Read NI Water's explanation of the reporting requirements that do not apply and check the details set out in the accounting records commentary or other supporting documentation. Check that the figures reported in Regulatory Accounts tables 6a, 18 to and 39 in the Annual Information Return agree with the underlying accounting data and Regulatory Accounts [final]. Read NI Water's explanation and agree to the details set out in the commentary to the underlying accounting records or other supporting documentation.
Read NI Water's response to the Regulator's inquiries and ensure that NI Water's comments are consistent with the Regulatory Accounts and the underlying accounting records. Read NI Water's comments and, where relevant, match details set out in the comments to the underlying accounting records or other supporting documentation. Read NI Water's comments and ensure that they are consistent with the policy applied in the Regulatory Accounts and the underlying accounting records.
Water's explanation and agreement details set out in the commentary on the underlying accounting documents or other supporting documentation.
Reporting
Obtain from NI Water detailed information on changes to the actuarial assumptions underpinning the FRS17 assessment that have taken place since the end of last year. If there has been a change in the level of contributions within the year, check that management has included a comment on the difference in the relative amount of contributions used to fund any deficit. For the purposes of your work with these procedures, we consider 5% of FRS17 operating profit to be significant.
PART D – INCOME
Annual Information Return tables
Background and key risks
Procedures
Check whether the amounts reported in the movement of net revenues from the tariff basket (water supply and sewerage services) match the basic basis.
PART E – BAD DEBT
Read NI Water's explanation and agree with details of any assumptions or allocation made in the basis of preparation to the underlying accounting records or other supporting documentation. Describe the source of the underlying accounting records or billing systems on which data is agreed upon. Describe the nature of the outstanding income reported in rules 1 to 56 (ie confirm that the definition of "revenue outstanding" as set out in NI Water reporting requirements is met) of the.
Enter the details of the underlying oldest debt report or other accounting items, such as the revenue. If the figures do not match, test that the reason for the difference in management's comments can be linked to the underlying accounting or other support. Check that "non-household income outstanding" has been correctly extracted from NI Water's underlying accounting records or other supporting documentation.
Obtain NI Water's comments based on the allocation of customer service operational expenditure (between lines 59 to 63). Check that NI Water has provided an explanation for any material changes (+/-30% between the reporting year and the previous year) to the data reported in the 'customer service operational expenditure' lines. Check whether the reported figures for household and non-household costs for outstanding operating expenditure for revenue collection in lines 60 and 60a can be reconciled with the underlying accounting data or other supporting documentation.
Request NI Water's comments and check whether NI Water has given reasons for any material differences (+/- 30% between the reporting year and the previous year) in each element. Trace any amount reported in line 61 (Donations to charities that help customers in debt) to the underlying accounting records or other supporting documentation. If they are not in agreement, check whether the reasons for a discrepancy can be agreed with the underlying accounting documents or other supporting documents.
PART F – TAXATION
Check that NI Water's tax details have been accurately extracted from the underlying accounting records and are consistent with the amounts included in the tax calculation submitted to HMRC. Read any comments made by management regarding the difference between line 17 (trading profit for tax) and line 18 (adjusted trading profit for tax) and check that it is consistent with the table and, where appropriate, with the underlying accounting records or other accompanying documentation. Read any comments and check that they are consistent with the table of rules and, where applicable, with the basis.
For deductions where management has commented on agreements with HMRC, you will need to agree the nature of these agreements with supporting written evidence. Read any comments on the position agreements with HMRC and check whether any disclosures can be supported as supporting evidence. Check that NI Water's reconciliation of Table 18b line 6 (capitalized revenue expenditure deducted in the year of expenditure) with Table 18a line 4 (deduction for capitalized revenue expenditure) is consistent with the Regulatory Accounts Tables and, where relevant, the underlying ones.
Where agreements with the HRMC are disclosed by NI Water for the treatment of expenditure for tax purposes, you must agree the nature of these agreements with supporting documentation. Check that the allocations in the table are consistent with the calculations submitted to HMRC. Check that lines 1 to 11 accurately reflect the total capital program (including IRE and net of grants) and that the types of expenditure in each line are consistent with the detailed operation of NI Water.
