Report cap gemini ernst and young review of mod cash management arrangements

REVIEW OF MOD CASH MANAGEMENT ARRANGEMENTS : Origin/Author Date 25 November 2003 Cap Gemini Ernst & Young UK PLC 76 Wardour Street London WIF OUU Phone +44 (0)20 7734 5700 Fax +44 (0)20 7297 3900 Referanen MOOCASH DECLASSIFIED 4. Definitions 5. Key Findings 6. Next Steps Appendix A Appendix B Appendix C © Cap Gemini Ernst & Young UK ple 2003 Reference MODCASH Version 1 Norenter 200s DECLASSIFIED The document reports a number of key findings against the terms of reference and offers some additional relevant findings. The report does not draw conclusions or make recommendations. The final section of the report suggests areas where additional work is required in order to move this study forward, 2. Terms Of Reference The following terms of reference have been referenced: "This review will be set up by the Head of the Government Accountancy Service and will be led independently of the government, but with the full involvement of Treasury and MOD officials. It will examine: • the quality and effectiveness of MOD's cash planning, monitoring and control within the Government's Resource Accounting and Budgeting framework; and • the division of responsibilities, flow of information and effective financial management between the top level budget holders and MOD centre. It will report initial findings to the Chief Secretary and the Defence Secretary within two weeks, and will be completed by the end of November 2003." 3. Review Conduct This review was undertaken between 28* October and 5'TM November by from Cap Gemini Ernst & Young. Comments have been received on the first and second draft reports and have been considered in completing this final version We are grateful to the MOD, which has provided documents for review, and has arranged a number of interviews at short notice to allow us to respond to our terms of reference. The following interviews have been conducted: MOD Centre Trevor Woolley FD Bruce Mann : DGFM Tom McKane - DGRP Referenco MOOCASH Verseat Novarter Doxs DECLASSIFIED We have also had input and assistance from John Dodds from HMT John Dodds and We have also reviewed draft findings with Trevor Woolley, lan Woodman, Andrew Likierman, 4. Definitions In the interests of clarity it has proved necessary to define and use some specific terms: • Net Cash Requirement - the actual cash requirement flowing through the bank account, derived from the accruals based accounts and the management of working capital. This Estimates process. • Near Cash - approximates to RDEL plus CDEL less old AME. totals voted by Parliament. • Net Cash Management - the process of ensuring that annual net cash requirements are raised as required. identified and covered through the supply Estimate, ensuring that supplementaries are • Net Cash Estimating - the process of determining the Net Cash Requirement flowing Estimate process; from the planning round before the start of the financial year. This feeds into the Supply • Net Cash Forecasting - the process of ensuring that immediate (<2 month) and longer term (within a year) cash flow requirements are identified. The short term forecasting impacts the draw down from the Consolidated Fund and thelonger term forecasts support the Estimates process. Near Cash Control - the process of defining, cascading and controlling selected lines Treasury within the Operating Cost Statement, plus Capital expenditure against limits set by the • CAPITAL systems - these are the commercially available packaged software that MOD uses to produce its financial information. The CAPITAL. systems include Accounting Operations systems (which are being systematically upgraded and standardised en Oracle 1li software) and the Short Term Planning system (based on Oracle Financial Analyser Referever HOOPER DECLASSIFIED accounty and budgeting framework. It is important to note that the RAB budgetary framework (Stage 2) requires control of RDEL. and CDEL but does not require Departments to control the Net Cash Requirement. This is a Parliamentary rather than Treasury control. Together, the parliamentary and RAB frameworks provide the control mechanism for public expenditure Net Cash Planning • Consistent with the requirements of the RAB budgetary framework this is calculated by MOD at the end of the planning process, as a consequence of other resource based decisions; Near Cash Planning • Consistent with the requirements of the RAB budgetary framework, the planning process in 03/04 did not look at near cash after the completion of its initial phase; Short Term (1-2 months) Net Cash Forecasting Short term monitoring and forecasting is effective Longer Term (2 month to End of Year) Net Cash Forecasting The approaches to longer term monitoring are not well developed and would need further work if Net Cash Control were included as part of the RAB budgetary framework; Net Cash Management - In Year Processes are in place to forecast net cash needs and to flag these for Supplementary Estimates. These rely on a variety of cash monitoring and forecasting processes which deliver a range of outcomes but which are not designed to enforce Net Cash Control. Net Cash Control - Year End • The MOD has basic processes in place to control the net cash position during the run up to year end, building on the end year controls used under the pre-RAB control regime. These provide basic assurance that the MOD does not overspend the Spring Supplementary Net Cash Requirement agreed by parliament but have not had to be tested since the introduction of RAB. Near Cash Control - In Year Consistent with the RAB budgetary framework, near cash control was not in place at the start of the year (in the period from April to September) although MOD managed to re- implement this quickly once instructed by Treasury. This instruction took effect in October 2003, although Treasury had previously indicated concems aver near cash contral. Reference MODEASI Version ( Modinaur Eye DECLASSIFIED • The Treasury guidance on Stage 2 RAB is clear that departments only need to budget for and control RDEL and CDEL. • Government Accounting, Section 11.8 Key Finding 1.2: Within the MOD there are different levels of cash (near cash and net cash) management and forecasting. Sources: • Interviews with MOD Centre and 4 TLBs (there are a total of 11 TLBs) • Review of TLB reporting packs (pre AP3 and post AP3) • Written response to our draft report. Given the nature of the RAB control regime, across the piece there is limited focus on the management of working capital and some further work is required around the management of these items. TLBs and the Centre expressed concem about their ability to derive reliable working capital figures in year limiting the ability of MOD to monitor and control its cash This is compounded by the timing of the underlying processes - i.e. the STP and Estimates processes complete prior to the end of the financial year (and certainly before the final balance sheet values are known). This means that there is always going to be a variation between the STP and net cash estimates in the Supply Estimates and the actual opening position at the start of the financial year. Near Cash Although the MOD had moved to control based on the RAB Stage 2 Control Framework, and the IYM instructions from DGRP/ DGFM made it clear that RDEL and CDEL were the control totals, among the TLBs we visited different internal controls have been implemented. Land based on an Command decided to retain the previous near cash (old DEL) control regime assumption that the MOD internal ring fencing arrangements for some non cash items would leave no room for flexing between old DEL and old AME in their budget Others (DLO and DPA) did not see any need to control and manage cash versus old AME, although they have the split entirely maintained the split for TLB internal reporting purposes. Central TIB had moved away from MOD Centre has said that all TIBs. and the MOD Centre, had full visibility of hoth the accrued cash and non-cash lines in the OC'S and carried out full variance analysis against these Safaresee MODCASH DECLASSIFIED Key Finding 1.3: For the past 2 years there has been no net cash control framework. However, the MOD has a simple mechanism that provides some control over the final year end net cash position. Sources: • Interviews with MOD centre DGRP and DGFM • Instructions on Control Regime for In Year Management 2003/04 issued 12 May 2003 by • Net Cash Requirement - End Year Monitoring and Control Instruction dated 17 January 2003. The NetCash control (as applied prior to RAB) ceased with the change to resource accounting. That, combined with the introduction of new systems to deliver RAB, allowed the removal of the MOD's central cash ledger. In line with the RAB control framework, MOD has not had a system of Net Cash Control for the last 2 years. Net cash has been a consequence of managing on an accruals basis (using the CAPITAL systems designed to manage on a full RAB basis), and changes in net cash requirements have been flagged through Supplementary Estimates. Near cash continued to be controlled until the end of 2002/3 under Stage 1 RAB. Short term net cash forecasting and draw down from the BOE is effective and year end control processes exist to ensure that net cash control can be exercised after the Spring Supplementary. This ensures that there is no overspend against the net cash requirement but acts as a fairly crude tool that can only act as a control at the margins. As the MOD has under-spent its net cash requirement (including supplementaries) by fibn in each of the last two years these processes have not had to be used. Key Finding 1.4: Whilst there is no Net Cash control, some Net Cash forecasting and management is in place. This is of mixed quality and ongoing