Annual Report and Resource Accounts

2007-2008

Contents

• Annual Report (including management commentary
• Remuneration Report
• Statement of Accounting Officer's Responsibilities
• Statement on Internal Control
• The Certificate and Report of the Comptroller and Auditor General
• Statement of Parliamentary Supply
• Operating Cost Statement
• Balance Sheet
• Cash Flow Statement
• Statement of Operating Costs by Departmental Aim and Objectives
• Notes to the Departmental Resource Accounts

Annual Report
For the year ended 21 March 2008

1. Basis of Accounts

2. Establishment of the Northern Ireland Court Service

Further information about the Court Service can be found at www.courtsni.gov.uk.

3. Departmental Boundary

During the year the Department held responsibility for the granting of funds to the Northern Ireland Legal Services Commission (NILSC) and the Northern Ireland Judicial Appointments Commission (NIJAC). As executive NDPB’s the NILSC and the NIJAC are outside the departmental boundary for the purposes of these resource accounts.

The funds invested by the Court Funds Office are specifically excluded from the departmental boundary, in accordance with HM Treasury guidance. Third party monies are similarly excluded. The Northern Ireland Legal Services Commission, the Northern Ireland Judicial Appointments Commission and Court Funds Office each publish their own audited financial statements.

4. Departmental Reporting Cycle

The main estimate and any supplementary estimates are published each year on the HM Treasury website at www.hm-treasury.gov.uk.

An Annual Report is published by the Court Service each year on www.courtsni.gov.uk/publications

5. Ministers and the Management Board

5.1 Ministers

This included all the organisations that made up the Department of Constitutional Affairs. The following were in Ministerial office up to 9 May 2007: The Lord Chancellor, The Right Honourable The Lord Falconer of Thoroton.

The Right Honourable Harriet Harman QC MP: Minister of State at the Department of Constitutional Affairs.

Baroness Ashton of Upholland: Parliamentary Under-Secretary of State at the Department of Constitutional Affairs.

Bridget Prentice MP: Parliamentary Under-Secretary of State at the Department of Constitutional Affairs.

Vera Baird QC MP: Parliamentary Under-Secretary of State at the Department of Constitutional Affairs.

The following held ministerial office for the remainder of the year, subsequent to the formation of the Ministry of Justice:

The Right Honourable Jack Straw MP: Minister of Justice (appointed 28 June 2007).

Lord Hunt of Kings Heath OBE Philip Hunt: Parliamentary Under Secretary of State for Justice (appointed 29 June 2007).

The Right Honourable David Hanson MP: Minister of State (appointed 9 May 2007). Marie Eagle MP: Parliamentary Under Secretary of State (appointed 29 June 2007). Michael Wills MP: Minister of State for Ministry of Justice (appointed 29 June 2007). Bridget Prentice MP: Parliamentary Under Secretary of State (appointed 9 May 2007).

5.2 Departmental Management Board

The composition of the Departmental Management Board during the year was as follows:

D A Lavery Director NI Court Service
D P Andrews Head of Publicly Funded Legal Services
J Durkin Head of Operations
G Fee Head of Criminal Policy and Legislation (from 31 March 2008)
L McAlpine Head of Civil Policy and Legislation
S Broderick Head of Tribunals Operations (from 30 April 2007)
D Thompson Finance Director
K King Non-executive Director
Executive members of the Management Board are appointed in accordance with the Civil Service Management Code.
David Thompson is an appointee, recruited via Interchange from PricewaterhouseCoopers.
Kevin King is an independent member of the Management Board

5.3 Other Committees

6. Management Commentary

6.1 Principal Aim and Objectives

The Department's purpose is:

• to facilitate the conduct of the business of the Supreme Court, county courts, magistrates' courts, coroners' courts and certain tribunals;
• to give effect to judgments to which the Judgments Enforcement (Northern Ireland) Order 1981 applies; and
• to provide the Lord Chancellor with policy advice and legislative support relating to his ministerial responsibilities in Northern Ireland.

• modernising court business
• improving access to justice
• promoting confidence in the justice system
• supporting an independent judiciary

6.2 Performance in 2007-08

Modernising court business

• Integrated Court Operations System (ICOS) and Causeway;
• Electronic Service Delivery Programme; and
• Courtroom Technology Programme.

The Court Service is a partner in the Causeway Programme which will underpin electronic communication and information sharing between the criminal justice agencies in Northern Ireland when fully implemented. The technical solution is currently undergoing rigorous user acceptance test trials and is planned to enter live service later in 2008.

As part of the Electronic Service Delivery programme new Copy Orders and Media Court List On-line Services were also launched during the reporting period.

The Courtroom Technology Programme was further progressed during the year with the implementation of new Video Conferencing and evidence display facilities across the province.

Improving access to justice

The improvement of access to justice and making the justice system more accessible to everyone remains a core objective.

The 2005 three year Customer Service Strategy committed the Court Service to provide “an efficient, accessible, and quality service for all customers by listening and responding to their needs.” During 2007-08 we made significant achievements in offering choice to our customers, improving the way in which we process our business and changing our listing arrangements to better meet their needs.

The department continued to work closely with its sponsored body, the Northern Ireland Legal Services Commission, in supporting its programme of legal aid reform to deliver publicly funded legal services where it is needed most. Officials worked hard to secure a sustainable funding position for the Commission for 2007 – 2008 and to improve the financial management regime.

In 2007-08 the Court Service brought forward legislation renaming the office of Resident Magistrate as District Judge (Magistrates’ Courts) in Northern Ireland. The restyling of the office, which was recommended by the Northern Ireland Criminal Justice Review, is intended to reflect, for the benefit of court users, that the magistracy is an integral part of the judiciary, and to reflect that the term resident, which has its origins in the nineteenth century has less relevance in the modern context where magistrates no longer need to live in the district in which they hold office.

Following the 2006-07 review of civil court fees, the new statutory framework was implemented in 2007-08. The new fees, along with a robust exemptions and remissions policy, achieve a balance between the need to recover the full cost of civil court business and the need to ensure continued access to justice. During the year a Court Funds Office (CFO) modernisation project was commenced, to review all aspects of CFO business policy, practices and operations to ensure a modern, professional, transparent, flexible and cost effective service which meets the specific needs of clients and stakeholders. This includes a review of governance arrangements, legislative provisions, accounting arrangements and operational systems and procedures.

The Enforcement of Judgments Office (EJO), responsible for the recovery of money, property and goods from civil court judgments, continues on its quality improvement programme under the Modernising Government Agenda. This year EJO was awarded a “Mark of Excellence” under the Business Excellence Model promoted by the European Foundation for Quality Management Scheme. The award was achieved through significant results including better value for money, considerable improvement in processing times, overall improvements in staff and customers’ satisfaction and modernising business through innovative technology such as on-line Case Tracking and Judgment Searching. To further support business improvement and people development, EJO introduced and implemented an extensive Quality Management System which was accredited under ISO 9001:2000. This highly detailed approach ensures that best practice is consistently applied in order to bring benefits for both staff and customers.

