CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper 3 22/02/19

CAIRNGORMS NATION­AL PARK AUTHORITY

FIN­ANCE & DELIV­ERY COMMITTEE

FOR DIS­CUS­SION

Title: FIN­ANCE MON­IT­OR­ING: 10 MONTHS TO 31 JANU­ARY 2019

Pre­pared by: Daniel Ral­ph, Fin­ance Man­ager Dav­id Camer­on, Dir­ect­or of Cor­por­ate Services

Pur­pose

To present a sum­mary review of income and expendit­ure for the 10 months to 31 Janu­ary, 2019, fol­low­ing on from the last mon­it­or­ing report which covered the 6 months to 30 Septem­ber, 2018, to the Fin­ance & Deliv­ery Committee.

Recom­mend­a­tions

The Fin­ance & Deliv­ery Com­mit­tee is reques­ted to: a) Note the res­ults of the 6 months to 31 Janu­ary 2019; and b) Note the pos­i­tion on pro­jects in same period.

Exec­ut­ive Summary

1. The main report to the Com­mit­tee is con­tained in Annex 1. This report cov­ers the 5 main com­pon­ents f the Authority’s oper­a­tions — Core and Oper­a­tion­al Plan and pro­jects: LEAD­ER, the Tomin­toul & Glen­liv­et Land­scape Part­ner­ship (T&GLP), Great Place Badenoch (GPB) and the Caper Frame­work (CF).

2. The con­sol­id­ated pos­i­tion can be derived at any time, not solely at month ends, and is com­pared with the budget fore­cast for the year to assess pro­gress towards the planned out­turn for the fin­an­cial year. This present­a­tion can be expan­ded to cov­er any oth­er sig­ni­fic­ant extern­ally fun­ded pro­grammes which need to be accoun­ted for sep­ar­ately to the Authority’s income and expenditure.

3. Annex 2 is the ana­lys­is of the Oper­a­tion­al Plan by Theme, show­ing both expendit­ure (actu­al and com­mit­ted) and any attrib­ut­able income.

4. Any adverse vari­ances 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.

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper 3 22/02/19

1. Pos­it­ive vari­ances will be repor­ted as + £x,xxx and neg­at­ive as — £x,xxx.

Over­view

Oth­er Income

1. Oth­er income to 31 Janu­ary was £107,600 and includes the fol­low­ing: a) Grants- Sus­trans £40,000 b) Ex NPP LLP £1,400 c) Plan­ning fees £65,400 d) RBS CC rebate £800

2. The share of plan­ning fees due from the loc­al Author­it­ies with­in the Nation­al Park bound­ar­ies for the 6 months to 31 Decem­ber was £34,500. The fees for the month 31 Janu­ary was £1,723 (recog­nised in Feb­ru­ary) and will be invoiced at the end of June. Fees for Feb­ru­ary and March are expec­ted to be modest.

CORE Activ­it­ies

Board and staff costs

1. Board fees and staff costs are broadly in line with expect­a­tion for the 10 months, with addi­tion­al sav­ings on man­aging absences/​leavers.

Oth­er Board and staff costs

1. Oth­er board and staff costs are in line with expect­a­tions for the 10 months and there are no mater­i­al vari­ances to report.

Facil­it­ies Costs

1. The fol­low­ing vari­ances are repor­ted at 31 Janu­ary: a) Rent and rates for the new build: while the new rent for the offices has been accrued billing is in arrears. Sim­il­arly, while the High­land and Islands Valu­ation Office has now began to assess the rate­able value of the new build­ing, pro­vi­sion has been made for any fur­ther rates to be raised in the year. b) Interi­or repairs + £9,000: repair sched­ule run­ning behind as emphas­is has been on snag­ging in the new build, with repair work in ​“old” build­ings cur­rently underway.

IT and Pro­fes­sion­al Costs

1. The fol­low­ing vari­ances are repor­ted at 31 Janu­ary: a) GIS — £12,300: GIS activ­ity and work anti­cip­ated to be placed with an extern­al con­tract­or has been less than expected.

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper 3 22/02/19

b) Intern­al audit fees + £5,000: due to pro­file of work car­ried out in year to date.

Oper­a­tion­al Plan

1. Con­ser­va­tion and Land Man­age­ment are now repor­ted intern­ally as sep­ar­ate ser­vices but will repor­ted on as one ser­vice for stat­utory report­ing as they con­tin­ue to work closely in deliv­er­ing priorities.

