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Financial Statements for the year ended 31st December 2007

  • Statement of Responsibilities of the Agency
  • Statement on Internal Financial Control
  • Report of the Comptroller and Auditor General
  • Accounting Policies
  • Income and Expenditure Account
  • Statement of Total Recognised Gains and Losses
  • Balance Sheet
  • Cash Flow Statement
  • Notes to the Financial Statements

Statement of Responsibilities of the Agency

Section 50(1) of the Environmental Protection Agency Act, 1992, requires the EPA to prepare financial statements in such form as may be approved by the Minister for the Environment, Heritage and Local Government in consultation with the Minister for Finance. In preparing those financial statements, the EPA is required to:

  • select suitable accounting policies and then apply them consistently;
  • make judgements and estimates that are reasonable and prudent;
  • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the EPA will continue in operation;
  • disclose and explain any material departures from applicable accounting standards.

The EPA is responsible for keeping proper books of account which disclose with reasonable accuracy, at any time, the financial position of the EPA and which enable it to ensure that the financial statements comply with Section 50 of the EPA Act. The EPA is also responsible for safeguarding its assets and for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement on Internal Financial Control 2007

  1. On behalf of the Board of Directors of the EPA,
    I acknowledge our responsibility for ensuring that an effective system of internal financial controls is maintained and operated, for preparing the accounts of the EPA and for complying with all statutory obligations applicable to the EPA.
  2. The Directors of the EPA also acknowledge that the system of internal financial controls can provide only reasonable and not absolute assurance that assets are safeguarded, transactions are authorised and properly recorded, and that material errors or irregularities are either prevented or would be detected and rectified in a timely period.
  3. Key Control Procedures
    1. The Directors of the EPA have taken steps to ensure an appropriate control environment within the EPA by:
      • Publishing the EPA Strategy Statement 2020Vision - Protecting and Improving Ireland's Environment. This new Strategy covers the period to 2010 and sets out the EPA's environmental and organisational goals. Implementation of the Strategy will be monitored and reported to the Board of the EPA on a six month basis.
      • Agreeing a detailed work programme for each year, and monitoring and evaluating progress against the work programme on a regular basis.
      • Holding regular Board meetings to manage and supervise the work of the EPA.
      • Establishing an Internal Audit Committee, as part of the ongoing systematic review of the control environment and governance procedures within the EPA, to oversee the Internal Audit function and advise the Board in relation to the operation and development of that function.
      • Establishing and operating a Risk Management Policy.
      • Implementing a Performance Management and Development System for all staff.
      • Clearly defining management responsibilities.
      • Adopting a set of financial procedures to control the significant financial elements of the EPA's business.
      • Maintaining a comprehensive schedule of insurances to protect the EPA's interests.
      • Establishing and operating procedural regulations and standing orders for conducting the business of the Board.
      • Ensuring compliance with the Ethics in Public Office Acts requirements and Sections 37 & 38 of the EPA Act 1992, relating to the Declaration and Disclosure of Interests.
      • Delegating appropriate functions.
      • Reviewing and approving all EPA policies and procedures.
      • Adopting a Code of Business Conduct for Directors and Staff in accordance with the requirements of the Code of Practice.
    2. During 2007 the EPA Risk Registers were reviewed in accordance with the EPA Risk Management Policy and a Corporate Risk Register was prepared. Each Director provides quarterly assurance statements to the Director General acknowledging responsibility for the ongoing update, monitoring and review of the risk register in their Office and for ensuring the implementation of the Risk Management Policy.
    3. The system of internal financial controls is based on a framework of regular management information, a system of delegation and accountability, a set of financial procedures, administrative procedures including segregation of duties, and rigorous ongoing checks by the finance function. In particular it includes:
      • A comprehensive budgeting system with an annual budget, which is reviewed and approved by the Board of Directors.
      • The assignment of budgets and budgetary authority and responsibility for specific functions to selected managers.
      • Restricting authority for authorising all disbursement of EPA monies, payment of salaries, pensions, creditors, and expenses etc. to Directors and four named Programme Managers.
      • Regular and ongoing review of all payments by senior management.
      • Regular reviews by the Board of Directors of periodic and annual financial information and reports (including management accounts), which indicate financial performance against budgets.
      • Setting targets to measure financial and other performance.
      • Project management disciplines in respect of building programmes and major consultancy projects.
      • Modern computerised Financial Accounting and Payroll software systems to underpin the internal financial controls of the EPA.
      • Procedures for engaging consultants.
      • A system of control on the overall approval of capital and consultancy contracts.
    4. The financial implications of business risks have been considered through the formal business risk assessment process and in the preparation of the EPA Internal Audit Plans. These will be further assessed and evaluated through the phased implementation of the EPA's Internal Audit Plan. Procedures have been issued to control the significant financial elements of the EPA's business, and authorisation limits have been set by the Board for purchasing.
    5. The EPA's Internal Audit Committee is comprised of an external Chairperson and other external expertise in lieu of non-executive Director input, together with senior representation from the EPA. The EPA Internal Audit Plan 2007 - 2008 was progressively implemented with two internal audits conducted during 2007. These were in the areas of:
      • Emissions Trading Unit; and
      • Compliance with Corporate Legislation.