development continues: Sources Interviews • TLB AP Returns • Short Term Cash Management League table of Departmental Performance • Fleet AP 03 In Year Management Pack Referee MODCASH Version 1 November 209317 DECLASSIFIED monse there are a manoer of processes and systems working alongside each other (CLIME, Oracle, Net Cash Requirement Tool, Historic Extrapolation) to manage net cash: • Oracle and CLIME - (CLIME consolidates data from Oracle and other financial systems used in Tl.Bs) provide actual and forecast net cash figures. • The NCR tool provides a further forecasting system using OCS and B/S data from Oracle or other TLB financial systems. It is a mandatory tool for use each month by experience. • Historic extrapolation offers an alternative check on forecasts on the basis of past These tools used together help formulate requests for changes in net cash provision through the Supplementary Estimate process. Although there are differences between the results generated from these tools, due in part to uncertainties in working capital forecasts on a month by month basis, MOD Centre believe that together they provide a sufficiently clear picture for the purpose for which they are used - i.e. forecasting to support the Supply Estimates process. Some TLBs, however, expressed concern over the quality and accuracy of the information generated, others raised concerns over the quality of the inputs, given the TL.B's ability to a requirement to control net cash. forecast working capital and consumption. These would need to be addressed were there to be requirements; others have not. Some TLBs have developed complex and sophisticated approaches to tracking net cash Whilst there is a net cash spend profile generated by IPTs for the DPA and this is updated throughout the year, it appears that this planned cash flow information is not used as part of the central net cash management process. The MOD does not have a consolidated commitment accounting ledger (or visibility on purchase orders) and does not have visibility on invoices received (accounts payable) until these have been processed by DBA (this is often well after the accrual should have been recorded). This restricts its ability to assess accruals on a monthly basis and pro-actively to foresee potential cash flow needs and to manage its working capital. However. the AP report. post AP06. does include a section on Committed Expenditure Referenca моделян DECLASSIFIED Sources: • Interviews • 2003/04 In Year Management: Issue of Revised Control Totals and Amendment to AP06 Model Submission from DPA to TLBs - 14 Ocober 2003 • SR2002 Guidance • E-mail from HMT to dated 20" Feb Summary Chronology: • Although the Treasury's SR2002 guidance does not differentiate between near cash and non cash for control regime purposes, the MOD's Spending Review bid was prepared on a near cash and non cash basis and did, as required, distinguish between Stage 1 RDEL and AME; • In early January 2003MOD input the relevant financial data from the initial phase of STP 03 to the PES database for the Main Estimates process. Figures generated automatically by the PES database showed a decrease innon cash resource of £806m. From February 2003, HMT sought to clarify this amount in correspondence with MOD. The Settlement Letter contained an 'estimate of the cash spending associated with SR02 plans for presentational purposes and to allow a reconciliation back to previous plans' • 2ad April John Dodds wrote to MOD increasing its near cash and net cash provision by £200m 'without prejudice'; • After discussions between HMT and MOD, a residual non-cash to near cash sum of £490m remained at issue (versus the initial £806m). As part of this MOD said that they had reduced non cash items through good management and that they wanted to re-deploy this to cash. Eventually it was discovered that £170m of the E806m was due to technical adjustments. The remainder of the reduction from £806m to £490m related to planned write-offs which had not actually been implemented.; In September 2003 MOD advised the Treasury that the residual £490m had increased to £870m, as a result of further non-cash to near cash transfers. These were identified in the later stages of the STP process, which had been finally completed some months before, but after the Main Estimates had been submitted 2 weeks later MOD advised that the final sum at issue was fl. 15bn The MOD Centre said that this further change was a result of additional analysis and re-calculation and clarification of the assumed SRO2 near cash baseline. Treasury said that at this time the Reference MODCASH Neater sort versink 1 DECLASSIFIED The Winter Estimate now requests a change against the onginal KDEL and CDEL Estimate. The additional request is largely for Iraq. This brings with it an increase in net cash close to £1.55bn. Commentary: Based on a near cash view of the world the final MODshortfall against