The modernised Coroners Service for Northern Ireland was inspected by Her Majesty’s Inspectorate of Court Adminstration (HMICA) during 2007. HMICA issued a report in October 2007 on the progress made by the Coroners Service since its establishment in April 2006 and recommending 7 areas where continued development could be made. The Coroners Service drew up and implemented an action plan to take forward the recommendations and at the same time issued a Business Review covering the disposal of business between the period of April 2006 to March 2007. These reports may be viewed on the Court Service website at www.courtsni.gov.uk.

In March 2006, the Secretary of State in direct rule announced a programme for tribunal reform including the transfer of administrative responsibility for NI tribunals from NI Departments and NIO to the Court Service on a cost neutral basis. It was also announced that any newly established tribunals would become the responsibility of the Court Service from the outset.

Since the Secretary of State’s announcement the Court Service has assumed responsibility for two new tribunals - the NI Valuation Tribunal (established in April 2007) and the Traffic Penalty Tribunal (which became operational in November 2006). During its first year in operation the NI Valuation Tribunal received 9 appeals (the first of which was received October 2007). Five appeals were heard within the financial year (4 disposed of; 1 adjourned). During the same period the Traffic Penalty Tribunal received 224 appeals (including Statutory Declaration appeals). Of these, 29 were either withdrawn by the appellant or not contested by Roads Service. Of those that proceeded to hearing 31 were successful; 125 were refused (a success rate for applicants of 20%). At the end of the year 39 cases await listing.

The Charities Tribunal when established will also be administered by the Court Service.

The administration of Criminal Injuries Compensation Appeal Panel for Northern Ireland (CICAPNI), previously sponsored by the Secretary of State, transferred to the Court Service on 1 December 2007. The transfer of the administration of the remaining NIO tribunal, the Police Medical Pensions Appeal Tribunal, will take place later in 2008.

Although a considerable amount of work was undertaken by the Court Service and by officials in the NI departments to give effect to the Secretary of State’s March 2006 announcement, the transfer of the administration of the NI departmental tribunals had not been completed when the NI Assembly was restored in May 2007. It therefore became necessary to seek the views of the Northern Ireland Executive on the future of the reform. The Executive endorsed a continuation of the reform programme on the 24th April 2008.

Other achievements made in Customer Service are as follows:

• The successful roll out of Witness Service to magistrates’ courts;
• Engagement with Victim Support regarding the appropriate refurbishment of Victim and Witness rooms throughout the court estate;
• The introduction of a remote link from NSPCC premises to Londonderry Courthouse;
• Contribution to the development of the Criminal Justice System Victim and Witness strategy;
• Introduction of a telephone interpreting service at public counters in Dungannon and Laganside Courts;
• Booklet for children who appear as a witness in civil courts;
• Customer exit survey, and
• Appointment of Case Progression Officers to assist in reducing avoidable delay for our customers.

Promoting Confidence in the Justice System

During the year the Court Service worked with colleagues in the Northern Ireland Office to facilitate the enactment of the Justice and Security (Northern Ireland) Act 2007 which delivered the Government’s commitment to abolish non-jury “Diplock courts”. With a view to making juries in Northern Ireland more representative of society as a whole, we have also progressed plans to widen the jury pool by conducting a review of persons ineligible to perform jury service and those excusable as of right.

The Court Service worked closely with the NIO on reforming sentencing reflected in the draft Criminal Justice (NI) Order currently laid before Parliament. The draft Order introduces extended sentences for public protection for serious cases and a system of release on licence for all prisoners which will replace the system of fifty percent remission. The Order also contains provisions designed to update and enhance road traffic law and contains a number of other miscellaneous provisions.

The Service has also been involved in preparation for the possible future devolution of justice functions in Northern Ireland. This has included the identification of those legislative steps necessary to devolve functions from the Lord Chancellor and the Court Service to the Northern Ireland Assembly and the development of policy in relation to devolution of those functions. Developmental work has also been undertaken to establish a framework for the future status of the Northern Ireland Court Service on devolution and on a draft concordat on judicial independence.

The Court Service Outreach Programme coordinates and underpins a commitment to promote and enhance knowledge and understanding about the courts and the wider justice system.

During 2007/08 the Court Service organised a wide range of educational and community based activities throughout Northern Ireland including a range of court visits tailored to meet the needs of schools, colleges, community groups and the general public.

The National Magistrates’ Court Mock Trial Competition is a highlight of the Court Service’s Outreach programme. Each year it involves 4,500 young people throughout England, Wales and Northern Ireland, and 800 magistrates and other legal professionals. The Northern Ireland heats of this Competition (2007/08) were hosted by the Court Service in Laganside Courts. This event provides young people with an excellent opportunity to gain a better knowledge and understanding of the justice system in an exciting and innovative way.

The Court Service supported Criminal Justice Week (18 – 22 February 2008) by inviting local schools and community groups to attend a range of open days at 7 court venues. The events offered local communities the opportunity to learn more about the Criminal Justice System and to engage with frontline court staff and representatives from other criminal justice agencies and the voluntary sector. Each of the open days focused on a particular theme – including crime prevention, safety, victims and witnesses, working with the community and the role of the judiciary/ legal profession.

6.3 Financial Position and Results for the Year

Financial Position (Balance Sheet)

The Department’s activities are financed mainly by Supply voted by Parliament and financing from the Consolidated Fund.

The Department’s Balance Sheet consists primarily of tangible fixed assets totalling £211m. Of this, £207m represents land and buildings; the remainder being Information Technology assets, furniture and fittings, plant and machinery.

During the year the department expended £0.5m in capital refurbishment and improvement of its property. IT additions amounted to £1.07m primarily as a result of the department’s ongoing programme of business modernisation.

Results for the Year (Operating Cost Statement)

Net Operating Costs amounted to £138.4m (2006-07 £136.7m restated)
• Staff Costs of £20.1m (2006-07 £19.4m restated)
• Other Administrative Costs of £6.7m (2006-07 £8.0m restated)
• Gross payments of £132.0m (2006-07 £127.0m restated) relating to the department’s programme activities
• Operating Income of £20.5m (2006-07 £17.7m)

The Department employed an average of 750 (Full Time Equivalent) staff during 2007-08, a decrease of 15 from 2006-07. Accommodation rentals, PFI service charges, and non-cash asset related charges accounted for the majority of other administration costs.

As in previous years, a large portion of the Department’s expenditure was allocated to publicly funded legal services, or Legal Aid. The funding of Legal Aid continues to be a pressure on departmental resources. However, the ongoing programme of reform has been designed to address this. The administration of publicly funded legal services is carried out by the Northern Ireland Legal Services Commission (NILSC). The NILSC is an executive Non-Departmental Public Body (NDPB), and subject to the relevant government and accounting guidelines. Details of operational and financial performance of the NILSC can be found on their website at www.nilsc.org.uk. The total grants paid to NILSC in 2007-08 amounted to £80m, over 50% of the gross expenditure of the Department.

The Department is also responsible for providing grant in aid funding to the Northern Ireland Judicial Appointments Commission (NIJAC). NIJAC is another executive NDPB and so is also subject to the relevant government and accounting guidelines. Further details about the activities of NIJAC can be found on their website at www.nijac.org. The grant in aid paid to NIJAC during 2007-08 totalled £1.4m. The Department had operating income of £20.5m which was used to support the administration of justice.