      A further audit on the adequacy and integration of the EPA's Information Systems was scheduled to be undertaken at the end of 2007 but was deferred to early 2008 for operational reasons.

      Implementation plans to address the audit recommendations were approved by the Audit Committee and the Board of the EPA. Progress on the implementation of the actions in each of the Implementation Plans is regularly reviewed and reported to the Audit Committee and to the Board.

      An Internal Audit Plan for the period 2008 - 2009 was developed in 2007 and, among others, reflects the corporate risks identified in the EPA's Corporate Risk Register, the requirements of the Comptroller and Auditor General, and developments and
      issues in relation to Corporate Governance that have arisen in the Public Sector in general. This Internal Audit Plan was approved by the Internal Audit Committee and by the EPA Board.

  4. Annual Review of Controls

    I can confirm that, in addition to the internal audits carried out and referred to in paragraph 3 (v) above, the EPA undertook a formal review of the internal financial control systems in 2006. This review was carried out using external expertise and was based on a detailed examination of financial management and control documentation. The overall conclusion of the review was that the system of internal financial controls is working effectively. An Implementation Plan to address the recommendations to further enhance the system of internal financial controls was approved by the Board in 2006 and was implemented in full by March 2008. A final implementation report on this review was presented to the Board and the Internal Audit Committee in April 2008.

    As the implementation of the recommendations from the 2006 review was ongoing to the end of 2007, a post implementation review was carried out in April 2008. This review related to the 2007 system of internal financial controls. I confirm that in April 2008, the Board of the Agency conducted a review of internal controls for 2007.

    Signed on behalf of the Board.

Report of the comptroller and auditor general for presentation to the houses of the oireachtas

I have audited the financial statements of the Environmental Protection Agency for the year ended 31 December 2007 under the Environmental Protection Agency Act, 1992.

The financial statements, which have been prepared under the accounting policies set out therein, comprise the Accounting Policies, the Income and Expenditure Account, the Statement of Total Recognised Gains and Losses, the Balance Sheet, the Cash Flow Statement and the related notes.

Respective Responsibilities of the members of the Agency and the Comptroller and Auditor General

The Agency is responsible for preparing the financial statements in accordance with the Environmental Protection Agency Act, 1992, and for ensuring the regularity of transactions. The Agency prepares the financial statements in accordance with Generally Accepted Accounting Practice in Ireland. The accounting responsibilities of the Members of the Agency are set out in the Statement of Responsibilities of the Agency.

My responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).

I report my opinion as to whether the financial statements give a true and fair view, in accordance with Generally Accepted Accounting Practice in Ireland. I also report whether in my opinion proper books of account have been kept. In addition, I state whether the financial statements are in agreement with the books of account. I report any material instance where moneys have not been applied for the purposes intended or where the transactions do not conform to the authorities governing them.

