CAIRNGORMS NATION­AL PARK AUTHORITY

Fin­ance & Deliv­ery Com­mit­tee Paper | 06/03/2020

CAIRNGORMS NATION­AL PARK AUTHORITY

FIN­ANCE & DELIV­ERY COMMITTEE

FOR DIS­CUS­SION

Title: FIN­ANCE MON­IT­OR­ING: 10 MONTHS TO 31 JANU­ARY, 2020

Pre­pared by: DANIEL RAL­PH, FIN­ANCE MANAGER

Pur­pose

To present a sum­mary review of income and expendit­ure for the 10 months to 31 Janu­ary, 2020, togeth­er with a pro­jec­ted out­turn for the ²⁰²⁰⁄₂₁ fin­an­cial year.

Recom­mend­a­tions

The Fin­ance & Deliv­ery Com­mit­tee is reques­ted to:

a) Note the out­turn for the 10 months to 31 Janu­ary, 2020 and the pro­jec­ted out­turn for the year.

Exec­ut­ive Summary

1. The main report to the Com­mit­tee is con­tained in Annex 1. This report cov­ers the 5 main com­pon­ents of the Authority’s oper­a­tions — Core and Oper­a­tion­al Plan and sig­ni­fic­ant extern­ally fun­ded pro­jects: LEAD­ER, the Tomin­toul & Glen­liv­et Land­scape Part­ner­ship (T&GLP), Great Place Badenoch (GPB) and the Caper Frame­work (CF). Annex I shows the actu­al out­turn pos­i­tion as at 31 Janu­ary 2020, with the cur­rent estim­ate of the year end out­turn by 31 March 2020.

2. Any adverse vari­ances in the year to date are high­lighted under CORE activ­it­ies. Vari­ances on CORE expendit­ure and Oper­a­tion­al Plan are mon­itored on an ongo­ing basis and vari­ances of great­er than 15% or £5,000 from budget, whichever is the high­er, will be brought to the Committee’s atten­tion. Most of the repor­ted vari­ances will self-cor­rect dur­ing the fin­an­cial year due to the tim­ing of spend and recog­ni­tion of pre­pay­ments or accruals.

3. Pos­it­ive vari­ances (those help­ing fin­an­cial per­form­ance) are repor­ted as “+ £x,xxx” and neg­at­ive vari­ances as “- £x,xxx”.

CAIRNGORMS NATION­AL PARK AUTHORITY

Fin­ance & Deliv­ery Com­mit­tee Paper | 06/03/2020

Over­view

1. Annex I sum­mar­ises the out­turn as at 31 Janu­ary and the pro­jec­ted out­turn to 31 March. The pro­jec­ted out­turn is sub­ject to change as Ser­vices con­firm their actu­al spend and any under­spend is vired.

Oth­er Income

1. Oth­er income of £89,886.42 recog­nised to Janu­ary includes: a) Recov­ery of leg­al fees £13,203.60 b) Plan­ning fees £66,398.40 c) NPP sourced income £168.40 d) Shared costs recovered £207.00 e) Oth­er recov­er­ies £9,909.02

2. Pro­jec­ted oth­er income includes £6,000 from the Nation­al Parks LLP.

3. Oper­a­tion­al Plan income of £576,771.55 includes: a) Conservation

    Forest holidays £5,000.00
    RSPB curlew survey £5,000.00
   

   b) Vis­it­or Access

    Writer in residence £16,573.25
    LCTT recoveries £234,497.25
    Hightrans £10,099.20
    LEADER £8,292.85
   

   c) Rur­al Devel­op­ment RTIF — Glen­more £113,393.00

    RTIF - Dinnet £54,000.00
    Sustrans - Glenmore £15,000.00
    Developer contribution £68,620.00
   

*RTIP Rur­al Tour­ism Infra­struc­ture Fund

1. Pro­jec­ted oth­er income includes a fur­ther con­tri­bu­tion of £98,000 from SNH against the final sec­tion of the Spey­side Way from Ruthven to Tromie Bridge, LEAD­ER pay­ments to pro­jects of £37,200, a final £2,000 from Cre­at­ive Scot­land for the Writer in Res­id­ence pro­ject, and the final con­tri­bu­tion from RTIP for the Muir of Din­net upgrade.

