GILSLAND CHURCH OF ENGLAND PRIMARY SCHOOL · PDF fileCompany Registration Number 08047328...

Company Registration Number 08047328

GILSLAND CHURCH OF ENGLAND PRIMARY SCHOOL

FINANCIAL STATEMENTS

31 AUGUST 2014

(A company limited by guarantee)

ArmstrongWatson® Accountants & Financial Advisers

GILSLAND CHURCH OF ENGLAND PRIMARY SCHOOL (A company limited by guarantee)

CONTENTS

Page

Reference and administrative details of the academy, its governors and advisers 1

Governors' report 2 - 5

Governance statement 6 - 8

Statement on regularity, propriety and compliance 9

Governors' responsibilities statement 10

independent auditors' report 11 - 1 2

Independent reporting accountant's assurance report on regularity 1 3 - 1 4

Statement of financial activities 1 5 - 1 6

Balance sheet 17

Cash flow statement 18

Notes to the financial statements 1 9 - 3 8


REFERENCE AND ADMINISTRATIVE DETAILS OF THE ACADEMY, ITS GOVERNORS AND ADVISERS FOR THE YEAR ENDED 31 AUGUST 2014

Members

D Murray, Chairman J A Armstrong Carlisle Diocesan Board of Finance Limited A Higgs (resigned 30 June 2014)

Governors/Directors

D Murray, Chairman M Roberts L Rooney N Kirby H Kirby J Dalgleish S O'Neil H Richardson M Bell C Hawkins B Barwick Revd A Longs haw M Smith (resigned 30 June 2014) D Taylor (appointed 1 July 2014) A Higgs (appointed 1 July 2014)

Company registered number

08047328

Principal and registered office

Gilsland Church of England Primary School, Gilsland, Brampton, Cumbria, CA8 7AA

Company Secretary and Clerk to the Governors

Y Weir

Head Teacher/ Accounting Officer

C Boucetla

independent auditors

Armstrong Watson Audit Limited, Fairview House, Victoria Place, Carlisle, Cumbria, CA1 1HP

Bankers

HSBC Bank Pic, 29-31 English Street, Carlisle, Cumbria, CAS 8JW

Solicitors

Dickinson Dees LLP, One Trinity, Broad Chare, Newcastle upon Tyne, NE1 2HF

Actuary

Mercer Limited, Mercury Court, Tithebarn Street, Liverpool, L2 2QH

Page 1


GOVERNORS' REPORT FOR THE YEAR ENDED 31 AUGUST 2014

The Governors (who are also directors of the Charity for the purposes of the Companies Act) present their annual report together with the audited financial statements of Gilsland Church of England Primary Schooi (the Academy) for the year ended 31 August 2014. The Governors confirm that the Annual report and financial statements of the Academy comply with the current statutory requirements, the requirements of the Academy's governing document and the provisions of the Statement of Recommended Practice (SORP) "Accounting and Reporting by Charities" issued in March 2005.

STRUCTURE, GOVERNANCE & MANAGEMENT

CONSTITUTION

The Academy is a company limited by guarantee and an exempt charity. The Academy is constituted under a Memorandum of Association dated 26 April 2012.

The Governors, some of whom are directors of the charitable company for the purpose of company law, are responsible for the overall management and control of Gilsland Church of England Primary School. The charitable company is known as Gilsland Church of England Primary School.

The work of implementing their policies is carried out by members of the following committees:

Finance and Staffing Curriculum Premises

The trustees and members of the Academy Trust are detailed at the start of the financial statements.

MEMBERS' LIABILITY

Each member of the charitable company undertakes to contribute to the assets of the charitable company in the event of it being wound up while they are a member, or within one year after they cease to be a member, such amount as may be required, not exceeding £10, for the debts and liabilities contracted before they ceased to be a member.

METHOD OF RECRUITMENT AND APPOINTMENT OR ELECTION OF GOVERNORS

The management of the Academy is the responsibility of the Governors who are elected and co-opted under the terms of the Articles of Association.

The core activities of Governors are to: Monitor the quality of the school performance

• Monitor the school's finances Hold the school to account in order to provide best value

New Governors are appointed as follows: The Staff Governors are appointed by vote of the Governors

• Parent Governors are appointed by vote of the Governors • The Head Teacher is also a Governor

POLICIES AND PROCEDURES ADOPTED FOR THE INDUCTION AND TRAINING OF GOVERNORS

New Governors are welcomed to their first full Governing Body meeting, they are introduced to ail Governors and given a copy of the school prospectus. All new Governors are given an introductory tour of the school and meeting with the Head Teacher. New Governors are given a welcome pack explaining their role and providing details of various websites that are accessible. Existing Governors attend training courses where appropriate.

Page 2


GOVERNORS' REPORT (continued) FOR THE YEAR ENDED 31 AUGUST 2014

ORGANISATIONAL STRUCTURE

The Governors determine the genera! policy of the Academy. The day to day management of the Academy is delegated to the Head Teacher. The Head Teacher undertakes the key leadership role overseeing educational, pastoral and administrative functions. The day to day administration is undertaken with the policies and procedures approved by the Governors.

RISK MANAGEMENT

The Governors have assessed the major risks to which the Academy is exposed, in particular those related to the operations and finances of the Academy, and are satisfied that systems and procedures are in place to mitigate our exposure to the major risks.

The Governors are responsible for the overseeing of the risks faced by the Academy. Detailed considerations of risk are delegated to the Senior Management of the Academy. Risks are identified and assessed, controls established throughout the period. Through risk management processes established for the Academy, the governors are satisfied that the major risks identified have been adequately mitigated where necessary. It is recognised that systems can only provide reasonable but not absolute assurance that major risks have been adequately managed.

OBJECTIVES AND ACTIVITIES

OBJECTS AND AIMS

Gilsland Church of England Primary School is a company limited by guarantee, operating under a Funding Agreement signed by the Secretary of State for Education, dated 1 June 2012. Its main objective is to maintain a non-fee paying primary school with a designated Church of England religious character offering a broad curriculum for the public benefit conducted in accordance with principles, practices and tenets of the Church of England both generally and in particular in relation to arranging for religious education and daily acts of worship and in having regard to the advice of the Diocesan Board of Education, and in providing education for students of different abilities at the heart of the community in Gilsland. The Governors confirm they have referred to the guidance obtained in the Charity Commission's general guidance on public benefit when reviewing the Academy's aims and objectives.

Our aims are: • To provide a broad, balanced curriculum conducted in accordance with the Church of England principles

and practices which provides rich and appropriate experiences and opportunities to develop each child, to encourage high achievements and promote excellence for all. To provide a safe, internal and external school environment in which children can develop a healthy lifestyle and learn to stay safe. To develop and extend positive learning partnerships between school, home and community.

• To provide high quality teaching and support in all aspects of learning and to make learning fun, giving our children the confidence to succeed.

• To have high expectations for achievement of our children enabling them to have positive attitudes towards their work, developing enquiring minds and becoming life-long learners. To provide quality of opportunity for all. To create a welcoming, caring, positive learning environment to enable both the children and the staff to feel valued and respected.

Page 3



OBJECTIVES, STRATEGIES AND ACTIVITIES

During the year we have achieved many of our aims.