I also report if I have not obtained all the information and explanations necessary for the purposes of my audit.

I review whether the Statement on Internal Financial Control reflects the Agency's compliance with the Code of Practice for the Governance of State Bodies and report any material instance where it does not do so, or if the statement is misleading or inconsistent with other information of which I am aware from my audit of the financial statements. I am not required to consider whether the Statement on Internal Financial Control covers all financial risks and controls, or to form an opinion on the effectiveness of the risk and control procedures.

I read other information contained in the Annual Report, and consider whether it is consistent with the audited financial statements. I consider the implications for my report if I become aware of any apparent misstatements or material inconsistencies with the financial statements.

Basis of Audit Opinion

In the exercise of my function as Comptroller and Auditor General, I conducted my audit of the financial statements in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board and by reference to the special considerations which attach to State bodies in relation to their management and operation. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures and regularity of the financial transactions included in the financial statements. It also includes an assessment of the significant estimates and judgments made in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Agency's circumstances, consistently applied and adequately disclosed.

I planned and performed my audit so as to obtain all the information and explanations that I considered necessary in order to provide me with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming my opinion I also evaluated the overall adequacy of the presentation of information in the financial statements.

Opinion

In my opinion, the financial statements give a true and fair view, in accordance with Generally Accepted Accounting Practice in Ireland, of the state of the Agency's affairs at 31 December 2007 and of its income and expenditure for the year then ended.

In my opinion, proper books of account have been kept by the Environmental Protection Agency. The financial statements are in agreement with the books of account.

John Buckley,
Comptroller and Auditor General
30 June 2008

Accounting Policies

1. Basis of Accounting

The financial statements have been prepared under the historical cost convention and in the form approved by the Minister for the Environment, Heritage and Local Government with the consent of the Minister for Finance in accordance with Section 50 of the Environmental Protection Agency Act, 1992.

The financial statements are prepared on an accruals basis, except as stated below, and in accordance with generally accepted accounting practice. Financial reporting standards recommended by the recognised accountancy bodies are adopted as they become applicable.

2. Oireachtas Grants

The figures shown are the actual grants received in the accounting period.

3. Licence Fees

Applicants for all licences are required to pay the full licence application fee at the time of making the application. The amounts received are apportioned to the Income and Expenditure Account on completion of the following stages of the licensing process:

Integrated Pollution Prevention and Control and Waste Management Licences:
Application 30%
Proposed Determination 50%
Licence Issue 20%
Waste Water Discharge Licences:
Application 10%
Acknowledgement of Complete application 40%
Licence Decision Issue 50%

4. Funding of Emissions Trading Unit

The Emissions Trading Unit (ETU) was established within the Agency in 2003. In 2007 the costs of the ETU were recovered from the proceeds of the auctions of allowances by the Agency which took place during 2006 to defray the costs of administering the emissions trading scheme. This auction of a quantity of the total allowances (not greater than 1%) is provided for in the Government direction to the Agency in connection with the EU emissions trading scheme.

Auction proceeds retained by the Agency to fund the ETU are recognised as income of the Agency in line with the associated costs. Auction proceeds not required to fund ETU costs are paid over to the Department of the Environment, Heritage and Local Government and are not treated as income of the Agency.

5. Fixed Assets and Depreciation

Fixed assets are stated at cost less accumulated depreciation. Depreciation is provided on a straight line basis at the rates stated below which are estimated to reduce the assets to their realisable values at the end of their expected working lives :

Buildings 2%
Furniture and Fittings 10%
Laboratory and Field Equipment 15%
IT and Computer Equipment 25%
Motor Vehicles 20%

6. Capital Funding

The fixed assets of the EPA and advances to fund work in progress and asset purchases are met from a combination of capital grants, approved borrowing and allocations from current revenue. Funding sourced from grants (including that used to repay borrowings) is transferred to a capital account which is amortised in line with the depreciation of the related assets.

7. Stocks

All stocks, including consumables are written off in the year of purchase.

