The Local Government Changes for England (Collection Fund Surpluses and Deficits) Regulations 1995

Major precepting authority— audit adjustment

7.—(1) This regulation applies following the conclusion, in accordance with Part III of the Local Government Finance Act 1982, of the audit of the accounts for the immediately preceding year of a relevant billing authority in relation to which a transferring major precepting authority is an abolished or relinquishing authority and for the purposes of this regulation —

(a) “final surplus or deficit” shall have the same meaning as in regulation 5(1), and

(b) “transferring major precepting authority’s audited share” means an amount calculated by applying to the final surplus or deficit the formula in paragraph 6(4) of Part II of Schedule 2 to the Funds Regulations to the final surplus or deficit, where items B, C and D are as stated in that paragraph and item A is the final surplus or deficit.

(2) This regulation shall not apply to the calculation of the audit amount or audit adjustment of a relevant billing authority which is an abolished or relinquishing authority.

(3) The relevant billing authority shall, within one month of the conclusion of the audit referred to in paragraph (1) above, calculate the audit amount and the audit adjustment of—

(a) each transferee authority of a transferring major precepting authority, except where the transferee is a sole successor authority in which case the relevant billing authority shall calculate its audit adjustment only,

(b) a relinquishing major precepting authority,

(c) each relevant major precepting authority which was such an authority in relation to the relevant billing authority for the immediately preceding year and which is not subject to a section 17 order, and

(d) itself,

and notify to each transferee authority, and each such relevant major precepting authority, its audit adjustment.

(4) For the purpose of paragraph (3) above—

(a) the audit amount—

(i) of a transferee authority, or of a relinquishing authority, shall be a proportion of the transferring major precepting authority’s audited share, which proportion shall, subject to paragraph (9) below, be the same proportion which the estimated amount of the transferee or relinquishing authority, as the case may be, calculated under regulation 6, bears to the transferring major precepting authority’s estimated share,

(ii) of any other relevant major precepting authority referred to in paragraph (3)(c) above, shall be calculated by applying to the final surplus or deficit the formula in paragraph 6(4) of Part II of Schedule 2 to the Funds Regulations, where items B, C, and D are as stated in that paragraph and item A is the final surplus or deficit, and

(iii) of the relevant billing authority, shall be calculated by applying to the final surplus or deficit the formula in paragraph 6(2) of Part II of Schedule 2 to the Funds Regulations, where items B, C and D are as stated in that paragraph and item A is the final surplus or deficit, and

(b) subject to paragraphs (5) and (9) below, the audit adjustment —

(i) of a transferee authority where the transferring major precepting authority is an abolished authority in respect of which there is a single successor authority, shall be calculated by deducting from the amount of the transferring major precepting authority’s audited share, the amount of that authority’s estimated share,

(ii) of any other transferee authority, or a relinquishing major precepting authority, shall be calculated by deducting its estimated amount from its audit amount,

(iii) of any other relevant major precepting authority referred to in paragraph (3)(c) above, shall be calculated by deducting from the audit amount of that authority its estimated amount, such amount being its share of any surplus or part of any deficit, in relation to the estimate, and calculated by the relevant billing authority in accordance with paragraph 6(4) of Part II of Schedule 2 to those Regulations, and

(iv) of a relevant billing authority, shall be calculated by deducting from its audit amount its estimated amount, such amount being its share in any surplus, or part of any deficit, in relation to the estimate, and calculated by it under the Funds Regulations using the formula in paragraph 6(2) of Part II of Schedule 2 to those Regulations.

(5) Each of the audit amounts and the estimated amounts referred to in paragraph (4)(b) above shall be expressed as a positive figure if a proportion of a surplus in the collection fund of the relevant billing authority and a negative figure if a proportion of a deficit, and the audit adjustment may be a positive or negative figure.

(6) Subject to paragraph (7) below, where the audit adjustment of a transferee authority, or a major precepting authority, is a positive amount, the relevant billing authority shall pay that authority an amount equal to such amount, and where such amount is a negative amount, that authority shall pay the relevant billing authority such amount, in either case in the year in which payment falls to be made in accordance with regulation 8 and in a manner agreed between the relevant authorities.

(7) Paragraph (6) above shall not apply in relation to a transferee authority where that authority is the relevant billing authority.

(8) Subject to regulation 8, where a transferee authority is a billing authority it shall, where the audit adjustment is a positive amount, transfer that amount from its collection fund to its general fund, and where its audit adjustment is a negative amount it shall transfer that amount from its general fund to its collection fund.

(9) Where for the immediately preceding year there is no estimated surplus or deficit in the collection fund of the relevant billing authority—

(a) an authority’s audit adjustment shall be its audit amount, and

(b) for the purposes of paragraph (4)(a)(i) above the proportion to be used in the calculation of the audit amount of a transferee or relinquishing authority shall be calculated according to tax base in the same manner as the proportion of a transferring major precepting authority’s estimated share is calculated under regulation 6(4).