2. Staff costs recovered of £410,174.43 includes con­tri­bu­tions and fund­ing from third parties, Nation­al Lot­tery Her­it­age Fund (against staff dir­ectly employed by the Author­ity on HF pro­jects), recov­er­ies against spe­cif­ic staff roles (East Cairngorms Moor­land officer, Peat­land officers, Access officer [now ceased]) and staff ​“pur­chas­ing” addi­tion­al annu­al leave.

3. Pro­jec­ted oth­er Core staff cost recov­er­ies includes the Peat­land Action officers costs for the quarter to 31 March (£18,186), con­tri­bu­tions towards staff costs from the Scot­tish Land Com­mis­sion and Loch Lomond and Trossachs Nation­al Park (£6,707), the final pay­ment from Paths for All (£3,334) and the final two months addi­tion­al annu­al leave recov­er­ies (£1,588).

CAIRNGORMS NATION­AL PARK AUTHORITY

Fin­ance & Deliv­ery Com­mit­tee Paper | 06/03/2020

CORE Activ­it­ies

Board and Staff Costs

1. Board fees for the year are expec­ted to be over budget for the year. How­ever, the actu­al value will not be known until any adjust­ments for the last quarter of the year are pro­cessed in March.

2. Core and pro­ject staff costs, and recov­er­ies, have been broadly in line with pro­jec­tions for the peri­od with a net under­spend pro­jec­ted for the year after net­ting actu­al costs with all recov­er­ies. The pos­it­ive vari­ance is due to in year leav­ers and tim­ing of recruit­ment and man­aging vacant positions.

3. ²⁰¹⁹⁄₂₀ is the first year that staff costs recovered have been repor­ted sep­ar­ately and in future year’s budgets oth­er income and staff costs recov­er­ies will be repor­ted sep­ar­ately for great­er clarity.

Oth­er Board and Staff Costs

1. Oth­er board and staff costs are broadly in line with expect­a­tions giv­en the nor­mal phas­ing of expendit­ure. As there is a nor­mal skew in the phas­ing of expendit­ure, espe­cially charges in from oth­er pub­lic bod­ies’, monthly recharges in the final two months will be high­er than the aver­age monthly recharges through­out the first 10 months of the year.

Facil­it­ies Costs / IT and Pro­fes­sion­al Costs

1. In addi­tion to points a – d, which were repor­ted in the last mon­it­or­ing paper, points e onwards should be noted for the 10 months out­turn pos­i­tion now reported:

   a) Rates have been paid in full for the whole year in April. Full pro­vi­sion for the addi­tion­al rates for the new build was taken into the ¹⁸⁄₁₉ as an accru­al; b) Rent for the new build is now com­ing through as expec­ted and at anti­cip­ated levels; c) Motor vehicle insur­ance has been recog­nised for the full year; d) Pre­pay­ments recog­nised in ¹⁸⁄₁₉ for ¹⁹⁄₂₀ were released in full over all accounts in April 2019 and this includes rent, the motor vehicle fleet and IT main­ten­ance and ser­vices plans. e) Sav­ings are com­ing through fol­low­ing the mer­ger of 2 mobile phone con­tracts into 1. Anti­cip­ated sav­ings remain at about £8,000. Fur­ther sav­ings are com­ing through on Voice Over Inter­net Pro­tocol use for tele­phony and for BT con­tracts, and are approx­im­ately half the anti­cip­ated monthly cost; f) Office clean­ing costs will high­er, £5,000, due to con­tract­or passing on staff increases as a con­sequence of the Authority’s con­trac­tu­al insist­ence that the staff are paid in line with the Scot­tish Min­im­um wage;

