TAUNTON & SOMERSET NHS FOUNDATION TRUST. Charitable Funds Annual Report and Accounts to 31 March 2014

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1 TAUNTON & SOMERSET NHS FOUNDATION TRUST Charitable Funds Annual Report and Accounts to 2014 Report to: Trust Board, Part A on 30 July 2014 Purpose of the Report: a) The Charitable Funds Annual Report and Accounts were completed in April and were audited by PricewaterhouseCoopers LLP in May. The audit is complete and there should be no significant changes to the statements attached. This narrative has been produced which outlines the key highlights of the accounts. b) PWC has issued a draft ISA 260 (governance report) this is attached as Appendix B. The Charitable Funds Committee is requested to note this report. Sponsor: David Hobdey, Director of Finance Author: Contact Details: Financial/Resource Implications: Risk Implications: Legal Implications: Link to Relevant Annual Health Check Standard: Tina Garrity, Head of Financial Services None Compliance with the Trust s statutory reporting obligations. None C7b Openness, honesty, probity and effective use of resources Freedom of Information Status: Previous Considerations: Action Required: (Please type in Bold) The previous year s Annual Report and Accounts were discussed at the July 2013 Charitable Funds Committee meeting. Following review by the Charitable Funds Committee on 23 July the Board, as Corporate Trustee, is asked to approve the accounts and to note the ISA 260 governance report issued by PWC. Charitable Funds Annual Report and Accounts 2013/14 Tina Garrity, Head of Financial Services Trust Board, Part A TSTA/07.14 Page 1 of 3 P

2 Annual report and Accounts to Introduction The Annual Report and Accounts for 2013/14 for the charitable trust were produced in line with the year end timetable and have been audited by the Trust s external auditors; PricewaterhouseCoopers LLP. These are provided in Appendix A attached. The purpose of this report is to highlight the key features of these statements and to outline the process for completion and sign off. 2. Key Features 2.1. Basis for Preparation The Annual Report and Accounts have been produced according to United Kingdom Generally Accepted Accounting Practice (UK GAAP) and as such comply with charity specific guidance such as the Statement of Recommended Practice (SORP) for charities issued in (NB: unlike the Foundation Trust accounts, charitable accounts are not produced using International Financial Reporting Standards) Income The charity s income for the year amounted to 838k compared with 477k in 2012/13. The comparison between the two years shows an increase in donations of 124k, an increase in legacy income of 213k, an increase in investment income of 9k and an increase in lottery income of 30k with the introduction of the staff lottery in September Fundraising income has decreased by 15k. The finances section of the annual report (page 10) provides a more detailed analysis of the main donations, legacy and fundraising activity Expenditure Total expenditure amounted to 887k compared with 835k in 2012/13. Notes 5 and 6 of the accounts provide a break down of this expenditure and page 8 of the annual report shows that the majority of this was spent on the purchase of new equipment and grants for patient and staff welfare and amenities and also provides a more detailed breakdown of the key areas of expenditure. Note 5 of the accounts provides a summary of governance costs incurred in the year which amounted to 29k ( 24k in 2012/13) Investment Gains Note 9 shows that the charity made investment gains of 46k ( 165k in 2012/13) of which 36k were unrealised ( 157k in 2012/13). Since the financial year end (in the period to 30 th June 2014, there has been a 289k decrease in the value of investments (as set out in note 20 to the accounts). This is a non-adjusting post balance sheet event which is not required to be reflected in either the Statement of Financial Activity or the Balance Sheet. The finance report on page 12 includes a summary of the investment fund s performance against market benchmarks and demonstrates that the Charles Stanley managed funds appear to have underperformed during this period. This is attributable to two reasons: 1. The adoption of a Medium Low risk mandate has increased the Fixed interest exposure which has come under pressure as the possibility of interest rate rising has increased. Charitable Funds Annual Report and Accounts 2013/14 Tina Garrity, Head of Financial Services Trust Board, Part A TSTA/07.14 Page 2 of 3 P