the supplementary budget information attached to the settlement amounted to £1.15bn). The fl. 15bn figure was a consequence of the Resource and Capital DEL plans from the planning round, not the result of an in-year forecast or changes. Action has already been taken to deal with the shortfall including a range of internal adjustments to budgets and Treasury agreement to the 'flex' of £400M from 'non-cash' to 'near-cash' within the overall Resource DEL control. MOD are satisfied that this action will enable them to meet the 2003/04 near cash control total imposed by HMT in September 2003, albeit with significant slippage into 2004/05. It is important to note that there are a number of elements included within near cash, which may not impact directly on an immediate cash flow (Net Cash Requirement) eg: Stock consumption; • Working Capital Movements; • Accruals for assets in the course of construction. * CDEL. imolications of on balance sheet PFls. History has shown that a near cash control does not necessarily translate to net cash control (the past 2 years have shown variant figures), nor can it be expected to. The overall control framework (RAB and parliament) relies on control of RDEL, CDEL and net cash. However. the experience of the last 2 years suggests that if HMT wish to control PSCE via 'near cash' these controls may not be sufficient The MOD does not have a single definitive system to provide a consistent and stable control over the MOD's net cash requirement. Whilst the systems provide forecasts that support the Estimates process. there remain issues with the overall accuracy of the numbers generated. As a result the MOD does not have a common view on how much, if any, of the near cash deficit would have materialised in net cash terms Whilst the MOD has changed its spending plans there has been no coresponding adjustment to its NCR. But at this time, the MOD has not Reference MoDeAsu Noventior con DECLASSIFIED There is no miner suppiementary Estimates. This requirement will ned Estimate. This requirement will need to be considered in the Spring Supplementary Estimates year. requirement as provided through the Main and Winter Supplementary Estimates. TOR: Examine the division of responsibilities, flow of information and effective financial management between the top level budget holders and MoD centre. Division of Responsibility The structure of finance does not align with key processes but the division of responsibility between the DGFM and DGRP is clearly understood on the ground and the teams work effectively together. • There is clear communication between the Centre and the TLBs with clear budgetary delegation and effective control and holding, to account. Flow of Information owned by DGRP. At the end of the planning process the DGFM converts the STP data into an Estimate and enters the relevant data into the PES database. loaded to Accounting Operations Systems and is not updated to reflect in year changes. providing greater visibility to the centre • Summary available to the centres of each TL.B and the Centre of the Department happened and it was not required under RAB Stage 2 • There is a regular monthly and quarterly flow of information from the 1L.Bs to the DGRP Reference MODCASH DECLASSIFIED Key Finding 2.1: At the start of this year there was direction from the Centre of MOD to TLBs to control RDEL and CDEL and to report back on the impact on net cash. RDEL and CDEL control has been effective. Sources: • Interviews; • AP In Year reporting packs; • Management Board Pack; • Finance Organisation Charts • Terms of Reference for Finance Roles; • Instructions to TLBs. The following diagram shows the key information flows and MOD relationships: Marily aurenary Management Annual financial raDset Board adeounts (monity / Monthly balanced quaria ty) Consolidation Reconcilation Racenolation Budget preparation Of TLB figures SFIOQ / 04 Cash Formcanting IGLIME/NCR STP Initial & Final STP DGRP Consoldation & Stabetical besia) DGFM Banking operations: Summary far CAB 7Nolfication of abement apomvals Eatmatoe and PES databaso Monttey budge Settlements/ back budgets Sysium Geceratod (CLIME) Palcies &. Standarde OCS Caen forscosts for Financial Vramart apsovals he year and Y1D! Salaree Sheat Instructions & STP - Plans & Budgets Gudance and Syslame Guidance STP Plane reporting formats" Land HONI Strike Fleet Central CJO 2SL DLO AG DPA PTC "Onnad by OGRP bu Wound petty by DORP Bre DEFA Vetober undine issued be DGRFi The MOD had moved away from stage I to stage 2 RAB in its entirety Control totals have been cascaded to TI.Bs on this basis - 12 May letter from DIP&A and CFC makes it clear that TLBs are responsible for DEL. control total (C' and R) not net cash, but Reference MODCASH Verstar # Newomber 2012 DECLASSIFIED reports trom the Accounting Operations systems and other sources. Full variance reports are submitted to the centre of MOD (DPA) by