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CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper | 28/08/2020

CAIRNGORMS NATION­AL PARK AUTHOR­ITY FIN­ANCE & DELIV­ERY COMMITTEE

FOR DIS­CUS­SION

Title: FIN­ANCE MON­IT­OR­ING: 4 MONTHS TO 31 JULY, 

	2020

Pre­pared by: DANIEL RAL­PH, FIN­ANCE MANAGER

Pur­pose To present a sum­mary review of income and expendit­ure for the 4 months to 31 July, 2020.

Recom­mend­a­tions The Fin­ance & Deliv­ery Com­mit­tee is reques­ted to: a) Note the out­turn for the 4 months to 31 July, 2020.

Exec­ut­ive Summary

1. The ana­lys­is of fin­an­cial pos­i­tion over the four months to 31 July is con­tained in Annex

2. This is a sim­pli­fied man­age­ment account­ing report and cov­ers the 5 main com­pon­ents of the Authority’s oper­a­tions — Core activ­it­ies and Oper­a­tion­al Plan and the 4 extern­ally fun­ded pro­jects: LEAD­ER, the Tomin­toul & Glen­liv­et Land­scape Part­ner­ship (T&GLP), Great Place Badenoch (GPB) and the Caper Frame­work (CF). These extern­ally fun­ded pro­jects are aggreg­ated and included as Pro­jects Costs Recovered (income) and Pro­ject Costs (expendit­ure). Annex I shows the actu­al out­turn pos­i­tion as at 31 July 2020, com­pared to a pro­jec­ted pos­i­tion based on a straight line alloc­a­tion of the revised budget for the year over the 4 months.

3. There are no over­all impacts on the authority’s budget from these extern­ally fun­ded pro­jects to report at this point. Actu­al and expec­ted income received from pro­jects off­sets the pro­ject costs incurred to date.

4. Over­all, income is broadly on budget at this point in the year, with receipts around £4k ahead of the budget for the peri­od of £166k, once extern­ally fun­ded pro­jects are removed.

5. Salar­ies are also broadly on budget, with a small under­spend of £13k against the budget for the four month peri­od of £1,190k.

6. Core and Oper­a­tion­al Plan expendit­ure is below budget on a straight line (even monthly expendit­ure over the year) phas­ing basis. This is a com­mon pos­i­tion for oper­a­tion­al plan expendit­ure, and some impacts of COVID19 restric­tions will have exacer­bated nor­mal lead times in com­mit­ting expendit­ure plans. Ini­tial adjust­ments to

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper | 28/08/2020 budget to real­loc­ate funds were approved by the Board in June 2020 and these adjust­ments are reflec­ted in Annex I. The man­age­ment team is cur­rently con­duct­ing a fur­ther review of expendit­ure plans and com­mit­ments in order to identi­fy any expendit­ure pres­sures and need for fur­ther budget reallocations.

1. Annex I also sets out the spe­cif­ic addi­tion­al and unbudgeted costs of COVID19 related actions taken by the Author­ity, which totals £12k at the end of July.

2. Annex I does not include a pro­jec­ted out­turn for the year as it is too early in the fin­an­cial year for such pro­jec­tions. As with pre­vi­ous years, the work­ing assump­tion is that we will man­age the budgeted over­spend down as far as is a pos­sible dur­ing the work­ing chal­lenges of due to the cov­id-19 pan­dem­ic (cov­id).

Over­view

1. Des­pite the cov­id out­break the fin­ance depart­ment has con­tin­ued to oper­ate largely unaf­fected and mostly remotely from Grant­own on Spey.

2. The year-end presen­ted some oper­a­tion­al chal­lenges and the dead­lines for the com­ple­tion and present­a­tion of the draft accounts to the aud­it­ors were met. The audit timetable has slipped due to the dif­fi­culties of audit­ing at a dis­tance, and remotely, and the accounts are on track to be signed at the Audit and Risk Com­mit­tee meet­ing on the 11 Septem­ber. We have not been made aware of any changes to the out­turn which shows a draft repor­ted (a) an under­spend of £5,000 on resource, (b) an under­spend of £1,000 on non-cash and © break even on capital.

