Accountancy should be easy, shouldn’t it? After all, everything is either a debit or a credit: only two possibilities. What could possibly go wrong? How then, am I expected to write an interesting and stimulating blog about such a dry subject? That sounds like a challenge: there’s nothing worse than comedy-free professionals like accountants trying to be humorous.
Talking of comedy-free, we’re in the middle of the annual audit process at the moment, and the Wales Audit Office staff are poring over the financial statements for 2010/11. That’s not a slight on the WAO – its just a painful process trying to remember why you made some decisions, going back sometimes 2 years or more, when they put you on the spot. I’m sure there was a good reason at the time.
As well as the Library, there are also accounts for Culturenet Cymru which have to be audited and then consolidated with the Library’s to produce group accounts. On top of this there are the accounts of the Pension Scheme, and the Whole of Government Account – the Library’s accounts are consolidated into a “Wales PLC” account, which in turn becomes part of UK PLC. All this is very interesting stuff for us accountants and not at all tedious …
Actually, quite a lot can go wrong with the Library’s financial situation. Knowing what is a debit and what is a credit is fairly straightforward – it’s not the accounts and all the other accounting rules that are the major headaches, or even the auditors. It’s shrinking income, both grant and trading, inflation running away at +5% and finding sensible ways to reduce the pay-bill that are the big challenges. This is without worrying about the Pension Scheme: at least on this one we seem to be turning the financial position around slowly but surely. That reflects a combined effort over a number of years from the Library and the Scheme Trustees, not to mention the staff whose contributions have gone up substantially. It’s not a pain-free process. I’m still concerned about what the Hutton report could mean for the Scheme – comments from the UK Government were a big story in the news in the last few days – but I think we’re ahead of the game. The deficit appears to be under control and not too large. Even the Actuary seems relatively optimistic about the prospects for getting the Scheme in balance, however there’s still a lot that could go wrong.
By the way, definition of an Actuary: an accountant without a sense of humour.