We carried out a science audit within the Academy, took part in science week and had a science after school club.

The school kitchen has been extended into the school house to create a better working environment with the capacity to incorporate the Free School Meals initiative. As part of this work we have carried out some works in preparation for the relocation of the boys toilets.

We purchased a number of new laptops for use by the pupils.

We have been instrumental in setting up a rural learning alliance and have been awarded Teaching School Status and are a lead school for this.

We have continued extending our sporting activities throughout the year.

ACHIEVMENTS AND PERFORMANCE

GOING CONCERN

After making appropriate enquiries, the Board of Governors has a reasonable expectation that the Academy has adequate resources to continue in operational existence for the foreseeable future. For this reason it continues to adopt the going concern basis in preparing the financial statements. Further details regarding the adoption of the going concern basis can be found in the Accounting Policies.

REVIEW OF ACTIVITIES

The financial statements show a surplus of £79,821 for the financial period from 1 September 2013 to 31 August 2014 based on total incoming resources for the period of £326,196.

During the period ended 31 August 2014 the total resources expended were £278,375 which were spent entirely on the Academy's Objectives and were covered by recurrent grant funding from Department of Education and other income sources.

Included with the Statement of Financial Activities is an actuarial gain of £32,000 for the period for the Local Government Pension Scheme (See note 26)

INVESTMENT POLICY AND PERFORMANCE

Investments will only be made with the prior approval of the Finance Committee. Governors will take a view on the type of investment and liquidity of funds to ensure cash flow needs are meet.

FINANCIAL REVIEW

RESERVES POLICY

The Governors review the reserve levels of the Academy annually. This review encompasses the nature of reserves. The Governors do not have a formal reserves policy. Any reserves, which have been accumulated in line with best practice, are to provide sufficient working capital to cover any delay, reduction or cessation of funding streams, together with any unexpected emergencies such as urgent maintenance requirements. Reserves over and above this level are reinvested in the school's educational operations to ensure the highest quality of education continues to be provided.

Page 4



PLANS FOR THE FUTURE

FUTURE DEVELOPMENTS

Gilsland Church of England Primary School will continue to provide an educational environment to develop the potential of pupils in its care and strive to ensure its pupils progress in their education. The plans for the current academic year involves:

Embedding the new national curriculum across all subjects Relocation of the boys toilets to create an additional classroom Upgrading the sewerage system

DISCLOSURE OF INFORMATION TO AUDITORS

Each of the persons who are Governors at the time when this Governors' report is approved has confirmed that:

• so far as that Governor is aware, there is no relevant audit information of which the charitable company's auditors are unaware, and

• that Governor has taken all the steps that ought to have been taken as a Governor in order to be aware of any relevant audit information and to establish that the charitable company's auditors are aware of that information.

AUDITORS

The auditors, Armstrong Watson Audit Limited, have indicated their willingness to continue in office. The Designated Governors will propose a motion re-appointing the auditors at a meeting of the Governors.

This report was approved by order of the Board of Governors on 3] and signed on the board's behalf by:

C Boucetla Accounting Officer

D Murray Chair of Governors

Page 5


GOVERNANCE STATEMENT

SCOPE OF RESPONSIBILITY

As Governors, we acknowledge we have overall responsibility for ensuring that Gilsland Church of England Primary School has an effective and appropriate system of control, financial and otherwise. However such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss.

The Board of Governors has delegated the day-to-day responsibility to the Head Teacher, as Accounting Officer, for ensuring financial controls conform with the requirements of both propriety and good financial management and in accordance with the requirements and responsibilities assigned to it in the funding agreement between Gilsland Church of England Primary School and the Secretary of State for Education. They are also responsible for reporting to the Board of Governors any material weaknesses or breakdowns in internal control.

GOVERNANCE

The information on governance included here supplements that described in the Governors' report and in the Governors' responsibilities statement. The Board of Governors has formally met 6 times during the year. Attendance during the year at meetings of the Board of Governors was as follows:

Governor

D Murray, Chairman A Higgs M Roberts L Rooney N Kirby H Kirby J Dalgleish S O'Neil H Richardson M Bell C Hawkins B Barwick Revd A Longshaw M Smith D Taylor

Meetings attended Out of a possible

3 6 1 1 6 6 2 6 3 6 5 6 5 6 5 6 4 6 3 6 3 6 4 6 2 6 3 5 1 1

The Finance and Staffing Committee is a sub-committee of the main Board of Governors. Its purpose is to monitor the financial and staffing situation of the Academy.

Attendance at meetings in the year was as follows:

Governor Meetings attended Out of a possible

D Murray M Roberts M Smith H Richardson

3 4 4 4 1 4 3 4

The Academy also has a Premises Committee and a Curriculum Committee who met 3 and 4 times respectively during the year.

Page 6

GiLSLAND CHURCH OF ENGLAND PRIMARY SCHOOL (A company limited by guarantee)

GOVERNANCE STATEMENT (continued)

THE PURPOSE OF THE SYSTEM OF INTERNAL CONTROL

The system of internal control is designed to manage risk to a reasonable level rather than to eliminate aii risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an ongoing process designed to identify and prioritise the risks to the achievement of Academy policies, aims and objectives, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically.

As the Academy has grown and matured the Board of Governors have realised that the internal control systems in place at the start of year needed to be more robust and compliant. The board of governors have therefore reviewed the systems and are taking steps to develop these further to ensure that these are in line with the Academies Financial Handbook.

CAPACITY TO HANDLE RISK

The Board of Governors has reviewed the key risks to which the Academy is exposed together with the operating, financial and compliance controls that have been implemented to mitigate those risks. The Board of Governors is of the view that there is a formal ongoing process for identifying, evaluating and managing the Academy's significant risks, that has been in place for the year 1 September 2013 to 31 August 2014 and up to the date of approval of the annual report and financial statements. This process is regularly reviewed by the Board of Governors.

THE RISK AND CONTROL FRAMEWORK

The Academy's system of internal financial control is based on a framework of regular management information and administrative procedures including the segregation of duties and a system of delegation and accountability. In particular, it includes:

setting targets to measure financial and other performance; regular reviews by the Finance and Staffing Committee of reports which indicate financial performance against the forecasts and of major purchase plans, capital works and expenditure programmes; clearly defined purchasing (asset purchase or capita! investment) guidelines; delegation of authority and segregation of duties; identification and management of risks.

The Board of Governors acknowledge that there were staffing issues during the start of the year which resulted in a decline in the standard of internal controls operating within the Academy. This matter has now been addressed through the implementation of systems and procedures which are in line with those contained within the Academies Financial Handbook. The Board of Governors have also requested that the external auditors extend their work to encapture a regular review of the Academy's newly implemented internal controls. This will commence for the Academic year 14/15.

Page 7


GOVERNANCE STATEMENT (continued)

REVIEW OF EFFECTIVENESS

As Accounting Officer, the Head Teacher has responsibility for reviewing the effectiveness of the system of internal control. During the year in question the review has been informed by:

• the work of the external auditors; • the financial management and governance self-assessment process; • the work of the executive managers within the Academy who have responsibility for the development and

maintenance of the internal control framework. The Accounting Officer has been advised of the implications of the result of their review of the system of interna) control by the Finance and Staffing Committee and a plan to address weaknesses and ensure continuous improvement of the system is in place.