2. Actu­al expendit­ure incurred to 31 Janu­ary fol­lows nor­mal expect­a­tions and prac­tice com­pared to pri­or years’ spend pro­files. Oper­a­tion­al Plan spend is his­tor­ic­ally high­er in the second half of the fin­an­cial year and notice­ably high­er in the last 3 months of the year.

3. Spe­cif­ic ref­er­ence has to be brought to the appar­ent over­spend on Cor­por­ate ser­vices. The suc­cess­ful Euro­parc 2018 con­fer­ence has yet to be fully recon­ciled with fin­an­cial inform­a­tion to be provided by the events man­age­ment com­pany which was hot avail­able at the time of pre­par­a­tion of this report. Full pro­vi­sion has been made for the likely costs of dir­ect Board elec­tions which are due to take place at the end of March 2019.

4. Income attrib­ut­able to the Oper­a­tion­al Plan is £239,400:

Lead­er recov­ery — The Big Week­end £10,100 Lead­er recov­ery — Volun­teer Cairngorms £16,800 Lead­er recov­ery — Youth Mani­festo £20,700 Rap­tor Track­er con­tri­bu­tion from SNH £18,200 Con­tri­bu­tion to reprint­ing of leaf­lets £1,000 Euro­Parc Con­fer­ence income £89,300 Developer Con­tri­bu­tions £83,300

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. A pre­lim­in­ary alloc­a­tion of office exten­sion costs, treated as an asset in the course of con­struc­tion, has been car­ried out and this is sub­ject to a fur­ther review when the final costs to com­plete are agreed with the Reidhaven Estate. Cur­rent indic­a­tions are that the non­cash alloc­a­tion will be exceeded and the review will con­sider wheth­er any cost cap­it­al­ised, on all tan­gible and intan­gible assets, can be jus­ti­fied being expensed in year. The policy of cap­it­al­ising expendit­ure in excess of £500 will also be reviewed for ¹⁹⁄₂₀ and the threshold pos­sible increased.

Grant-in-Aid

1. Resource (R DEL): resource grant in aid has been drawn down in line with the planned draw­down (£3,835,000 to date from total annu­al budget of £4,565,000). The full alloc­a­tion will be drawn down in full as profiled.

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper 3 22/02/19

1. Cap­it­al (C DEL): cap­it­al grant in aid has been drawn down in full as ori­gin­ally pro­filed (£200,000).

Cap­it­al Spend

1. This was pre­vi­ously flagged as a red RAG and as noted in Non-cash above the alloc­a­tion between cap­it­al grants and cap­it­al spend will be reviewed without effect­ing operations.

Pro­jects

Tomin­toul & Glen­liv­et Land­scape Partnership

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

Quarter ended £ Received 30 June 68,170 11 08 18 30 Septem­ber 77,249 05 12 18 31 Decem­ber 93,315 o/​s

1. Con­tri­bu­tions from the 3 main part­ners have been received, £50,000 each from CNPA, Crown Estate Scot­land and The Moray Council.

2. Fund­ing for ¹⁸⁄₁₉ of £50,000 from HIE will be in April.

3. Activ­ity so far has been slower than expec­ted so far and will now accel­er­ate as work com­mences on the Blairfindy, Scalon and Access pro­jects. This will put pres­sure on cash flow in the 2^nd and 3^rd quarter of ²⁰¹⁹⁄₂₀.

4. The pro­jec­ted spend for the pro­jects is to be repro­filed in Octo­ber to take account of pro­ject slip­page and revised phas­ing and scope of indi­vidu­al projects.

LEAD­ER

1. All claims for pro­ject advances and admin­is­tra­tion costs are now made on the ​“LARCS” sys­tem. Pro­gress con­tin­ues to be made on claim reviews and pay­ments from Scot­tish Gov­ern­ment with the peri­od between load­ing a claim and review­ing shortening.

2. At 31 Janu­ary the ​“RAG” pos­i­tion on the LARCS sys­tem remains at ​“amber”. A great deal of pro­gress has been made in the last 4 months, as shown in the table below, in terms of claims reviewed by the LEAD­ER team in Edin­burgh and in sub­sequent pay­ments. At 31 Janu­ary, claims noted as due to CLAG are £14,927.56 (I his­tor­ic admin part claim and 3 pro­ject claims). The fol­low­ing table sum­mar­ising the pro­gress of all LARCs claims made in the fin­an­cial year to date:

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper 3 22/02/19

27.

