Appendix-AShropshire Fire and Rescue ServiceIntroduction The domain of financial management is very important for every public facility providing organization. The financial management personnel endeavour to maintain a track of financial dealings to keep a record of the resource allocation and their changes in future. Also such information is important to educate and inform the public about different activities and their financial implications. The Fire and Rescue services, owing to its sensitivity of human life and safety should particularly plan the allocation of available resources in such manner that the public trust and safety can be guarded.
Being appointed as a financial manager of Shropshire Fire and Rescue Authority, various aspects of fiscal management need to be analysed to be able to assist the senior financial manager to develop a financial report. The task requires an extensive analysis of the budgetary arrangements laid down by the authority to monitor its finances. In case of external debt, the commonly applied budgetary controls are Authorized Limit and Operational Boundary. Hence the report will initially define and elaborate these indicators and the authority’s initiatives to see whether or not it is able to meet various possible eventualities that may take place in its capital management activities.
For this purpose marginal safety will also be calculated. While undertaking a financial assessment, it also becomes important to specify the particular characteristics that are peculiar to the Shropshire fire and rescue authority. The assessment of these ground realities can help in justifying the various initiatives taken by the authority to a number of stakeholders. The various risks, faced by the Shropshire fire and rescue service will also be identified to assess their financial implications.
This assessment will help us understand the performance of the authority in mitigating these risks and their financial implications. Setting an authorized limit and an operational boundary: Both Authorized Limit and an Operational Boundary are the limits applied to the specific considerations of external debt. These are set out in consistence with an authority's plans for capital disbursements and finance policy statement and practices. These financial benchmarks lend the financial managers the authority, to undertake detailed monitoring of available resources. The operational boundary is the approximation of the expected sum of different borrowing needs and activities from outside the authority.
The operational boundary needs to establish a direct connection with the monetary costs of the authority's plans, the approximate values of the capital financing obligations as well as the estimated cash flow supplies for different purposes, including revenue. On the other hand, the Authorized Limit is calculated and set out to provide headroom for unusual cash-flow movements and other loan requirements, besides the operational boundary. Thus it is strongly suggested that the authorised Limit should permit for a 5% deviation (rounded approximately to £0.5 million) on the operational boundary to permit the allowance of necessary headroom.
Considerations accommodated by Shropshire Fire and Rescue serviceThe Shropshire Fire and Rescue Authority, in England has a long history of working and taking serious efforts to ensure the safety of lives and properties of the both the rural as well as the urban population (Shropshire fire and rescue service, Safer communities core strategy, 2006-2009). However, besides being ambitious the authority also seeks to control and make efficient use of available resources.
Thus, the department of Resource and Financial Management at Shropshire undertake necessary actions to ensure that the level of external debt is not breached throughout the year, by taking into account the Operational Boundary and authorised limit.