3. The account­ing sys­tem is now be accessed remotely on the Vir­tu­al Machines (VM) with office time kept to a min­im­um. Pay­ments con­tin­ued to be pro­cessed, salar­ies pre­pared and all pay­ments made timeously. In con­trast to many oth­er organ­isa­tion we have been able to carry on func­tion­ing with little or no dis­rup­tion, though at times slower than previously.

4. While the cov­id out­break has brought many chal­lenges it also been a push for real change, not just to account­ing and fin­ance but to the wider digit­al oper­a­tion of the Author­ity. For instance, work has star­ted on digit­ising all fin­ance trans­ac­tions which means that provid­ing sample selec­tion at the next audit will be more effi­cient. On the wider organ­isa­tion­al scale we are explor­ing a new way of access­ing the serv­er remotely using ​“secure hyper­linked micro tun­nels” which, if tri­als are suc­cess­ful, will mean more staff can work more pro­duct­ively from home dir­ect to the office servers.

Oth­er Resource Income

1. Oth­er resource income is made up of:

   Other income	£15,703
   Operational income	£39,265
   Project activity costs recovered	£115,115
   Staff costs recovered	£115,294
   

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper | 28/08/2020

1. Oth­er income of £15,704 represents:

   a) Recov­ery of leg­al fees £1,714 b) 3 month plan­ning fees to 30 June recovered £12,989 c) Oth­er recov­er­ies £1,000

£48,883 was invoiced at the end of June for the Authority’s share of plan­ning fees for the 6 months to 30^th June from the five coun­cils with­in the Park bound­ar­ies. Only £121 remains outstanding.

1. Oper­a­tion­al plan income of £39,265 represents:

   a) CLIF fund­ing for ant study at Marr Lodge £10,000 b) Con­tri­bu­tions to cur­lew map­ping £10,000 c) Recov­ery of costs incurred on Capercaillie

   Project since closure of Development phase	£19,265
   

The per­mis­sion to start for the Deliv­ery Phase of the Caper­cail­lie pro­ject was giv­en on 27 July and costs will start to be incurred from August onwards.

1. Staff costs recovered of £115,294 represents:

   a) Con­tri­bu­tions to ECMP (whole year) £11,500 b) Con­tri­bu­tions from SLC (quarter 1) £3,272 c) Con­tri­bu­tion to Spey­side Wader officer costs £8,075 d) Recov­er­ies from staff for addi­tion­al annu­al leave £3,103 e) Recov­ery of pro­ject staff costs £89,344

2. In ¹⁹⁄₂₀ SNH con­trib­uted to the costs of employ­ing the two Peat­land Action officer posts. The fund­ing for the posts for ²⁰⁄₂₁ has yet to be agreed with Scot­tish Gov­ern­ment. If fund­ing is made avail­able on the same basis as ¹⁹⁄₂₀, as is expec­ted based on cor­res­pond­ence to date, a fur­ther £25,000 is poten­tially recov­er­able for the 4 months to July.

Board and Staff Costs

1. With the excep­tion of the Peat­land action posts noted in 11, all pro­ject staff costs, have either been recovered or will be recovered for the 4 months. Staff costs relat­ing to sea­son­al rangers are not repor­ted in the staff costs line but as a sea­son­al ranger cost with­in the oper­a­tion­al plan line for Vis­it­or Ser­vices for man­age­ment account­ing pur­poses and covered by that budget. These staff costs will be reclas­si­fied in the fin­an­cial accounts pur­poses at the year-end.

Oth­er Board and Staff Costs

1. As is to be expec­ted with the cur­rent unique way of work­ing, with most staff work­ing from home, costs related to Board and staff costs have reduced sub­stan­tially reflect­ing espe­cially the reduc­tion in travel and sub­sist­ence costs. Costs con­tin­ue to be incurred on the leased car fleet, and motor vehicle insur­ance, and ongo­ing HR and training.

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper | 28/08/2020 Over­all ​“sav­ings” can be expec­ted to con­tin­ue until there is a rever­sion, if at all, to closer to nor­mal scale of oper­a­tions. Sav­ings in these budgets have to be bal­anced with oth­er costs arising solely due to how we have reacted to cov­id to allow us to con­tin­ue to work as seam­lessly as pos­sible – shown in Annex I as COV­ID related costs.