3 2. The associated costs in raising significant funds from the portfolio to fund spending requirements has also impacted on performance as equities were used to compliment the reduction in the risk profile Overall (loss) for the financial year The overall net consumption of resources held by the charity during the financial year was 39k (2012/13: 193k) Balance Sheet The main movements on the balance sheet between the two years were: A decrease in the value of investments from 1,557 at 1 st April 2013 to 1,258k at 31 st March This comprises a net movement of (339)k in stock market investments after accounting for 300k set aside for disposal and a 40k increase in fixed interest investments. At 1 st April 2013 Investments held for Sale amounted to 300k. These were sold during the year and replaced with a further 300k of Investments held for Sale. Increase in short term investments and cash holdings from 109k at 1 st April 2013 to 119k at 31 st March Overall decrease in fund balances from 1,818k at 1 st April 2013 to 1,779 at 31 st March This reflects the net deficit of income over expenditure of funds made during the year. 3. Presentation of funds Funds held by charities are distinguished into the categories of unrestricted, restricted and designated funds depending on the source of the donation and the donor s wishes. Restricted funds are given with very specific instructions about the donations purpose; unrestricted funds can be applied at the Trustee s discretion within the general charitable purposes of the charity, and designated funds which are ring-fenced for a particular purpose at the choice of the Trustee. A full analysis of the funds that fall into each respective category is provided at note 16 in the Annual Accounts. 4. Process to Completion Once agreed by the Charitable Funds Committee, the annual report and accounts need to be approved by the Trust Board. PricewaterhouseCoopers LLP (PWC) have completed their independent review of the accounts and subsequent to the Board approval it is anticipated that PWC will issue an unqualified audit report (a draft version of their report has been included in the accounts at pages 15 and 16). 5. Conclusion Following review by the Charitable Funds Committee on 23 July 2014, the Trust Board, as Corporate Trustee, is asked to approve the accounts and to note the ISA 260 governance report issued by PricewaterhouseCoopers. Charitable Funds Annual Report and Accounts 2013/14 Tina Garrity, Head of Financial Services Trust Board, Part A TSTA/07.14 Page 3 of 3 P

4 TAUNTON AND SOMERSET NHS FOUNDATION TRUST GENERAL CHARITABLE FUNDS Registered Charity Number: TRUSTEE'S ANNUAL REPORT AND ACCOUNTS For the year ended 31st March

5 Trustee s Annual Report and Accounts 2013/14 Index Page Trustee's Annual Report and Accounts 2013/14 Reference and Administrative Details 3 Structure Governance and Management of the Charitable Funds 4-11 Investment Policy and Performance Statement of Trustee s Responsibilities 14 Independent Auditors' Report Statement of Financial Activities 17 Balance Sheet 18 Notes to the Accounts

6 Reference and Administrative Details Registered Charity No: Address of Charity: Taunton and Somerset NHS Foundation Trust General Charitable Funds Musgrove Park Hospital TAUNTON Somerset TA1 5DA Tel: Trustee Arrangements: Taunton and Somerset NHS Foundation Trust General Charitable Funds Trustee s Annual Report and Accounts 2013/14 The Taunton and Somerset NHS Foundation Trust Board is the Corporate Trustee of the Charity governed by the law applicable to trusts, principally the Charities Act 2011 and the Trustee Act The Directors who served the Taunton and Somerset NHS Foundation Trust during the year to 31st March 2014 were as follows: Non-Executive Directors: Ms Rosalinde Wyke Mr Chris Harvey Ms Gill McComas Mr Brian Perowne Mr Gavin Gracie Mr Stephen Harrison Mr Derek Manuel Chair Vice Chairman Senior Independent Director Executive Directors: Ms Jo Cubbon Chief Executive Mr Peter Lewis Deputy Chief Executive Mr David Allwright Director of Corporate Planning and Performance Dr Colin Close Medical Director Mr Chris Perry Director of Change (appointed ) Mr Simon Wombwell Director of Finance and IM&T (left ) Mr David Hobdey Director of Finance (appointed Acting and Substantive ) Mrs Carol Dight Director of Nursing and Governance (appointed Acting and Substantive ) The Trustee has delegated responsibility for the on-going management of the funds to the Charitable Funds Committee. The Charitable Funds Committee which meets a minimum of twice a year has a membership of 3 nonexecutives and 3 executives. Those serving in year are as follows: Chair Ms Rosalinde Wyke, Mr Simon Wombwell (to ), Mr Brian Perowne, Ms Gill McComas, Mr David Hobdey, Mr Peter Lewis, Mr David Allwright. Bankers: Investment Managers: External independent Auditors: Solicitors: National Westminster Bank PLC 49 North Street TAUNTON TA1 1NB Charles Stanley & Co Ltd Broadwalk House Southernhay West EXETER EX1 1TS PricewaterhouseCoopers LLP Princess Court, 23 Princess Street PLYMOUTH PL1 2EX Bevan Brittan LLP Kings Orchard, 1 Queen Street BRISTOL BS2 0HQ 3