CAIRNGORMS NATION­AL PARK AUTHORITY

Fin­ance & Deliv­ery Com­mit­tee Paper | 06/03/2020

g) Staff recruit­ment is show­ing an over­spend of £13,044 due to the high­er than expec­ted levels of staff turnover and con­sequent recruit­ment activ­ity; h) Ser­vice improve­ment costs, now recog­nised as an oper­a­tion­al plan cost, are £14,756.38 high­er than ori­gin­al budget due to agreed increase in invest­ment from avail­able funds, relat­ing to a new approach to cul­tur­al change and devel­op­ment with­in the Author­ity which is a key tool in deliv­er­ing Organ­isa­tion­al Devel­op­ment Strategy 3. This spend to train in house train­ers will save future devel­op­ment costs by tak­ing ser­vice pro­vi­sion in-house.

Oper­a­tion­al Plan

1. In the run up to the year end the work­ing assump­tion is that all Ser­vices will either spend their allot­ted budget, allow budget trans­fer with oth­er Ser­vices, or identi­fy costs which can be poten­tial ​“for­ward phased” to use resource in the cur­rent year with invest­ment that would oth­er­wise rep­res­ent a call on ²⁰²⁰⁄₂₁ resources. At the end of Janu­ary the actu­al spend was £1,073,138 with pro­jec­ted spend being £2,037,000. The skew in the expendit­ure towards the year end is nor­mal and provided for.

2. Fur­ther oral update will be giv­en at Com­mit­tee on the pro­gress made to that date.

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 ²⁰¹⁹⁄₂₀ is £150,000, com­pared to £116,000 included in the Budget for the year.

2. Cur­rent pro­jec­tions for ²⁰¹⁹⁄₂₀, 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, indic­at­ing that cur­rent year’s non-cash budget will be under­spent by £4,000. This does not pose an issue for the Author­ity and our spon­sor team are aware of this small variation.

Grant-in-Aid

1. Resource (R DEL): £3,765,000 resource grant-in-aid has been drawn down in line with the planned draw­down (budget of £4,565,000). The inten­tion is to draw down as pro­filed in the remain­ing 2 months.

2. Addi­tion­al grant-in-aid was awar­ded to cov­er addi­tion­al pen­sion costs (£117,000) and on peat­land recov­ery (£45,560). Both these amounts were drawn down in Feb­ru­ary. The revised total resource grant-in-aid for the year is £4,727,560 (£4,828,000 in Annex I. This has increased over the year from the pro­jec­ted RDEL of £4,745,000 by the two addi­tion­al awards, less

3. Cap­it­al (C DEL): £180,000 cap­it­al grant-in-aid has been drawn down in line with the planned draw­down (budget of £240,000). 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.

CAIRNGORMS NATION­AL PARK AUTHORITY

Fin­ance & Deliv­ery Com­mit­tee Paper | 06/03/2020

1. In Annex I, the ori­gin­al budget (core) dis­closes total grant-in-aid of £4,745,000 to cov­er oper­at­ing expendit­ure and cap­it­al grants. The pro­jec­ted grant-in-aid is £4,898,000 and increase of £153,000. This move­ment includes the addi­tion­al pen­sion and peat­land set­tle­ment (£163,000) less £10,000 which has been vired from cap­it­al grant spend to expendit­ure which will be cap­it­al­ised as tan­gible or intan­gible assets in the state­ment of fin­an­cial position.

Cap­it­al Spend

1. Cap­it­al spend on assets for use in day to day oper­a­tions to the end of Janu­ary includes: a) Digit­al infra­struc­ture and devices £12,900 b) Soft­ware £2,800 c) Oper­a­tion­al assets £23,600

2. The ori­gin­al cap­it­al budget alloc­ated to cap­it­al assets was £60,000. This has now been increased to £70,000. It is pro­jec­ted that this budget will be spent in full with approx­im­ately £10,800 on oper­a­tion­al assets and £19,900 on the digit­al infra­struc­ture and devices, largely on two new serv­ers with an estim­ated use­ful life of five years.

