Financial Statement

* These are estimated figures (as at date of publication) and subject to change at the time of publication of the 2003 Annual Financial Statement (AFS).

Financial Overview

Total expenditure on capital and revenue services in 2003 amounted to €81.9m (2002 €90.4m). Of this €43.7m (2002 €42.8m) was spent on revenue services and €38.2m (2002 €47.6m) was spent on capital services. Both figures indicate a very high level of activity during the year and the €38.2m spent on capital services is an indication of the Council’s ongoing commitment to position Sligo and the North West region to have a good quality of physical, social and recreational infrastructure and a satisfactory range of ancillary services which both modern businesses and individuals require.

Prompt Payments Act

The council’s policy is to process payments in accordance with the provisions of the Act.

Financial Management System

The Government Publication “Better Local Government – A Programme for Change” was published in December 1996. Section 5 of the publication, which dealt with Finance, set out as one of its main objectives “The development of a Financial Management System (FMS)”. The Financial Management system is called “Agresso”. Significant progress has been made to date in this area as follows:

• Introduction of on-line purchase to pay module (April 2001).
• Introduction of Revenue collection system (Nov 2001).
• Introduction of Billing systems covering rents, rates, loans (May 2003).

All of the above projects were successfully implemented in Sligo County Council on the dates agreed with the Department of Environment Heritage and Local Government and the Local Government Computer Services Board.

An integral part of the FMS is asset valuation and balance sheets. The current objective is to have full balance sheet accounting as part of the Annual Financial Statement (AFS) for 2003. In order to achieve this the Historical Assets of Sligo County Council have been identified, quantified and valued.

The benefits of the move to balance sheet accounting will be to bring Irish local authority accounting into line with other European countries. It should also be noted that there is now a requirement to establish a National Public Property Register, which will contain details of all properties in the ownership of Government

Departments and other public bodies including local authorities. Commencing in 2003 the Annual Financial Statement (AFS) of county, city and town councils will include a balance sheet that will show all of the assets and liabilities of a local authority.

The previous financial system used by local authorities (prior to the new FMS) was perceived to be deficient in the following areas:

• It did not promote accountability in the use of assets
• Lack of control over certain assets and the non maintenance of certain asset registers
• All of the assets and liabilities of a local authority were not reflected in the AFS
• Lack of information on the level of assets employed in delivering services
• Did not reveal or quantify the level of potential liabilities (e.g. unfunded capital balances).

The anticipated benefits arising from balance sheet accounting are as follows:

• Provide a more transparent picture of all the assets and liabilities of a local authority.
• Provide greater control over the location and identity of assets
• Help to quantify the true costs of delivering services and the amount of capital employed
• Identify a link between ongoing costs to be met by a corresponding stream of income (i.e. housing loans)
• Having quantified the value of assets will help in the negotiation of a higher level of maintenance budget to maintain the asset in good working order
• Help to develop replacement policies and future cash flow requirements
• Promote a more efficient use of assets and assist in improving financial decisions re: making and setting of fees, Investment of surplus cash and disposal of surplus assets.

Therefore the 2003 AFS for Sligo County Council will be a document significantly more comparable to the Accounts of a private sector company in that they will contain an Income/expenditure account (similar to a Profit & Loss account) and a Balance Sheet with comprehensive notes supporting the financial information in both documents.