Fees from civil court work are included in these financial statements as appropriations in aid (AinA).

It is government policy that the provision of services for civil court proceedings must be self-financing, so the fees earned from this type of work must cover the cost of that provision. Note 10 shows the level of civil court costs, and the associated income generated. In 2007-08 the recovery level was 68%. It is expected that the revised civil fee structure was implemented in October 2007 after an Equality Impact Assessment and Regulatory Impact Assessment were undertaken, will result in an increase percentage cost recovery in 2008-09.

Comparison of Outturn against Estimate (Statement of Parliamentary Supply)

Supply Estimates are a request by the Department to Parliament for funds to meet expenditure. When approved by the House of Commons, they form the basis of the statutory authority for the appropriation of funds and for the Treasury to make issues from the Consolidated Fund. Statutory authority is provided annually by means of Consolidated Fund Acts and by an Appropriation Act. These arrangements are known as the “Supply Procedure” of the House of Commons.

As a government department the Court Service is accountable to Parliament for its expenditure. Parliamentary approval for its spending plans is sought through Supply Estimates presented to the House of Commons.

The Statement of Parliamentary Supply provides information on how the department has performed against the Parliamentary and Treasury control totals against which it is monitored. This information is supplemented by Note 2 which represents Resource Outturn in the same format as the Supply Estimate.

In 2007-08 the Court Service met all of its control totals. At £130.9m the net resource outturn was £9.9m less than the 2007-08 Estimate of £140.9m. The main reasons for this variance were:

• Expenditure on court and other legal services was £5.4m less than the Estimate
• Grants in support of the NI Legal Services Commission were £4.4m less than the Estimate
• Grants in support of the NI Judicial Appointments Commission were £0.1m less than the Estimate

A reconciliation of resource expenditure between Estimates, Accounts and Budgets can be found below.

It should be noted that the resource consumption of NDPB’s included above is an unaudited figure. The Resource Budget (Budget) in the Estimate for 2007-08 is £149,180k (2006-07: £158,893k).

These accounts have been prepared on a going concern basis.

Cash Flow Statement

The Cash Flow Statement provides information on how the Court Service finances its ongoing activities. The main sources of funds are from the Consolidated Fund.

The Cash Flow Statement shows a net cash outflow from operating activities of £122.5m (2006-07 £119.9m). The change is mainly due to increased support of the departmental NDPBs.

Statement of Operating Costs by Departmental Aim and Objectives

This statement reports expenditure by Departmental objective. The basis of allocation and apportionment of administration and programme expenditure is set out in Note 22.

The Criminal Injuries Compensation Appeals Panel Northern Ireland (CICAPNI)

During the financial year CICAPNI (the Panel) received a total of 859 appeals which shows a decrease of 152 from last years figure of 1011. This number represents an appeal rate of just fewer than 33% of the 2610 reviewed decisions given by the Compensation Agency during the same period. In the year the Panel processed 837 appeals and out of that number 371 applicants won their appeals thus indicating a successful application rate of approximately 44%. The total value of awards made to the successful applicants amounted to £2,050,656.30. The Panel finished the year with 679 appeals in hand and continues to work closely with the Agency's Presenting Officers Section in order to seek ways of reducing that number. The Panel also provided timely and considered advice to the Secretary of State on matters within the Scheme.

The Panel received 3 applications for judicial review in the financial year which represents a judicial review application rate of less than 0.4% of the total decisions made by the Panel in the year thus indicating the high quality of the decision making of the Panel.

The net costs of operating the panel for the 2007-08 financial year were £669,368 (2006-07 £568,995).

The 2006-07 comparatives have been restated to recognise the transfer of the Criminal Injuries Compensation Appeals Panel Northern Ireland (CICAPNI) from the Northern Ireland Office on 1st December 2007 by way of a Machinery of Government transfer. Restatement has resulted in an increase in net operating costs of £568,995 and an increase in net assets of £61,118. Full details are disclosed in notes 1.21 and 34 to the accounts.

6.4 Business Focus for the future

• Delivering responsive customer services – the Court service will deliver quality services which meet the needs of our customers.
• Improving access to justice – the Court service will work to make the justice system more accessible.
• Promoting confidence in the justice system – the Court Service will work to promote confidence in the justice system.
• Supporting an independent judiciary – the Court Service will support the Judiciary by providing it with a consistently high quality service.

The Corporate Plan 2008-2011 can be found on the Court Service website at www.courtsni.gov.uk/publications.

As noted earlier the NI Executive has now endorsed a continuation of tribunal reform. This reform programme will transfer administrative responsibility for tribunals from the NI departments to the NI Court Service. On devolution of justice, statutory responsibility for the administration of tribunals can transfer to a Department of Justice.

The Court Service continues to work with the NILSC to secure a stable and sustainable funding settlement throughout the CSR period. This involves seeking additional funds and taking costs out of the legal aid system.

6.5 Principle risks and uncertainties

Devolution of Policing and Justice

The Report also recommends that responsibility for the Northern Ireland Judicial Appointments Commission should be transferred to the Office of the First Minister and the Deputy First Minister and that responsibility for legal aid and the Northern Ireland Legal Services Commission should transfer to the planned Department of Justice. It also recommends that responsibility for the Northern Ireland Judicial Appointments Ombudsman transfer to the Department of Justice.

The Committee was unable to reach agreement on a date by which it will request devolution of justice and this will be for the Assembly and political Parties to decide.

6.6 Personal Data Related Incidents

Sustainability report

Community Programmes

Securing a clear understanding on the part of the community about the way in which criminal justice operates and is structured is an essential component of a strategy of enhancing public confidence in the system and is an important contribution to transparency and accountability.’ Our Community Programmes take place under a number of different themes. Below are major themes which the Court Service has developed programmes within which members of the community may be able to get involved.

• Education Online
  This programme provides teachers, Key Stage 3 & 4 pupils and primary school children with a simple guide to how criminal courts work. Downloads and teaching aids in this programme are designed to support the teaching of the citizenship module in schools.
• Outreach The Court Service has a diverse programme of court visits and events which take place in courthouses right across Northern Ireland. Following the principles set out in the Criminal Justice Review our Outreach Programme strives to promote understanding and involvement.
• Heritage The Northern Ireland Court Service recognises and accepts the responsibility bestowed upon it and is proud to conserve the buildings and their settings, for your interest and for the benefit of future generations. By taking our heritage tour you can learn about seven of our courthouses, including four listed buildings and Laganside Courts.
• Corporate Social Responsibility The Court Service is currently developing a corporate social responsibility strategy. Further information on this shall be provided when this strategy is published on www.courtsni.gov.uk.

Further information on the above can be found on www.courtsni.gov.uk

Improving Access of Justice

Improving access to justice is also about improving the ways through which justice can be secured involving resolving disputes by access to an independent tribunal. Tribunals serve a specific purpose – allowing the public to resolve disputes on a range of issues without resorting to the more formal process of a court hearing. The Court Service is responsible for a number of tribunals including the Office of the Social Security Commissioners and the Pensions Appeals Tribunal, and will build upon its programme of tribunal reform by transferring other tribunals to the Court Service to create a unified Courts and Tribunals Service for Northern Ireland.

