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FM 114
OPERATING PLAN (INCLUDING EFFICIENCY PLAN), ALLOCATIONS, OUTTURN FORECASTING AND OPERATING REPORT
1. The purpose of this FM is to outline the procedures for the production of the Operating Plan, the issue of the allocations, outturn forecasting and the production of the Operating Report. FM 103 describes the background and timetable for the Planning, Reporting and Bidding Cycle. OPERATING PLAN (INCLUDING EFFICIENCY PLAN) 2. The PPARC Operating Plan is based on the PPARC allocation as announced annually during October by the OST. The Operating Plan sets out the key objectives and the programme to be carried out by PPARC in fulfilling its mission and meeting these objectives.3. The effective production of the Operating Plan relies heavily on recognising responsibilities, adhering to deadlines, and good communication and interaction. Finance Division Planning and Budgeting (P&B) Group is responsible for the co-ordination and production of the Operating Plan. The completed Operating Plan is usually submitted to the OST during the later part of February each year. In order to meet this deadline it is necessary for all those participating in the production of the text and tables to be fully aware of their responsibilities and the agreed timetable. Following the receipt of instructions for submission from the OST, the P&B Group produce and circulate a comprehensive guidance note together with key dates for completion of the Operating Plan. The Director Programmes is the custodian of the master copy of the text and P&B Group hold the master copy of all financial tables. It is therefore important that any amendments to either text or tables are notified to the appropriate "owners". The P&B Group is responsible for preparing the Operating Plan for publication. 4. Responsibility for the production of the various components of the Operating Plan are allocated as follows:
5. The draft version of the Operating Plan is approved by Council at its meeting prior to the submission date to the OST. 6. The reproduction of the Operating Plan, including the design of the front and back covers, is carried out in-house by the Joint Reprographics Services (JRS). The P&B Group liaise with the JRS early in January to ensure a slot is made available for the work to be carried out within the agreed timescale. The printing costs are charged to Centre Code AFI for administration purposes and are covered by the central photocopying budget held by the Business Administration Group.7. Once the Operating Plan is complete, the P&B Group are in a position to commence work on preparation for the issue of provisional allocations (excluding carry-forward adjustments) to the Director Programmes, Director Administration, Director Strategic Planning and Communications and in parallel, the Directors at the UK ATC, ING and JAC. The figures used for the provisional allocation are those appearing in the current Operating Plan under year one. The provisional allocation text and table form part of the Letters of Delegation of Authority issued to the Directors by the Chief Executive during April of each year (FM 101 refers). 8. The text of the Letters of Delegation of Authority should inform the Directors of the total allocation for their particular Directorate/Establishment, highlight any particular issues of note and provide the date by which the first formal outturn forecast is required by the P&B Group. Directors are reminded that the expenditure should be monitored carefully and are advised that appropriate measures should be taken to ensure that allocations are not exceeded and any potential problems are brought to the attention of Finance Division as soon as possible. Directors also sign an annual assurance statement on internal control (DAASIC) which includes a section on financial control.9. The allocation table in the Letters of Delegation of Authority sets out the resources allocated for each main activity heading for the domestic and international programmes to be undertaken as well as programme management and administration, divided between staff and non-staff headings as appropriate. 10. Directors, in turn, may wish to sub-delegate some or all of their budget to members of the Directorate. For Swindon Office it is the responsibility of the P&B Group, in consultation with the Directors, to prepare the sub-delegation memoranda and tables for issue to the Swindon Office budget holders.11. Provisional allocations do not include adjustments in respect of over/underspends from the previous financial year. Adjustments may be made to the provisional allocations when the end of year reconciliation expenditure exercise has been completed during May. 12. It is possible that minor inter-allocation adjustments may be required by the budget holders throughout the year. These are formally notified to the P&B Group by the budget holder. The P&B Group make the adjustment, update the working allocation table held on the PLANET system 'G' drive and inform the budget holder of the action by means of a footnote on the appropriate budget holder's report. Establishments are informed of allocation adjustments by means of a letter or e-mail together with an updated allocation table. 13. Any adjustment to the overall in-year allocation figure is announced by the OST as part of the Winter Supplementary Estimates in September or the Spring Supplementary Estimates in January. 14. In order for Senior Management to keep abreast of the overall financial situation, it is essential that accurate forecasts are submitted to the P&B Group regularly and on time. Tight cash management demands that all budget holders produce comprehensive forecasts. The key element of the outturn report is that it should report the spend to date and forecast future expenditure on a line-by-line basis.15. The P&B Group provide budget holders with their first report early in July each year and monthly thereafter, usually by the 8th working day of the month. The first formal outturn forecasts are required by the P&B Group the second week of July and monthly thereafter, usually by the 14th working day of the month. A timetable of due dates is produced for all budget holders and the sites. As agreed at the PPARC Finance Officers meeting held on 18 November 1998, budget holders at the sites are asked to perform an in-depth review of their area quarterly for the first nine months of the financial year and monthly during the final quarter of each financial year. 16. The P&B Group is responsible for the production of the top level reports and management charts by 20th of each month for submission to the appropriate monthly senior management meeting.17. It should be noted that Treasury regulations allow for PPARC to carry-forward up to 5% of recurrent grant-in-aid from one financial year to the next. Of this, up to 2% may be funds received from the OST and the remaining 3% carried forward under the End of Year Flexibility scheme. For capital grant-in-aid, up to £2M or 5% can be carried forward, provided that it has not been paid out by OST. END OF YEAR REPORTING PROCEDURES 18. The final budget holders reports are produced as soon as the final payments for the year have gone through the bank and any final journal adjustments made by the accounting staff. This is usually by the 14th working day of April. The final budget holders reports and the top level management reports give the final spend position for the financial year against the final allocation position. 19. At a meeting between the P&B Group and the Swindon Office Directors, it is decided against which budgets the over/underspends are carried forward to the next financial year. As soon as the carry-forward exercise is complete, revised allocations (which include the agreed carry-forward figures) are issued to the Swindon Office Directors for sub-delegation to each budget holder within their Directorate. 20. The Operating Report is submitted in draft form to the OST by 30 June each year and a final version by the end of July. Submission dates are confirmed by the OST annually. The Operating Report compares the Operating Plan for the previous year against actual performance. The requirement is to report against both the financial plan and against milestone targets, recognising that many of the milestone targets in the Operating Plan are for the three year period of the Spending Review, so it is possible that reporting will be progress towards a milestone rather than achievement of it.21. The reproduction of the final version of the Operating Report follows OST approval and is in the same format as the Operating Plan adhering to the stipulated timetable. 22. The Operating Report is not 'approved' by Council, but copies of the final bound report are provided to each member. 23. Any queries concerning the content or interpretation of this FM should be referred to Paul Blackford, Head Planning and Budgeting, Finance Division, Swindon Office, tel: 01793 442062, e-mail: paul.blackford@pparc.ac.uk . Paul Blackford Last updated: 20 August 2001 |