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Explanation of the Accounts Pack
Although the pack looks daunting and is fiddly to produce accurately, the principles involved are actually relatively simple and should be easy to follow.
There are 12 separate component schedules of which the first 7 are closely interlinked. Schedules 8 and 9 provide supporting detail with totals that can be seen on the earlier schedules. Schedule 10 provides an analysis of the reserves held and the uses for which a proportion has been earmarked (but not firmly committed). Schedule 12 provides a list of the fixed assets for which the Parish Council is responsible. Five of the Schedules contain the most important financial information.
a) The best place to start is the Summary of Income and Expenditure (Schedule 5). The third column summarises payments and receipts by category. Some items received and paid during the period properly relate to earlier or later periods. The next three columns represent the adjustments required to correct this. The right hand column gives the adjusted figures, which represent the income and expenditure actually attributable to the current year. It is these figures that are used in the Accounting Statement, sometimes referred to as the Annual Return (Schedule 1). It is important to note that all expenditure is shown in the schedules net of VAT, because, as a local government body, the Parish Council is able to reclaim all VAT that is paid. We do this annually, immediately after the end of the financial year.
b) The Accounting Statement (Schedule1) is in a format laid down in legislation. It shows the movements in the financial reserves of the Council during the year. It starts with the balance brought forward from last year, adds income, deducts expenditure (both taken from the right hand column of Schedule 5), leaving a closing total of reserves. There is a requirement to split out and show separately just two numbers from income and expenditure (the precept income and staff costs).
There is one extra line at the bottom, namely the cost of fixed assets owned by the Council. These are listed in Schedule 12.
The decision as to whether or not to include an item as a fixed asset is basically dependent on whether or not we consider ourselves responsible for its maintenance,
c) The Explanation of Variances (Schedule 4) is used to explain major differences in income and expenditure from one year to the next .
By separating out projects which are obviously one off in character, we can demonstrate that recurrent income and expenditure is not subject to material variances from year to year. This in turn makes it a lot easier to set the budget sensibly.
d) Reserves and Allocations (Schedule 10) provides details on amounts set aside to spend on one off projects. We also show here the amount we are holding in trust for the Balscote Ironstone Mining Action Group . In effect, the total shown on this schedule simply earmarks a proportion of the reserves for non-recurrent future spending. It is important to note that an allocation does not commit the Council to actually undertake this spending unless and until a resolution is passed to do so.
e) The Fixed Assets Register (Schedule 12) provides a full list of the assets for which the Council is responsible. The total is used to complete the fixed assets line on the Accounting Statement (Schedule 1).
Michael Robarts
April 2026
Explanation of the Accounts Pack
Although the pack looks daunting and is fiddly to produce accurately, the principles involved are actually relatively simple and should be easy to follow.
There are 12 separate component schedules of which the first 7 are closely interlinked. Schedules 8 and 9 provide supporting detail with totals that can be seen on the earlier schedules. Schedule 10 provides an analysis of the reserves held and the uses for which a proportion has been earmarked (but not firmly committed). Schedule 12 provides a list of the fixed assets for which the Parish Council is responsible. Five of the Schedules contain the most important financial information.
a) The best place to start is the Summary of Income and Expenditure (Schedule 5). The third column summarises payments and receipts by category. Some items received and paid during the period properly relate to earlier or later periods. The next three columns represent the adjustments required to correct this. The right hand column gives the adjusted figures, which represent the income and expenditure actually attributable to the current year. It is these figures that are used in the Accounting Statement, sometimes referred to as the Annual Return (Schedule 1). It is important to note that all expenditure is shown in the schedules net of VAT, because, as a local government body, the Parish Council is able to reclaim all VAT that is paid. We do this annually, immediately after the end of the financial year.
b) The Accounting Statement (Schedule1) is in a format laid down in legislation. It shows the movements in the financial reserves of the Council during the year. It starts with the balance brought forward from last year, adds income, deducts expenditure (both taken from the right hand column of Schedule 5), leaving a closing total of reserves. There is a requirement to split out and show separately just two numbers from income and expenditure (the precept income and staff costs).
There is one extra line at the bottom, namely the cost of fixed assets owned by the Council. These are listed in Schedule 12.
The decision as to whether or not to include an item as a fixed asset is basically dependent on whether or not we consider ourselves responsible for its maintenance,
c) The Explanation of Variances (Schedule 4) is used to explain major differences in income and expenditure from one year to the next .
By separating out projects which are obviously one off in character, we can demonstrate that recurrent income and expenditure is not subject to material variances from year to year. This in turn makes it a lot easier to set the budget sensibly.
d) Reserves and Allocations (Schedule 10) provides details on amounts set aside to spend on one off projects. We also show here the amount we are holding in trust for the Balscote Ironstone Mining Action Group . In effect, the total shown on this schedule simply earmarks a proportion of the reserves for non-recurrent future spending. It is important to note that an allocation does not commit the Council to actually undertake this spending unless and until a resolution is passed to do so.
e) The Fixed Assets Register (Schedule 12) provides a full list of the assets for which the Council is responsible. The total is used to complete the fixed assets line on the Accounting Statement (Schedule 1).
Michael Robarts
April 2026