each of the TLBs each These reports include a full OCS and B/S, variance analysis (including commentary) against the DEl. control totals, and information showing the impact of change on the parliamentary controls. For QI, Q2 and Q3, management meetings are held between the FD and each of the TLBs to challenge performance with the control emphasis directed on the DEL control totals. Thereafter meetings take place onan 'as required' basis. controlled outside of the Accounting Operations systems. This process is well understood. The MOD has been focused on reducing certain parts of its asset base (stock holding an apital assets) in order to reduce the capital charge and depreciation charged against RDEI However, there are some areas where control could be improved - e.g. one of the systems that manages stock consumption and returns does not yet fully support the accounting for these the accounting framework introduced under RAB for stock is complex requiring revaluation of items to replacement cost; there is no consistent approach to commitment accounting. (Changes to the systems to properly reflect accounting movements should be achieved during 2003/04) Significant leaming is still required across much of the MOD and HMT as it gets to grips with full resource accounting (this is being addressed). AL DECLASSIFIED Sources: • Documentation on PSCE from Liz Passman • Interviews The Treasury controls PSCE in order to help manage public spending and thereby monitor adherence to the fiscal rules. PSCE is a national accounts concept using internationally accepted definitions (as defined in EAS95). The RDEL, CDEL and NCR framework has been instituted by Treasury as it believes that together they provide the right mix of management incentives and controls against the fiscal This relies on the setting of robust baselines as part of the budgeting process. by Government Accounting requirements may not have been present in MOD Estimates. and HMT). differences c.g. around the capital programme and the treatment of stock consumption. Key Finding 3.2: Treasury and MOD understand the specifie requirements of the Resource Accounting and Budgeting Control framework. However, the interaction between RAB and other control regimes is unclear. Since Spring 2003, Treasury in correspondence to the MOD has sought to clarify that cash management remains important and has raised issues relating to both near cash and net cash management. Sources: • HM Treasury Secure Intranet Site • Blue Book • Govemment Accounting • SR 02 Guidelines • HMT Internet Site on RAB • 2 April letter from John Dodds to Bruce Mann Referent "MODCASH DECLASSIFIED Amenahur Versier 1 er tasted Budgeung Guidance, states in para 21 that in year control is provided through DEL limits set by Treasury. Other publications state that net cash control needs to continue, most notably in Government Accounting section 11 which states that Departments are responsible for planning and controlling the allocation of resources and net cash so that they do not exceed amounts voted by parliament. For the past 2 years under Stage 1 RAB, the MOD has been controlled by Treasury on a near cash basis (old RDEL) which provided the required fiscal control. With the move to Stage 2 RAB and the removal of near cash (old RDEL) from the control regime, there needed to be a stronger direct focus on net cash to provide the necessary fiscal control. The MOD's SR02 bid set out Stage I AME requirements to allow a new Stage 2 RDEL baseline to be agreed. The SR02 settlement was in terms of RDEL and CDEL though the Settlement Letter did show the estimated near cash consequences of the resource plans and a near cash requirement derived by Treasury, is included within the supplementary budget information to the Supply Estimates. These were to allow reconciliation back to previous plans and for use in presentations but were not themselves part of the RAB control regime Therefore, at the start of 2003/4, MOD were of the belief that there was no requirement for them to implement a formal cash control (near cash or net cash) regime. While Phase I of STP03 was conducted on a Stage 2 RAB basis, old AME (i.e. non-cash) was still broken out separately at that stage. Key Finding 3.3: There is no End Year Flexibility for net cash as EYF is a budgetary concept There is, therefore, an inconsistency in the treatment of resource and the cash required to fund it. For example, whilst accruals allow for the underlying resource to be consumed in year, the lack of EYF on cash potentially removes the ability to pay. The absence of end year flexibility for net cash suggests thamet cash has not been regarded by the Treasury as part of the RAB Budgetary Control Framework. Over the past 2 years the MOD has underspent by fibn net cash (estimates plus supplementaries) each year. As net cash has been described in Treasury's RAB guidance as a consequence rather than a control