (2,665) 7,490Movement in Reserves StatementReversal of net charges made to the Surplus or Deficit for the Provision of Services for post employment benefits in accordance with the code 2,200 (2)Actual amount charged against the General Fund Balance for pensions in the year Employer's contributions payable to the scheme 1,289 1,278

The cumulative amount of actuarial gains and losses recognised in the Comprehensive Incomeand Expenditure Statement to the 31 March 2012 £22.378m.

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32.

Assets and Liabilities in Relation to Post-employment Benefits

Reconciliation of present value of the scheme liabilities (defined benefit obligation):

2011/12 2010/11 2011/12 2010/11£000 £000 £000 £000

Opening balance at 1 April 42,455 44,501 1,534 1,724Current Service Cost 679 767 0 0Interest Cost 2,330 2,495 81 94Contributions by scheme participants 284 288 0 0Actuarial (gains) and losses 4,721 (2,005) 223 (94)Benefits paid (1,152) (942) (109) (106)Past service costs (gains) 0 (2,649) (84)Curtailments/Pension Strain 55 0 0 0Settlements 0 0 0 0Closing balance at 31 March 49,372 42,455 1,729 1,534

Reconciliation of fair value of the scheme (Plan) assets:

2011/12 2010/11 2011/12 2010/11£000 £000 £000 £000

Opening balance at 1 April 26,288 24,380 0 0Expected rate of return 1,784 1,524 0 0Actuarial (gains) and losses (1,489) (251) 0 0Employer contributions 1,331 1,289 109 106Contributions by scheme participants 284 288 0 0Benefits paid (1,204) (942) (109) (106)Settlements 0 0 0 0Closing balance at 31 March 26,994 26,288 0 0

The expected return on scheme assets is determined by considering the expectedreturns available on the assets underlying the current investment policy. Expectedyields on fixed interest investments are based on gross redemption yields as atthe Balance Sheet date.

Funded liabilities: Local Government Pension

SchemeUnfunded liabilities:

Discretionary Benefits

Local Government Pension Scheme Unfunded Benefits

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32. DEFINED BENEFIT PENSION SCHEME CONT

Expected returns on equity investments reflect long term real rates of return experiencedin the respective markets.

The actual return on scheme assets in the year was £296,000 (2010/11 £2,370,000)

Scheme History 2007/08 2008/09 2009/10 2010/11 2011/12£000 £000 £000 £000 £000

Local Government Scheme (36,266) (30,519) (42,777) (40,919) (47,643)Discretionary Benefits (1,694) (1,445) (1,724) (1,534) (1,729)Present value of liabilities (37,960) (31,964) (44,501) (42,453) (49,372)Fair Value of assets in the Local Government Pension Scheme 22,089 17,493 24,380 26,288 26,994Surplus/(deficit) in the scheme: (15,871) (14,471) (20,121) (16,165) (22,378)

The liabilities show the underlying commitments that the Council has in the long run to pay postemployment (retirement) benefits. The total liability of £49,372,000 has a substantial impacton the net worth of the Council as recorded in the Balance Sheet, resulting in a negative overallbalance of £22,378,000. However, statutory arrangements for funding the deficit mean thatthe financial position of the Council remains healthy: the deficit on the local government scheme will be made good by increased contributions over the remaining working life of employees (i.e. before payment falls due), as assessed by the scheme actuary; finance is only required to be raised to cover discretionary benefits when the pensions are actually paid.

The total contributions expected to be made to the Local Government Pension Scheme by the Council in the year to 31 March 2013 is £1,173,000. Expected contributions for theDiscretionary Benefits scheme in the year to 31 March 2013 are £109,000.

History of Experience Gains and LossesThe actuarial gains/losses identified as movements on the Pensions Reserve in 2011/12 canbe analysed into the following categories, measured as a percentage of assets or liabilitiesat 31 March 2012:

2007/08 2008/09 2009/10 2010/11 2011/12% % % % %

Differences between the expected and actual return on assets -11.00 -35.40 20.90 1.00 5.50Experience gains and losses on liabilities -13.50 25.10 -23.40 3.80 -0.30

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32

Basis for Estimating Assets and LiabilitiesLiabilities have been assessed on an actuarial basis using the projected unit method,an estimate of the pensions that will be payable in future years dependent on assumptionsabout mortality rates, salary levels, etc. Both the Local Government Pension Schemeand Discretionary Benefits liabilities have been assessed by Barnett Waddingham an independentfirm of actuaries, estimates for the County Council Fund being based on the latest fullvaluation of the scheme as at 31 March 2010.