	Admin costs claimed £	Pro­ject advances claimed £	Sus­pense £	Claims still to be made £	Total £
As at 01.04.18	26,93.07	234,216.59	6,041.89	170,985.93	438,037.08
Trans­fer		170,985.93		(170,985.93
Claimed	60,903.21	880,016.95	(6,319.64)		934,600.52
Still to claim				30,431.85	30,341.85
Received	(86,855.21)	(1,230,915.88)			(1,317,771.09)
As at 31.01.19	841.07	54,303.59	(277.75)	30,341.85	85,298.76

1. This table is now embed­ded in LEAD­ER report­ing and will form part of the audit evid­ence made avail­able to the extern­al aud­it­ors. Fur­ther, it has now been pos­sible to recon­cile pay­ments made from the LEAD­ER alloc­a­tion between the fin­an­cial records main­tained by the Author­ity and LARCS. The dif­fer­ence iden­ti­fied was due to a ​“back cap­ture” exer­cise car­ried out cent­rally which incor­rectly included claims pre SLA and omit­ted claims after the SLA. These dif­fer­ences have now been dis­cussed with the Edin­burgh Lead­er team.

2. The £841.07 is now flagged as due to LAG.

3. There are 2 claims (£30,431.85) still to be loaded due to a LARCS. The £54,303.59 rep­res­ents 8 claims of which 4 (£14,927.56) are flagged as due to LAG at the time pre­par­a­tion of this report.

Great Place Badenoch

1. This is a 3 year (to end by 3 March 2021) HLF pro­ject to con­serve and devel­op­ment the cul­tur­al her­it­age of Badenoch. The per­mis­sion to start was gran­ted in March 2018 and a pro­ject man­ager was in post in April. (The pro­ject man­ager is employed by Vol­un­tary Action Badenoch & Strathspey)

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

Quarter ended £ Received 30 Septem­ber 20,865 8 11 19 31 Decem­ber 13,147 7 02 19

Caper­cail­lie Framework

1. The Devel­op­ment Phase of the HLF pro­ject to con­serve the remain­ing Caper­cail­lie pop­u­la­tion in the Cairngorms was giv­en the per­mis­sion to stat by HLF on 28^th June and all dir­ectly employed staff are now in post. HLF will con­trib­ute fund­ing at a rate of 62.5%.

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

Quarter ended £ Received 30 Septem­ber 5,415 29 11 18 31 Decem­ber 27,800 07 02 19

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper 3 22/02/19

1. The first claim to HLF cov­ers the peri­od to 30 Septem­ber and was revised to £5,415.

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. A num­ber of tools are being developed to help man­age and bal­ance cash needs to identi­fy stress points. This mon­it­or­ing will be developed fur­ther and cash flow mod­els will be used for each com­pon­ent of the Authority’s activities.

3. The graph below sets out the cur­rent pro­jec­ted cash flow until 31 March 2019 with the cash pos­i­tion of each component’s RAG status shown. (Red, warn­ing; amber, neut­ral; green positive.)

Quarter ended…	March	June	Sept
CORE activ­it­ies	🟢	🟢	🟢
LEAD­ER	🟢	🟠	🟢
T&GLP	🟢	🟠	🟢
GPB	🟢	🟠	🟢
CF	🟢	🟠	🟢

The cur­rent pro­jec­ted cash bal­ances at the year-end are in line with those repor­ted at 31 March 2018.

Out­turn Pos­i­tion ²⁰¹⁷⁄₁₈

1. The vari­ance between the ¹⁷⁄₁₈ budget and out­turn for income and expendit­ure is as follows:

	Budget £	Out­turn £	vari­ance £
Oth­er income	(200)	(308)	+108
Board and staff costs	2,740	2,726	-14
Oper­a­tion­al Plan	994	1,358	+364
Oth­er Board and staff costs	206	216	-10
Facil­it­ies costs	296	272	-24
IT and professional	178	116	-62
Non-cash*	55	75	+20

• Out­turn excludes all pro­ject costs and recoveries
• Non-cash: £55,000 recog­nised in budget approved by Board and £ allowed by spon­sor­ing department.

CAIRNGORMS NATION­AL PARK AUTHOR­ITY Fin­ance & Deliv­ery Com­mit­tee Paper 3 22/02/19

Out­turn Pos­i­tion ²⁰¹⁸⁄₁₉

1. The inten­tion is still to fin­ish the fin­an­cial year at. All budget lines con­tin­ue to be mon­itored on a weekly basis, with close work­ing with Heads of Ser­vice with cost recov­er­ies iden­ti­fied, and vires between budget lines incor­por­ated into Man­age­ment inform­a­tion as early as possible.

Daniel Ral­ph danielralph@​cairngorms.​co.​uk Dav­id Camer­on davidcameron@​cairngorms.​co.​uk 12 Feb­ru­ary 2019