Facil­it­ies Costs / IT and Pro­fes­sion­al Costs

1. Many of the facil­it­ies costs are con­sidered rel­at­ively ​“fixed”. Rent, rates, and util­it­ies costs are only slightly less than budget for the peri­od largely due to the fixed nature of these costs and tak­ing the oppor­tun­ity of less staff in the office to ​“catch up” on facil­it­ies work — redecoration/​establishment work and install­a­tion of addi­tion­al charge points for elec­tric vehicles – ori­gin­ally planned for late March but aban­doned due to lock­down. The work on the facil­it­ies for the 4 months is £10,400.

2. As noted above we have attrac­ted addi­tion­al costs and expenses due cov­id 19 and these amount to £12,325 by the end of July. Costs alloc­ated to this code are those which would not have oth­er­wise been incurred but for cov­id, such as addi­tion­al IT kit to sup­port dis­persed work­ing — tele­phony head­sets, cord­less key­boards and mice sets, port rep­lic­at­ors for des­ig­nated hot desk (all to min­im­ise the risks of cross con­tam­in­a­tion); PPE (masks and san­it­iser) and also move­able sol­ar powered signs for use round the park when it opened again. These units are on hire for 3 months and will cost approx­im­ately £20,000, after a con­tri­bu­tion from Aber­deen­shire Coun­cil which has still to be recovered.

3. We have also spent more on PPE (£1,600), due to addi­tion­al costs for remote work­ing, and on addi­tion­al mobile phones and con­nec­tions to make home work­ing more efficient.

4. At some point, before the year end, the cod­ing of all expendit­ure incurred will be reviewed and if appro­pri­ate recoded to con­sol­id­ate all cov­id related costs in one heading.

5. Should any staff mem­ber be in the office and sub­sequently tests pos­it­ive for cov­id the office will have to be closed and deep-cleaned by spe­cial­ists. The estim­ated costs of each deep-clean, which can­not be car­ried out by the clean­ing con­tract­or, will be approx­im­ately £3,600 per deep-clean. Depend­ing on the areas accessed this costs can poten­tially be pro­por­tion­ately reduced.

6. As noted in the over­view we are explor­ing new ways of work­ing and using digit­al solu­tions more appro­pri­ately and effect­ively. The use of Lifes­ize for video con­fer­ences has been a highly cost effect­ive suc­cess­ful invest­ment. Cur­rently, des­pite buy­ing addi­tion­al VM licenses at the start of lock­down, there are still issues with bot­tle­necks and speed of access using the VMs. We are cur­rently explor­ing, and are about to tri­al, anoth­er tech­no­logy which poten­tially would allow more staff to have access to the serv­er without the VM lim­it­a­tions. This may mean fur­ther invest­ments in the IT infra­struc­ture. If the ​“secure hyper­linked micro tun­nels” tri­al is suc­cess­ful we will poten­tially be able to give 4 times as many staff access to the serv­ers at a com­par­able cost of hav­ing 15 VM licenses.

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper | 28/08/2020

Oper­a­tion­al Plan

1. Oper­a­tion­al plan spend is lower than anti­cip­ated. The remain­ing budgeted spend for the year is being repro­filed to give a more accur­ate monthly spend for both cash flow and to reas­sess stress points between now and the year end. Tra­di­tion­ally the spend­ing pro­file is biased towards the last quarter in the fin­an­cial year and is likely to be more pro­nounced this year.

2. Included behind Vis­it­or Ser­vices are the costs incurred in July, for the sea­son­al rangers. This amoun­ted to £35,300, which means it is broadly on track to spend the full alloc­ated budget.

Non-Cash

1. Non-cash budget pro­vi­sion from Scot­tish Gov­ern­ment provides for depre­ci­ation of assets and oth­er account­ing pro­vi­sions made neces­sary by the Authority’s oper­a­tions. The budget alloc­ated for ²⁰²⁰⁄₂₁ by Scot­tish Gov­ern­ment is £320,000. This includes the ​“depre­ci­ation” of leased assets covered by IFRS 16, the adop­tion of which has been post­poned for anoth­er fin­an­cial year, until ²⁰²¹⁄₂₂. This alloc­a­tion will be reduced before the end of the fin­an­cial year.