Approved by order of the members of the Board of Governors on 3/i -i IH- and signed on its behalf, by:

cvuvA r? X

Mr D Murray Chair of Govenors

Mrs C Boucetla Head Teacher - Accounting Officer

Page 8


STATEMENT ON REGULARITY, PROPRIETY AND COMPLIANCE

As Accounting Officer of Gilstand Church of England Primary School I have considered my responsibility to notify the Academy Board of Governors and the Education Funding Agency of material irregularity, impropriety and non-compliance with EFA terms and conditions of funding, under the funding agreement in place between the Academy and the Secretary of State. As part of my consideration I have had due regard to the requirements of the Academies Financial Handbook (2013).

I confirm that I and the Academy Board of Governors are able to identify any material, irregular or improper use of funds by the Academy, or material non-compliance with the terms and conditions of funding under the Academy's funding agreement and the Academies Financial Handbook (2013).

I confirm that no instances of materia! irregularity, impropriety or funding non-compliance have been discovered to date. If any instances are identified after the date of this statement, these will be notified to the Board of Governors and EFA.

j

JAtesrC Boucetla Accounting Officer

Date: 3 / izz-j

Page 9

GILSLAND CHURCH OF ENGLAND PRIMARY SCHOOL (A company Hmited by guarantee)

GOVERNORS' RESPONSIBILITIES STATEMENT FOR THE YEAR ENDED 31 AUGUST 2014

The Governors (who act as Governors of Gilsland Church of England Primary School and are also the directors of the charitable company for the purposes of company law) are responsible for preparing the Governors' report and the financial statements in accordance with the Annual Accounts Direction issued by the Education Funding Agency, United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) and applicable law and regulations.

Company law requires the Governors to prepare financial statements for each financial year. Under company law the Governors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charitable company and of its incoming resources and application of resources, including its income and expenditure, for that period. In preparing these financial statements, the Governors are required to:

• select suitable accounting policies and then apply them consistently;

• observe the methods and principles of the Charities SORP;

• make judgments and accounting estimates that are reasonable and prudent;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in business.

The Governors are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company's transactions and disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Governors are responsible for ensuring that in its conduct and operation the charitable company applies financial and other controls, which conform with the requirements both of propriety and of good financial management. They are also responsible for ensuring grants received from EFA/DfE have been applied for the purposes intended.

The Governors are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Approved by order of the members of the Board of Governors on 3. ( » M- and signed on its behalf by:

W r u s - f - ^

Mr D Murray Chair of Governors

Page 10


INDEPENDENT AUDITORS' REPORT TO THE BOARD OF GOVERNORS OF GILSLAND CHURCH OF ENGLAND PRIMARY SCHOOL

We have audited the financial statements of Gilsland Church of England Primary School for the year ended 31 August 2014 which comprise the Statement of financial activities, the Balance sheet, the Cash flow statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law, United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) and the Academies Accounts Direction 2013 to 2014 issued by the Education Funding Agency.

This report is made solely to the Academy's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Academy's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Academy and its members, as a body, for our audit work, for this report, or for the opinion we have formed.

RESPECTIVE RESPONSIBILITIES OF GOVERNORS AND AUDITORS

As explained more fully in the Governors' responsibilities statement, the Governors (who are also the directors of the Academy for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS

A description of the scope of an audit of financial statements is provided on the Financial Reporting Council's website at www.frc.org.uk/auditscopeukprivate.

OPINION ON FINANCIAL STATEMENTS

In our opinion the financial statements:

• give a true and fair view of the state of the academy's affairs as at 31 August 2014 and of its incoming resources and application of resources, including its income and expenditure, for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006 and the Academies Accounts Direction 2013 to 2014 issued by the Education Funding Agency.

OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006

In our opinion the information given in the Governors' report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Page 11


INDEPENDENT AUDITORS' REPORT TO THE BOARD OF GOVERNORS OF GILSLAND CHURCH OF ENGLAND PRIMARY SCHOOL

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

• the financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of Governors' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit; or

• the Governors were not entitled to take advantage of the small companies' exemption from the requirement to prepare a Strategic report.

.-sss&r: Jean Carroll (Senior Statutory Auditor) for and on behalf of Armstrong Watson Audit Limited Chartered Accountants & Statutory Auditors Carlisle Date: -

Page 12


INDEPENDENT REPORTING ACCOUNTANTS' ASSURANCE REPORT ON REGULARITY TO GILSLAND CHURCH OF ENGLAND PRIMARY SCHOOL AND THE EDUCATION FUNDING AGENCY

In accordance with the terms of our engagement letter dated 25 September 2014 and further to the requirements of the Education Funding Agency (EFA) as included in the Academies Accounts Direction 2013 to 2014, we have carried out an engagement to obtain limited assurance about whether the expenditure disbursed and income received by Gilsland Church of England Primary School during the year 1 September 2013 to 31 August 2014 have been applied to the purposes Identified by Parliament and the financial transactions conform to the authorities which govern them.

This report is made solely to Gilsland Church of England Primary School and EFA in accordance with the terms of our engagement letter. Our work has been undertaken so that we might state to Gilsland Church of England Primary School and EFA those matters we are required to state in a report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Gilsland Church of England Primary School and EFA, for our work, for this report, or for the conclusion we have formed.

RESPECTIVE RESPONSIBILITIES OF GILSLAND CHURCH OF ENGLAND PRIMARY SCHOOL'S ACCOUNTING OFFICER AND THE REPORTING ACCOUNTANT

The accounting officer is responsible, under the requirements of G(Island Church of England Primary School's funding agreement with the Secretary of State for Education dated 15 March 2013, and the Academies Financial Handbook extant from 1 September 2013, for ensuring that expenditure disbursed and income received is applied for the purposes intended by Parliament and the financial transactions conform to the authorities which govern them.

Our responsibilities for this engagement are established in the United Kingdom by our profession's ethical guidance and are to obtain limited assurance and report in accordance with our engagement letter and the requirements of the Academies Accounts Direction 2013 to 2014. We report to you whether anything has come to our attention in carrying out our work which suggests that in all material respects, expenditure disbursed and income received during the year 1 September 2013 to 31 August 2014 have not been applied to purposes intended by Parliament or that the financial transactions do not conform to the authorities which govern them.

APPROACH

We conducted our engagement in accordance with the Academies Accounts Direction 2013 to 2014 issued by EFA. We performed a limited assurance engagement as defined in our engagement letter.

The objective of a limited assurance engagement is to perform such procedures as to obtain information and explanations in order to provide us with sufficient appropriate evidence to express a negative conclusion on regularity.

A limited assurance engagement is more limited in scope than a reasonable assurance engagement and consequently does not enable us to obtain assurance that we would become aware of ail significant matters that might be identified in a reasonable assurance engagement. Accordingly, we do not express a positive opinion.

Our engagement includes examination, on a test basis, of evidence relevant to the regularity and propriety of the academy's income and expenditure.

