Scottish Government

Notes to the Accounts

1. Accounting Policies

In accordance with the Accounts Direction issued by Scottish Ministers under section 19(4) of the Public Finance and Accountability (Scotland) Act 2000 these accounts have been prepared in compliance with the Government Financial Reporting Manual, which follows generally accepted accounting policies in the UK to the extent that it is meaningful and appropriate in the public sector context. The particular accounting policies adopted by SWIA are described below.
They have been applied consistently in dealing with items considered material in relation to the accounts.

1.1 Accounting Convention

The accounts have been prepared under the historic cost convention modified to account for the revaluation of fixed assets, at their value to SWIA by reference to their current costs, where such re-valuation is considered material.

1.2 Continuing Activities

The results of the SWIA Operating Cost Statement derive from operating activities, all of which are continuing.

1.3 Fixed Assets

Fixed assets comprise office and IT equipment. These are capitalised at their cost of acquisition and installation. Office and IT equipment are not revalued on the grounds that their value is not material.

The threshold for capitalising tangible fixed assets is £1,000. Office and IT equipment include individual assets whose costs fall below the threshold, but as they are of a similar nature they are grouped together and capitalised.

1.4 Depreciation

Provision for depreciation is made to write-off the cost of fixed assets on a straight-line basis over the expected useful lives of the assets concerned. The expected useful lives are as follows:

1.5 Cost of Capital

A charge reflecting the cost of capital utilised by SWIA is included in the operating statement. The charge is calculated on the average value of fixed assets and working capital held during the year at the real rate set by HM Treasury (currently 3.5% per annum).

1.6 Value Added Tax

SWIA accounts for VAT in line with normal practice as amended by contracted-out rules applicable to government departments. Operating Costs are stated net of VAT where VAT is recoverable by SWIA.

SWIA is registered for VAT as part of the Scottish Government, which is responsible for recovering VAT from HM Revenue & Customs on behalf of SWIA.

1.7 Pensions

Past and present SWIA employees are covered by the provisions of the Principal Civil Service Pension Scheme ( PCSPS) which are reported in the Remuneration Report and in Note 2.

Full superannuation costs are an expense of SWIA at rates determined by HM Treasury.

1.8 Operating Income

Operating income is credited to the Operating Cost Statement on an accruals basis.

1.9 Leases

From the 2005-06 financial year, SWIA leases buildings in Edinburgh and Glasgow. These leases are operating leases and the rentals are charged to the Operating Cost Statement on a
straight-line basis over the term of the lease.

1.10 Going Concern

The financial statements for the year to 31 March 2008 show a deficit on the general fund of £258,000. This has arisen as a result of the requirement to account for the activities of SWIA on an accruals basis, whilst recording funding from the Scottish Government as they arise. There is no risk to SWIA's financial position as a result of these accounting requirements, and these financial statements have been prepared on a 'going concern' basis.

1.11 Date on which financial statements are authorised for issue

The Annual Report and Accounts are authorised for issue on the date they are signed by the external auditor.

2. Staff Costs and Numbers

2.1 Staff costs during the year were:

Other pension costs include back-dated employer superannuation contributions for fixed-term appointment sessional inspectors not previously included as staff. The amount involved is £106k (2006-07 £nil).

2.2 The average number of persons employed during the year was:

The average number of staff in 2007-08 includes 18 fixed-term appointment sessional inspectors not previously classified as staff.

2.3 Pensions

The Principal Civil Service Pension Scheme ( PCSPS) is an unfunded multi-employer defined benefit scheme but SWIA is unable to identify its share of the underlying assets and liabilities. The scheme actuary valued the scheme at 31 March 2007. Details can be found in the resource accounts of the Cabinet Office: Civil Superannuation www.civilservice-pensions.gov.uk.

For 2007-08, employer's contributions of £474,728 (2006-07 £356,514) were payable to the PCSPS at one of four rates in the range 17.1% to 25.5% of pensionable pay, based on salary bands. The scheme's actuary reviews employer contributions every four years following a full-scheme valuation. (The rates will be changing with effect from April 2009.)

The contribution rates are set to meet the cost of the benefits accruing during 2007-08 to be paid when the member retires, and not the benefits paid during this period to existing pensioners. Further information on pension arrangements is contained in the remuneration report on page 21.

3. Other Administration Costs

*No other services were supplied by Audit Scotland during the period ended 31 March 2008.

4. Income

5. Fixed Assets

6. Debtors

7. Creditors

8. Leasing Commitments

At 31 March 2008, SWIA was committed to making the following payments during the next year
in respect of operating leases:

9. Movements in General Fund

10. Related Party Transactions

SWIA is an executive agency of the Scottish Government. During the year SWIA had a number of transactions with government departments and bodies.

During the year the managerial staff and board members have not undertaken any material transactions with SWIA.

11. Capital Commitments and Contingent Liabilities

There were no capital commitments or contingent liabilities existing at the year end.