The principal assumptions used by the actuary have been:

2010/11 2011/12Long term expected rate of return on assets in the scheme:Equity investments 7.50% 6.40%Government Bonds 4.40% 3.30%Other Bonds 5.10% 4.60%Property 6.50% 5.40%Cash/liquidity 0.50% 0.50%Mortality assumptionsLongevity at 65 for current pensioners: Men 22.6 22.7 Women 25.2 25.3Longevity at 65 for future pensioners: Men 24 24.1 Women 26.8 26.8Rate of inflation (RPI) 3.40% 3.30%Rate of inflation (CPI) - 2.50%Rate of increase in salaries 4.40% 4.30%Rate of increase in pensions 2.90% 2.50%Rate for discounting scheme liabilities 5.50% 4.60%Take up of option to convert annual pension into retirement lump sum 50% 50%

The Discretionary Benefits arrangements have no assets to cover its liabilities.The Scheme's assets consist of the following categories, byproportion of the total assets held:

31 March 2011 31 March 2012Equity investments 69% 70%Government Bonds 7% 4%Other Bonds 10% 10%Property 11% 14%Cash/liquidity 3% 2%

100% 100%

Local Government Pension Scheme

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33. CAPITAL DISPOSALS FOR THE YEAR ENDED 31 MARCH 2012

The Council made the following disposals in the year:

ValueNo. of assets

£000Property, Plant & Equipment Disposals: - Vehicles 0 1 - Plant & Equipment 0 3 - Operational Bulidings 85 3 - Operational Intangible Assets 0 5

85 12

34. LOCAL AREA AGREEMENT (LAA)

The total amount of LAA grant received by the council in 2011/12 was £29,457 asCrime Reduction Funding for specific agreed projects

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35. CONTINGENT LIABILITIES

Guarantee Bond Scheme

The Council provides private landlords with damage deposit bonds to encourage the acceptance of tenants who are homeless.A bond entitles a landlord to claim for any damage caused by the tenant, the Council will then pay the landlord for valid claims up to the value of the bond and pursue the former tenant for reimbursement. Bonds issued are valid for a period of two years.During the period 1 April 2011 to 31 March 2012, 86 bonds were issued and the total value of bonds unclaimed at 31 March 2012 is £42,622.

Land Charges Fees

There is a conflict between the Environmental Information Regulations and the Local Land Charge Fee Regulations over the application of charges for some information provided as part of the land search. This issue remains unresolved. At the time of preparing the accounts there have been three claims, for refund of fees, made against the Council. It is not known whether any of the charges for fees previously levied will need to be repaid.It is not possible to quantify any costs which might have to be met from the Council’s General Fund balance however, a grant of £34,355 paid to all local authorities from central government, to contribute towards any liabilities, has been set aside as a prudent measure.

Planning Appeals

An appeal, from The Baltic Consortium against the Council’s decision to refuse an application for the approval of reserved matters for a scheme comprising of housing ,offices and leisure uses pursuant to the granting of outline planning permissionwas accepted by the Planning Inspectorate on 11 April 2012. The costs to the Council for defending this appeal are not yet known.

In 2011 the Council refused planning permission for a wind farm development, submitted by Renewable Energy Systems Ltd (RES Ltd), at Turncole Farm, Southminster. An appeal was accepted by The Planning Inspectorate on 21 October 2011, and due to be heard in November 2012. The cost to the Council for defending this appeal is likely to be in excess of £100,000

36. CONTINGENT ASSETS

VAT Claims

In January 2008, the High Court ruled against HMRC in respect of the case of Fleming (T/a Bodycraft) v HMRC. This case determined that the introduction by HMRC of a 3 year cap on retrospective claims for VAT refunds in 1996/97 was unlawful. Consequently, in 2009/10 the Council made back-dated voluntary disclosures to HMRC in respect of overpaid VAT. As at 1 April 2011 £958,682 remained in dispute. In 2011/12 HMRC settled a further £408,879 relating to Trade Waste and Cemetery income, this includes £208,093 for simple interest.As at 31 March 2012 £762,325 still remains in dispute.The Council engaged the services of Pricewaterhouse Coopers (PWC) to act on their behalf with regard to this claim. PWC charge a percentage of the final amount received back from HM Revenue & Customs on a ‘no win no fee’ arrangement, 5% on claims relating to off street parking and cemetery income, 20% on claims relating to trade wastesports courses & sporting services.

The Council has also made voluntary disclosure claims totalling £1,165,574.88 of VAT paid on off-street car parking,activities dating back to July 2001. These claims are currently subject to an appeal by the Council, which is currently being held over pending the outcome of a similar case, Isle of Wight and Others v HMRC.

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37. GLOSSARY

Accruals ConceptIncome and expenditure is recognised where it is earned or incurred, not when the money is received or paid.

Actuarial Gains and LossesFor a defined benefit pension scheme, actuarial gains and losses are the changes in the actuarial surplus/deficits which arise because either events have not coincided with previous actuarial assumptions or where actuarial assumptions have changed.

AppropriationsThe transfer of resources between revenue/capital accounts and the reserves held by the Council.