Page 13


INDEPENDENT REPORTING ACCOUNTANTS* ASSURANCE REPORT ON REGULARITY TO GILSLAND CHURCH OF ENGLAND PRIMARY SCHOOL AND THE EDUCATION FUNDING AGENCY (continued)

The work undertaken to draw our conclusion includes:

• having a general awareness of regularity and propriety whilst conducting the statutory audit function;

• review of extra-contractual payments for staff have been made in accordance with the Handbook;

• review of resources expended for individual transactions exceeding £5,000;

• reviewing any borrowing agreements, including leases to ensure they have been made in accordance

with the Handbook;

• reviewing the minutes of the meeting of the main committees during the year;

• reviewing expenditure to check that it was not ultra vires to the charitable objectives;

• obtaining trustee/governor's declaration of interests.

CONCLUSION

In the course of our work, except for the matters listed below nothing has come to our attention which suggests that in all material respects the expenditure disbursed and income received during the year 1 September 2013 to 31 August 2014 have not been applied to purposes intended by Parliament and the financial transactions do not conform to the authorities which govern them.

Matters arising:

lack of internal controls over cash recording leading to an insufficient audit trail.

lack of authorisation procedures within the purchases cycle.

limited management information and reporting.

insufficient policies in place, not in accordance with those suggested in the Academies Financial

Handbook.

missing/out of date contracts of employment held within the personnel files.

non-submission of quarterly VAT returns from October 2012 to August 2014.

non-adherence to the statutory obligation for filing with Companies House in respect of the non-

appointment of directors on a timely basis.

non-compliance with the disclosure requirements of the Annual Financial Statements on the Academies website.

Jean Carroll (Senior Statutory Auditor) For and on behalf of

Armstrong Watson Audit Limited Chartered Accountants & Statutory Auditors Carlisle

Date: . \<>^ Z - o v V

Page 14


STATEMENT OF FINANCIAL ACTIVITIES (incorporating income and expenditure account and statement of total recognised gains and losses)

FOR THE YEAR ENDED 31 AUGUST 2014

Restricted fixed asset

funds

As restated Total

funds Period 1

June 2012 to 31 August

2013

Total funds

Unrestricted funds

Restricted funds

2014 2014 2014 2014 Note £ £ £ £ £

INCOMING RESOURCES Incoming resources from

generated funds: Voluntary income Activities for generating funds 4 Investment income

Incoming resources from charitable activities

3 1,527 15,468

1,527 15,468

567,992 15,135

5 14 14 9

71,006 6 238,181 309,187 326,587

TOTAL INCOMING RESOURCES 238,181 71,006 326,196 909,723 17,009

RESOURCES EXPENDED Costs of generating funds:

Costs of generating funds Charitable activities Governance costs

19,828 288,479

20,662

7 17,779 5,484 234,917

9,632

23,263 245,480

9,632 10,563

8

TOTAL RESOURCES EXPENDED 11 10,563 278,375 328,969 17,779 250,033

NET INCOMING I (OUTGOING) RESOURCES BEFORE TRANSFERS (770) (11,852) 60,443 47,821 580,754

Page 15


STATEMENT OF FINANCIAL ACTIVITIES (continued) FOR THE YEAR ENDED 31 AUGUST 2014

Restricted Restricted fixed asset

funds

As restated Total

funds Period 1


2013

Unrestricted funds

Total funds funds

2014 2014 2014 2014 Note £ £ £ £ £

Transfers between Funds (1,070) 21 1,070

NET INCOME FOR THE YEAR (770) (12,922) 61,513 47,821 580,754

Actuarial gains and losses on defined benefit pension schemes 32,000 32,000 4,000

NET MOVEMENT IN FUNDS FOR THE YEAR (770) 19,078 61,513 79,821 584,754

Total funds at 1 September 2013 (53,708) 637,692 770 584,754

TOTAL FUNDS AT 31 AUGUST 2014 (34,630) 699,205 584,754 664,575

All activities relate to continuing operations.

The Statement of Financial Activities includes all gains and losses recognised in the year.

The notes on pages 19 to 38 form part of these financial statements.

Page 16

GiLSLAND CHURCH OF ENGLAND PRIMARY SCHOOL (A company limited by guarantee) REGISTERED NUMBER: 08047328

BALANCE SHEET AS AT 31 AUGUST 2014

2014 2013 Note £ £ £ £

FIXED ASSETS Tangible assets

CURRENT ASSETS

18 697,934 638,762

Debtors Cash at bank

19 80,608 6,676

12,871 31,850

87,284 44,721

CREDITORS: amounts falling due within one year (14,729) (66,643) 20

NET CURRENT ASSETS 20,641 29,992

TOTAL ASSETS LESS CURRENT LIABILITIES Defined benefit pension scheme liability

668,754 (84,000)

718,575 (54,000) 26

NET ASSETS INCLUDING PENSION SCHEME LIABILITY 664,575 584,754

FUNDS OF THE ACADEMY Restricted funds:

Restricted funds Restricted fixed asset funds

21 19,370 699,205

30,292

637,692 21

Restricted funds excluding pension liability Pension reserve

667,984

(84,000)

718,575 (54,000)

Total restricted funds Unrestricted funds

664,575 583,984 21 770

TOTAL FUNDS 664,575 584,754

The financial statements were approved by the Governors, and authorised for issue, on 3 O e o a L f - t o e j QO)M- and are signed on their behalf, by:

Mr D Murray Chair of Governors

The notes on pages 19 to 38 form part of these financia) statements.

Page 17


CASH FLOW STATEMENT FOR THE YEAR ENDED 31 AUGUST 2014

As restated Period 1 June

2012 to 31 August 2013 2014

Note £ £

Net cash flow from operating activities Returns on investments and servicing of finance Capital expenditure and financial investment

(26,459) 23 32,911 24 14 9 24 1,271 (1,070)

(25,174) 31,850 (DECREASE)/INCREASE IN CASH IN THE YEAR

RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS FOR THE YEAR ENDED 31 AUGUST 2014

As restated Period 1 June

2012 to 31 August 2014 2013

£ £

(Decrease)/!ncrease in cash in the year (25,174) 31,850

MOVEMENT IN NET FUNDS IN THE YEAR Net funds at 1 September 2013 (as restated)

(25,174) 31,850

31,850

6,676 31,850 NET FUNDS AT 31 AUGUST 2014

The notes on pages 19 to 38 form part of these financial statements.

Page 18


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2014

1. ACCOUNTING POLICIES

1.1 Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention, with the exception of investments which are included at market value. The financial statements have been prepared in accordance with the Statement of Recommended Practice (SORP), 'Accounting and Reporting by Charities' published in March 2005, the Academies Accounts Direction 2013 to 2014 issued by EFA, applicable accounting standards and the Companies Act 2006.

1.2 Fund accounting

Unrestricted income funds represent those resources which may be used towards meeting any of the charitable objects of the academy at the discretion of the Governors.

Restricted fixed asset funds are resources which are to be applied to specific capital purposes imposed by funders where the asset acquired or created is held for a specific purpose.

Restricted general funds comprise all other restricted funds received and include grants from the Department for Education.

Investment income, gains and losses are allocated to the appropriate fund.

1.3 Incoming resources

All incoming resources are included in the Statement of financial activities when the Academy has entitlement to the funds, certainty of receipt and the amount can be measured with sufficient reliability.