The Court Service is also committed to reforming the civil justice system and are working closely with the Lord Chief Justice of Northern Ireland, Sir Brian Kerr, who has established a Civil Justice Committee. The Civil Justice Committee will consider how to make the civil justice system as accessible, economical and efficient as possible.

Environmental Issues

6.8 Public Interest and Other matters

Pensions and Early Departure Costs

Employment of Disabled Persons

The Department has in place a Code of Practice on the Employment of People With Disabilities and a Good Practice Guide for Managers. A Disability Liaison Officer has been designated to support people with disabilities in their employment. The Department aims to ensure that people with disabilities have equality of opportunity and fair participation in all aspects of their employment, and that discrimination does not take place.

Following the introduction of two new disability duties for public authorities in June 2007 the Court Service issued a Disability Action Plan for the period 2007-09. The Plan details the actions we have already taken and future plans to: I Promote positive attitudes towards disabled people; and II Encourage the participation of disabled people in public life.

Equal Opportunities and Diversity

The Department has in place an Equal Opportunities Policy which guards against discrimination in employment, a Diversity Strategy, which values difference and an Equality Scheme which ensures that all 9 groups contained in Section 75 of the Northern Ireland Act 1998 are protected. An Employment Equality Plan has been put in place to draw together all the proposed activity, which will take place in relation to these policies within the life of the corporate plan. The Equal Opportunities policy states that there shall be no discrimination against staff on grounds of gender, marital status, race, colour, nationality, ethnic origin, religion, disability, age or background. Employment and promotion are based solely on merit. Staff who work reduced hours are assessed on exactly the same basis as those working full time. A Dignity and Harmony at Work policy is in place and provides systems and procedures to enable and support staff to challenge harassment and bullying.

Employee Involvement

In addition to using the Whitley forum for communication with staff, a central focus of the development and review of policy within the department includes staff consultation. This is achieved through policy review focus groups to which staff may nominate themselves.

A Workplace Health Committee meets throughout the year to discuss health and safety matters of concern to staff and management.
The Court Service has a well established internal communications system, which meets the requirements of the Information and Consultation of Employees Regulations (NI) 2005, which includes for example team briefing sessions, focus groups, the staff handbook, staff notice board, intranet site, staff notices and staff attitude surveys. The departmental magazine of the Court Service, “Open Court” is circulated quarterly to all members of staff.

Payment of Suppliers

The Department is committed to the prompt payment of suppliers and has signed up to the Government's Prompt Payment Charter which promotes the payment of suppliers within 30 days. In 2007-08 98.02% (2006-07: 95%) of invoices were paid within 30 days.

Auditors

The audit of the financial statements for 2007-08 resulted in an audit fee of £45,850 (2006-07: £50,000). This fee is included in non staff administration costs, as disclosed in Note 8 to these accounts. The C&AG did not provide any non-audit services during the year. Directorships and other significant interests A register is maintained by the Court Service that includes details of company directorships and other significant interests held by Board members which may conflict with their management responsibilities. This register is available for public inspection upon request.

Other

Through the Court Funds Office, the Department administers a banking and investment service for funds deposited in court. Examples of the types of funds include monies held for minors, certain assets of some mental health patients, and payments in court in satisfaction of a claim. A formal review of administrative and investment processes has commenced with the objective of improving the efficiency and effectiveness of this service. The performance of these funds is outside the departmental boundary and further details may be found in the published white paper accounts for Funds in Court in Northern Ireland.

At the year-end there were no potential environmental liabilities. The Court Service had no contracted capital commitments as detailed in Note 23 to these accounts.

So far as I am aware, there is no relevant audit information of which the Department’s auditors are unaware. I confirm that I have taken all the steps that I ought to have taken to make myself aware of any relevant audit information and to establish that the Department’s auditors are aware of that information.

D A Lavery
Accounting Officer
26 June 2008

Remuneration Report

Remuneration Policy

The Review Body also advises the Prime Minister from time to time on the pay and pensions of Members of Parliament and their allowances; on Peers’ allowances; and on the pay, pensions and allowances of Ministers and others whose pay is determined by the Ministerial and Other Salaries Act 1975.

In reaching its recommendations, the Review Body has regard to the following considerations:

• the need to recruit, retain and motivate suitably able and qualified people to exercise their different responsibilities;
• regional / local variations in labour markets and their effects on the recruitment and retention of staff;
• Government policies for improving the public services including the requirement on departments to meet the output targets for the delivery of departmental services;
• the funds available to departments as set out in the Government’s departmental expenditure limits;
• the Government’s inflation target.

The Review Body takes account of the evidence it receives about wider economic considerations and the affordability of its recommendations.

Further information about the work of the Review Body can be found at www.ome.uk.com.

Service Contracts

Unless otherwise stated below, the officials covered by this report hold appointments, which are open-ended until they reach the normal retiring age of 60. Early termination, other than for misconduct, would result in the individual receiving compensation as set out in the Civil Service Compensation Scheme.

Staff are appraised annually against a set of competencies and individually targeted objectives. Bonuses, which form only a small percentage of total salaries, are the only form of remuneration subject to performance conditions.

Further information about the work of the Civil Service Commissioners can be found at www.civilservicecommissioners.gov.uk.

Salary and pension entitlements

Remuneration(audited)

Salary

This report is based on payments made by the Department and thus recorded in these accounts. Kevin King, non-executive director, supplies his services under the terms of a contract, which commenced on 7 October 2004. He is remunerated by way of a daily attendance fee. As non-executive director, there are no entitlements to pension or other contributions from the Court Service.

David Thompson, Finance Director is an appointee, recruited via Interchange. PricewaterhouseCoopers (PWC) supply his services under the terms of a contract, which commenced 5 March 2007. PWC are remunerated by way of a daily attendance fee. There are no entitlements to pension or other contributions from the Court Service. The total amount paid to PWC in 2007-08 for the services of David Thompson was £235,471.37.

Benefits in kind

Pension Benefits (audited)

Civil Service Pensions

Employee contributions are set at the rate of 1.5% of pensionable earnings for classic and 3.5% for premium, classic plus and nuvos. Benefits in classic accrue at the rate of 1/80th of final pensionable earnings for each year of service. In addition, a lump sum equivalent to three years’ pension is payable on retirement. For premium, benefits accrue at the rate of 1/60th of final pensionable earnings for each year of service. Unlike classic, there is no automatic lump sum. Classic plus is essentially a hybrid with benefits in respect of service before 1 October 2002 calculated broadly as per classic and benefits for service from October 2002 calculated as in premium. In nuvos a member builds up a pension based on his pensionable earnings during their period of scheme membership. At the end of the scheme year (31 March) the member’s earned pension account is credited with 2.3% of their pensionable earnings in that scheme year and the accrued pension is uprated in line with RPI. In all cases members may opt to give up (commute) pension for lump sum up to the limits set by the Finance Act 2004.