7 Structure, Governance and Management of the Charitable Funds The Charity was created by Trust Deed on the 27 November 1996 and was named as the Taunton and Somerset NHS Trust General Charitable Funds. In September 2008 this was changed by a supplemental deed of declaration to Taunton and Somerset NHS Foundation Trust General Charitable Funds. Taunton and Somerset NHS Foundation Trust General Charitable Funds (the Charity) administers individual funds on behalf of the following related health bodies: Taunton and Somerset NHS Foundation Trust Somerset Partnership NHS Foundation Trust Where there is a legal restriction on the purpose to which a fund may be put, the fund is held as a restricted fund. Funds where the capital is held to generate income for charitable purposes and cannot itself be spent are accounted for as permanent endowment funds. Other funds are classified as unrestricted funds. Within the Charity's unrestricted funds are a number of designated (earmarked) funds relating to particular wards and departments. The Charity manages spending through local fund holders who are allocated the funds to spend in accordance with agreed authorisation limits. Fund holders for each of the funds manage these on a day-to-day basis within the Standing Financial Instructions and Standing Orders and powers of delegated authority set by the Corporate Trustee. The Trustee oversees the work of the fund holders and has the power to revoke a fund holders remit or, subject to any specific donor restriction, direct the use to which funds are applied. The Corporate Trustee is the Taunton and Somerset NHS Foundation Trust (the Trust). The Executive Directors and Non-Executive Directors of the Trust Board share the responsibility for ensuring that the NHS body fulfils its duties as Corporate Trustee in managing the charitable funds. The Chair and Non-Executive Directors are appointed by the Trust's Governors. The Chief Executive and Executive directors are appointed by the Nomination Committee of the Trust made up of the Non-Executive Directors of the Board of the Taunton and Somerset NHS Foundation Trust. The appointment of the Chief Executive also has to be approved by the Members and Council of Governors of the Trust. The Board of the Taunton and Somerset NHS Foundation Trust has delegated responsibility to manage the charitable funds to the Charitable Funds Committee. The Director of Finance is responsible for the day-to-day management and control of the administration of the charitable funds and reports to the Charitable Funds Committee. The Director of Finance has particular responsibility to ensure that the spending is in accordance with the objects and priorities agreed by the Charitable Funds Committee and the Board; that the criteria for spending charitable monies are fully met; that full accounting records are maintained; and that devolved decision making or delegated arrangements are in accordance with the policies and procedures set out by the Board on behalf of the Corporate Trustee. The Charitable Funds Committee reviews the performance of the external investment manager and ensures that the investment of funds is in accordance with its policy on investments, for example by ensuring that investments are not made in industries that derive the major part of their income from the tobacco industry. The Committee approves the appointment and terms of the investment manager and approves items of expenditure which exceed the delegated limits of Executive Directors. Somerset Partnership NHS Foundation Trust is invited to send a representative to attend the Charitable Funds Committee meetings and their Finance Director receives the agendas and minutes of the meetings. 4

8 PICTURE " Musgrove Park Hospital s Radiotherapy Department has recently treated their first patient using a new method of treatment known as Intensity Modulated Radiotherapy (IMRT). Somerset Unit for Radiotherapy Equipment (SURE), Musgrove Leukemic Group Somerset (MLGS) and the Musgrove Park Hospital Beacon Centre charitable fund have all contributed donations to get this service in place". " In June 2013 the children's ward received three new I-Pads as a result of fundraising by Taunton mother Jane Hoffmeister". Trustee Induction and Training A training package was developed and implemented in the financial year 2006/07 to enhance the knowledge of the existing Executive and Non Executive Directors of the Taunton and Somerset NHS Foundation Trust and ensure that they are aware of their responsibilities as Board members of the Corporate Trustee of Taunton and Somerset NHS Foundation Trust General Charitable Funds. This package is being used as an induction programme for new Directors. This induction includes an introduction to the objectives, scope and policies of the charitable funds, Charity Commission information on Trustee responsibilities and copies of the previous three years of Trustee annual reports and accounts together with a copy of the governing documents for the constituent charitable funds. The same information will be provided for new members of the Charitable Funds Committee. Any updates are provided by the Trust Secretary at the next Charitable Funds Committee or by if the information is significantly important. Strategic Objectives and Activities for the Public Benefit The Charity s objectives are as follows: The Trustees shall hold the Trust Fund upon trust to apply the income, and at their discretion, so far as may be permissible, the capital, for any charitable purpose or purposes relating to the National Health Service. 5