Grants are included in the Statement of financial activities on a receivable basis. The balance of income received for specific purposes but not expended during the period is shown in the relevant funds on the Balance sheet. Where income is received in advance of entitlement of receipt, its recognition is deferred and included in creditors as deferred income. Where entitlement occurs before income is received, the income is accrued.

General Annual Grant is recognised in full in the year for which it is receivable and any unspent amount is reflected as a balance in the restricted general fund.

Capital grants are recognised when receivable and are not deferred over the life of the asset on which they are expended. Unspent amounts of capital grant are reflected in the balance in the restricted fixed asset fund.

The value of donated services and gifts in kind provided to the Academy are recognised at their open market value in the period in which they are receivable as incoming resources, where the benefit to the Academy can be reliably measured. An equivalent amount is included as expenditure under the relevant heading in the Statement of financial activities, except where the gift in kind was a fixed asset in which case the amount is included in the appropriate fixed asset category and depreciated over the useful economic life in accordance with the Academy's policies.

Donations are recognised on a receivable basis where there is certainty of receipt and the amount can be reliably measured.

Page 19



1. ACCOUNTING POLICIES (continued)

1.4 Resources expended

Expenditure is recognised in the period in which a liability is incurred and has been classified under headings that aggregate al! costs related to that category. Where costs cannot be directly attributed to particular headings they have been allocated on a basis consistent with the use of resources, with central staff costs allocated on the basis of time spent, and depreciation charges allocated on the portion of the asset's use. Other support costs are allocated based on the spread of staff costs.

Costs of generating funds are costs incurred in attracting voluntary income, and those incurred in trading activities that raise funds.

Charitable activities are costs incurred in the Academy's educational operations.

Governance costs include the costs attributable to the Academy's compliance with constitutional and statutory requirements, including audit, strategic management and Governors' meetings and reimbursed expenses.

All resources expended are inclusive of irrecoverable VAT.

1.5 Going concern

The Governors assess whether the use of going concern is appropriate, i.e. whether there are any material uncertainties related to events or conditions that may cast significant doubt on the ability of the academy to continue as a going concern. The Governors make this assessment in respect of a period of one year from the date of approval of the financial statements.

1.6 Tangible fixed assets and depreciation

All assets costing more than £100 are capitalised.

Where tangible fixed assets have been acquired with the aid of specific grants, either from the government or from the private sector, they are included in the Balance sheet at cost and depreciated over their expected useful economic life. The related grants are credited to a restricted fixed asset fund in the Statement of financial activities and are carried forward in the Balance sheet. Depreciation on such assets is charged to the restricted fixed asset fund in the Statement of financial activities so as to reduce the fund over the useful economic life of the related asset on a basis consistent with the Academy's depreciation policy.

A review for impairment of a fixed asset is carried out if events or changes in circumstances indicate the carrying value of any fixed asset may not be recoverable. Shortfalls between the carrying value of fixed assets and their recoverable amounts are recognised as impairments, impairment losses are recognised in the Statement of Financial Activities.

Tangible fixed assets are stated at cost less depreciation. Depreciation is not charged on freehold land. Depreciation on other tangible fixed assets is provided at rates calculated to write off the cost of those assets, less their estimated residual value, over their expected useful lives on the following bases:

Freehold property Office equipment

2% per annum straight line 20% per annum reducing balance

Page 20

GiLSLAND CHURCH OF ENGLAND PRIMARY SCHOOL {A company limited by guarantee)


1. ACCOUNTING POLICIES (continued)

1.7 Operating leases

Rentals under operating leases are charged to the Statement of financial activities on a straight line basis over the lease term.

1.8 Taxation

The Academy is considered to pass the tests set out in Paragraph 1 Schedule 6 of the Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the Academy is potentially exempt from taxation in respect of income or capita! gains received within categories covered by Chapter 3 Part 11 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes.

1.9 Pensions

Retirement benefits to employees of the Academy are provided by the Teachers' Pension Scheme ("TPS") and the Local Government Pension Scheme ("LGPS"). These are defined benefit schemes and the assets are held separately from those of the Academy.

The TPS is an unfunded scheme and contributions are calculated so as to spread the cost of pensions over employees' working lives with the Academy in such a way that the pension cost is a substantially level percentage of current and future pensionable payroll. The contributions are determined by the Government Actuary on the basis of quinquennia! valuations using a prospective benefit method. As stated in note 26, the TPS is a multi-employer scheme and the Academy is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis. The TPS is therefore treated as a defined contribution scheme and the contributions recognised as they are paid each year.

The LGPS is a funded scheme and the assets are held separately from those of the Academy in separate trustee administered funds. Pension scheme assets are measured at fair value and liabilities are measured on an actuarial basis using the projected unit method and discounted at a rate equivalent to the current rate of return on a high quality corporate bond of equivalent term and currency to the liabilities. The actuarial valuations are obtained at least triennially and are updated at each balance sheet date. The amounts charged to operating surplus are the current service costs and gains and losses on settlements and curtailments. They are included as part of staff costs. Past service costs are recognised immediately in the Statement of financial activities if the benefits have vested. If the benefits have not vested immediately, the costs are recognised over the period until vesting occurs. The expected return on assets and the interest cost are shown as a net finance amount of other finance costs or credits adjacent to interest. Actuarial gains and losses are recognised immediately in other gains and losses.

Page 21



2. GENERAL ANNUAL GRANT (GAG)

Under the funding agreement with the Secretary of State the academy was subject to limits at 31 August 2014 on the amount of GAG that could be carried forward from one year to the next. An amount equal to 12% of GAG could be carried forward, of which up to 2 % could be used for general recurrent purposes, with any balance being available for premises/capital purposes.

The Academy has not exceeded these limits during the year ended 31 August 2014.

3. VOLUNTARY INCOME As restated

Total funds

Period 1 June 2012 to 31

2014 August 2013

Unrestricted funds

Restricted funds

Total funds

2014 2014 £ £ £ £

Donations 1,527 1,527 567,992

Voluntary income

2014 2013 £ £

Transfer of land and buildings on conversion Transfer of pension liability on conversion Transfer of cash balances on conversion Sundry donations

643,000 (83,000)

6,751 1,241 1,527

1,527 567,992 Total

4. ACTIVITIES FOR GENERATING FUNDS As restated

Total funds


2014 August 2013

Unrestricted funds

Restricted funds

Total funds

2014 2014 £ £ £ £

Catering income Fundraising income

14,227 1,241

14,227 1,241

11,662 3,473

15,468 15,468 15,135

Page 22

GILSLAND CHURCH OF ENGLAND PRIMARY SCHOOL (A company Hmited by guarantee)


5. INVESTMENT INCOME As restated

Total funds


2014 August 2013

Restricted funds

Total funds

Unrestricted funds

2014 2014 £ £ £ £

14 9 Bank interest received 14

6. INCOMING RESOURCES FROM CHARITABLE ACTIVITIES As restated

Total funds


2014 August 2013

Total funds

Unrestricted funds

Restricted funds

2014 2014 £ £ £ £

301,704 4,580 2,000

321,122 4,918

301,704 4,580 2,000

Educational operations Music, swimming and school trips University student income Uniform 903 903 547