8. Debtors

Provision for doubtful debts is made, where warranted, in the accounts. Bad debts, as they arise, are written off against that provision.

9. Superannuation

The Environmental Protection Agency operates defined benefit pension schemes, which are funded annually on a pay as you go basis from monies available to it including monies provided by the Department of the Environment, Heritage and Local Government and from pension contributions deducted from staff salaries.

Pension costs reflect pension benefits earned by employees in the period and are shown net of staff pension contributions which are retained by the Agency. An amount corresponding to the pension charge is recognised as income to the extent that it is recoverable, and offset by grants received in the year to discharge pension payments.

Actuarial gains or losses arising on scheme liabilities are reflected in the Statement of Total Recognised Gains and Losses and a corresponding adjustment is recognised in the amount recoverable from the Department of the Environment, Heritage and Local Government. Pension liabilities represent the present value of future pension payments earned by staff to date. Deferred pension funding represents the corresponding asset to be recovered in future periods from the Department of the Environment, Heritage and Local Government.

Income and Expenditure Account For the year ended 31 December 2007

Income

Note

2007

2006

Oireachtas Grants

1

39,659,257

29,099,203

Emissions Trading Costs Recovered

2

1,062,339

1,237,454

Other Services  

28,387

552,356

Income from Regional Laboratories  

2,147,968

1,955,690

Licensing Activities

3

1,285,060

965,689

Enforcement Activities

4

7,689,253

7,158,841

Sundry Receipts

5

117,418

188,729

Net deferred funding for Pensions

18(b)

7,270,864

5,232,636

 

59,260,546

46,390,598

Expenditure
Salaries and PRSI

6

17,760,966

15,557,564

Pension Costs

18(c)

8,188,664

6,096,070

Travelling Expenses

7

1,775,596

1,401,390

Laboratory and Field Costs

8

1,250,084

930,540

Accommodation Costs

9

1,276,577

1,185,859

Other Administration Costs

10

5,486,972

4,840,423

Consultants and Grants  

7,233,829

4,486,822

Environmental Research  

11,269,137

6,967,701

Depreciation

15

1,802,802

1,615,826

 

56,044,627

43,082,195

Transfer to Capital Account

11

3,609,373

2,749,679

 

59,654,000

45,831,874

Operating (Deficit) / Surplus  

(393,454)

558,724

Surplus / (Deficit) on Disposals of Assets  

493,283

(170,208)

Surplus before Interest  

99,829

388,516

Interest Received

12

10,820

1,653

Interest Payable and Similar Charges

13

(114,221)

(102,430)

(Deficit) / Surplus for Year  

(3,572)

287,739

Surplus / (Deficit) at 1 January  

37,846

(249,893)

Surplus at 31 December  

34,274

37,846

The results for the year relate to continuing operations. The statement of accounting policies and cash flow statement, together with notes 1 to 21 form part of these financial statements.

Statement of Total Recognised Gains and Losses
 

Note

2007

2006

(Deficit) / Surplus for the Year  

(3,572)

287,739

Experience losses on pension scheme liabilities  

(583,000)

(9,891,000)

Changes in assumptions underlying the present value of pension scheme liabilities  

8,505,000

(3,056,364)

Actuarial Gain / (Loss) on Pension Liabilities

18(f)

7,922,000

(12,947,364)

Adjustment to Deferred Pension Funding  

(7,922,000)

12,947,364

Total Recognised Gains and Losses for the Year  

(3,572)

287,739

The results for the year relate to continuing operations. The statement of accounting policies and cash flow statement, together with notes 1 to 21 form part of these Financial Statements.