The partnership pension account is a stakeholder pension arrangement. The employer makes a basic contribution of between 3% and 12.5% (depending on the age of the member) into a stakeholder pension product chosen by the employee from a panel of three providers. The employee does not have to contribute but where they do make contributions, the employer will match these up to a limit of 3% of pensionable salary (in addition to the employer’s basic contribution). Employers also contribute a further 0.8% of pensionable salary to cover the cost of centrally-provided risk benefit cover (death in service and ill health retirement).

The accrued pension quoted is the pension the member is entitled to receive when they reach pension age, or immediately on ceasing to be an active member of the scheme if they are already at or over pension age. Pension age is 60 for members of classic, premium and classic plus and 65 for members of nuvos.

Further details about the Civil Service pension arrangements can be found at the website www.civilservice-pensions.gov.uk.

Cash Equivalent Transfer Values

Due to certain factors being incorrect in last years CETV calculator there might be a slight difference between the final period CETV for 2006/07 and the start of period CETV for 2007/08.

Real increase in CETV

D A Lavery
Accounting Officer
26 June 2008

Statement of Accounting Officer's Responsibilities

In preparing the accounts, the Accounting Officer is required to comply with the requirements of Managing Public Money and in particular to:

• observe the Accounts Direction issued by HM Treasury including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis;
• make judgements and estimates on a reasonable basis;
• state whether applicable accounting standards as set out in Government Financial Reporting Manual have been followed, and disclose and explain any material departures in the accounts; and
• prepare the accounts on a going concern basis.

Statement on Internal Control

Scope of responsibility

The purpose of the system of internal control

Capacity to handle risk

The risk and control framework

The Audit & Risk Management Committee is responsible for the maintenance and development of the risk management and review processes through, for example, ensuring compliance with the structured quarterly review points and twice yearly formal stewardship reporting in order to ensure continued alignment with planning and monitoring at corporate, divisional and branch level. In challenging risks identified by executive management the Committee ensures that there is ongoing consideration of the impact of both external and internal initiatives on the planned work of the Department. Risk management documentation and procedures have recently been reviewed and revisions to the system will be implemented during 2008/09; the newly established Planning and Performance Management team within Finance Branch will assume responsibility for risk management as part of their overall responsibility for corporate plan monitoring and reporting.

Review of effectiveness

The Department's Risk and Assurance Branch operates to the Government Internal Audit Standards. It submits regular reports, including an independent opinion by the Head of Risk & Assurance on the adequacy and effectiveness of the Department's system of risk management, control and governance.

My review of the effectiveness of the system of internal control is informed by the work of the internal auditors and the executive managers within the Northern Ireland Court Service who have responsibility for the development and maintenance of the internal control framework, and comments made by the external auditors in their management letter and other reports. The review processes outlined ensure that there is continuous improvement in the system of internal control.

I have been advised on the implications of the result of my review of the effectiveness of the system of internal control by the Board and the Audit & Risk Management Committee and a plan to address any weaknesses and to ensure continuous improvement of the system is in place.

Information risk is currently considered as part of the overall risk assessment process. A number of pieces of work were taken forward during the year to specifically address this area, including reaccreditation to ISO 27001, the information security management standard. A records management review is currently being carried out, the outcome of which should enable further development of our policies and procedures to enhance the management of information risk.

The Civil Court Fees Policy was introduced in September 2007 and although this has increased the value of fees collected, this is still significantly short of the full cost recovery position. We recognise that more work needs to be done and we will take this forward in 2008/09.

Throughout the year I have worked closely with the Northern Ireland Legal Services Commission (NILSC) to improve the financial management regime within the NILSC. The joint Northern Ireland Court Service / NILSC Financial Management Oversight Board continues to co-ordinate a range of activities to assist the NILSC in progressing various initiatives to improve its financial management including the production of Annual Accounts and its forecasting capability.

The Northern Ireland Court Service, through the Financial Management Oversight Board, continues to provide a senior accountant who is the NILSC's Director of Finance. This resource has been supplemented by a range of accountants and technical consultancy support. This work has enabled the NILSC to make progress with the production of accounts and agree a way forward for the treatment of provisions. In particular the Financial Management Oversight Board has made significant progress in establishing the forecast liabilities for the CSR period and this project has informed discussions with HMT aimed at securing a stable and viable funding platform.

The NILSC's internal auditors have undertaken a comprehensive programme of reviews of operational and financial systems, including the systems for the prevention and detection of fraud. The majority of these projects have provided only limited assurance and have highlighted a range of weaknesses, due to either the absence of or non compliance with key controls.

During the year a Landscape Review of the NILSC was undertaken and its results will be published shortly. This review has provided the new Chair of the NILSC with an important overview of the NILSC and key recommendations covering a wide range of the NILSC's activities. The NILSC is finalising an action plan setting out its response to the Landscape Review's findings and recommendations.

The circumstances surrounding the acceptance of hospitality by two Court Service officials in a sailing holiday at the invitation of a prominent contractor continue to be investigated by the PSNI and an independent investigation. Pending the outcome of these investigations the two officers remain on precautionary suspension. Neither of the investigations has reached their conclusion but it is expected that they will conclude in the course of the incoming year. The independent investigation will be concluded when PSNI investigations are finished, at which time a final report will be issued and an action plan will be devised at that stage to implement any recommendations, if applicable.

D A Lavery
Accounting Officer
26 June 2008

The Certificate and Report of the Comptroller and Auditor General to the House of Commons

Respective responsibilities of the Accounting Officer and auditor

My responsibility is to audit the financial statements and the part of the Remuneration Report to be audited in accordance with relevant legal and regulatory requirements, and with International Standards on Auditing (UK and Ireland).

I report to you my opinion as to whether the financial statements give a true and fair view and whether the financial statements and the part of the Remuneration Report to be audited have been properly prepared in accordance with HM Treasury directions issued under the Government Resources and Accounts Act 2000 and directions made by the Secretary of State for Justice under Article 8(4) (a) (iii) of the Criminal Injuries Compensation (Northern Ireland) Order 2002. I report to you whether, in my opinion, the Annual Report (including the management commentary but excluding the section titled ‘Comparison of Outturn against Estimate (Statement of Parliamentary Supply)’), is consistent with the financial statements. I also report whether in all material respects the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them.

In addition, I report to you if the Department has not kept proper accounting records, if I have not received all the information and explanations I require for my audit, or if information specified by HM Treasury regarding remuneration and other transactions is not disclosed.

I review whether the Statement on Internal Control reflects the Department’s compliance with HM Treasury’s guidance, and I report if it does not. I am not required to consider whether this statement covers all risks and controls, or to form an opinion on the effectiveness of the Department’s corporate governance procedures or its risk and control procedures.

I read the other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. This other information comprises the unaudited part of the Remuneration Report and the reconciliation of resource expenditure between Estimates, Accounts and Budgets. I consider the implications for my report if I become aware of any apparent misstatements or material inconsistencies with the financial statements. My responsibilities do not extend to any other information.