309,187 326,587 309,187

FUNDING FOR ACADEMY'S EDUCATIONAL OPERATIONS As restated

Total funds


2014 August 2013

Total funds

Unrestricted funds

Restricted funds

2014 2014 £ £ £ £

DfE/EFA grants

Capital maintenance grant General annual grant Start-up grant Other DfE grants Other Government grants SEN

66,680 208,931

66,680 208,931 229,751

25,000 34,419 31,952

18,831 18,831

7,262 7,262

301,704 301,704 321,122

Page 23

GILS LAND CHURCH OF ENGLAND PRIMARY SCHOOL (A company limited by guarantee)


Other DfE and Government grants

2014 Period 1 June £ 2012 to 31 August

2013 £

Capital Devolved Formula Pupil premium ESG - Phonics PE grant Other CCC CCC - Aitchinson PGCE Funding

4,326 5,790

4,270

600 8,115

30,149 27,606

1,256 3,090

18,831 66,371 Total

7. COSTS OF GENERATING FUNDS As restated

Total funds


2014 August 2013

Unrestricted funds

Restricted funds

Total funds

2014 2014 £ £ £ £

Catering 17,779 5,484 23,263 19,828

8. GOVERNANCE COSTS As restated

Total funds


2014 August 2013

Unrestricted funds

Restricted funds

Total funds

2014 2014 £ £ £ £

Legal and professional costs Auditors' remuneration Overprovision of accountancy fees in the

previous year Governors' expenses reimbursed

6,132 4,000

6,132 4,000

16,529 4,000

(500) (500) 133

9,632 9,632 20,662

Page 24

GILSLAND CHURCH OF ENGLAND PRIMARY SCHOOL (A company iimited by guarantee)


9. DIRECT COSTS

Total Period 1


2013 Educational operations

Total 2014

€ £ £ Interest cost on pension scheme Educational supplies Staff development Other direct costs Teaching and educational support staff costs National insurance Pension cost

3,000 20,195

3,096

3,000 20,195

3,096

5,000 14,569 6,961

839 839 227 153,064

11,274 22,263

125,412 9,765

14,750

125,412 9,765

14,750

177,057 177,057 213,358

10. SUPPORT COSTS

Total Period 1


2013 Educational

operations Total 2014

£ £ £ 10,563

5,369 10,563

5,369 9,578 6,168 1,005

Depreciation Maintenance of premises and equipment Cleaning Rent and rates Heat and light Insurance Security and transport Technology costs Bank interest and charges Other support costs Support staff costs National insurance Pension cost

695 695 736 736 883

11,114 6,246 2,760 3,844

9,437 4,793

9,437 4,793

457 457 4,127 4,127

188 5,287

24,515 5,287

24,515 5,452

22,871 1,685 3,327

241 241 2,203 2,203

68,423 68,423 75,121

Page 25



11. RESOURCES EXPENDED

Non Pay Staff costs Expenditure

Other costs Total Total


August 2013 2014 2014 2014 £ £ £ £

Costs of generating voluntary income 23,263 23,263 19,828

Costs of generating funds 23,263 23,263 19,828

Educational operations Support costs - Educational operations

149,927 26,959

27,130 41,464

177,057 68,423

213,358 75,121

Charitable activities 176,886 68,594 245,480 288,479

Governance 9,632 9,632 20,662

176,886 101,489 278,375 328,969

12. ANALYSIS OF RESOURCES EXPENDED BY ACTIVITIES

Activities undertaken

directly Support

Total costs Total Period 1 June

2012 to 31 2014 August 2013 2014 2014

£ £ £ £

Educational operations 177,057 68,423 245,480 288,479

13. NET INCOMING I (OUTGOING) RESOURCES

This is stated after charging:

Period 1 June 2012 to 31 August

2013 2014 £ £

Depreciation of tangible fixed assets: - owned by the charity

Auditors' remuneration 10,563 4,000

9,578 4,000

Page 26



14. STAFF

Staff costs

Staff costs were as follows:


2013 2014 £ £

Wages and salaries Social security costs Other pension costs (Note 26)

149,927 10,006 16,953

175,935 12,959 25,590

176,886 214,484

Staff numbers

The average number of persons employed by the Academy during the year expressed as full time equivalents was as follows:

2014 2013 No. No.

Teachers Administration and support Management

3 3 4 4 1 1

8 8

Higher paid staff

No employee received remuneration amounting to more than £60,000 in either year.

Three of the above employees participated in the Teacher's Pension Scheme during the period ended 31 August 2014. Employer pension contributions for these staff amounted to £13,136 (2013 - £16,202). Five other employees participated in the Local Government Pension Scheme. Employer pension contributions for these staff amounted to £7,888 (2013 - £9,177).

Page 27



15. GOVERNORS' REMUNERATION AND EXPENSES

The Head Teacher and other staff Governors only receive remuneration in respect of services they provide undertaking the roles of Head Teacher and staff, and not in respect of their services as Governors. Other Governors did not receive any payments, other than expenses, from the Academy in respect of their role as Governors. The value of Governors' remuneration fell within the following bands:

2014 £'000

2013 £'000

Heather Kirby Julia Dalgleish (Staff Governor) Susan O'Neii (Staff Governor) Beverly Barwick Christine Boucetla (Head Teacher)

0-5 0-5 25-30 15-20

25-30 15-20

5-10 5-10 55-60 55-60

During the year, no Governors received any reimbursement of expenses (2013 - one Governor, £133).

16. GOVERNORS' AND OFFICERS* INSURANCE

In accordance with normal commercial practice the Academy has purchased insurance to protect Governors and officers from claims arising from negligent acts, errors or omissions occurring whilst on Academy business. The insurance provides cover up to £25,000,000 on any one claim and the cost for the year ended 31 August 2014 was £4,793 (2013 - £4,475). The cost of this insurance is included in the total insurance cost.

17. OTHER FINANCE INCOME


2013 2014 £ £

Expected return on pension scheme assets Interest on pension scheme liabilities

4,000 (7,000)

3,000 (8,000)

(3,000) (5,000)

Page 28



18. TANGIBLE FIXED ASSETS

Office and classroom equipment

Freehold land and buildings Total

£ £ £ Cost At 1 September 2013 Additions

643,000 63,954

5,340 5,781

648,340 69,735

At 31 August 2014 706,954 11,121 718,075

Depreciation At 1 September 2013 Charge for the year

8,975 8,459

603 9,578 10,563 2,104

17,434 At 31 August 2014 2,707 20,141

Net book value At 31 August 2014 689,520 8,414 697,934

634,025 4,737 At 31 August 2013 638,762

Included in land and buildings is freehold land at a valuation of £284,000 (2013 - £284,000), which is not depreciated.

The EFA undertook an exercise to have land and buildings valued for all Academies opened as at 31 March 2013 by one of two contractors. The valuation was carried out by Mouchel and the effective date of the valuation was 31 August 2013.

The Academy's additions relating to freehold land and buildings are wholly for the renovation of the school house to extend the kitchen. A capital maintenance fund grant of £66,679 was received, of which £33,340 is included in accrued income at the year end, see note 19.

Office and classroom equipment additions were purchased from Devolved Capital Formula grant of £4,326 and General Annual Grant of £1,455.

