Scottish Government

SCOTTISH CONSOLIDATED FUND RECEIPTS PAYMENTS ACCOUNT
1 APRIL 2002 To 31 MARCH 2003

STATEMENT OF ACCOUNTABLE OFFICER'S RESPONSIBILITY

1. Section 19 (2) of The Act requires the Scottish Ministers to prepare and lay before Parliament an account showing the receipts into and payments out of the Scottish Consolidated Fund. The accounts are prepared on a cash basis and must properly present the Scottish Consolidated Fund's transactions for the period 1 April 2002 to 31 March 2003.

2. The responsibilities of the Accountable Officer, including his responsibility for the propriety and regularity of the public finances and for the keeping of proper records, are set out in the Memorandum to Accountable Officers issued by the Principal Accountable Officer to each Accountable Officer.

STATEMENT ON INTERNAL CONTROL

1. As Accountable Officer, I have responsibility for maintaining a sound system of internal control that supports the achievement of the policies, aims and objectives, set by the Scottish Ministers for the Scottish Consolidated Fund (the Fund), whilst safeguarding the public funds and assets for which I am personally responsible, in accordance with the responsibilities assigned to me.

2. The system of internal control is designed to manage rather than eliminate the risk of failure to achieve those policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness.

3. The system of internal control is based on an ongoing process designed to identify the principal risks to the achievement of the Fund's policies, aims and objectives, to evaluate the nature and extent of those risks and to manage them effectively, efficiently and economically. This process has been in place for the year ended 31 March 2003 and up to the date of approval of the annual accounts and accords with guidance from the Scottish Ministers.

4. The operation of the Fund is governed by the provisions of the Scotland Act 1998 and the Public Finance and Accountability (Scotland) Act 2000 (PFA Act) which set out the conditions for payments to be made out of the Fund and sums to be paid into the Fund.

5. The Fund uses and relies on the core financial management systems of the Scottish Executive to carry out its accounting and payment functions. I have received satisfactory assurances from the Principal Finance Officer on the reliance of these central systems.

6. I have only limited control over receipts. In many cases the receipts are the responsibility of other Accountable Officers and my responsibility begins only when they are actually paid over to the Fund.

7. The following procedures to identify, evaluate and manage significant risks have already been implemented:

• Guidance on Risk Management has been prepared and issued by the Scottish Executive. The risks associated with the operation of the Fund have been identified and incorporation of these into a risk register together with the determination of a control strategy for each risk is in process.
• The Scottish Executive's internal auditors provide reports on the adequacy and effectiveness of the Fund's systems of internal control together with recommendations for improvement.

In the financial year 2002-03 the Fund has:

• revised and updated procedures to take account of recommendations from external and internal auditors

• regularly reviewed its processes to identify and keep up to date the risk register and related control strategies
• promoted good practice in risk management through awareness training
• ensured that there was a full risk and control assessment before reporting on the year ending 31 March 2003
• ensured that during the year staff have received regular training on the revised procedures and arrangements operating within the Fund

8. During financial year 2003-4 the Fund further plans to:

• continually review the procedures of the Fund to take account of any comments made by external and internal auditors and opportunities for improvement identified from operational activities
• review the operation of the funding drawdown procedures

9. My review of the effectiveness of the system of internal control is informed by the work of the internal auditors and my staff who manage the Fund and have responsibility for the development and maintenance of the internal control framework and by comments made by the external auditors in the management letters and other reports.

THE SCOTTISH CONSOLIDATED FUND RECEIPTS AND PAYMENTS ACCOUNTFOR THE PERIOD 1 APRIL 2002 to 31 MARCH 2003

The notes on pages 7 to 11 form part of these accounts.

NOTE 1

ANALYSIS OF RECEIPTS NOT AUTHORISED TO BE USED TO SUPPORT EXPENDITURE

As provided for in Section 64(3) of the Scotland Act 1998 (and certain other legislative provisions) all sums received by members of the Scottish Administration (and certain other bodies) are to be paid into the Scottish Consolidated Fund unless there are alternative statutory provisions. In practice, most of the receipts of the bodies concerned were authorised to be used to support expenditure under the Budget Act and the Budget Orders (see Note 2).

Scotland Act 1998 (Designation of Receipts) Order 2000 designates certain receipts (designated receipts) and provides that sums equivalent to these are to be paid to the Secretary of State, in practice for paying into the UK Consolidated Fund.

During the year 67.9m (2001/2002 85.2m) was paid to the Secretary of State for Scotland for onward transmission to the UK Consolidated Fund. A total of 429,000 received during 2001/2 was paid over to the Secretary of State during financial year 2002-2003.

NOTE 2

PAYMENTS AUTHORISED UNDER THE BUDGET ACTS

There have been three Budget Acts laid before and approved by the Scottish Parliament for the period of this account: The Budget (Scotland) Act 2002 as amended by The Budget (Scotland) Act 2002(Amendment) Order 2002 (SSI 2002/542) and The Budget (Scotland) Act 2002 (Amendment) Order 2003 (SSI 2003/157).

These Orders appropriate sums out of the Scottish Consolidated Fund for the financial year ending 31 March 2003 for the purposes of meeting expenditure in that year in connection with the functions for which expenditure is, by virtue of the Scotland Act 1998 and provisions made under it, payable out of the Fund during the year.

During 2001-2002 the payments authorised under the Budget Acts was 16,527,126,000 this is summarised below:

NOTE 3
AUDITOR GENERAL FOR SCOTLAND'S PENSION FUND

During the year Audit Scotland paid a total of 43,937.45 to the Fund in respect of the pension for the Auditor General for Scotland. The sum is paid to the Fund as the liability to pay any future pension will fall to Audit Scotland and be paid from their annual budget, which in turn will be funded by the Fund.

NOTE 4
JUDICIAL SALARIES
RECEIPTS AND PAYMENTS ACCOUNT
FOR THE PERIOD 1 APRIL 2002 to 31 MARCH 2003

NOTE 5
SUMMARY OF THE BALANCE HELD AT THE OFFICE OF HM PAYMASTER GENERAL

The balance on the General Reserve of the Scottish Consolidated Fund does not necessarily represent an amount available for appropriation by a Budget Act or other means as there may be sums due to the Scottish Executive or other funded bodies and/or sums due to the Scotland Office (now the Department of Constitutional Affairs) for onward transmission to the UK Consolidated Fund. In particular, non-domestic rates paid to and by Scottish Ministers are credited to or drawn from the Scottish Consolidated Fund and are accounted for in more detail in a separate non-domestic rating account. The net balance on non-domestic rate activities recorded in that account is partly reflected in the General Reserve of the Scottish Consolidated Fund and partly in balances with the Scottish Executive.

Since the end of the financial year 600m of the balance on the account at 31 March has been utilised by the bodies directly funded by the Fund, through a reduction in the sum drawn down from the Department of Constitutional Affairs. The Fund is continuing to monitor the level of the balances held.