Agenda item: Attachment: HRA EMT COVER SHEET Date of Meeting: 10th July 2013 Title of Paper: Financial report as at 31 May 2013 for financial year 2013/14 Purpose of Paper: To report on the financial position of the Authority for the month ended May 2013. Reason for Submission: To ensure the Board is aware of the financial position of the HRA at the end of May 2013. Details: This paper presents the financial position as at the end of May 2013. It is the first financial report for the 2013/14 financial year. There are no matters of concern for the EMT or the board to note at this stage of the financial year. The Board is asked to approve the report. Suitable for wider circulation? Yes once approved Recommendation / Proposed Actions: To Approve To Note Comments Name: Debbie Corrigan Job Title: Interim Director of Finance Date: 24 June 2013 Yes 13 F Finance Report - Financial Year 2013/14 Health Research Authority as at 31 May 2013 1. Introduction This report outlines the financial position of the Authority in respect of revenue and capital expenditure for the month ended May 2013. 2. Revenue Resource Limit The HRA initial grant in aid/ opening revenue resource limit was confirmed at £9.46m following approval of the HRA business plan for 2013/14. The whole of this sum has been classified as administration funding under HM Treasury definitions and this sum represents the HRA annual statutory funding from the Department of Health (DH). This sum excludes income from other government departments or income from the devolved administrations, the planning assumptions for which amount to a sum of £220k. Further clarification is required of the revenue cash limit in light of the cash carried forward from 2012/13 and an update will be provided in due course. The assumption in this paper is that the cash limit will equal the revenue resource limit. 3. Revenue Position at 31 May 2013 The revenue position of the Authority is summarised below with further performance detail in Appendix A. The Authority under spent by £27k against expenditure budgets. Summary of financial outturn 31 May 2013 Description Income HRA income Grant in aid Total Expenditure National Research Ethics Service Chief Executive Corporate Services (incl reserves) Improvement Total Surplus/Deficit Initial Annual Budget (£'000) Budget for period to 31 May 2013 (£'000) -220 -9460 -9680 -10 -1404 -1414 -10 -1378 -1388 0 27 27 4,042 1,339 3,179 1,120 9,680 743 230 238 203 1,414 750 210 226 202 1,388 7 -20 -12 -1 -27 0 0 0 0 Outturn as at 31 May 2013 Variance (£'000) (£'000) The main points to note in the outturn expenditure position as at 31 May 2013 of £1,388k are that 1. Staff costs amounted to £909k (65%) 2. Compliance with the better payment practice code was excellent in 2012/13 with 99% of invoices being paid within 30 days compared to 97% in 2011/12. It should also be noted that 41% of invoices were paid within 10 days. So far in 2013/14, performance on the latter target has reduced to 32%. This situation needs careful monitoring especially as the inability to see invoice images for approvals did not impact until June. 3. The largest variance is a £20k under spend within the Chief Executive set of functions. This is largely due to a missed accrual for a pay recharge (£8k) a contributory factor being the inability to view invoices at month end plus a £4k under spend against the participation fees budget. The profile of the budget for meetings/stakeholder events needs to be revisited in light of the under spend of £5.5k as at the end of May. 4. Capital The HRA opening capital resource cash limit has been noted by the DH and informally confirmed at £1,050k respectively at the beginning of the financial year. The table below sets out the initial position agreed with the Department of Health. Capital Resource and Capital Cash Limits Details 2013-14 opening budgets Non-recurrent adjustments Under spend 2013-14 Final allocation Capital £'000 1,050 Capital cash limit £'000 1,050 0 1,050 0 1,050 Initial plans and timings for expending the above are due to be presented to the Systems Development Board in July 2013. 5. Balance sheet and cash A summarised balance sheet can be found in Appendix A comparing the closing balances in March 2013 with the position at the end of April and May 2013. Net assets have reduced due to the low level of cash drawdown in April and May. 6. Recommendations That the Executive Management Team (EMT) approves the final financial position. Debbie Corrigan Interim Director of Finance 24th June 2013 Health Research Authority – Financial position as at 31 May 2013 • • • • FINANCIAL RESULTS • HEADLINES • • Appendix A HRA is reporting an under spend against expenditure plans of £27k at the end of May. 14% (£1.4million) of the annual budget has been spent. An early forecast points to a break even position. Detailed forecasts will be developed and refined with budget managers.. The largest variance at month 2 (May) is a £20k under spend within the Chief Executive’s cost centres. This has arisen largely due to a missed pay