Balance Sheet As at 31 December 2007
 

Note

2007

2006

Fixed Assets

15

24,363,802

23,739,239

Current Assets
Debtors and Prepayments

16

7,252,217

4,576,573

Cash on Hand and at Bank  

6,044,078

8,675,905

   

13,296,295

13,252,478

Less Current Liabilities
Creditors (Amounts falling due within one year)

17(a)

9,444,572

12,127,982

Net Current Assets

 

3,851,723

1,124,496

Creditors (Amounts falling due after more than one year)

17(b)

(2,494,583)

(2,748,594)

Total Assets less Current Liabilities before Pensions  

25,720,942

22,115,141

Deferred Pension Funding

18(d)

98,329,000

98,980,000

Pension Liabilities

18(e)

(98,329,000)

(98,980,000)

   

0

0

Total Net Assets  

25,720,942

22,115,141

Represented by:
Capital Account

11

25,686,668

22,077,295

Income and Expenditure Account  

34,274

37,846

   

25,720,942

22,115,141

The statement of accounting policies and cash flow statement, together with notes 1 to 21 form part of these financial statements.

Cash Flow Statement For the Year Ended 31 December 2007
 

Note

2007

2006

Reconciliation of Surplus to Net Cash
Inflow from Operating Activities
(Deficit) / Surplus for year  

(3,572)

287,739

Interest Received

12

(10,820)

(1,653)

(Surplus) / Deficit on Disposal of Assets  

(493,283)

170,208

Transfer to Capital Account

11

3,609,373

2,749,679

Depreciation charge for year

15

1,802,802

1,615,826

(Increase) / Decrease in Debtors  

(2,675,644)

1,989,497

(Decrease) / Increase in Creditors (other than Loan Creditors)  

(2,703,913)

7,763,059

Net Cash Flow from Operating Activities  

(475,057)

14,574,355

Cash Flow Statement
Net Cash Flow from Operating Activities  

(475,057)

14,574,355

Returns on investments and servicing of finance
Bank Interest  

10,820

1,653

Investing activities
Payments to acquire fixed assets  

(1,934,082)

(7,125,386)

Net Cash (Outflow) / Inflow Before Financing  

(2,398,319)

7,450,622

Financing
Fixed Asset Loan Repayments

15

(233,508)

(233,845)

(Decrease) / Increase in Cash  

(2,631,827)

7,216,777

Reconciliation of net cash flow to movement in cash balances
(Decrease) / Increase in cash in year  

(2,631,827)

7,216,777

Funds at 1 January  

8,675,905

1,459,128

Funds at 31 December  

6,044,078

8,675,905

The statement of accounting policies together with notes 1 to 21 form part of these financial statements.

Notes to the Financial Statements

1 Oireachtas Grants

  2007 2006
Department of the Environment, Heritage and Local Government Vote:
Grants from the Vote:

Current

21,939,769

14,290,123

Capital

3,051,000

3,985,131

Research Funding

11,165,000

7,000,000

Other Programmes

3,503,488

3,823,949

 

39,659,257

29,099,203

The Research Funding is a specific allocation to meet the cost of Environmental Research. €11,269,137 was expended on these research activities in 2007 (2006 €6,967,701).

2 Emissions Trading Unit (ETU) Activities

 

(a) Cost of Emissions Trading Unit

1,062,339

1,237,454

Emissions Trading Operator Registration Fees, etc.

5,300

1,950

Costs to be recovered from Auction Funds, etc.

1,057,039

1,235,504

Total Funding of ETU Costs

1,062,339

1,237,454

(b) Summary of Emissions Trading Unit Funds:

Funds Carried Forward

6,948,380

0

Total Funds Generated

79,488

13,273,337

Balance of 2005 ETU Costs

0

(404,871)

Total Current Year ETU Costs

(1,062,339)

(1,237,454)

Provision for 2007 ETU Costs

0

(1,500,000)

ETU Funds payable to the DoEH&LG

5,965,529

10,131,012

Paid to DoEH&LG

(5,448,380)

(4,682,632)

Balance of ETU Proceeds payable to DoEH&LG (see Note 17 (a) )

517,149

5,448,380

3 Licensing Activities - IPPC, Waste and WWD

 

Licence Fees prepaid at 1 January

865,454

736,076

Fees Received

2,811,421

1,127,366

Less Refunds Paid

(80,632)

(32,299)

Licence Fees prepaid at 31 December (see Note 17 (a) )

(2,311,183)

(865,454)

Amount credited to Income and Expenditure Account

1,285,060

965,689

Licensing: Integrated Pollution Prevention and Control (IPPC) and Waste

Under Section 83 of the Environmental Protection Agency Act, 1992 the EPA is responsible for the licensing of large/complex industrial and other processes with significant polluting potential. Under Section 40 of the Waste Management Act, 1996 the EPA is responsible for the licensing of all significant waste recovery and disposal activities operated by local authorities and private enterprise.