Best Value Accounting Code of Practice (BVACOP)This guidance is produced by CIPFA and sets out the proper accounting practices for local authorities in respect of the contactand presentation of the costs and income of services.

Billing AuthorityThis refers to Maldon District Council as the authority responsible for invoicing and collecting the Council Tax from all residential properties within the District. This is undertaken on behalf of Maldon District Council, Essex County Council,Essex Fire Authority, Essex Police Authority and Parish and Town Councils. Maldon District Council is also the authorityresponsible for invoicing and collecting the National Non-Domestic Rates in the district on behalf of central government.

Capital ExpenditureExpenditure relating to the acquisition or enhancements of Property, Plant & Equipment Assets , heritage assets, intangibleassets and Investment Property and certain other items meeting the defination of Capital expenditure under statute

Budget RequirementThis represents net budgeted expenditure for the year adjusted for transfers to and from reserves, but allowing for sums required by Parish and Town Councils. It is used to determine the amount of Council Tax to be precepted on the Collection Fund after allowing for income from Revenue Support Grant, redistribution of National Non-Domestic Rates and any surplus/deficit on the Collection Fund.

Capital Financing RequirementThe statutory measure of a local authority’s underlying need to borrow for capital purposes.

Capital ProgrammeThe council’s budget for capital expenditure and resources over the current and future years.Income generated from the sale of capital assets and the repayment of grants/loans given for capital purposes. The governmentprescribes the amount of the receipt which must be set aside to repay debt and the usable amount which may be used for finance capital expenditure.

Chartered Institute of Public Finance and Accountancy (CIPFA)The Chartered Institute of Public Finance and Accountancy is the lead professional accountancy body for public services. CIPFA issues the Code of Practice on Local Authority Accounting, which sets down in detail how the accounting standards are to be applied to the preparation of statement of accounts for local authorities.

Collection FundAll receipts of Council Tax and Non-Domestic Rates are paid into this Fund. The Council uses this to pay its precepts to Essex County Council, Essex Fire authority and Essex Police Authority and the demand by the Council’s General Fund, whichfinance the Council’s day to day expenditure. Any surplus or deficit is shared between the various authorities (excluding Parish and Town Councils) in proportion to the precepted amounts.

CommitmentsBudget provision for specific items that are committed or planned for a year where the specific goods or services are not received by 31 March and for which there is no provision in the following year. Such budgets may be formally ‘carried forward’ to the following year to match the committed or planned expenditure.

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37. GLOSSARY CONT.

Contingent AssetsA contingent asset arises where an event has taken place that gives the Council a possible asset whose existence will only be confirmed by the occurrence or otherwise of uncertain future events not wholly within the control of the Council. Contingentassets are not recognised in the Balance Sheet but disclosed in a note to the accounts where it is probable that there will be aninflow of economic benefits or service potential.

Contingent LiabilitiesA contingent liability arises where an event has taken place that gives the Council a possible obligation whose existence willonly be confirmed by the occurrence or otherwise of uncertain future events not wholly within the control of the authority. Contingent liabilities also arise in circumstances where a provision would otherwise be made but either it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured reliably. Contingent liabilities are not recognised in the Balance Sheet but disclosed in a note to the accounts.

Corporate and Democratic Core (CDC)This incorporates the following subdivisions, the activities of which cannot be recharged to service under the Service Reporting code of Practice for Local Authorities (SeRCOP)• Democratic Representation and Management Costs – these include all aspects of the activities of Councilmembers, such as policy making and general governance.• Corporate Management Costs – these relate to activities which provide the infrastructure of the Councilwhich allows services to be provided.

Council TaxA local tax charged to the occupiers of residential properties used to finance the budget requirement of the council for the year.

CreditorsAmounts owed by the Council for goods, services and works that have been received by the Council for which no payments have not been made by the Council at the Balance Sheet date.

Current AssetAsset held which will be realised, sold or consumed within the next financial year.

Current LiabilityAmounts which will be settled within the next financial year.

DebtorsAmounts owed to the Council for goods, services and works that have been provided by the Council for which payments havenot been received by the Council at the Balance Sheet date.

DepreciationThe measure of the loss in the value of an asset during the period due to age, wear and tear, deterioration or obsolescence. This charge is spread over the useful life of the asset.

Earmarked ReservesAmounts set aside for future commitments or potential liabilities.

Fair ValueThe amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.

Financial InstrumentsThese are contracts that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity. The financial instruments held by the Council include borrowings, investments, creditors and debtors.

Financial YearThe period of twelve months covered by the accounts, which commences on 1st April.

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37. GLOSSARY CONT.

General FundThe main revenue fund of the Council, which summarises the cost of all services provided by the Council.

Gross Book ValueThis represents the original price paid for an asset adjusted for subsequent revaluations, acquisitions, enhancements and disposals.

ImpairmentA reduction in the value of a non current asset caused by a specific event occurring to the asset.