9 The names and objectives are as follows: 1) Taunton and Somerset NHS Foundation Trust a) Musgrove Park Hospital Charitable Funds b) Bridgwater Hospital Charitable Funds c) Burnham Hospital Charitable Funds d) Minehead Hospital Charitable Funds e) Williton Hospital Charitable Funds f) Wellington Hospital Charitable Funds g) Victoria Hospital Frome Charitable Funds (* see below) h) Shepton Mallet Hospital Charitable Funds i) West Mendip Hospital Charitable Funds j) Dene Barton Unit Charitable Funds The objective for each fund is for any charitable purpose or purposes relating to the NHS wholly or mainly at the hospital concerned. * The Victoria Hospital Frome is now the Frome Community Hospital. 2) Taunton and Somerset NHS Foundation Trust Research Charitable Funds 3) Taunton and Somerset NHS Foundation Trust Art for Life Charitable Funds a) Enhancing the environment of the hospital by the provision and development of the therapeutic programmes connected with the arts and the provision or artworks. b) Encouraging patients to participate in such programmes. 4) Primary Care General Community Services Fund Objectives Funding of the Charity Taunton and Somerset NHS Foundation Trust General Charitable Funds Within the main charitable registration, a number of separate special purpose charities have been listed for each hospital site together with three specific areas within the group registration (2, 3 and 4 below). The objects of each listed Charity provide for the funds to be applied for any charitable purpose relating to the NHS and then proceed to earmark the fund for a hospital/unit reflecting the origin of the fund. The objective is for any charitable purpose or purposes principally (but not exclusively) at or in connection with Taunton and Somerset NHS Foundation Trust, which will further the following aims: a) The investigation of the causes of sickness and disability and the prevention, treatment, cure and defeat of sickness and disability in all its forms. b) The advancement of scientific and medical education and research into topics related to sickness and disability. c) The furtherance of any other charitable purposes for the relief of persons suffering from sickness and disability in all its forms. The objective is to relieve the sickness of patients at Taunton and Somerset NHS Foundation Trust by: The objective is for any charitable purposes relating to the NHS wholly or mainly for Primary Care general community services. In setting our objectives and planning our activities the Trustee has given careful consideration to the Charity Commission's general guidance on public benefit. The Charity is funded by donations and legacies received from patients, their relatives, the general public and other organisations. The overall strategy of the Charity is to provide support to the above Trusts by the following means: 6

10 Patients' Expenditure - Purchase of small items of equipment, provision of services, and the provision of facilities not normally provided by or in addition to the normal NHS provision. Staff Expenditure - a) b) Motivation of staff, by improving staff facilities and by providing services that improve staff wellbeing. Education of staff by providing education over and above what would normally be provided by the NHS. Capital Equipment - Medical Research - Purchases of equipment in addition to that normally provided by the NHS. To support non commercial research projects which are of benefit to the NHS. Whilst respecting the wishes of the donors, the Corporate Trustee applies the charitable funds, in accordance with the NHS Act 1977 sections 93 and 94, where service changes have taken place or it is impractical to maintain the separate designated fund. Where the Department of Health has required a special purpose fund to be created following an NHS reorganisation, although the fund is free to be used for any charitable purpose in support of the NHS, the Corporate Trustee would not seek to vary the use to which these funds are put without prior consultation with affected parties. Picture " Taunton's Musgrove Park Hospital has been donated a cuddle cot and several butterfly boxes and books from Towards Tomorrow Together, a charity which provides support to parents after the loss of a baby. Pictured from left to right is Mel Scott founder of Towards Tomorrow Together and Sue Spooner Neonatal Unit manager". Relationships with Related Parties/External Bodies The Taunton and Somerset NHS Foundation Trust works closely with, and all of its grants are provided, to its related NHS organisations, authorities and to individuals within these organisations. Staff within these organisations identify and advise the Taunton and Somerset NHS Foundation Trust on local priorities and assist the Corporate Trustee in monitoring the use of the charitable funds. Grants are met from the special purpose Charity, within the group registration, to which the relevant NHS organisation authority relates. Taunton and Somerset NHS Foundation Trust maintains close links with staff and patients within the related health bodies and their hospitals and community. The strong relationship with members of staff is particularly valued and enables the charitable funds to be directed to ensure an effective contribution is made in support of these organisations. Close links are also maintained with individual hospital Leagues of Friends and associated voluntary organisations. The Charity is pleased to work with these organisations in the provision of charitable support to the related health organisations and hospitals. The Corporate Trustee is a member of the Health Financial Management Association (HFMA) and the Institute of Charities and receives regular updates and bulletins on matters affecting NHS charity funds from the HFMA Charitable Funds Special Interest Group. 7