and the MOD has previously obtained any additional net cash through Supplementaries, there have to date been no practical consequences of having no EYF on cash. Whilst the annual net cash requirement seems to be a consequence of other activities under RAB. the Parliamentary regime maintains annual net cash spend as part of its key controls. For the MOD however, there are legitimate causes of major short term timing tifferences that have a stenificant impact on net saab reni nents (eg issuing stock to the 1L. MODDA 5A DECLASSIFIED Key Finding 3.4: There are a number of factors that have been offered to support the shift from non-cash to near cash. The following are believed to have a material contribution, although at present only around 1/3 of the overall shift has been definitively identified: • The QQR review revalued assets downwards at the end of 2002/3, thus reducing non- to near cash headings within the overall RDEL total. however, the net effect was to release non cash to be spent on near cash items. asset base shrinking, thereby releasing funds to be re-invested to deliver the strategy. • The timing of the MOD planning process is not ideal for supporting the Estimates, which means that opening balance sheet values impacting net cash requirements are • Costs associated with slippage of the Equipment Plan are managed centrally through the ring-fencing provisions. Any slippage can reduce the depreciation charge significantly allowing non cash savings to be used for near cash expenditure. Other factors considered but not regarded as material: • The opening cash balance was different to plan. This is not an issue because the MOD does not carry large cash balances and therefore does not carry forward cash. The MOD planning systems do not directly provide a net cash requirement figurethis is generated by the Estimates team as a consequence of resource plans Palaria MOOCASH 15 Navecitar 200a DECLASSIFIED 6. Next Steps The following issues / questions have been raised both in the presentation of this draft report and with the MOD. We have now received the following responses from MOD: Last year's STP planning sought additional non cash RDEL coverage. As MOD were looking at the plan in terms of near cash and non cash at that time, why did they not also identify and flag issues with funding on the cash side too? Response: STP03 was conducted During STP03, a net reduction in the requirement for provision for non-cash items emerged on a Stage 2 RAB basis (i.e. RDEL and CDEL) but for scrutiny purposes, TLBs phase l submissions showed non-cash costs within total RDEL. In Dec 2002, MOD undertook a review of TLBs non-cash costs, but thereafter non-cash costs were not tracked separately. The remainder of the STP03 planning process was performed on a RDEL and CDEL basis only. STP / EP 03 were concluded in late Feb03. Main Estimates were submitted to the Treasury in early Jan 03 and a briefing given on the main elements, including cash consequences, in February 03 * During last year's QOR, the DGFM and Guy Lester identified some areas where there was an increase in the asset values, requiring additional funding of non-cash RDEL. Did these increases materialise and was additional RDEL funding provided for these despite the net overall asset value reduction? Response: The initial stages of the QQR in late 2002 indicated an increase in valuations, which would have impacted non-cash costs adversely. However, as the QOR progressed it became clear that re- valuations upwards were more than offset by revaluations downward. In 2003/03, £3. 8bn of fixed asset impairments was charged to the OCS. In addition, extensions to asset lives further reduced non-cash requirements. These changes were reflected in the STP03 process Raterare M00EA5H DECLASSIFIED • Ascertain from where the data in GEMS is sourced for the MOD submissions The Treasury GEMS spreadsheet is completed on a monthly basis taking actual data from the CLIME system. Forecast data is based on the latest Supply Estimates figure, i.e. the original figure equates to the Main Estimate figure derived from the STP process. The forecast figures are subsequently adjusted to reflect the Winter Supplementary Estimate and ultimately the Spring Supplementary Estimate. Changes in the final STP figures arising after data is provided for the Main Estimate will therefore be reflected when the Winter Supplementary forecast is input to Other suggested actions flowing from this draft report, or suggested in discussion of this draft report but outside of the Terms of Reference, are: • An analysis of the detailed causes breakdown of the £1.I5bn against the contributory factors shown in this report; • An analysis of the reasons for previous years' net cash "underspend" and the impact on 03/04 if any: • A review of the expected and currently forecast net cash and near cash outtum for MOD and identification of the financial impact