Licensing: Waste Water Discharges (WWD)

The Waste Water Discharge (Authorisation) Regulations 2007 provide for the licensing of local authority waste water discharges. Discharges from areas that serve over 500 population equivalent will require a licence from the EPA. Areas that serve less than 500 population equivalent will be required to be certified by the EPA. The EPA's licensing income arises from fees charged in respect of processing such licensing applications.

4 Enforcement Activities - IPPC and Waste

 

2007

2006

Enforcement Charges Invoiced and Fees Received

7,689,253

7,158,841

Under Section 96 of the Environmental Protection Agency Act, 1992 the EPA is responsible for the regulation of large/complex industrial and other processes with significant polluting potential. Under Section 15 of the Waste Management Act, 1996 the EPA is responsible for the regulation of all significant waste recovery and disposal activities operated by local authorities and private enterprise. The EPA's enforcement income arises from fees charged in respect of this monitoring work.

5 Sundry Receipts

 

Insurance claims

714

524

Sales of publications

17,317

33,222

Sundry

99,387

154,983

 

117,418

188,729

6 Salaries and PRSI of Staff

 

Salaries

16,489,866

14,461,834

Employers' PRSI

1,271,100

1,095,730

Total Salary Costs

17,760,966

15,557,564

(b) The numbers of employees on 31 December were :
Headquarters

Wexford

140

135

Regional Inspectorates:

Castlebar

25

27

 

Cork

33

30

 

Dublin

71

68

 

Kilkenny

16

15

 

Monaghan

14

11

Regional Offices  

8

8

   

307

294

7 Travelling Expenses

 

Travel and Subsistence

1,666,447

1,296,513

Motor Vehicle Expenses

126,332

120,447

Travel Refunds

(17,183)

(15,570)

 

1,775,596

1,401,390

8 Laboratory and Field Costs

 

2007

2006

Laboratory and Field Expenses

919,885

652,843

Equipment Repairs and Maintenance

313,620

261,448

Protective Clothing

16,579

16,249

 

1,250,084

930,540

9 Accommodation Costs

 

Rent and Rates

389,598

335,706

Power, Light and Heat, Cleaning

499,264

529,229

Repairs, Maintenance, Security

387,715

320,924

 

1,276,577

1,185,859

10 Other Administration Costs

 

Telephone and Postage

262,662

280,689

Printing of Publications and Stationery Supplies

534,701

512,678

Insurance

95,664

96,324

Computer and Data Processing Charges

2,244,361

1,543,563

Audit Fees

14,400

14,400

Corporate Governance and Internal Audit Costs

69,278

83,967

Legal Fees

491,082

435,722

Staff Appointment Costs

82,675

110,901

Bank Interest and Charges

4,848

5,304

Books, Periodicals, and Library

93,362

86,488

Staff Development and Training Costs

692,170

579,280

Advertising

300,816

481,388

Communications

501,934

527,507

Sundries

99,019

82,212

 

5,486,972

4,840,423

11 Capital Account

   

At 1 January 2007    

22,077,295

Transfer from Income and Expenditure Account :
Income Allocated for
Capital purposes
Fixed Asset Additions

2,639,990

  To Fund Future Additions (See note 16)

2,751,303

  Repayment of Loans

233,507

 

5,624,800

Less
Disposals of Fixed Assets at Cost

369,926

 
Less prior depreciation on disposals

(157,301)

 
 

212,625

Depreciation charge for year

1,802,802

 
Net Transfer from Income and Expenditure Account  

3,609,373

At 31 December 2007  

25,686,668

As at 31 December 2007, the Capital Account balance includes €4,185,680 in respect of prepayments for fixed assets
(see Note 16 - Debtors and Prepayments).