11 Review of the Finances, Activities, Achievements and Performance of the Charitable Funds The strategy of the Taunton and Somerset NHS Foundation General Charitable Fund is to support its related constituent bodies by providing funds to benefit patients and staff. It does this by purchasing supplementary and complementary equipment or services for which the related NHS organisations are unable to provide funding through exchequer sources. The Charity engages in a limited amount of fund-raising activity, currently focused more on engagement with complementary charitable groups. The Trust therefore relies more upon the generosity of patients and their relatives and other donors who are familiar with, or have experienced the care of the participating NHS trusts and hospitals, or who are sympathetic and generous in their support to their local NHS service. The Charitable Funds Committee members wish to express their thanks to all those who have donated to the funds during the year. During the year the Charity paid grants of 796,893 and these are detailed in note 7 of the accounts. The grants relate to patients welfare and amenities, new equipment, medical research, staff welfare and amenities and a contribution to the NHS in relation to staff development and training. Investment Costs 1% Lottery Expenditure 2% Fundraising Expenditure 4% Patients Welfare 23% Governance Costs 3% Analysis of Charitable Expenditure Purchase of New Equipment 35% Staff Training 11% Staff Welfare 6% Medical Research 15% Patients' welfare and amenities, medical research and purchase of new equipment Patients' welfare grants in 2013/14 totalled 203,982. In addition medical equipment was purchased at 309,908. All new equipment is purchased under the scheme of delegation. Medical research expenditure totalled 136,591. Of this 43,948 was incurred in respect of Clinical Trials, 21,946 in respect of Urology Research, 39,085 in respect of Leukaemia Research and 21,833 in respect of Oncology and Haematology Research with the remaining 9,779 coming from amounts expended in the other research funds. Expenditure over 10,000 has to be approved by the Trustee. There were three items falling within this category: 1. A Hitachi Ultrasound Machine and prostate biopsy template was purchased for 80,666 with grants of 60,000 from the General Musgrove Park Hospital charitable funds and 20,666 from Urology Research charitable funds. 2. An Ultrasound Machine for Vascular Duplex was purchased for 55,368 which was fully funded by a donation from Western Provident Association (WPA). 3. A Laparoscopic Stack System was purchased for 50,602 which was also fully funded by a donation from Western Provident Association (WPA). 8

12 "One of our first staff lottery 1,000 winners. The lottery has been introduced to boost our general charitable funds" " One of our refurbished children's unit rooms from monies generously donated to the unit" Staff welfare and amenities Staff welfare expenditure totalled 50,655 and related to contributions made towards functions held for members of the Trusts staff and office equipment for staff. Staff education, training and development Staff education, training and development spending of 95,758 assisted with the funding of staff training and training courses to further educate and equip staff with relevant skills, thereby promoting efficient performance of their duties and improving the quality of the care they provide. Included in staff education, training and development is 4,867 in support of the Trust's charitable efforts in Zanzibar. Individual fund holders are responsible for the day to day management of charitable funds, and the Trustee relies on the fund holders to ensure the effective use of those charitable funds restricted for their clinical area or activity, by applying their local or specialist knowledge. 9

13 Finance In the 2013/14 financial year the Charity received 777,775 of donations, fundraising, lottery and legacy income split between restricted, designated and unrestricted funds. Large donations received during the year were 106,478 from Western Provident Association (WPA) for the purchase of vascular surgery equipment, 15,920 from the Heritage Lottery for art for life, 19,139 from Macmillan for Oncology/Haematology, 10,000 from Think Amy for the children's unit and 10,000 from AK20 Nobel UK for art work for Bridgwater Hospital. Large legacies received were interim payments of 97,786 with an expected further 31,623 from the estate of Maureen Winifred Dodd for the Beacon Centre and 125,000 from the estate of Audrey Francis Rowe for the Coronary Care Unit. Lottery Income was 29,742 and Investment Income was 60,577. The Charity s total incoming resource for the year was 838,353. The Charity is indebted to the generosity of patients, their families and carers, well wishers and friends who have donated so generously to the work of the Charity. The overall financial performance recorded net outgoing resources of 74,820. This has been decreased by unrealised gains on investments of 9,775 which results in a total negative movement of 65,045. Investment Income 7% Analysis of Charitable Income Lottery Income 4% Legacies 38% Donations & Fundraising 51% " The launch of Love Musgrove, the new visual identity and name of the charitable funds in July Supported by the attendance (greatly appreciated) of representatives of 40 Commando based in Taunton". 10