2. Cur­rent pro­jec­tions for ²⁰²⁰⁄₂₁, based on assets in use at the begin­ning of the fin­an­cial year, pro­posed cap­it­al spend, with no abnor­mal charges or write downs for diminu­tion in value, are for a full year depre­ci­ation charge of £132,000.

Grant-in-Aid

1. Resource (R DEL): £1,625,000 resource grant-in-aid has been drawn down in line with the planned draw­down (budget of £4,565,000).

2. Cap­it­al (C DEL): £120,000 cap­it­al grant-in-aid has been drawn down in line with the planned draw­down (budget of £390,000). The C Del alloc­a­tion is to cov­er assets bought to be used in the Park Authority’s oper­a­tions or to be spent as cap­it­al contributions/​grants.

3. Addi­tion­al cap­it­al grant-in-aid of £250,000 has been awar­ded and is sub­ject to con­firm­a­tion in the Autumn Budget revi­sions. This addi­tion­al fund­ing has not been taken into account in the budgets.

Cap­it­al Spend

1. Only £2,308 has been spent on cap­it­al items in the 4 months. This is 5 addi­tion­al laptops required as we move to replace desktops to allow for more effi­cient home work­ing. An addi­tion­al 10 laptops were delivered in August.

Pro­jects Tomin­toul & Glen­liv­et Land­scape Partnership

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper | 28/08/2020

1. Amounts received/​due from the Nation­al Lot­tery Her­it­age Fund (NLHF) in the cur­rent year are:

   Quarter ended £ Received 31 March (claim 13) 146,812 27 July 30 June (claim 14) 63,051 o/​s

2. Claim 14 has been loaded on the NLHF portal for £63,051 and has still to be form­ally claimed. Before sub­mis­sion this claim will be increased with a claim for match fund­ing for agri- envir­on­ment schemes. Once final­ised the claim will be sub­stan­tially high­er. Indic­a­tions are that all the agri-envir­on­ment schemes will be com­pleted before the end of the pro­ject now set at 31 Decem­ber 2020.

LEAD­ER

1. All pro­ject advances unclaimed at 31 March (£63,969) have now been claimed on LARCS, and only I claim remains to be paid (£3,000). All claims included as debt­ors, at 31 March (£195,002) have now been received, as have all oth­er pro­ject claims made in the 4 months to 31 July (£32,562). All admin­is­tra­tion costs for the 4 months have been treated as claimed in the fig­ures repor­ted with the form­al claim yet to be made.

Great Place Badenoch

1. Activ­ity in the 4 months has been low, not solely due to cov­id but because of the appoint­ment of a replace­ment part-time pro­ject man­ager. The pro­ject has now been exten­ded past its ori­gin­al 31 Decem­ber end due to a com­bin­a­tion of the late start to the pro­ject and the impact of cov­id on planned events for the summer/​autumn 2020.

2. Amounts received/​due from the NLHF in the cur­rent year are:

   Quarter ended £ Received 31 March (claim 8) 6,095 8 June 30 June (claim 9) 7,080 17 August

Caper­cail­lie Framework

1. The final Devel­op­ment Phase claim, for the peri­od to 31 March (£79,537), was received on the 29^th June.

2. The first claim for the Deliv­ery phase will be made for the 2 months to 30 September.

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper | 28/08/2020

Out­turn Pos­i­tion ²⁰²⁰⁄₂₁

1. All budget lines con­tin­ue to be mon­itored on a reg­u­lar basis, while work­ing closely with Heads of Ser­vice to repro­file spend for the remainder of the year and to identi­fy pres­sure points, or slack, as early as pos­sible. At this stage in the fin­an­cial year, no pro­jec­ted out­turn has yet been mod­elled and, as ever, the inten­tion will be to return an out­turn as close as is pos­sible to break even in what has been, and will con­tin­ue to be, a chal­len­ging year.

Daniel Ral­ph danielralph@​cairngorms.​co.​uk 18 August, 2020