THE Scottish Executive is set to agree a multi-million-pound rescue package for Scotland's troubled economic development agency.Whenever the taxpayer reads about "a complicated accounting device" he should reach for his revolver. It seems to me that here we have a failure to understand basic accounting principles. Depreciation is a process by which the cost incurred in purchasing an asset is spread over several years profit and loss accounts based on the expected useful life of the asset. The point is that one doesn't "set aside" money to cover depreciation - it's already been spent when the asset in question was purchased. Doesn't the enterprise minister understand this? Why didn't any other MSP jump on this statement?
Nicol Stephen, the enterprise minister, yesterday revealed that ministers were looking at a complicated accounting device to wipe out overspending at Scottish Enterprise.
He told Holyrood's enterprise committee that the agency had spent £25 million from last year's budget on economic development projects, but the money should have been set aside to cover "other costs" such as depreciation and property expenses.
Monday, 8 May 2006
Bookkeeping, government style
I've just come across this story about Scottish Enterprise (sic):