14 Events since the year end and future plans Financial Risks i) Liquidity Risk ii) Credit Risk iii) Interest Rate Risk iv) Investment Risk Taunton and Somerset NHS Foundation Trust General Charitable Funds The Trustee does not expect any significant changes in the objectives of the Charity in the forthcoming year and intends to continue to reduce reserves where suitable projects or programmes can be identified. The level of activity is dependent upon the generosity of donors and the receipt of legacies. Those areas identified for support in the immediate future include: Assistance with training and education activities. Enhancing the environment of the hospital. Support for capital projects within the Taunton and Somerset NHS Foundation Trust and Somerset Partnership NHS Foundation Trust. The majority of income derives from donations and these determine the nature of expenditure that they source. No expenditure is committed against these sums until the cash has been received. Surplus cash is held either in bank deposits or as liquid investments, consequently liquidity risk is low. The Charity never commits to expenditure unless the cash has been received from the income source; therefore credit risk is low. All of the Charity s investments carry nil or fixed rates of interest therefore interest rate exposure is low. However there is a risk, that if interest rates rise, then the Charity may lose out. At the balance sheet date the Charity s investments were held in one portfolio managed by Charles Stanley & Co Ltd. As with all stock market securities, these investments are subject to fluctuations in value. The Charity mitigates its investment risk by using professional advisors to monitor performance against market and sector benchmarks and through regular review by the Charitable Funds Committee. The Trustee will take action by altering the portfolio to ensure the risk profile of investments is appropriate. Risk Management Policy The major risks to which the Charity is exposed have been reviewed by the Board of the Trust and systems have been established to mitigate those risks. The major risks identified are an adverse change in stock market conditions coinciding with the planned change in investment policy, and an unforeseen fall in income. These risks are mitigated by the reserves policy below and by the six monthly investment performance reviews by the Charitable Funds Committee and advice from an external financial advisor. This may result in the portfolio being changed if the Trustee feels the investments held are exposed to unnecessary risks. The Trustee has considered a risk management strategy document and drawn up a risk register for the Charity. This register identifies the risks to the Charity and sets out the controls and action required to mitigate the risk. The risk register will be reviewed on an annual basis and the Corporate Trustee will review any new risks identified during the year on an on-going basis. 11

15 Investment Policy and Performance The Charity s investment powers are broad but subject to restriction as detailed in its investment policy. The Investment Portfolio is administered by Charles Stanley & Co Ltd. The current investment policy allows for investment in a diverse managed risk portfolio of investments. The investment policy specifically excludes businesses that derive the major part of their income from the tobacco industry. Those income funds not required in the coming year are invested in the portfolio which currently adopts an overall medium level of risk. The performance of the investments is reviewed on a regular basis in comparison with suitable benchmarks. The investment performance for the year is measured against indices relevant to this type of investment. Performance for the year from 1 April 2013 to 2014 During the financial year 2013/14 the performance of the fund over the whole year against industry benchmarks was: Portfolio Capital Return 0.23% 9.33% 8.56% Income Return 3.36% 3.55% 1.79% Total Return 3.59% 12.88% 10.35% Comparison against industry benchmarks FTSE WMA (formerly APCIMS) Balanced FTSE 100 FTSE A Govt (Gilts) 2.57% 9.96% 9.74% 2.91% 11.15% 12.48% (5.96%) 1.59% 1.27% The underperformance against the benchmark including in prior years, is attributable to the following: i) The adoption of a revised Medium Low risk mandate has increased the Fixed Interest exposure which has come under pressure as the possibility of interest rate rising has increased. ii) The associated costs in raising significant funds from the portfolio to fund spending requirements has also impacted on performance as equities were used to compliment the reduction in the risk profile. Reserves Policy The Trustee expects fund balances to be spent on the purposes for which they were donated rather than to be accumulated. A balance should be maintained within each fund to provide working capital and cover fluctuations in income and expenditure. The manager or clinician responsible for any fund with a significant balance will be expected to prepare a programme of expenditure. The Trustee reviews these plans and progress statements every six months. The current level of unrestricted retained reserves is 1,018,833. A small number of investments may be liquidated over the next few months to bring the cash balances up to the required operational level. Grant Making Policy This year the Charity made grants of 796,893 representing 89.9% of total charitable expenditure. In making grants, the Trustee requires that the activity falls within the objects of the Charity, that the grant request is supported by a partner NHS body and that the funds are available to meet the request. Where funds are under the day to day management of a fund holder, the fund holder may incur any expenditure, subject to the authorised expenditure limits, provided the expenditure falls within the objects of the fund, is a reasonable charge to charitable funds, and is in furtherance of the objects of the charity. Expenditure incurred by fund holders under the scheme of delegation is not reported formally as a number of grants but is accounted for as an on-going activity in furtherance of the objects of the Charity. 12