Basis of audit opinions

I conducted my audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. My audit includes examination, on a test basis, of evidence relevant to the amounts, disclosures and regularity of financial transactions included in the financial statements and the part of the Remuneration Report to be audited. It also includes an assessment of the significant estimates and judgments made by the Accounting Officer in the preparation of the financial statements, and of whether the accounting policies are most appropriate to the Department's circumstances, consistently applied and adequately disclosed.

I planned and performed my audit so as to obtain all the information and explanations which I considered necessary in order to provide me with sufficient evidence to give reasonable assurance that the financial statements and the part of the Remuneration Report to be audited are free from material misstatement, whether caused by fraud or error, and that in all material respects the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them. In forming my opinion I also evaluated the overall adequacy of the presentation of information in the financial statements and the part of the Remuneration Report to be audited.

Opinions

Audit Opinion

• the financial statements give a true and fair view, in accordance with the Government Resources and Accounts Act 2000 and directions made thereunder by HM Treasury and Article 8(4) (a) (iii) of the Criminal Injuries Compensation (Northern Ireland) Order 2002 and directions made thereunder by the Secretary of State for Justice, of the state of the Department’s affairs as at 31 March 2008, and the net cash requirement, net resource outturn, net operating cost, operating costs applied to objectives, recognised gains and losses and cash flows for the year then ended;
• the financial statements and the part of the Remuneration Report to be audited have been properly prepared in accordance with HM Treasury directions issued under the Government Resources and Accounts Act 2000; and
• information which comprises the Annual Report (including the management commentary but excluding the section titled ‘Comparison of Outturn against Estimate (Statement of Parliamentary Supply)’), is consistent with the financial statements.

Audit Opinion on Regularity

Report

T J Burr
Comptroller and Auditor General
National Audit Office
151 Buckingham Palace Road
Victoria
London
SW1W 9SS
14 July 2008

Statement of Parliamentary Supply

Summary of income payable to the Consolidated Fund.

Explanations of variances between Estimate and outturn are given in the Management Commentary. The Department accepts payment for fines imposed in the Magistrates and Crown courts for onward transmission to the Consolidated Fund. Fines imposed in court can be cleared either by payment or by means other than payment, including committal to prison. Fines are deemed to be outside the scope of the Department’s activities until paid. On collection of fines the receipts are accounted for as a creditor to the Consolidated Fund until paid over. For 2007-08, the balance of fines outstanding was:

Operating Cost Statement
for the year ended 21 march 2008

Statement of Parliamentary Supply

Balance Sheet

Cash Flow Statement for the year ended 21 March 2008

Statement of Operating Costs by Departmental Aim and Objectives for the year ended 21 march 2008

Notes to the Departmental Resource Accounts

1.0 Statement of Accounting Policies

In addition to the primary statements prepared under UK GAAP, the FReM also requires the Department to prepare two additional primary statements. The Statement of Parliamentary Supply and supporting notes show outturn against Estimate in terms of the net resource requirement and the net cash requirement. The

Statement of Operating Cost by Departmental Aim and Objectives and supporting notes analyse the Department’s income and expenditure by the objectives agreed with Ministers.

Where the FReM permits a choice of accounting policy, the accounting policy which has been judged to be most appropriate to the particular circumstances of the Department for the purpose of giving a true and fair view has been selected. The Department’s accounting policies have been applied consistently in dealing with items considered material in relation to the accounts.

1.1 Accounting Convention

1.2 Basis of Consolidation

The Department sponsors two executive non-departmental public bodies (NDPB’s). These are the Northern Ireland Legal Services Commission (NILSC) and the Northern Ireland Judicial Appointments Commission (NIJAC). These have been excluded from the Departmental boundary for the purposes of these resource accounts.

The NILSC was established on 1 November 2003 to operate the legal aid system, a function previously performed by the Legal Aid Department (LAD).

The NIJAC was established on 15 June 2005 to reform the system for the appointment of members of the judiciary and tribunals.

The funds invested by the Court Funds Office (Funds in Court) are specifically excluded from the departmental accounts following HM Treasury guidance. Third party monies are similarly excluded. The funds held on behalf of third parties by the Court Funds Office are included in Note 31.

Financial information about the Northern Ireland Legal Services Commission, the Northern Ireland Judicial Appointments Commission and the Funds in Court may be obtained from their separately published annual accounts.

1.3 Tangible Fixed Assets

Freehold and leasehold land has been included within the balance sheet on the basis of open market value for existing use. Due to the specialised nature of courthouses they are included within the balance sheet at depreciated replacement cost. Other buildings are included within the balance sheet on the basis of existing use value. Land and buildings surplus to requirements are valued on the basis of open market value less any directly attributable selling costs. Antiques are professionally valued every five years. All other assets are included at depreciated replacement cost.

Professional valuations of land and buildings take place at least once every five years in accordance with FRS 15 and appropriate indices are applied to revalue in intervening years. Land and buildings were valued by the Valuation and Lands Agency of the Department of Finance and Personnel at 31 March 2004. Indices used to update land and buildings were provided by the Valuation and Lands Agency.

Other tangible fixed assets have been stated at their value to the business by reference to Office of National Statistics (ONS) indices. The indices for other tangible fixed assets were obtained from ONS MM17 Price Index Numbers for Current Cost Accounting as at December 2007.

Assets costing more than the prescribed capitalisation level of £1,000 are treated as capital assets.

1.4 Intangible Fixed Assets

1.5 Depreciation

Useful lives are normally in the following ranges:

Antiques (non-operational) are included in the Furniture & Fittings section in the Fixed Asset note.

1.6 Donated Assets

1.7 Stocks

Assets seized by the Enforcement of Judgments Office are not included in stocks on the basis that they are not owned by the Department, but are held for resale in settlement of third party creditors. Third party assets held by the Enforcement of Judgments Office at the year-end are disclosed in Note 31.

1.8 Operating Income

Income is accrued and accounted for in the period in which it is earned in the operating cost statement. Operating income is stated net of VAT.

1.9 Administration and Programme Expenditure

1.10 Capital Charge

• tangible and intangible fixed assets where the cost of capital charge is based on opening values, adjusted pro rata for in-year:
- additions at cost - disposals as valued in the opening balance sheet (plus any subsequent capital expenditure prior to disposal) - impairments at the amount of the reduction of the opening balance sheet value (plus any subsequent capital expenditure) - depreciation of tangible and amortisation of intangible fixed assets.
• amounts to be surrendered to the Consolidated Fund, cash balances with the Office of the Paymaster General and donated assets, where the charge is nil.

1.11 Operating Leases

1.12 Pensions

1.13 Early Departure Costs

Pension liabilities may arise in respect of provisions for lump sum early departure costs and the balance of any unpaid ASLC. Such liabilities will normally be disclosed within creditors (falling due within one year).

1.14 Value Added Tax (VAT)

1.15 Private Finance Initiative (PFI) Transactions.

Where the balance of risks and rewards of ownership of the PFI property is borne by the Department, the property is recognised as a fixed asset and the liability to pay for it is accounted for as a finance lease. Contract payments are apportioned between an imputed finance lease charge and a service charge.