recharge accrual of £8k, plus an underspend of £4k against the participation fees budget for projects and £5.5k against the meetings budget. Additionally, within the Improvement Directorate there is a £12k year to date underspend due to website project costs not yet charged and an £11k under spend within the Confidentiality Advisory Team which requires further investigation. These underspends are offset by a £32k overspend on the IRAS cost centre presented within the Improvement Directorate currently. This is due to the monthly budget phasing and the actual payment of invoices received being quarterly charged in advance. Better Payment Practice Code (BPPC) compliance for April and May returned figures of 100% on both the number and value of invoices paid. However, the problem of accessing invoice images began in June and it remains to be seen what impact this has had on our performance in this area. The HRA will be publishing its performance against the 5 day payment target for 2013/14. All approvers are asked to note this and to approve invoices promptly or place on hold if there is a dispute. Balance sheet highlights – Net Assets and Taxpayers Equity are down to £562k from the year end level of £1428k. This is caused by the low level of drawdown of Revenue Resource cash from DH over April and May - £500k. Payables are consistent with the year-end level, while cash resources have fallen by £957k. Cash flow - position reflects the actual level of expenditure up to the end of May and the expected expenditure to the yearend. Cash book level is £1,030k lower than the year-end, but the forecast assumes that cash levels will be maintained (pending agreement with DH) and that the March 2014 target of £2,297k will be achieved. HRA Better Payment Practice Code for the period 1 April to 31 May 2013 0-5 Days 6-10 Days 11-20 Days 21-30 Days Over 30 Days Total BPPC achieved Number 12 169 355 35 571 % 2 30 62 6 Value (£) 52,771 119,009 186,823 173,271 100 531,874 100 % 10 22 35 33 0 100 100 Aged Creditors at 31 May 2013 Headlines Non-NHS Trade 60+ days debit balance (money owed) of £5,036 comprises Keele University credit note not yet repaid of £4,510 and Park Royal Hotel credit note of £544.20. The former is being vigorously pursued for full cash refund. 1-30 days debit balance of £810 is caused by a credit note for Medical Research Council of £1,162.20 offset by small items of amounts owing by HRA. Non-NHS Other 60+ days balance of £404 owed by HRA is mainly an invoice for Natural Health Practice for £300, which was paid on 4 June. Aged Creditors – (£) amounts past due date Non NHS Trade Non NHS Other NHS Total 1-30 days -810 274 31-60 days 22 198 60 + days -5036 404 0 0 0 220 -4632 -536 HRA Revenue position for the period ended 31 May2013 Period (£'000) Department Actual Income Budget Variance -10 -10 0 -1404 -1649 -245 -1,414 -1,659 -245 Budget Actual Variance 743 925 182 230 234 4 238 292 54 203 208 5 1,414 1,659 245 0 0 0 Year to date (£'000) Budget Actual Full year (£'000) Variance 2012/13 actual Initial budget Latest Budget Forecast -10 -10 0 -270 -220 -220 -220 Grant in Aid -1404 -1378 27 -9,027 -9,460 -9,460 -9,460 Total Income -1,414 -1,388 27 -9,297 -9,680 -9,680 -9,680 Variance 2012/13 actual HRA income Expenditure Budget Actual Initial budget Latest Budget Forecast National Research Ethics Service 743 750 7 5,460 4,042 4,042 4,042 Chief Executive 230 210 -20 814 1,339 1,339 1,339 Corporate services (including reserves) 238 226 -13 2,166 3,179 3,179 3,179 Improvement 203 202 -1 857 1,120 1,120 1,120 1,414 1,388 -27 9,297 9,680 9,680 9,680 0 0 0 0 0 0 0 Total Expenditure Surplus (Deficit) HRA Balance Sheet as at 31 May 2013 Mar-13 £k 197 Apr-13 £k 198 May-13 £k 213 Forecast £k 197 156 2279 2435 192 1886 2079 81 1397 1478 156 2279 2435 1204 706 1129 1204 1204 706 1129 1231 Net Current Assets/(Liabilities) 1428 1373 349 1428 Net Assets 1428 1571 562 1428 Tax payers Equity Department of Health Funding General Fund 1428 1571 562 1428 Revaluation Reserve Total Taxpayers' Equity 1428 1571 562 1428 Fixed assets Current assets Trade and other receivables Cash and cash equivalents Less Current Liabilities Trade and other payables Provisions for liabilities and charges Other liabilities Represented by:- Cash Flow Forecast to 31 March 2013 As at 31 May 2013 £'000s Opening Balance Receipts Debtors Revenue cash limit Capital cash limit Bank Transfers Total Receipts Payments Staff Other revenue payments Capital payments Bank Transfers Total Payments Closing Balance Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total 2,279 1,745 1,429 1,508 1,277 1,481 1,602 1,694 1,821 1,829 1,939 2,083 2,279 21 76 500 860 860 860 115 860 860 860 860 860 300 860 300 115 1,210 400 21 576 860 860 860 975 860 860 860 1,160 1,160 1,725 327 9,450 1,000 10,777 276 405 466 626 466 496 496 496 494 478 478 805 5,982 279 487 315 465 190 358 272 237 358 272 300 238 300 324 400 3,795 555 892 781 1,091 656 854 768 733 852 1,050 1,016 1,529 1,000 10,777 1,745 1,429 1,508 1,277 1,481 1,602 1,694 1,821 1,829 1,939 2,083 2,279 2,279