Intangible AssetsAssets which do not have a physical substance but are identifiable and are controlled by the Council through custody or legalrights. Examples of such asset are software licences.

Investment PropertyProperty (land or a building, or part of a building, or both) held solely to earn rentals or for capital appreciation or both, rather than for use in the production or supply of goods or services or for administrative purposes, or sale in the ordinary course of operations.

LeasesA lease is an agreement whereby the lessor conveys to the lessee in return for a payment or series of payments the right to use an asset for an agreed period of time. A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of an asset. Title may or may not eventually be transferred. An operating lease is a lease other than a finance lease.

Non Distributed CostsThese are overhead costs which provide no benefits to services and are therefore not distributed to services. These include pensions arising from discretionary added years service.

National Non-Domestic Rates (NNDR)This is a levy paid by the occupiers of non residential properties within the Council’s district. This levy contributes to the cost of providing local authority services. It is charged on the rateable value of the each non residential property multiplied by a uniform amount set annually by central government. NNDR income collected by the Council is paid into a national pool, which is then divided by central government between authorities in proportion to their population.

Net Book Value (NBV)The Net Book Value of an asset is equivalent to its gross book value, less cumulative depreciation and impairment charges. Assets are included in the Balance Sheet at their net book value.

PreceptThis is the amount that local authorities providing services within the Maldon District require to be paid from the Collection fund to meet the net cost of their services. The Council Tax requirement is made up of the sum of all the precepts levied on the Billing Authority. For the Colchester borough – precepts are raised by Colchester Borough Council, Essex County Council, Essex Police Authority, Essex Fire Authority and Town and Parish Councils.

Principal AmountThe original amount of debt or investment on which interest is calculated.

Property, Plant and Equipment (PPE)Assets held by the Council, which are directly used or occupied by the Council in the delivery of the Council’s services. These are tangible assets (e.g. land, buildings, vehicles etc.) which yield benefit to the Council for a period of more than a year.

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37. GLOSSARY CONT.

ProvisionAmounts set aside where an event has taken place that gives the Council a legal or constructive obligation that probably requires settlement by a transfer of economic benefits or service potential, and a reliable estimate can be made of the amountof the obligation.

Prudential CodeThis Code is developed by CIPFA and sets out the system of capital financing and capital controls for local authorities. Prudential limits apply to all borrowing, qualifying credit arrangements and other long-term liabilities – whether supported by government or entirely self-financed. The system is designed to encourage authorities that need, and can afford, to borrow for capital investment to do so. The Code seeks to ensure that local authorities’ capital investment plans are affordable, prudent and sustainable; that treasury management decisions are taken in accordance with good professional practice; and that localstrategic planning, asset management planning and proper option appraisal are supported.

RevaluationA technique used to adjust the value of certain classes of Property, Plant and Equipment assets to their fair value.

Revenue Expenditure Funded from Capital under Statute (REFCUS)Expenditure incurred during the year that may be capitalised under statutory provisions but that does not result in the creationof a non-current asset.

Revenue Support Grant (RSG)Central government provides financial support towards the general expenditure of local authorities. The entitlement of eachlocal authority is determined by a prescribed methodology.

IFRS Code of Practice

The IFRS Code of Practice for Local Authority Accounting which was adopted by the council in the preperation of the Statement of Accounts for 2011/12

Useful LifeThe period over which benefits will be derived from the use of Property, Plant and equipment asset.

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Maldon District Council Annual Governance Statement 2011/12

MALDON DISTRICT COUNCIL ANNUAL GOVERNANCE STATEMENT 2011/12 1.0 Scope of Responsibility 1.1 Maldon District Council is responsible for ensuring that its business is conducted in accordance

with the law and proper standards, and that public money is safeguarded and properly accounted for, and used economically, efficiently and effectively, and has a duty under the Local Government Act 1999 to make arrangements to secure continuous improvement in the way in which its functions are exercised, having regard to economy, efficiency and effectiveness.

1.2 Maldon District Council has approved and adopted a local Code of Corporate Governance which is consistent with the principles of the CIPFA/SOLACE Framework ‘Delivering Good Governance in Local Government’ (CIPFA 2007). This Statement explains how Maldon District Council has complied with the Code and also how it meets the requirements of regulation 4 of the Accounts and Audit Regulations 2011.

2.0 The Purpose of the Governance Framework 2.1 The governance framework comprises the systems and processes, culture and values by which

the Council is directed and controlled and the activities through which it is accountable to, engages with and leads the community. It enables the Council to monitor the achievement of its strategic objectives and to consider whether those objectives have led to the delivery of appropriate and cost effective services.

2.2 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 and can therefore only provide reasonable, not absolute assurance of effectiveness. The system of internal control is, in part, based on an ongoing process of risk management, designed to identify and rank the risks to the achievement of the Council’s priorities, plans and policies. Risk management is designed to evaluate the likelihood of those risks occurring, to consider their impact should they materialise and to manage them efficiently, effectively and economically.