Further details of current ongoing agreements are shown in Note 25 to the accounts.

1.16 Grants Payable

1.17 Provisions

1.18 Contingent Liabilities

Where the time value of money is material, contingent liabilities, which are required to be disclosed under FRS 12, are stated at discounted amounts and the amount reported to Parliament separately noted. Contingent liabilities that are not required to be disclosed by FRS 12 are stated at the amounts reported to Parliament.

1.19 Third Party Assets

1.20 Changes to Estimation Techniques

1.21 Comparatives

Note 34 gives the financial impact of the restatement of comparatives necessary to recognise the transfer of the Criminal Injuries Compensation Appeals Panel Northern Ireland (CICAPNI) from the Northern Ireland Office to the Northern Ireland Court Service on 1st December 2007

Analysis of net resource outturn by section

Request for Resources 1:

Supporting the effective & efficient administration of justice in Northern Ireland

Detailed explanations of the variances are given in the Management Commentary.

3. Reconciliation of outturn to net operating cost and against Administration Budget

3(a) Reconciliation of net resource outturn to net operating cost

3(b) Outturn against final Administration Budget

4. Reconciliation of resources to cash requirement

5. Analysis of income payable to the Consolidated Fund In addition to appropriations in aid, the following income relates to the Department and is payable to the Consolidated Fund (cash receipts being shown in italics):

6. Reconciliation of income recorded within the Operating Cost Statement to operating income payable to the Consolidated Fund

7. Staff numbers and related costs

The Principal Civil Service Pension Scheme (PCSPS) is an unfunded multi-employer defined benefit scheme but the Northern Ireland Court Service is unable to identify its share of the underlying assets and liabilities. A full actuarial valuation was carried out at 31 March 2007. Details can be found in the resource accounts of the Cabinet Office: Civil Superannuation (www.civilservice-pensions.gov.uk).

For 2007-2008, employers' contributions of 2,990K were payable to the PCSPS (2006-07: 2,740k) at one of four rates in the range 17.1% - 25.5% (2006-07: 17.1% to 25.5%) of pensionable pay, based on salary bands. The scheme's Actuary reviews employer contributions every four years following a full scheme valuation. Employer contribution rates were revised from 2005-06 and will remain unchanged until 2008-09. The contribution rates reflect benefits as they are accrued, not when the costs are actually incurred, and reflect past experience of the scheme.

Employees can opt to open a partnership pension account, a stakeholder pension with an employer contribution. Employer contributions are age-related and range from 3% to 12.5% (2006-07 3% to 12.5%) of pensionable pay. Employers also match employee contributions up to 3% of pensionable pay. In addition, employer contributions of 0.8% of pensionable pay are payable to the PCSPS to cover the cost of the future provision of lump sum benefits on death in service and ill health retirement of these employees. During 2007-08, no employees of the Department opted for a partnership pension account.

Judicial office holders are mainly covered by the provisions of the Judicial Pensions Scheme. The terms of most of the pension arrangements are set out in (or in some cases are analogous to), the provisions of two Acts of Parliament, the Judicial Pensions Act 1981 and the Judicial Pensions & Retirement Act 1993 (JUPRA).

The Judicial Pension Scheme (JPS) is an unfunded public service scheme, providing pensions and related benefits for members of the judiciary. Participating Judicial Appointing or Administering Bodies make contributions known as accruing superannuation liability charges (ASLCs), to cover the expected cost of benefits under the JPS. ASLCs are assessed regularly by the Scheme's Actuary - The Government Actuary's Department.

The contribution rate required from the Judicial Appointing or Administering Bodies to meet the cost of benefits accruing in the year 2007-08 has been assessed as 30.75% of the relevant judicial salaries. This includes an element of 0.25% as a contribution towards the administration costs of the scheme. A contribution rate of 32.15% has been recommended for the year commencing 1 April 2008.

The liability for future payment is not chargeable to the Northern Ireland Court Service but is a charge on the JPS. The Northern Ireland Court Service is unable to identify its share of the underlying assets and liabilities. There is a separate scheme statement for the JPS as a whole and a full actuarial valuation was carried out as at 31 March 2005. Details of the Resource Accounts of the Department for Constitutional Affairs: Judicial Pensions Scheme can be found on the Department for Constitutional Affairs website (www.dca.gov.uk).

Average number of persons employed

The average number of whole-time equivalent persons employed during the year was as follows:

8. Administration Costs

9. Programme Costs

10. Income

An analysis of fees and charges from civil business services provided to external and public sector customers is as follows:

Income shown is in respect of civil fee earning business and has been accounted for in accordance with HM Treasury Fees and Charges Guide.

The Department is committed to achieving full cost recovery for the services it provides in respect of civil court business. The income for 2007-08 represents 68% of cost recovery. Further information on the Civil Fees Review can be found in the Management Commentary.

The civil business fee recovery target, above is based on expenditure net of exemptions and remissions. Applicants in receipt of certain means-tested benefits are entitled to automatic fee exemption. Remission of fees is considered on an individual basis and is granted in cases of hardship. Total fees remitted during 2007-08 amounted to 15.5k.

11. Analysis of net operating cost by spending body

12. Tangible Fixed Assets

13. Intangible Fixed Assets

14. Debtors

14(a) Analysis by type

14(b) Intra-Government Balances

15. Cash at bank and in hand

16. Creditors

16(a) Analysis by type

16(b)Intra-Government Balances

17 Provisions for liabilities and charges

17.1 Early departure costs

17.2 Legal claims

17.3 Other

18. Pension liability

On 4 April 2006, the judicial office-holder transferred to the Judicial Pensions Scheme. The provision represents the value of the pension liability at that date, based on the calculation prepared by the Government Actuaries Department (GAD) in April 2006.

19. General Fund

20. Reserves

20(a) Revaluation Reserve

20(b) Donated Asset Reserve

21. Notes to the Cash Flow Statement

21(a) Reconciliation of operating cost to operating cash flows

21(b)Analysis of capital expenditure and financial investment

21(c) Analysis of capital expenditure and financial investment by Request for Resources

21(d) Analysis of financing

21(e) Reconciliation of Net Cash Requirement to increase/(decrease) in cash

22. Notes to the Statement of Operating Costs by Departmental Aim and Objectives

Resources per cost centre have been allocated to strategic objectives based on information obtained from managers within the Department. Common overheads have been apportioned to departmental cost centres on the basis of staff numbers.

Programme grants and other current expenditure have been allocated as follows:

Capital employed by Departmental Aim and Objectives at 31 March 2008

23. Capital commitments

24. Commitments under leases

24.1 Operating leases

Commitments under operating leases to pay rentals during the year following the year of these accounts are given in the table below, analysed according to the period in which the lease expires.

24.2 Finance leases

The Department had no finance leases operating during the year.

25. Commitments under PFI contracts

25.1 Off-balance sheet

IS/IT Services

In January 2000, the Department entered into a 10 year IS/IT Service Provision Agreement with Fujitsu Services. The estimated capital value of the agreement is £8m at 1999 prices. The agreement is based on Private Finance Initiative and will enable the Court Service to develop modern information systems to support the administration of justice. To date the following services have been successfully delivered -

• a new IT network and infrastructure
• corporate desktop service with Internet and e-mail access to all user staff
• a Court Service Intranet
• the migration to the new infrastructure and continued support for 9 existing legacy systems
• the development of a static website
• application databases to support the operations of the Office of Care & Protection and the Enforcement of Judgments Office.