16 "Visit to children's unit by England cricketer and former Somerset County Cricket Club player Jos Buttler" Signed:. Ms Rosalinde Wyke Chair of the Trust Board on behalf of the Corporate Trustee Date: 24 July

17 Statement of Trustee's Responsibilities The Trustee is responsible for preparing the Trustee's Annual Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). The law applicable to charities in England and Wales requires the trustee to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Charity and of the incoming resources and application of resources of the Charity for that period. In preparing these financial statements, the trustee is required to: select suitable accounting policies and then apply them consistently; observe the methods and principles in the Charities SORP; make judgements and estimates that are reasonable and prudent; state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Charity will continue in business. The Trustee is responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Charities Act 2011 and the Charity (Accounts and Reports) Regulations 2008 and the provisions of the trust deed. They are also responsible for safeguarding the assets of the Charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Trustee is responsible for the maintenance and integrity of the Charity and financial information included on the Charity s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. In so far as the Trustee is aware: There is no relevant audit information of which the Charity's auditors are unaware; and The Trustee's representatives have taken all steps they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information. By Order of the Trustee Signed: Date 24 July 2014 Chair of the Trust Board on behalf of the Corporate Trustee Date 24 July 2014 David Hobdey - Director of Finance 14

18 Our Opinion Taunton and Somerset NHS Foundation Trust General Charitable Funds Independent auditors' report to the trustee of Taunton and Somerset NHS Foundation Trust General Charitable Funds Report on the financial statements In our opinion the financial statements, defined below: give a true and fair view of the state of the Charity s affairs as at 2014 and of its incoming resources and application of resources, 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 section 144 of the Charities Act 2011 and Regulation 8 of The Charities (Accounts and Reports) Regulations 2008). This opinion is to be read in the context of what we say the remainder or this report. What we have audited The financial statements, which are prepared by Taunton and Somerset NHS Foundation Trust General Charitable Funds, comprise: the statement of financial activities for the year then ended; and the balance sheet as at 2014; the notes to the financial statements, which include a summary of significant accounting policies and other explanatory information. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). In applying the financial reporting framework, the trustees have made a number of subjective judgements, for example in respect of significant accounting estimates. In making such estimates, they have made assumptions and considered future events. What an audit of financial statements involves We conducted our audit in accordance with International Standards on Auditing (UK and Ireland)("ISAs(UK & Ireland"). An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Charity s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the trustee; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Trustee's Annual Report and Accounts (the "Annual Report") to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If misstatements or inconsistencies we consider the implications for our report. 15

19 Other Matters on which we are required to report by exception Sufficiency of accounting records and information and explanations received Under the Charities Act 2011 we are required to report to you if, in our opinion: we have not received all the information and explanations we require for our audit; or sufficient accounting records have not been kept; or the financial statements are not in agreement with the accounting records and returns; or We have no exceptions to report arising from this responsibility. Other information in the Annual Report Under the Charities Act 2011 we are required to report to you if, in our opinion the information given in the Trustee's Annual Report is inconsistent in any material respect with the financial statements. We have no exceptions to report arising from this responsibility. Responsibilities for the financial statements and the audit Our responsibilities and those of the trustees As explained more fully in the Statement of Trustee s Responsibilities set out on page 14, the trustee is 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 ISAs (UK & Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors. This report, including the opinions, has been prepared for and only for the Charity s trustee in accordance with section 144 of the Charities Act 2011 and regulations made under section 154 of that Act (Regulation 24 of The Charities (Accounts and Reports) Regulations 2008) and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors Plymouth July 2014 PricewaterhouseCoopers LLP is eligible to act, and has been appointed, as auditor under section 144(2) of the Charities Act 2011 (a) The maintenance and integrity of the Taunton and Somerset NHS Foundation Trust General Charitable Funds website is the responsibility of the trustee; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website. (b) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 16