2.3 The governance framework has been in place at Maldon District Council for the year ended 31

March 2012 and up to the date of approval of the Statement of Accounts.

3.0 The Governance Framework 3.1 On the 14 February 2008 the Council adopted a revised Code of Corporate Governance in line

with guidance provided by the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Society of Local Authority Chief Executives and Senior Managers (SOLACE). The Code describes how the District Council discharges its responsibilities for putting in place proper arrangements for the governance of its affairs, incorporating the six core principles of effective governance identified by CIPFA/SOLACE. The governance framework that the

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Maldon District Council Annual Governance Statement 2011/12

Council has put in place to encourage adherence to the Code is set out below together with the key areas of evidence of delivery,

3.1.1 Focusing on the purpose of the Authority and on the outcomes for the community and creating and implementing a vision for the local area. On 24 March 2011 the Council adopted a new Corporate Plan covering the period 2011 –

2014. The Corporate Plan details the vision, goals and core values that guide the direction, work and achievements of the authority. It is the Council’s core internal strategic planning document, from which supporting strategies can be developed and published, including the Medium Term Financial Strategy, Housing Strategy, Commissioning and Procurement Strategy, and Influencing Change Consultation Strategy.

Guided by the Corporate Plan, the corporate goals are underpinned by service pledges

contained in Service Business Plans which are the cornerstone of the planning process at the operational level and which contain the aims and priorities for each service area for a twelve month period and are notified to committees. Progress of service pledges and selected performance indicators are monitored closely by Heads of Service and on TEN, the Council’s corporate performance management system. Quarterly performance update reports are provided to the Council’s Overview and Scrutiny Committee at a meeting dedicated to this purpose and these reports are also discussed with the Chief Executive and Strategic Director by the Performance Monitoring Officer. Six monthly updates are provided to the Programme Committees. Staff objectives flow from, and contribute to, achieving the Business Plan objectives.

The Medium Term Financial Strategy sets out the Council’s financial planning and resource utilisation, to ensure that proposed service delivery can be effectively resourced. In light of the currently difficult economic and financial circumstances it is regularly updated to reflect the latest budgetary position and revised financial assumptions.

On 24 March 2011 the Council endorsed the revised and refreshed Sustainable Community Strategy, the Maldon District Local Strategic Partnerships (LSP) Community Plan that sets out the long term vision and priorities for delivering change and which forms the overarching strategy for the Maldon District to 2026. The Strategy is consistent with the corporate vision and goals of the Council. There has been joint consultation on the targets in the Strategy with the Corporate Plan.

The Council has continued to develop the new and improved website it introduced in 2010. This includes a range of information about the work that the Council and its partners are undertaking.

3.1.2 Members and Officers working together to achieve a common purpose with clearly defined functions and roles.

The Council has adopted a Constitution which defines how it operates and assigns clear

roles and responsibilities to Committee, Member and Officer functions. The Constitution incorporates three main Service Committees, an Overview and Scrutiny Committee, a Standards Committee and three Area Planning Committees. During 2011/12 there was also

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an Audit Sub-Committee of the Finance & Corporate Services Committee. From May 2012 this became a full Committee of the Council in its own right.

A Scheme of Delegation is included in the Constitution setting out the scope of delegation

and any restrictions. There is delegated decision making to the Service Committees, reporting to Council, which sets the policy framework and annual budget, and determines strategic and other matters as required by law. Each Committee has clear terms of reference with a specific portfolio of responsibilities requiring them to work closely with senior management to achieve the Council’s ambitions. The principal decision making body is Full Council.

The Council has adopted a number of codes and protocols that govern Member and Officer

relations and which assist in understanding roles and promoting effective communication. The Council’s Corporate Management Team (CMT), comprising the Chief Executive, the

Strategic Director and seven Heads of Service, provides corporate leadership and meets on a regular basis to steer and co-ordinate arrangements for the delivery of the Council’s vision and goals.

Member and Officer liaison is formally conducted through monthly meetings of the Chief

Executive and Strategic Director with the Leader, Deputy Leader and the Chairmen of the Service Committees in order to review progress in achieving the Council’s goals and forward plan for major issues.

A formal Member/Officer protocol approved by Council in December 2009 is in place.

3.1.3 Promoting values for the Authority and demonstrating the values of good governance

through upholding standards of conduct and behaviour. The Council has a Standards Committee, the terms of reference of which include promoting,

monitoring and enforcing probity and high ethical standards of conduct for elected Members. The arrangements in place in 2011/12 will be revised in the current year to reflect statutory changes.

The Council’s Monitoring Officer is responsible for advising if any proposal would give

rise to unlawfulness or maladministration, and therefore performs a key function in ensuring lawfulness and fairness in the operation of the Council’s decision making process. The Monitoring Officer role is performed by the Deputy County Solicitor for Essex County Council as part of the contract for provision of legal services. The Monitoring Officer has appointed deputies to act in her stead when necessary.