Pro­jects

Tomin­toul & Glen­liv­et Land­scape Partnership

1. Amounts due from the Nation­al Lot­tery Her­it­age Fund (NLHF) since last paper to Committee:

Quarter ended	£	Received
30 Septem­ber (claim 11)	436,141	9⁄12
31 Decem­ber (claim 12)	236,998	o/​s

1. The major pro­jects, Blairfindy, Scalan are largely com­plete and final meas­ures are expec­ted. The Access Pro­ject, Spey­side Way spur, being com­pleted in Decem­ber. As the pro­ject is now 7 months from com­ple­tion there remains sub­stan­tial work to com­plete the water/​agri envir­on­ment and inter­pret­a­tion projects.

2. Work is under­way with­in the Author­ity to estab­lish the leg­acy impacts bey­ond the form­al imple­ment­a­tion peri­od of the pro­ject and man­age­ment meas­ures required to deal with these. A sep­ar­ate update on these meas­ures will be brought to the Com­mit­tee in due course.

LEAD­ER

1. All claims for pro­ject advances and admin­is­tra­tion costs con­tin­ue to be made on the ​“LARCS” system.

CAIRNGORMS NATION­AL PARK AUTHORITY

Fin­ance & Deliv­ery Com­mit­tee Paper | 06/03/2020

1. The ​“RAG” status on LARCS has been upgraded to ​“green” high­light­ing that the Scot­tish Gov­ern­ment have now recog­nised that all intern­al pro­cesses and pro­ced­ures are appro­pri­ate and oper­at­ing effectively.

2. A sum­mary of the LEAD­ER pro­gramme fin­an­cial pos­i­tion is presen­ted in the fol­low­ing table:

3. LEAD­ER Pro­gramme Sum­mary of Position

Admin costs claimed	Pro­ject advances claimed	Sus­pense	Claims still to be made	Total
£	£	£	£	£
As at 01.04.19	-	114,085.33	(277.67)	30,431.85	144,239.51
YTO move­ment	-	-	120.44	-	120.44
Trans­fers	-	20,065.70	-	(20,065.70)	-
Claims made	103,881.41	305,924.44	-	-	409,805.85
Received	(47,245.91)	(339,197.65)	-	-	(386,443.56)
As at 31.01.20	56,635.50	100,877.82	(157.23)	10,366.15	167,722.24

1. Claims still to be made rep­res­ents ​“final” claims on 2 pro­jects which require a soft­ware res­ol­u­tion to be made by the LARCS team in Edinburgh.

2. Of the £157,513.32 out­stand­ing at 31^st Janu­ary, £57,342.63 is flagged on LARCS as ​“due to LAG” with the remainder, £100,179.69, flagged as being released for payment.

3. If all claimant mile­stones are met a fur­ther £147,000 will be advanced by 31 March.

Great Place Badenoch

1. This is a 3 year NLHF pro­ject to con­serve and devel­op the cul­tur­al her­it­age of Badenoch. The pro­ject was ori­gin­ally due to end 31 Decem­ber 2020 which has now been exten­ded with the agree­ment of the Her­it­age Lot­tery Fund to 31 March 2021.

2. The pro­ject man­ager, employed by Vol­un­tary Action Badenoch & Strath­spey on behalf of the part­ner­ship, left the pro­ject at the end of Janu­ary. A replace­ment is expec­ted to be in post in April, and as a con­sequence, expendit­ure in the final quarter of ²⁰⁄₂₁ is expec­ted to be minimal.

3. Amounts due from the Her­it­age Lot­tery Fund (HLF) since last paper to Committee:

Quarter ended	£	Received
30 Septem­ber (claim 6)	24,465	17 Octo­ber
31 Decem­ber (claim 7)	31,752	o/​s

Caper­cail­lie Framework

1. The Devel­op­ment Phase of the NLHF pro­ject to con­serve the remain­ing Caper­cail­lie pop­u­la­tion in the Cairngorms will close on the 31 March with the final claim being made to NLHF shortly thereafter.