Check that the average asset lives reported on lines 13 and 14 are consistent with those used for depreciation purposes. Check that lines 15 to 18 accurately reflect NI Water's closing tax position according to the tax calculation. Check that the total capital expenditure on line 12 is consistent with that shown elsewhere in the regulatory accounts tables.
PART G – ACCOUNTING CHARGES
PART H – LAND SALES
ANALYSIS OF BORROWINGS
The Regulatory Accounts have been prepared in accordance with Condition F of the Appointment Instrument and the Regulatory Accounting Guidance issued by the Water Regulatory Authority in so far as these are relevant to the regulatory environment in Northern Ireland, the accounting policies set out in the policy statement accounting and, in the case of historical cost regulatory accounting statements, according to the historical cost convention. Generally Accepted Accounting Principles (UK GAAP) and the basis of preparation of the information provided in the Regulatory Accounts because the Regulator. Where the Accounting Regulatory Guidance does not specifically address an accounting matter, then it requires UK GAAP to be followed.
We report to you our opinion on whether the regulatory historical cost accounting statements fairly, in terms of the historical cost convention, the income and costs, assets and liabilities of the appointee and its appointed business in accordance with the company's instrument of appointment and regulatory accounting proposal. Guideline 2.03 (Guideline for the classification of . expenses), Regulatory Accounting Guideline 3.06 (Guideline for the content of Regulatory Accounts) and Regulatory Accounting Guideline 4.03 (Guideline for the analysis of operating costs and assets); and whether the regulatory current cost accounting statements on pages [X] to [X] have been properly prepared in accordance with Regulatory Accounting Guidelines. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the Regulatory Accounts. Our opinion on the Regulatory Accounts is separate from our opinion on the statutory financial statements of the company we report on, which have been prepared for a different purpose.
The regulatory historical cost accounting statements on pages [X] and [X] have been prepared in accordance with Regulatory Accounting Guidelines in that infrastructure renewal accounting as applied in previous years must continue to be applied and accordingly that the relevant sections of Financial Reporting Standards 12 and 15 are not applied . In our opinion the Regulatory Accounts of the company for the year ended 31 March [XX] are reasonably present in accordance with Condition F of the Instrument of Appointment issued by the Department for Regional Development to Northern Ireland Water Limited as a water and sewerage undertaking in terms of the Water and Sewerage (Northern Ireland) Order 2006, the Regulatory Accounting Guidelines issued by the NIAUR and the accounting policy set out on page [X], the state of the company's affairs at 31 March [XX] on a historical cost and current cost basis, the historical cost and current cost profit for the year and the current cost cash flow for the year and has been properly prepared in accordance with those conditions, guidelines and accounting policies. This report is also made to the Northern Ireland Authority for Utilities Regulation (the "Regulator") in order to comply with the requirements of the appointment instrument by the Department for Regional Development of Northern Ireland Water Limited as a water and sewerage contractor under the Water and Sewerage Services (Northern Ireland) Order 2006 (the "Regulatory Licence") and to enable the NIAUR to verify that a report of independent auditors has been issued in relation to the Regulatory Accounts tables [6a, 18 to and 39].
We conducted our investigation in accordance with the Regulatory Accounting Guidelines, the annual information return reporting requirements dated [ ] and other relevant materials issued by NIAUR and the contract. An assessment involves examining, on a test basis, evidence relating to the amounts and disclosures in the tables of the Regulatory Accounts. It also includes an assessment of the significant estimates and judgments made by the directors of the Company in preparing the tables of the Regulatory Accounts, and whether the accounting policies are appropriate to the Company's circumstances, are consistently applied and adequately disclosed.
In forming our opinion, we also assessed the overall appropriateness of the presentation of information in the regulatory financial statement tables in terms of UK GAAP and Regulatory Accounting Guidelines. In our opinion, the tables of regulatory accounts contain information for the year ending March 31, 2011, which the company is required to submit to NIAUR in order to comply with condition F of the regulatory license and is substantively consistent with the information submitted to NIAUR in the regulatory accounts.