The work of the Audit Sub-Committee was intended to enhance public trust in the corporate

governance of the Council. It had a key role to form an opinion on the adequacy of governance and internal control arrangements and review the adequacy of the internal and external audit arrangements and advise the Council accordingly. Working together with the Council’s External Auditor, it reviewed and provided opinion on the systems of internal control, governance and validity of the annual accounts. From May 2012 the Audit Sub-Committee has been replaced by an Audit Committee which performs a similar role.

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Corporate governance arrangements in the form of Standing Orders, to regulate Council proceedings and business, and Terms of Reference, including a Scheme of Delegation, are embodied in the Constitution.

Adopted Financial Regulations provide the framework for managing the Council’s financial

affairs. They identify the financial responsibilities of the Council, the Committees, and key officers. The Section 151 Officer (under the Local Government Act 1972), is responsible for ensuring that sound financial management systems are maintained and expenditure is lawful and appropriate. The post-holder will always be a member of Corporate Management Team. The current s151 Officer is the Head of Organisational Development, with effect from 11 April 2012. During 2011/12 the role was held by the Chief Executive.

All Council Members and staff have a general responsibility for taking reasonable action to

provide for the security of the assets under their control, and for ensuring that the use of these resources is legal, properly authorised, provides value for money and achieves best value. The Head of Financial Services is responsible for maintaining a continuous review of the financial regulations and for reporting, where appropriate, any breaches. The Section 151 Officer considers that Council’s Finance function to be adequately resourced.

The Council’s Constitution sets out the Code of Conduct and Conventions for elected

Members to ensure stability, propriety of procedure, probity and proper democratic accountability. Officers are subject to the code of conduct applicable to all Local Government Officers as supplemented by local conditions. On 15 December 2011 the Council adopted the Joint Negotiating Committee (JNC) for Local Authority Chief Executives model in respect of the three statutory officer posts (Head of Paid Service, Monitoring Officer and s151 Officer), to clarify the disciplinary arrangements for these posts.

Registers of gifts and hospitality are maintained for both Members and officers, a register of

interests is maintained for Members, and the Code of Conduct requires staff to disclose interests. Periodic reminders are issued about the need to avoid potential conflicts of interest and protocols for the acceptance of gifts and hospitality.

The Council has a series of approved policies and strategies relating to good governance,

including, for example, the Code of Corporate Governance, anti-fraud and corruption, whistle-blowing, data quality, freedom of information, and corporate equality, all of which are accessible via the Council’s intranet.

These governance arrangements have been under scrutiny in 2011/12 and a number of

changes have been made as a result. These include separating the Head of Paid Service and s151 roles, introducing the JNC procedures referred to above and creation of a full Audit Committee. The Local Government Association has been asked to advise on further improvements.

3.1.4 Taking informed and transparent decisions which are subject to effective scrutiny, and

managing risk.

The Council’s published Constitution sets out the decision-making arrangements including the Access to Information Procedure Rules, protocols for running the business of the authority. The Codes of Conduct seek to safeguard Members and Officers against conflicts

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of interests. The Council has an approved Whistle Blowing (confidential reporting) Policy which provides arrangements for employees to disclose allegations of malpractice internally, in relation to staff, Members or contractors, supplier or consultant in the course of their work for the Council, without fear of victimisation, discrimination or disadvantage.

Council committee meetings are open to the public (with the exception of items that are

exempt under the Access to Information Act). Committee agendas and reports are available online seven working days before the date of the meeting, and are also available to view at the Council Offices. The Council makes every effort to advertise meetings, communicate decisions and minutes of the meetings to ensure that they are available to the public.

Following a pilot in Area Planning Committees, during 2011/12 a right for the Public to speak on pre-notified issues at meetings was introduced. For Planning committees this is in respect of a relevant planning application and for the major programme committees it is in respect of items on the agenda. At meetings of the full Council the public may ask questions of the Leader on any topic.

The Council’s Complaints Procedure has been designed to ensure that it is easy for the public to express their views and for all complaints to be handled in a prompt, fair and efficient manner. The procedure and complaint form are available on the Council’s website.

The scrutiny function of the Council is discharged by the Overview and Scrutiny

Committee. Amongst its responsibilities, this Committee reviews and examines the decisions made by, and performance of, both other Committees and Council Officers, ensures the effective management of risk by the Council (the latter function transferred to the new Audit Committee in May 2012); assists the monitoring of the achievement of value for money; and makes recommendations arising from the outcome of the scrutiny process.

Independent of the scrutiny function is the Audit Sub-Committee. The Sub-Committee is

subject to an annual review of best practice as defined by CIPFA. The Terms of Reference and operation are assessed against the CIPFA checklist and at the last reviews the Sub Committee was found to be compliant with the majority of the checklist and exceptions did not significantly impair the effectiveness of the Committee. From May 2012 this was replaced by an Audit Committee.