19. DEBTORS

2014 2013 £ £

Due after more than one year Other debtors

Due within one year Trade debtors Other debtors Prepayments and accrued income

1,172

254 40,351 38,831

8,484 4,387

80,608 12,871

Page 29



20. CREDITORS: Amounts falling due within one year

2014 2013 £ £

Trade creditors Other taxation and social security Other creditors Accruals and deferred income

49,877 3,028 2,332

11,406

3,886 1,923 8,920

66,643 14,729

£ Deferred income Resources deferred during the year 5,883

Page 30



21. STATEMENT OF FUNDS

Gains/ (Losses)

Brought Incoming Resources Forward resources Expended

Transfers in/out

Carried Forward

£ £ £ £ £ £

Unrestricted funds

General Funds (17,779) 770 17,009

Restricted funds

General Annual (223,944)

(9,344) (7,262)

(1,070) Grant (GAG) Other DFE grants

30,292 208,931 14,505

7,262

14,209 5,161

SEN Music, swimming

and school trips University student

income Uniform Pension reserve

(4,580) 4,580

(2,000) (903)

(2,000)

2,000 903

(84,000) 32,000 (54,000)

(1,070) (34,630) (53,708) 238,181 (250,033) 32,000

Restricted fixed asset funds

Devolved Capital Formula/GAG

Transfer of land and property

Capital maintenance fund

3,667 (2,103) 1,070 6,960 4,326

(7,180) 626,845 634,025

66,680 (1,280) 65,400

(10,563) 1,070 699,205 637,692 71,006

Total restricted funds 583,984 309,187 (260,596) 32,000 664,575

32,000 664,575 Total of funds 584,754 326,196 (278,375)

The specific purposes for which the funds are to be applied are as follows:

General Annua! Grant (GAG) must be used for the normal running costs of the Academy.

The pension reserve relates to the Academy's share of the deficit of the Local Government Pension Scheme.

Under the funding agreement with the Secretary of State, the Academy was not subject to a limit on the amount of GAG that it could carryforward at 31 August 2014.

Page 31

GILS LAND CHURCH OF ENGLAND PRIMARY SCHOOL (A company limited by guarantee)


SUMMARY OF FUNDS

Brought Incoming Fo rwa rd res o u rces

Resources Expended

Transfers in/out

Gains/ (Losses)

Carried Forward

£ £ £ £ £ £

General funds Restricted funds Restricted fixed

asset funds

17,009 (53,708) 238,181

770 (17,779) (250,033) (1,070) 32,000 (34,630)

637,692 71,006 (10,563) 1,070 699,205

584,754 326,196 (278,375) 32,000 664,575

A transfer of £1,070 has been made from restricted funds to restricted fixed asset funds to correct the opening fund position to match the opening net book value of assets held by the Academy.

22. ANALYSIS OF NET ASSETS BETWEEN FUNDS Restricted

fixed asset funds

As restated Total

funds Period 1


2013

Unrestricted funds

Restricted funds

Total funds

2014 2014 2014 2014 £ £ £ £ £

Tangible fixed assets Debtors due after more than 1

year Current assets Creditors due within one year Provisions for liabilities and

charges

697,934 697,934 638,762

1,172 84,841

(66,643)

1,172 86,112

(66,643) 1,271 44,721

(14,729)

(54,000) (54,000) (84,000)

(34,630) 699,205 664,575 584,754

23. NET CASH FLOW FROM OPERATING ACTIVITIES


2014 2013 £ £

Net incoming resources before revaluations Returns on investments and servicing of finance Assets transferred on conversion (non-cash) Depreciation of tangible fixed assets Capital grants from DfE Increase in debtors Increase in creditors FRS 17 adjustments

47,821 580,754 (14) (9)

(560,000) 9,578

(4,270) (12,871) 14,729

5,000

10,563 (71,006) (67,737) 51,914 2,000

(26,459) Net cash (outflow)/inflow from operations 32,911

Page 32



24. ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN CASH FLOW STATEMENT


2013 2014 £ £

Returns on investments and servicing of finance Interest received 14 9


2013 2014 £ £

Capital expenditure and financial investment Purchase of tangible fixed assets Capita! grants from DfE

(69,735) 71,006

(5,340) 4,270

(1,070) 1,271 Net cash inflow/(outf!ow) capital expenditure

25. ANALYSIS OF CHANGES IN NET FUNDS

Other non-cash

September Cash flow changes 2013

1 31 August

2014 £ £ £ £

(25,174) 6,676 31,850 Cash at bank and in hand: Debt: Debts falling due after more than one year (2,190)

(2,190)

2,190

(22,984) 6,676 31,850 Net funds

26. PENSION COMMITMENTS

The Academy's employees belong to two principal pension schemes: the Teacher's Pension Scheme for England and Wales (TPS) for academic and related staff; and the Local Government Pension Scheme (LGPS) for non-teaching staff, which is managed by Cumbria County Council. Both are defined benefit schemes.

The pension costs are assessed in accordance with the advice of independent qualified actuaries. The latest actuarial valuation of the TPS related to the period ended 31 March 2012 and of the LGPS 31 March 2013.

Contributions amounting to £2,332 were payable to the scheme at 31 August 2014 (2013 - £1,923) and are included within creditors.

Teachers' Pension Scheme

Introduction

The Teachers' Pension Scheme (TPS) is a statutory, contributory, defined benefit scheme, governed by the Teachers' Pensions Regulations (2010) and, from 1 April 2014, by the Teachers' Pension Scheme

Page 33



26. PENSION COMMITMENTS (continued)

Regulations 2014. Membership is automatic for full-time teachers in Academies and, from 1 January 2007, automatic for teachers in part-time employment following appointment or a change of contract, although they are able to opt out.

The TPS is an unfunded scheme and members contribute on a 'pay as you go' basis - these contributions along with those made by employers are credited to the Exchequer. Retirement and other pension benefits are paid by public funds provided by Parliament.

The Teachers' Pensions Regulations require an annual account to be kept of receipts and expenditure (including the cost of pensions' increases). From 1 April 2001, the account has been credited with a real rate of return, which is equivalent to assuming that the balance in the account is invested in notional investments that produce that real rate of return.

Valuation of the Teachers' Pension Scheme

The latest actuarial valuation of the TPS was carried out as at 31 March 2012 and in accordance with the Public Service Pensions (Valuations and Employer Cost Cap) Directions 2014. The valuation report was published by the Department for Education on 9 June 2014. The key elements of the valuation and subsequent consultation are:

employer contribution rates set at 16.48% of pensionable pay (including a 0.08% employer administration charge (currently 14.1%);

total scheme liabilities for service to the effective date of £191,500 million, and notional assets of £176,600 million, giving a notional past service deficit of £14,900 million; and

an employer cost cap of 10.9% of pensionable pay will be applied to future valuations.

The new employer contribution rate is applicable from 1 April 2015 and will be implemented for the TPS from September 2015.

A copy of the valuation report and supporting documentation is on the Teachers' Pensions website (https://www.teacherspensions.co.uk/news/empioyers/2014/06/pubiication-of-the-valuation-report.aspx).

Teachers' Pension Scheme Changes

Lord Hutton made recommendations in 2011 about how pensions can be made sustainable and affordable, whilst remaining fair to the workforce and the taxpayer. The Government accepted Lord Mutton's recommendations as the basis for consultation with trade unions and other representative bodies. In March 2012 the Department for Education published proposals for the design for a reformed TPS.