Significant progress has been made in the development of the Integrated Court Operations System (ICOS) that will support the business processes across all court tiers. The application is being rolled out in a modular and incremental manner; with the following modules becoming operational

The scheme also includes the provision of hardware and software support services, training services, legacy support services and help desk support services.

The agreement provides for technology refresh between years 3 and 5 of the agreement. The technology refresh was completed in July 2005.

The PFI property is not an asset of the department. This contract is treated as a contract for services and the operating cost statement will be charged with the service costs in the period to which they relate.

The computer equipment assets held by the Department were transferred to the provider and therefore were treated as a disposal in the 1999-2000 financial statements.

25.2 On-balance sheet

Laganside Complex

During February 1999, the Department entered into a Public Private Partnership (PPP) agreement with a private sector provider for the provision and maintenance of a high quality new court complex in Belfast.

In accordance with the agreement, service charges became payable with effect from February 2002 to December 2026 and these are charged to the operating cost statement. The new court complex has been accounted for as an asset of the Department.

The PFI property is included in the Department's accounts as a fixed asset. The liability to pay for the property is in substance a finance lease obligation. Contractual payments therefore comprise two elements, imputed finance lease charges and service charges. The imputed finance lease obligation is as follows:-

25.3 Charge to the Operating Cost Statement and future commitments

Other financial commitments

As in 2007-08, there are no contracted non-capital commitments at 31 March for which no provision has been made.

Financial instruments

As permitted by FRS 13, the Department has elected to exclude from disclosure all debtors and creditors which mature or become payable within 12 months from the balance sheet date.

Liquidity risk

The Department's net revenue resource requirements are financed by resources voted annually by Parliament, as is its capital expenditure. It is not, therefore, exposed to significant liquidity risks.

Interest rate risk

The Department's financial assets and its financial liabilities carry no rates of interest, and the Court Service is not therefore exposed to interest rate risks.

Interest rate profile and currency profile

The Department's financial assets of 8,996,000 (2007: 3,191,000) are non-interest bearing financial assets and comprise of cash at bank and in hand. Cash at bank and in hand is held in sterling and is available on demand.

The Department's financial liabilities of 3,133,000 (2007: 3,003,000) are non-interest bearing financial liabilities and are sterling liabilities.

Foreign Currency Risk

The department's exposure to foreign currency risk is not significant. Foreign currency income and expenditure is negligible.

Fair values

Fair value is not significantly different from book value since, in the calculation of book value, the expected cash flows have been discounted by the Treasury discount rate of 2.2 per cent in real terms

28. Contingent liabilities disclosed under FRS 12

There is an estimated contingent liability of £959,850.41

The amount for criminal appeals represents the amount of claims before the Taxing Master pending judicial direction. The Taxing Master is a Supreme Court judge and has complete discretion in deciding how much should be paid out in respect of claims put before him. As each case is assessed on an individual basis, it is not possible to predict the financial outcome of these claims. The department has therefore treated these as contingent liabilities in accordance with FRS 12.

There are further contingent liabilities upon which it is not possible to put a value. In particular, claims have been made under past contracts. It is the Department's assertion that these claims are unsubstantiated.

29. Losses and special payments

During the year, there were no losses or special payments that required disclosure.

30. Related-party transactions

During the year the Department provided funding to the Northern Ireland Legal Services Commission (NILSC) and the Northern Ireland Judicial Appointments Commission (NIJAC). These bodies are regarded as related parties with which the Department has had various material transactions during the year.

In addition, the Department has had a small number of transactions with other government departments and other central government bodies.

No minister or other related parties have undertaken any material transactions with the Department during the year.

Finance Director and Board Member, David Thompson, is an appointee, recruited via Interchange from PricewaterhouseCoopers (PWC). The total amount paid to PWC in 2007-08 for services in addition to the services of the Finance Director amounted £131,297 (excl. vat). This includes £118,840 paid by the Northern Ireland Court Service on behalf of the Northern Ireland Legal Services Commission.

31. Third-party assets

The Department holds as custodian or trustee certain assets belonging to third parties.

The Court Service, through the Court Funds Office, continues to provide a banking and investment service for funds that are deposited in court. The investment service is carried out by an external service provider. Examples of the types of funds include monies held for minors until they attain the majority, certain assets of some mental health patients, payments into court in satisfaction of a claim as well as statutory deposits and unclaimed balances in court.

These are not departmental assets and are not included in the accounts. The assets held at the balance sheet date to which it was practical to ascribe monetary values, comprised monetary assets such as bank balances and monies on deposit, and listed securities. They are set out in the table immediately below.

Other significant assets held at the balance sheet date to which it was not practical to ascribe monetary values comprised:

32. Entities within the departmental boundary

The departmental boundary incorporates only the core department of the Northern Ireland Court Service.

During the year the Department held responsibility for the granting of funds to the Northern Ireland Legal Services Commission (NILSC) and the Northern Ireland Judicial Appointments Commission (NIJAC). As executive NDPB's the NILSC and NIJAC are outside the departmental boundary for the purposes of these resource accounts.

The funds invested by the Court Funds Office are specifically excluded from the departmental boundary, following HM Treasury guidance. Third party monies are similarly excluded.

The Northern Ireland Legal Services Commission, Northern Ireland Judicial Appointments Commission and Court Funds Office publish separate audited financial accounts.

33. Criminal Injuries Compensation Appeals Panel Northern Ireland

The administrative functions of the Criminal Injuries Compensation Appeals Panel Northern Ireland (CICAPNI) transferred from the Secretary of State for Northern Ireland (SOSNI) to the Secretary of State for Justice (SOSJ) in the 2007 / 08 financial year and were delivered by a Machinery of Government letter on 1^st December 2007. A PES transfer from NIO to Court Service provides the funding for the tribunal.

As a consequence of this transfer CICAPNI ceased to be an NDPB and is therefore not required to produce a separate annual report and accounts for the 2007 / 08 financial year.

The SOSJ has directed a statement of accounts in accordance with the 2002 Order and the Scheme, requiring that he only requires a simple statement providing the full cost of CICAPNI for the year, given as a Note to the Court Service accounts.

This direction is in accordance with The Criminal Injuries (NI) Order 2002 ("the 2002 Order") and with the Northern Ireland Criminal Injuries Compensation Scheme 2002 ("the Scheme") which established the CICAPNI. Both the 2002 Order and the Scheme provide that the Secretary of State may direct the accounts of the CICAPNI.

This accounting note has been prepared in accordance with the accounts direction issued by the Secretary of State for Justice on 22 February 2008.

CICAPNI Statement of Account as at 31 March 2008

34. Machinery of Government Changes and Transfers of Function

The restatement of £568,995.12 in the Operating Costs Statement includes the following:

35. Post Balance Sheet events/ Prior year adjustments