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REPORT OF THE PRINCIPAL INSPECTION OF STRATHCLYDE FIRE BRIGADE 2003
EXTERNAL AUDITOR
The following section was prepared by the certifying auditor of Strathclyde Joint Fire Board, appointed by the Accounts Commission.
Financial Management
46. Strathclyde Fire Board's financial operations are governed by its financial regulations, standing orders relating to contracts, and a scheme of delegated functions to members and officers, which were all adopted in April 1996. These documents are subject to regular review with the last review taking place in June 2003. Audit Scotland's review of the Board's financial systems in 2002/2003 indicated that the internal control systems were satisfactory and there were no areas of major concern. The annual accounts received an unqualified auditor's opinion.
47. The Board is funded by 12 constituent authorities, representing the area covered by the former Strathclyde Regional Council, and Strathclyde Fire Brigade is the largest brigade in Scotland, with net budgeted expenditure of 106m in 2002/2003. Payroll costs at 94m account for 80.5% of gross budgeted expenditure.
48. It is the Board's practice to limit its net budget (excluding capital charges) to the aggregate of the Grant Aided Expenditure (GAE) assessment for fire services afforded to the constituent authorities by the Scottish Executive. The Board does not produce detailed budgets on a three-year basis, although, as it limits budgets to GAE, it can forecast the available funding over a three year period from the Scottish Executive's comprehensive spending review. The Board has, however, prepared a 10-year projection of anticipated firefighters pension costs.
49. Although the Board does not have a strategic plan, the documents First Impressions and its follow-ups Beyond First Impressions and First Impressions _ Future Progress set out in general terms the Board's strategic objectives and progress in achieving these objectives. In First Impressions the Board states that all improvements to services will be resourced from existing funding, but there is no financial information provided to support this assertion. In addition there is no formal link between these strategic documents and the budgetary process.
50. Budgeted expenditure per head of population of 42.9 for 2002/2003 (excluding capital charges), as disclosed in Rating Review which is published by the Chartered Institute of Public Finance and Accountancy (CIPFA), is in line with the Scottish average of 42.2.
51. The Board has a comprehensive budget monitoring system that includes monthly monitoring reports to budget holders and the Management Team. Most heads of expenditure are devolved to budget holders with the exception of wholetime firefighters, because Commands have no control over the recruitment of staff in this sector. Overtime payments for wholetime firefighters are devolved, however, as Commands are in a position to manage overtime where operational incidents allow.
52. Revenue monitoring reports are also submitted to all meetings of the Board. The reports to the Board and the Management Team detail explanations for variances, but there is no formal process for minuting significant variances to ensure that they are subject to review at subsequent meetings. The Firemaster and the Director of Finance conduct a joint year end review of overspends with the appropriate officers. Revenue and capital expenditure is also subject to review by a member scrutiny group.
53. Prior to 2002/2003 the Board had no powers to carry forward general balances and consequently the accumulated underspend on its operations since 1996 was shown in the balance sheet as being due to the constituent authorities. The Police and Fire Services (Finance) (Scotland) Act, however, which received Royal Assent on 5th December 2001, has given Police and Fire authorities the power to carry forward general balances, with an effective date of 31 March 2002. Since its inception the Board has maintained expenditure within budget limits and the cumulative revenue balance carried forward at 31 March 2003 was 2.349m.
54. The 12 constituent authorities received additional funding of 1.358m in 2002/2003 from the Scottish Executive for firefighters pensions. This additional funding was subsequently transferred to the Board and has been earmarked for firefighters pensions within the above balance of 2.349m.
55. As part of a strategic decision to re-equip all uniformed staff at a cost of 3.1m the Board appointed a Personnel Protection Equipment officer in August 2003 to manage the process. This officer is responsible for preparing a database which will record information in relation to costs and health and safety.
56. The Board annually submits statutory performance indicators to the Accounts Commission and provides performance information to CIPFA for provision in their annual publication of fire service statistics. The Board is also extensively involved in the development of local performance indicators under the auspices of the Chief and Assistant Chief Fire Officers Association (CACFOA).
Capital Finance
57. The Board's balance sheet at 31 March 2003 discloses the value of land and buildings at 110.1m (85%) out of total fixed assets valued at 128.7m. An asset register is maintained in accordance with the capital accounting rules.
58. Capital expenditure in 2002/2003 was 8.6m with 5.0m being spent on land and buildings and 3.6m on vehicles, communications, and information technology.
59. The Board prepares a three-year capital programme. A Capital Monitoring Group, chaired by the Director of Finance, and whose membership is comprised of budget holders, is responsible for monitoring capital expenditure. This group's meetings are arranged to coincide with the Board's meeting cycle and reports are submitted to the Board.
60. Responsibility for monitoring capital expenditure was transferred from the Director of Operations to the Director of Finance with effect from 1 April 2003.
61. A detailed history of all properties, including surveys, is maintained to ensure that investment in properties is prioritised on the basis of need and in line with the Board's policy objectives. Continuous assessment of vehicles, plant and equipment is made through routine servicing arrangements, periodic inspection and testing requirements.
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