In 2011/12 the Overview and Scrutiny Committee nominated a Member representative on

the Council’s Risk Management Steering Group. The Risk Management Steering Group is active in promoting good risk management practice across the Council and has its own business plan to ensure that progress is maintained.

There is an annual review by the staff in each service area of their controls and risks,

facilitated by the Performance Management team. This provides both information on the strength of internal control and governance and also becomes that service’s risk log included in their annual business plan.

The Corporate Risk Policy was updated and approved by Members in November 2010. It

will now be subject to review at two yearly intervals. In accordance with policy, the Corporate Risk Register risk register was subject to an

externally facilitated ‘zero-based’ review involving Members and Officers for 2011/12,

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which was held in March 2011. The Council maintained its clear focus on a relatively small number of genuinely important key corporate risks. Corporate risks remain under constant scrutiny and changes are made in year as necessary. Corporate risks in excess of the Council’s defined risk tolerance levels have identified mitigating actions, progress on which is regularly reported to the Overview & Scrutiny Committee. The Corporate Risk Register and associated actions are recorded and updated on the TEN performance system, so integrating them with the Council’s standard approach.

A Risk Management area is maintained on the Council’s intranet, bringing together in one

place the information, policies and guidance on Corporate Risk Management, Health and Safety risks, Project risk and Partnership risks.

3.1.5 Developing the capacity and capability of Members and Officers to be effective.

The Council aims to ensure that Members and officers have the necessary knowledge,

capacity and skills to undertake their duties. The Council’s Performance Management Framework ensures that the links between the

Council’s corporate goals, Service Business Plans and service pledges, performance data and targets, risk and staff objectives are clear. Staff have an annual Personal Development Plan (PDP) discussion with the aim of identifying learning and development needs and gaps are addressed through training and development opportunities. Regular team meetings and one to ones between staff and their line managers and are held where work objectives are discussed.

The Corporate Training Plan prioritises training by corporate need. After corporate priorities

have been funded the remaining funds are available to services to meet identified training needs for PDPs.

A training plan for Members is maintained, in liaison with the Leader of the Council as to

its content. The Member Bulletin, issued on a monthly basis, aims to keep Members abreast of relevant information relating to customers, staff news, council, district, county, regional and nationwide items, news and events of interest.

3.1.6 Engaging with local people and other stakeholders to ensure robust public accountability

The Council is committed to encouraging members of the local community to contribute to, and participate in, the work of the Council.

The Council seeks to undertake meaningful public consultation in order to inform decisions

taken by the Council, to help the best decisions based on the views of the local community and the wider information available to the Council. The Council’s approved Corporate Consultation Strategy ‘Influencing Change’ promotes a co-ordinated approach to consultation and a ‘Big List’ schedule of service led consultation exercises over the year aims to ensure that ‘public consultation overload’ is avoided. The Council has maintained public consultation using a varity of techniques as appopriate.

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Consultation with particular interest groups, including the Friends of Parks Groups, Parish Clerks’ Forum, Landlords’ Forum and Business Forum has continued. The Council is reviewing consultation arrangements for the review of public open spaces

The Council is engaging with appropriate Equality groups in order to ensure that we meet our obligations under the Equality Act 2010

4.0 Review of Effectiveness 4.1 Maldon District Council is responsible for conducting, at least annually, a review of its

governance framework including the effectiveness of systems of internal control. The review is informed by Heads of Service who are responsible for developing and maintaining the internal control environment. It also considers the work of the Council’s Internal Audit Team and comments made by the External Auditor, and other external review agencies and inspectorates.

4.2 In the Annual Audit Letter, for the period 2010/11, the external auditors, PKF, state that they

“are satisfied that, in all significant respects the Council has put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources”.

4.3 Also in the Annual Audit Letter and the Annual Governance Report for the period 2010/11,

PKF, state that they “noted a number of areas where deficiencies in internal controls should be improved or where the control environment could be strengthened including review and evidence of reconciliations and authorisation of invoices for payment”. Management agreed actions to resolve the issues identified.

4.4 Following the update of the Code of Corporate Governance in February 2008, the Council

continues to review and improve its governance arrangements. Amongst the processes during 2011/12 that have contributed to the review are:

The annual report of the Business Improvement Manager to the Audit Committee on the assurance gained from the Internal Audit work for the previous year. The report to the Audit Committee on 20 June 2012 (with regard to 2011/12) detailed background information relating to the protocols, scope of work and assessed quality of the Audit function, and highlighted areas where concerns had been identified through audit work, and where audit work was not completed.

