MPA support organisation outturn 2000/1 and budget 2001/2

Report: 6
Date: 21 June 2001
By: Treasurer

Summary

This report sets out the final out-turn position for the MPA Support Organisation/Internal Audit for the financial year 2000-01. An overspending of £67,000 (1.6 per cent) resulted. Application of £67,000 reserves held specifically for the high one-off setting up costs in the first year has been made.

A. Recommendation

Members note the report.

B. Supporting information

Forecast Outturn 2001/2

1. This report sets out the final position, subject to audit, showing forecast actual expenditure compared to the 2000-01 budget for the MPA Support Organisation and for Internal Audit. The opportunity is also taken to show the previous forecast presented to the 19 April 2001 meeting of the committee (Human Resources Committee - MPA Support Organisation - Budget Monitor - 19 April 2001).

2. The final position shows an overspend of £0.067 million against the budget of £4.098 million (as is shown in the table overleaf). As reported to the April meeting of the Committee the Treasurer was considering the use of the balance sheet reserve to support one-off costs. While these set up costs are in excess of the overspend of £97,000 shown for the MPA Support Organisation overleaf, it is proposed to link the allocation to £67,000 reflecting the net overspending on the combined MPA Support Organisation and Internal Audit.

3. The significant areas of variance partly reflects the difficulties that were faced in developing a budget for a new organisation. The Members Allowance budget was not adequate (being roughly half the maximum amount that can be claimed in any one year and also assuming that the MPA would not fully begin its business until September). The budgets for office supplies (including furniture and equipment) proved to be underestimates of the actual costs. Conversely, the rental provision has proved to be overprovided. The Internal Audit budget has showed an under spending primarily a consequence of the difficulties that have been faced in recruitment during the year.

*including cross-charging costs of £0.4 million from MPS.
The Internal Audit internal recharge (£1.472 million) to customers has been excluded from this analysis.

Budget 2001/2 and outlook

4. The financial year 2001-02 has been one of considerable change. Substantial set-up costs were incurred in developing the main support organisation. New budgets were originated and monitoring and reporting arrangements commenced both internally and to the Committee. With the experience of the first nine months the MPA Management Team has now agreed realignment of budgets heads to reflect a more accurate allocation, within the constraint of the overall budget allocated. In addition the opportunity is taken to reflect responsibility for consultative groups. Monitoring arrangements for these, presently with the MPS will be transferred during the course of the next six months. Additionally, the MPA has responsibility for corporate budgets relating to the Efficiency and Effectiveness reviews, External Audit and the contingency provision. The table below sets out the agreed 2001/2 budget for member's information.

5. Regular quarterly monitoring of the forecast outturn will be presented to Committee and the first report for the 2001-02 budget will be to the September meeting of the Committee.

C. Financial implications

The experience of budget monitoring for 2001-02 has informed the budget realignment for 2001-02. At the present time expenditure is expected to be contained within budget for this year.

D. Background papers

• Central Corporate Budget files

E. Contact details

The author of this report is Ken Hunt.

For information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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