1. General Notes
The following points should be applied throughout the return:
- Figures representing expenditure (debit amounts) should be entered as positive values and figures representing income (credit amounts) should be entered as negative values. For example, a surplus on the Income and Expenditure Account will be a negative value, whereas a deficit will be recorded as a positive value. All useable reserves balances (opening and closing) will be negative values.
- All figures should be entered in £ thousands, unless otherwise specified, and rounded to the nearest whole number.
- Figures should be based on authorities' audited accounts.
- The additional information sections of individual returns should be completed on a funding basis unless otherwise stated.
This return is closely aligned with SeRCOP - Recommended Standard Subjective Analysis and the Code of Practice on Local Authority Accounting. To avoid duplication, this guidance often refers directly to the SeRCOP guidance. Local authorities should refer to both sets of guidance when completing the return to ensure that the returns are completed consistently, so that valid and reliable figures for Scotland can be obtained.
1.1 Completing the Return
All of the LFRs, with the exception of LFR 24, are completed in a single workbook. Please note that this workbook now also includes the CR Final return (see tab 'LFR CR'). The forms are linked together allowing easy navigation between forms that ask for related information. The front page collects contact details for each LFR and the certification from the Director of Finance.
As in past years, not all LFRs are required from all authorities. Once you select your local authority from the drop-down list on the front page, the tabs you are required to fill in are then highlighted. To ensure the LFR figures reconcile to the local authorities' accounts, authorities are advised to complete LFR A0 first, followed by LFR 23. LFR 00 should also be completed before service-level LFRs to ensure control totals have been populated.
Cell H3 in each return is a drop-down box allowing respondents to mark individual returns as complete. This can be used to aid authorities when LFRs are being completed by a number of different staff members. Their use is entirely optional.
Completed returns should be emailed to firstname.lastname@example.org by no later than the 10 November 2021. Where possible, copies of local authorities' audited annual accounts will be sourced from local authorities' websites. However, you may be required to provide a copy of your accounts where it has not been possible for a copy to be downloaded.
Should you have any queries on the LFRs, please email email@example.com.
1.2 Colour Coding and Automatic Validation Checks
The following colour coding has been applied to the return:
Plain white cells: data is to be entered
Light grey cells: data has been automatically populated, either from another cell in the return or from prior years' data. If the cause of an error is not clear, it may be that a different part of the return needs to be completed first.
Light blue cells: subtotals
Dark blue cells: totals
Red cells: an automatic validation check has been flagged. Details of the broad types of validation checks are given below:
1. Control Totals compare totals in service-level LFRs against corresponding cells in LFRs A0, CR and 00. These checks are flagged when a figure does not match its control total, i.e. the difference column does not equal zero.
2. Pass / Fail validation checks test the figure entered against a specific set of validation criteria, for example ensuring figures sum to the appropriate total or the correct signage has been used.
3. Comparisons to prior years' data are applied to gross expenditure and income on a funding basis, and net revenue expenditure in Rows 28 to 31 of the service-level LFRs. Significant changes (those over £500k and 10%) will be flagged red and explanations for these changes should be provided in the relevant comments box.
'Failed Validation Check' Count: This is shown in cell E3 of each LFR, and in Column F on the front page, to assist tracking of checks across the workbook. The count reflects the total number of validation checks of type 1 and 2, as set out above, that have failed within each LFR. Ensure all data has been entered in LFR A0, CR, 00 and the relevant service-level LFR before attempting to address these errors. Returns containing failed validation checks on the Front Page tab will not be accepted and will be returned to the local authority for review.
This return also contains cell specific validation to ensure figures are entered as whole numbers and with the correct signage.
1.3 General Subjective Analysis Guidance
The Subjective Analysis used throughout the LFRs is based upon CIPFA's SeRCOP – Recommended Standard Subjective Analysis. This document only provides guidance where the LFRs deviate from SeRCOP. Local authorities should refer to CIPFA's SeRCOP Service Expenditure Analysis for Scotland for more detailed guidance on the service expenditure analysis required in the LFRs.
Revenue Contributions to Capital (RCC): RCC reflects capital expenditure on capital assets which was met directly from the service revenue within the current year. It equates to capital funded from current revenue. Include any capital expenditure charged to revenue for PPP / PFI schemes.
RCC is no longer included in the LFR gross expenditure calculation, but is accounted for in the statutory adjustments in LFR A0. However, RCC is still used in some measures of gross expenditure, such as for the Local Government Benchmarking Framework (LGBF). Therefore, RCC is still required at service level (Row 77 of LFR 00) and for specified subservices (Row 36 of LFRs 01, 02, 03, 05, 06 and 07).
Third Party Capital Projects funded from Capital Grant: Subject to the conditions set out in any capital grant, a local authority may be able to fund third party capital expenditure, either through direct expenditure or the provision of a grant. Third party capital expenditure includes that of other local authorities.
The element of capital grant which was paid out to fund third party capital projects should be recorded as service income (specifically in Rows 49 and 50 in LFR 00). The corresponding grant or direct payment should then be treated as service expenditure, and these figures are pre-populated in Row 32 in LFR 00, based on figures recorded in Rows 49 and 50.
Further guidance on the accounting treatment of capital grants and contributions can be found in Local Government Finance Circular 3/2018.
1.4 Scottish Welfare Fund
There are two types of grants in the Scottish Welfare Fund (SWF):
- Crisis Grants: provide a safety net when someone experiences a disaster or emergency situation, such as a fire or flood and there is an immediate threat to health and safety.
- Community Care Grants (CCG): to enable people to live independently or continue to live independently, preventing the need for institutional care. A CCG may also be able to help a family facing exceptional pressure.
Grants should be recorded against the service area that best describes its purpose according to SeRCOP guidelines. LAAP Bulletin 98 in 2013-14 (paragraph 53 onwards) provides additional guidance and recommends the following initial treatment of SWF grants:
- Crisis grants should be recorded in LFR 07 under economic development;
- CCGs should be recorded in LFR 03 against the relevant client group and community-based service.
As the SWF grant can be used for a wide range of services, authorities are free to record grants under other service headings if they believe that it better fits the purpose of the grant.
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