The approach to obtaining assurance from Heads of Service in respect of the annual

review of internal controls. Business Improvement staff engaged staff by inviting them to consider what are the biggest risks, of any type, facing them and what controls they have in place to deal with those risks. This has made it much easier for service staff to understand the relevance of the process. This process continues to be embedded with actions to update, monitor and report on progress.

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4.5 The annual report of the Business Improvement Manager for 2011/12 highlighted a number of weaknesses and areas for improvement both in governance and internal control. The overall conclusion was: “In my opinion, the Council has many reasonable control processes in place to manage the achievement of its objectives. A number of controls were found to be not operating effectively and improvements have either been made, or agreed by management and timetabled for action. Concerns have been expressed in some areas, the Corporate Management team are responsible for, and review, relevant issues and the Audit Committee continue to be informed of issues raised and recommendations implemented”.

5 Significant Governance Issues - 2011/12

The Corporate Risk Register details the key risk areas facing the Council, together with the proposed mitigating actions and progress made on these. We are satisfied that these actions will address the need for improvements that were identified in our review of effectiveness and will monitor their implementation and operation as part of the regular review of those risks. In addition to the information set out in the Risk Register, two governance issues were identified during 2011/12, as a result of the review of arrangements and by the work of external and internal audit and other agencies, that are considered to merit inclusion here: No. Issue Action / Progress to date 1 The procurement and

management of contracts for goods and services.

As a result of a number of separate incidents issues have been identified in the application of good procurement and contract management practice. It is considered that the policy framework is appropriate but that there is a need to raise awareness of this with managers and staff and to ensure that best use is made of available expertise and resources.

2 General corporate governance matters

As referred to in section 3.1.3 above, aspects of the general governance of the authority have been under scrutiny during the year, for example the member/ officer interface and the role of statutory officers. A number of improvements have been made and the Local Governance Association has been asked to provide further advice and support in this regard.

6 Certification by the Leader of the Council and the Chief Executive

Signed: Date: Date: Councillor R G Boyce Ms. F Marshall Leader of the Council Chief Executive

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Independent auditor’s report to the Members of Maldon District Council

Opinion on the Council’s financial statements We have audited the financial statements of Maldon District Council for the year ended 31 March 2012 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, Collection Fund 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 2011/12.

This report is made solely to the members of Maldon District Council 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.

Respective responsibilities of the Section 151 officer and auditor As explained more fully in the Statement of Responsibilities for the Statement of Accounts, the Section 151 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.

Scope of the audit of the financial statements 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 Council’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Section 151 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.

Opinion on financial statements In our opinion the financial statements:

give a true and fair view of the financial position of Maldon District Council as at 31 March 2012 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 2011/12.

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Opinion on other matters 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.

Matters on which we report by exception We report to you if:

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;

we issue a report in the public interest under section 8 of the Audit Commission Act 1998;

we designate under section 11 of the Audit Commission Act 1998 any recommendation as one that requires the Council to consider it at a public meeting and to decide what action to take in response; or

we exercise any other special powers of the auditor under the Audit Commission Act 1998.

We have nothing to report in these respects

Conclusion on Council’s arrangements for securing economy, efficiency and effectiveness in the use of resources Respective responsibilities of the Council and the auditor The Council is responsible for putting in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources, to ensure proper stewardship and governance, and to review regularly the adequacy and effectiveness of these arrangements.

We are required under Section 5 of the Audit Commission Act 1998 to satisfy ourselves that the Council has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources. The Code of Audit Practice issued by the Audit Commission requires us to report to you our conclusion relating to proper arrangements, having regard to relevant criteria specified by the Audit Commission.

We report if significant matters have come to our attention which prevent us from concluding that the Council has put in place proper arrangements for securing economy, efficiency and effectiveness in its use of resources. We are not required to consider, nor have we considered, whether all aspects of the Council’s arrangements for securing economy, efficiency and effectiveness in its use of resources are operating effectively.

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Scope of the review of arrangements for securing economy, efficiency and effectiveness in the use of resources We have undertaken our audit in accordance with the Code of Audit Practice, having regard to the guidance on the specified criteria, published by the Audit Commission in October 2011, as to whether the Council has proper arrangements for:

securing financial resilience; and

challenging how it secures economy, efficiency and effectiveness.

The Audit Commission has determined these two criteria as those necessary for us to consider under the Code of Audit Practice in satisfying ourselves whether the Council put in place proper arrangements for securing economy, efficiency and effectiveness in its use of resources for the year ended 31 March 2012.

We planned our work in accordance with the Code of Audit Practice. Based on our risk assessment, we undertook such work as we considered necessary to form a view on whether, in all significant respects, the Council had put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources.

Conclusion On the basis of our work, having regard to the guidance on the specified criteria published by the Audit Commission in October 2011, we are satisfied that, in all significant respects, Maldon District Council put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year ended 31 March 2012.

Leigh Lloyd-Thomas for and on behalf of PKF (UK) LLP

London, UK

25 September 2012

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