on PSCE: • A review of the control regime to confirm: whether net cash or near cash should be used as a surrogate for PSCE; whether net cash, near cash or something else should be used to provide Treasury with comfort that PSCE can be controlled; • A review of the control regime applied to MOD for the remainder of this year to allow Treasury and MOD priorities to be met. • Rapid introduction of working capital and net cash control and management guidance processes for MOD - subject to clarification on the Treasury controls above. Reference MOOCASH Worries t Maverito DECLASSIFIED CLIME Datailed Confict Date Due Prevention Variances Forecast Actuals AP01 With AP03 No Actuals & FOO No With AP03 No Actuais & FOO No Yes Yes Actuals & FOO Yos 31-Ju-03 Yes Yes Actuals & FOO No 26-Aug-03 Yos Yes Actuals & FOO No 23-Sop-03 Yes Yes Actuals & FOO Yes 23-0ct-03 Yes Yes Actuals & FOO Update 25-Nov-03 Yes Yen Actuals & FOO Update 05-Jan-04 Yes Yes Actuals & FOO Yes 26-Jan-04 Monthly Yes Yes Actuals & FOO No 24-Feb-04 Yes Monthly Yes Actuals & FOO No 23-Mar-04 Monthly Yes Yes Actuals & FOO No 27-Apr-0đ Yes Monthly Yes Actuais & FOO No 26-May-04 * Extract from 'Control Fleg me for TYM 2003/04: nound jointy try DGAP / DOGFM on 12:05 co DECLASSIFIED RDEL! RDEL Fil Year Forecastvs Control Tolal with commentsry inc management actions taken / love taken Risk / range assessment Part 2 Actuals YTD vs Budget with commentary inc management actions taken OCS Actuais Full Year Forecastvs Control Total with commentary inc management actons taken / libe taken Part 3 CDEL YTD vs Budget with commentary inc management actions takan CDEL' CDEL Full Year Forecastvs Control Total with commentary inc management actons taken / Ibe taken Risk / rango assessment Part 4 AP opening & closing balance ine movement; AP closing balance sEnd Year Forecast B'S Intangible & Tangibla FA Gurrent Assets: Creditors < tyr; Long term Liabilties (with breakdowns) YTD commantary ine management actions taken Ful Year commentary inc manegement actions taken / to be takan Part 5 Net Cash Requirement YTD vs Budget with commentary Part. Control Totab Net Cash Requirement Full Year va Control Total with commentary Other (Nat Resources, Resource & Non Op A-I-A) YTD vs Budget with commentary Other (Nut Resources, Resource & Non Op A+-A) Ful Year vsBudget with commentary Part 6 AME YTD vs Budget with commentary inc management acton taken AME' AME Full Year with commentary ine menegement action to be taken Risk / range assessmont Part 7 Amt, cost calegory, avent / narrative, stakeholders Ring fenoad AME Part 8 RDEL / COEL Transfers Transfers Exporting / importing TLB, dotall, value in, valuo out Port g Major receipts (>§1mn) actual and toracest Receipts Mem, anticipated / actual timing, amount • Based on Cortrol Regime far fa-Year Management 2003/04 Desied 12 05 031 Where appropnate, sectione routie coplarion of any vartarced alman data as reported and CLIVE DECLASSIFIED Stock Consumption Full Years Control Total inc prior AP comparative and remarka VTD commentary ino manegerent actions taken Ful Year commentary inc maregament actors taken / lo bo taken Risk / range assossmen Part 1b RDEL Indirect YTD vs Budget inc prior AP comparative and remarks RDEL Directl RDEL Indirect Futi Year vs Control Total Inc priot AP comparativa and remarks YTD commentary inc management actions taken Full Year commentary ine management actors taken / to be taken Risk / range assessment Ring fanoed iberns Part 2 Actuals YTO vs Budget with commentary OCS Actuals Full Year Forecastvs Control Total with commentaty inc (OCS breakdown includes subtotals for RDEL Direct, Stock Consumption, RDEL Indrect, AME and Other Part 3 CDEL YTD vs Budget inc prior AP comparative and remarks CDEL' CDEL Ful Yaar vs Control Total inc prior AP comparative and remarks YTD commentary inc management actions taken Ful Year commentary ine management actions taken / to be taken Risk / range assessment Part 4 B/S YTD commentary ind management actions taken Full Year commentary inc management actions taken / to be taken Part 6 Treasury Controls -RDEL, CDEL. AME Other Monthly Control Pariamentary Total Sumnuty - Net Resolaces. Net Cash Requirement. Rasource & Non Dp A-i-A YT Actual vs Budget, Full Year vs Budget Part 6 Not Cash Requirement YTD commantary Parliamentary Net Cash Requirerent Control Totals - Full Year commentary Resource & Non Op A-+-A - Commentary DECLASSIFIED Uncommitied Expandilura Section 2 Agreed Responsibility Transfers - Summary Section 3 Major Receipts by Month - Actual and Forecast Section 4 Quality Assurance & IYM Issues Log Section 5 Agreed Responsiblity Transfers- Detail • Based on 2003/04 In-year manegement linus of revied control islals and amendmant to AP06 model submistion (issued 14 1003) and actuaDLO submiscion for APOS reported and CLIME • Where appropriale, sochona miquto explanation of any verten cast obeen data as A l DECLASSIFIED