12 Interest Received

 

2007

2006

 

Bank deposit interest

10,820

1,653

 

10,820

1,653

13 Interest Payable and Similar Charges

 

Bank Loans repayable by Instalments

114,221

102,430

 

114,221

102,430

14 Taxation

The EPA is specifically exempted under the provisions of Section 32, and Schedule 2, of Finance Act, 1994. Accordingly no taxation charges have been included in the accounts.

15 Fixed Assets

 

Total

Buildings

Furniture & Fittings

IT & Computer Equipment

Lab & Field Equipment

Motor Vehicles

Cost            
At 1 January 2007

39,505,759

23,491,558

2,054,482

4,130,468

8,934,694

894,557

Purchases

2,639,990

339,958

258,312

287,920

1,551,177

202,623

Disposals

(369,926)

(264,645)

     

(105,281)

At 31 December 2007

41,775,823

23,566,871

2,312,794

4,418,388

10,485,871

991,899

Depreciation
At 1 January 2007

15,766,520

2,931,337

1,097,978

3,536,272

7,632,287

568,646

Charge for Year

1,802,802

465,823

195,126

366,986

620,289

154,578

On Disposals

(157,301)

(74,127)

     

(83,174)

At 31 December 2007

17,412,021

3,323,033

1,293,104

3,903,258

8,252,576

640,050

Net Book Value
At 31 December 2007

24,363,802

20,243,838

1,019,690

515,130

2,233,295

351,849

At 31 December 2006

23,739,239

20,560,221

956,504

594,196

1,302,407

325,911

Headquarters for the Environmental Protection Agency were built on the grounds of Johnstown Castle Estate, County Wexford, on a site whose title is vested in Teagasc. The EPA is in the process of negotiating a long-term lease of this site from Teagasc. The headquarters building was constructed by the Office of Public Works (OPW) who financed the construction by means of a commercial loan. The EPA funds the annual repayments made by the OPW. The interest element of the repayments met by the EPA is accounted for in the year it arises. Both the asset and the associated funding arrangements have been recorded in the books of the EPA to reflect the substance of the underlying transactions.

16 Debtors and Prepayments

 

2007

2006

Debtors

2,968,526

2,486,839

Prepayments

98,011

655,357

Prepayments for Fixed Assets

4,185,680

1,434,377

 

7,252,217

4,576,573

Prepayments for Fixed Assets

At 31 December 2007 prepayments totalling €4,185,680 had been made as set out hereunder. These prepayments have been included in the amounts transferred from the Income and Expenditure Account to the Capital Account.

Inniscarra

Under an arrangement with Cork County Council the Agency shared a building at Inniscarra, Co Cork for a number of years. In accordance with an agreement reached in 2003 the Agency took possession of the entire building in March 2008. At 31 December 2007 the total agreed amount of €1,174,377 (2006 €1,174,377) had been paid to Cork County Council in advance of the final transfer. This amount has been treated as a prepayment and will be transferred to fixed assets in 2008.

Advances to the Office of Public Works (OPW)

At 31 December 2007 advance payments of €2,850,000 (2006 €260,000) had been made to the OPW in respect of refurbishment and an extension at the Agency's headquarters building at Johnstown Castle Estate, Wexford. These amounts will be transferred to Fixed Assets on completion of the projects.

Advance payments for other Fixed Assets

Stage payments amounting to €161,303 were advanced in 2007 in respect of equipment which was delivered in 2008. These amounts will be transferred to Fixed Assets in 2008.

All debtors fall due within one year.