CAIRNGORMS NATION­AL PARK AUTHORITY

Fin­ance & Deliv­ery Com­mit­tee Paper | 06/03/2020

1. Amounts due from the NLHF since last paper to Committee:

Quarter ended	£	Received
30 Septem­ber (claim 7)	44,537	30⁄10
31 Decem­ber (claim 8)	44,340	03⁄02

CASH FLOW AND CASH MANAGEMENT

1. Although CNPA has been suc­cess­ful in attract­ive fund­ing for high value pro­jects the cash man­age­ment falls on CNPA to ensure that adequate fund­ing is avail­able to meet pro­ject liab­il­it­ies as they arise, in addi­tion to CNPA’s own fund­ing require­ments and to stay with­in guidelines set by the spon­sor­ing Depart­ment and Scot­tish Government.

2. The RAG status of cur­rent pro­jec­ted cash flow, at 31 March 2020, with the cash pos­i­tion of each component’s RAG status shown. (Red, warn­ing; amber, neut­ral; green pos­it­ive) is as follows:

Quarter ended…	Mar
CORE activ­it­ies	Green circle
LEAD­ER	Green circle
T&GLP	Green circle
GPB	Green circle
CF	Green circle

Out­turn Pos­i­tion ²⁰¹⁹⁄₂₀

1. All budget lines con­tin­ue to be mon­itored on a weekly basis, while work­ing closely with Heads of Ser­vice to identi­fy pres­sure points or slack as early as possible

2. The ¹⁹⁄₂₀ audit will com­mence on 27 April with the aud­it­ors being on site for I week fol­lowed by I week in office for com­ple­tion, with the tar­get estab­lished of accounts being signed at the Audit and Risk Com­mit­tee on 12^th June.

TABLE re Budget and pro­jec­ted out­turn (Core activ­it­ies only)

2019⁄20 Budget fore­cast	2019⁄20 pro­jec­ted out­turn	Vari­ance
£,000s	£,000s	£,000s
Total income	4,980	5,961	+981
Less cap­it­al allocations	(60)	(70)	-10
Net income	4,920	5,891	+971
Expendit­ure
Core budgets	3,805	3,834	+29
Oper­a­tion­al plan (less for­ward phasing)	1,148	2,037	+889
Expendit­ure against income for year	4,953	5,871	+918
Under/(over) spend	(33)	20	+53

CAIRNGORMS NATION­AL PARK AUTHORITY

Fin­ance & Deliv­ery Com­mit­tee Paper | 06/03/2020

1. The ¹⁹⁄₂₀ budget presen­ted to the Board in March included a ​“planned” defi­cit of £33,000, the res­ult of late repor­ted increased pen­sion costs, res­ult­ing in the £146,000 re-pro­fil­ing of the budget. In year addi­tion­al grant-in-aid of £117,000, approx­im­ately 80% of the addi­tion­al pen­sion cost, was awar­ded and received in the Feb­ru­ary grant- in-aid draw down.

2. While the cur­rent pro­jec­tions show an under­spend of £20,000 we will con­tin­ue to work towards break­even or as close as pos­sible to break even on resource and cap­it­al spend without impact­ing the deliv­ery of the Oper­a­tion­al Plan objectives.

3. The under­spend is, in part, attrib­ut­able to a pos­it­ive move­ment in the required pro­vi­sion for staff bene­fits (the assessed value of staff flexi­time cred­it and leave car­ried for­ward that is to be taken in the year ahead) which has reduced by almost £5,000, cre­at­ing a net under-spend of this value from this account­ing pro­vi­sion (non-cash) adjustment.

Daniel Ral­ph 24 Feb­ru­ary, 2020 danielralph@​cairngorms.​co.​uk