The key provisions of the reformed scheme include: a pension based on career average earnings; an accrual rate of 1/57th; and a Normal Pension Age equal to State Pension Age, but with options to enable members to retire earlier or later than their Normal Pension Age. Pension benefits built up before 1 April 2015 will be fully protected.

In addition, the proposed final agreement includes a Government commitment that those within 10 years of Normal Pension Age on 1 April 2012 will see no change to the age at which they can retire, and no decrease in the amount of pension they receive when they retire. There will also be further transitional protection, tapered over a three and a half year period, for people who would fall up to three and a half years outside of the 10 year protection.

In his interim report of October 2010, Lord Hutton recommended that short-term savings were also required, and that the only realistic way of achieving these was to increase member contributions. At the Spending Review 2010 the Government announced an average increase of 3.2 percentage points on the

Page 34




contribution rates by 2014-15. The increases have been phased in from April 2012 on a 40:80:100% basis.

The Department for Education has continued to work closely with trade unions and other representatives bodies to develop the reformatted Teachers' Pension Scheme and regulations giving effect to it came into force on 1 April 2014. Communications are being roiled out and the reformatted scheme will commence on 1 April 2015.

Under the definitions set out in Financial Reporting Standard (FRS 17) Retirement Benefits, the TPS is a multi-employer pension scheme. The Academy is unable to identify its share of the underlying assets and liabilities of the scheme. Accordingly, the Academy has taken advantage of the exemption in FRS 17 and has accounted for its contributions to the scheme as if it were a defined contribution scheme. The Academy has set out above the information available on the scheme.

Local Government Pension Scheme

The LGPS is a funded defined benefit scheme, with assets held in separate trustee-administered funds. The total contribution made for the year ended 31 August 2014 was £10,169, of which employer's contributions totalled £8,037 and employees' contributions totalled £2,132. The agreed contribution rates for future years are 19% for employers and between 5.5% and 7.5% for employees.

Parliament has agreed, at the request of the Secretary of State for Education, to a guarantee that, in the event of academy closure, outstanding local government pension scheme liabilities would be met by the Department for Education. The guarantee came into force on 18 July 2013.

The Academy's share of the assets and liabilities in the scheme and the expected rates of return were:

Expected return at

31 August 2014

Expected return at

31 August 2013

Fair value at 31 August

2014

Fair value at 31 August

2013 % £ % £

Equities Government Bonds Other bonds Property Cash/liquidity Other

7.00 67,000 20,000

9,000 9,000

10,000 4,000

7.00 40,000 10,000 10,000 4,000 1,000 3,000

2.90 3.40 3.80 4.40 6.20 5.70 0.50 0.50 7.00 7.00

Total market value of assets Present value of scheme liabilities

119,000 (173,000)

68,000 (152,000)

(Deficit)/surplus in the scheme (54,000) (84,000)

The amounts recognised in the Balance sheet are as follows:

2014 2013 £ £

Present value of funded obligations Fair value of scheme assets

(173,000) 119,000

(152,000) 68,000

Net liability (54,000) (84,000)

Page 35




The amounts recognised in the Statement of financial activities are as follows:


2013 2014 £ £

Current service cost Interest on obligation Expected return on scheme assets

(7,000) (7,000) 4,000

(9,000) (8,000) 3,000

Total (10,000) (14,000)

Movements in the present value of the defined benefit obligation were as follows:


2013 2014 £ £

Opening defined benefit obligation Current service cost Interest cost Contributions by scheme participants Actuarial Losses Liabilities assumed in a business combination

152,000 7,000 7,000 2,000 5,000

9,000 8,000 3,000 3,000

129,000

Closing defined benefit obligation 173,000 152,000

Movements in the fair value of the Academy's share of scheme assets:


2014 2013 £ £

Opening fair value of scheme assets Expected return on assets Actuarial gains and (losses) Contributions by employer Contributions by employees Assets acquired in a business combination

68,000 4,000

37,000 8,000 2,000

3,000 7,000 9,000 3,000

46,000

119,000 68,000

The cumulative amount of actuarial gains and losses recognised in the Statement of total recognised gains and losses was £52,000 (2013 - £84,000).

The Academy expects to contribute £2,000 to its Defined benefit pension scheme in 2015.

Page 36




Principal actuarial assumptions at the Balance sheet date (expressed as weighted averages):

2014 4.00 % 3.70 % 2.20 % 2.20 %

2013 4.50 % 4.15 % 2.40 % 2.40 %

Discount rate for scheme liabilities Rate of increase in salaries Rate of increase for pensions in payment / inflation Inflation assumption (CPI)

The current mortality assumptions include sufficient allowance for future improvements in mortality rates. The assumed life expectations on retirement age 65 are:

2014 Years

2013 Years

Retiring today Males Females

23.0 22.2 25.5 24.9

Retiring in 20 years Males Females

24.1 25.7 26.7 26.9

Amounts for the current and previous period are as follows:

Defined benefit pension schemes

2013 2014 £ £

(173,000) 119,000

(152,000) 68,000

Defined benefit obligation Scheme assets

(54,000) Deficit (84,000)

Experience adjustments on scheme liabilities Experience adjustments on scheme assets

(5,000) 37,000

(3,000) 7,000

Page 37



27. OPERATING LEASE COMMITMENTS

At 31 August 2014 the Academy had annual commitments under non-cancellable operating leases as follows:

2014 2013 £ £

Expiry date: Within 1 year Between 2 and 5 years

1,815 407 611

28. RELATED PARTY TRANSACTIONS

Owing to the nature of the Academy's operations and the composition of the board of trustees being drawn from local public and private sector organisations, transactions may take place with organisations in which a Governor has an interest. All transactions involving such organisations are conducted at arm's length and in accordance with the Academy's financial regulations and normal procurement procedures.

During the year three Governors were trustees of Jigsaw Nursery, a charity operating within the Academy building. The Academy processed wages and salaries on behalf of the Nursery amounting to £20,427. At the year end £6,679 was included in other debtors and £1,172 included within other debtors due after more than one year.

The Academy received a capital maintenance grant of £66,680 for the renovation of the kitchen, £33,340 is in accrued income at the year end. The Academy obtained three quotes in line with the Academies Financial Handbook. The Board of Governors were in agreement that Viaduct Developments, a company owned by relatives of a Governor of the academy would undertake the renovation work. £59,667 was invoiced during the year, £44,626 is within creditors at the year end.

29. RESTATEMENT OF COMPARATIVES

Voluntary Income has been restated by £566,752 to reflect the transfer of assets on conversion, being freehold land and buildings from the Diocese, the Local Government Defined Benefit pension liability and cash transferred on the establishment of the Academy Trust. These transfers were incorrectly shown within other gains and losses in the 2013 accounts.

Activities for Generating Funds has been restated by £12,216; £6,751 is the cash balance transferred on conversion to Voluntary Income with the remainder moved to Incoming Resources from Charitable Activities to reflect more appropriately the money received.

Costs of Generating Voluntary income have been restated by £7,801 and Incoming Resources from Charitable Activities have increased by this amount to reflect more appropriately the nature of the money spent.

The restatement has not affected the balance sheet.

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