17 Creditors and Accruals

 

(a) Amounts falling due within one year:
Licence Fees (see Note 3)

2,311,183

865,454

Proceeds of ETU Auction Payable to DoEH&LG (See Note 2(b))

517,149

5,448,380

Trade and Other Expenses

6,248,009

5,466,420

Instalments due on purchase of Fixed Assets

368,231

347,728

 

9,444,572

12,127,982

(b) Amounts falling due after more than one year:
Instalments due on purchase of Fixed Assets

2,494,583

2,748,594

18 Pension Obligations

(a) Pension Scheme

The EPA operates defined benefit superannuation schemes for staff which are unfunded. Superannuation entitlements arising under the schemes are paid out of current income. Accounting standard, Financial Reporting Standard No. 17 - Retirement Benefits (FRS 17), was issued by the Accounting Standards Board in November 2000. Compliance with the new standard became mandatory for the financial year 2005. The results set out below are based on an actuarial valuation of the liabilities in respect of EPA staff and former An Foras Forbartha staff as at 31 December 2007.

The financial assumptions used to calculate scheme liabilities under FRS17 are:

Assumption

2007

2006

2005

Discount rate

5.50%

4.75%

4.25%

Rate of increase in salaries

4.25%

4.00%

3.50%

Rate of increase in pensions in payment

4.25%

4.00%

3.25%

Inflation rate

2.50%

2.25%

2.00%

On the basis of these assumptions, and using the projected unit method prescribed in FRS 17, the value of the accrued pension liabilities at 31 December 2007 was estimated at €98.329m (compared with €98.98m as at 31 December 2006).

(b) Net Deferred Funding for Pensions in year
 

2007

2006

 

Funding Recoverable in respect of current year pension costs

8,881,000

6,724,000

State Grants applied to pay pensioners

(1,610,136)

(1,491,364)

 

7,270,864

5,232,636

(c) Analysis of total pension costs charged to Expenditure
 

Current Service Cost

4,034,000

3,156,000

Interest on Pension Scheme Liabilities

4,847,000

3,568,000

Employee Contributions Received

(692,336)

(627,930)

 

8,188,664

6,096,070

18 Pension Obligations (continued)

(d) Deferred Funding Asset for Pensions

The EPA recognises these amounts as an asset corresponding to the unfunded deferred liability for pensions on the basis of the set of assumptions described above and a number of past events. These events include the statutory basis for the establishment of the superannuation schemes, and the policy and practice currently in place in relation to funding public service pensions including contributions by employees and the annual estimates process. Whilst there is no formal agreement regarding these specific amounts with the Department of the Environment, Heritage and Local Government, the EPA has no evidence that this funding policy will not continue to meet such sums in accordance with current practice The deferred funding asset for pensions at 31 December 2007 amounted to €98.329 million (2006: €98.98 million).

e) Movement in Net Pension Liability during the financial year
 

2007

2006

Net Pension Liability at 1 January

98,980,000

80,800,000

Current Service Cost

4,034,000

3,156,000

Interest Costs

4,847,000

3,568,000

Actuarial loss / (gain)

(7,922,000)

12,947,364

Pensions paid in the year

(1,610,136)

(1,491,364)

Net Pension Liability at 31 December

98,328,864

98,980,000

(f) History of Experience Gains and Losses
 

2007

2006

Experience Gains / (Losses) on Scheme Liabilities
  Amount (€ '000)

(583)

(9,891)

Percentage of the present value of scheme liabilities

0.6%

10.0%

Total Amount recognised in the Statement of total recognised gains and losses
  Actuarial Gain / (Loss) - Amount (€ '000)

7,922

(12,947)

Percentage of the present value of scheme liabilities

8.1%

13.1%

19 Comparative Figures

Some changes have been made to the presentation of items in the financial statements and the comparative figures have been restated where necessary on a basis consistent with the current year presentation.

20 Board Members' Interests

The EPA has adopted procedures to govern its decision making in accordance with the Environmental Protection Agency Act, 1992 and the Ethics in Public Office Act, 1995 and regulations made thereunder. These procedures have been adhered to by the EPA during the year.

21 Approval of Financial Statements

The Financial Statements were approved by the Board of Directors on 24 June 2008.