General Purpose Revenues

[ken]

I was asked by a Council client to clarify what should be included in the item “General Purpose Revenues” which is included in both SS1 & Note 2a.

The Code & Financial Data Return seem to provide 3 definitions of General Purpose Revenues which (whilst not dissimilar) use different terminology and leave some room to manoeuvre in what should be included;

(i) GPFR page A-39 (Note 2a);
Rates and Annual Charges (incl. Ex Gratia), Non Capital General Purpose Grants, Interest and Investment Revenue.

(ii) SS C-6 (SS1);
Rates and Annual Charges (incl. Ex Gratia), Non Capital General Purpose Grants, Interest on Investments.

(iii) Page 39 (Draft FDR);
Rates & Annual Charges, Interest on Investments, Interest & Miscellaneous charges on overdue rates & charges, General Purpose Grants (FAG & Pensioners Rates Subsidies)

The main anomalies in each of these definitions are;

Definition (i) Uses the all encompassing term for Note 3 c revenue on the Income Statement

Definition (ii) Seems to focus on Investment Interest (which would tend to exclude Interest on Rates & Annual Charges)

Definition (iii) Does not mention Ex Gratia rates, specifically mentions Interest on overdue rates & charges, and whilst it also seems to define General Purpose Grants it excludes any discussion of Current/Non Current.

As well, in all the definitions that are available, none of them address the issue of Restricted Income on (i) Investments, (ii) Extra Charges and (iii) Rates Subsidies – all of which have elements of income that is externally restricted;

- Investment Income includes Water, Sewer, DWM & any other Special Rate Funds that earned Investment Income.
- Extra Charges on Rates & Annual Charges includes revenue derived from Water, Sewer, DWM etc
- Pensioner Rates Subsidies includes Water, Sewer & DWM.


This all leads to a couple of questions that it would be great to get some feedback on from Councils:

1. Has anyone come across a definitive definition to General Purpose Revenues!?
2. Should Interest on Rates & Charges included!?
3. Should any income relating to External Restrictions be excluded (incl. Investment Income, Extra Charges & Rates Subsidies relating to Water, Sewer, DWM & any other Special Rates & Charges).

Any assistance you can provide would be appreciated.


In my opinion in relation to the 3 questions posed;

1. The definitive definition should be:
Rates & Annual Charges (not restricted), Investment Revenue only (excl. Investment Revenue on Externally Restricted Funds & excl. Interest on ALL Rates & Charges) + FAG + General Pensioners Rates Subsidy.

2. Interest on ALL Rates & Charges should be excluded – it relates to revenue for Council providing a service (ie. the provision of credit). There are many services Council provides for general revenue (eg. parking fines) and none of these are included in the definition – so why should Interest on Rates & Charges!?

3. Yes – as per my suggested definition – Revenues relating to Councils other Funds & Special Rates are not available for General use!


Looking forward to any feedback you might have on the matter!?