20 Statement of Financial Activities for the year ended 2014 Note Unrestricted Restricted Total Total Funds Funds Funds Funds 2013/ / Incoming Resources Incoming resources from generated funds Voluntary income: Donations Legacies 3, Sub total voluntary income Activities for generating funds: Fundraising events Lottery Income Investment income Total incoming Resources Resources Expended Costs of generating funds Fundraising costs Lottery Expenditure Investment management costs Charitable activities Governance costs Total Resources Expended Net incoming/(outgoing) resources before other recognised gains and losses Other recognised gains and losses: Gain on investment assets Net Movement in Funds 111 (160) (49) (358) (154) (39) (193) Reconciliation of funds Fund balances brought forward at 1 April 2013 Gross transfer of funds between restricted and designated Fund balances carried forward at ,818 2, (19) 0 0 1, ,779 1,818 All gains and losses recognised in the year are included in the Statement of Financial Activities and relate to continuing operations. There is no material difference between the net outgoing resources for the financial year stated above and their historical cost equivalents. The notes on pages 19 to 27 form part of these accounts 17

21 Balance Sheet as at 2014 Note Unrestricted Funds Restricted Funds Total at 2014 Total at Fixed Assets Investments ,258 1,557 Total Fixed Assets ,258 1,557 Current Assets Debtors Assets available for sale Cash at bank and in hand Total Current Assets Creditors amounts falling due within one year Net Current Assets Net Assets 1, ,779 1,818 Funds of the Charity Restricted Unrestricted Designated Total Charity Funds 1, ,779 1,818 The accounts on pages 17 to 27 were approved by the Corporate Trustee on 24 July 2014 and signed on its behalf by: Signed:.. Name: Ms Rosalinde Wyke Chair of the Trust Board on behalf of the Corporate Trustee Date: 24 July

22 Notes to the Accounts 1. Accounting Policies (a) Basis of Preparation The financial statements have been prepared under the historic cost convention, with the exception of investments which are included at market value. The accounts have been prepared on a going concern basis. The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice (SORP 2005) issued by the Charity Commission and applicable UK Accounting Standards and with the Charities Act (2011) and the Charities (Accounts and Reports) Regulations (b) Structure of Funds Where there is a legal restriction on the purpose to which a fund may be put, the fund is classified either as an endowment fund, where the donor has expressly provided that only the income of the fund may be expended, or as a restricted income fund where the donor has provided for the donation to be spent in furtherance of a specified charitable purpose. Those funds which are not restricted funds, are unrestricted funds which are sub analysed between designated (earmarked) funds where the donor has made known their non binding wishes or where members of the Corporate Trustee, at their discretion, have created a specific fund for a specific purpose, and wholly unrestricted funds which are wholly at the Trustee's discretion. The major funds held in each of these categories are disclosed in Note 16. (c) Incoming Resources All incoming resources are recognised once the Charity has entitlement to the resources, it is certain that the resources will be received and the monetary value of incoming resources can be measured with sufficient reliability. Incoming Resources from Legacies Legacies are accounted for as incoming resources either upon receipt or where the receipt of the legacy is virtually certain; this will be once confirmation has been received from the representatives of the estate(s) that payment of the legacy will be made or property transferred and once all conditions attached to the legacy have been fulfilled and it is virtually certain that the amount of incoming resources is known. (d) Resources Expended All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the category. All expenditure is recognised once there is a legal or constructive obligation committing the Charity to the expenditure. (i) Irrecoverable VAT Irrecoverable VAT is charged against the category of resources expended for which it was incurred. (ii) Allocation of Overhead and Support Costs Overhead and support costs have been allocated between charitable and governance costs. Costs which are not wholly attributable to an expenditure type have been apportioned. The analysis of overhead and support costs and the basis of allocation is shown in Note 5. Once allocation and/or apportionment of overhead and support costs have been made between charitable activities and governance costs, the cost attributable to charitable activities is apportioned across those activities in proportion to total spend. 19

23 (iii) Costs of Generating Funds Taunton and Somerset NHS Foundation Trust General Charitable Funds The costs of generating funds are those costs attributable to generating incoming resources for the Charity, other than those costs incurred in undertaking charitable activities or the costs incurred in undertaking trading activities in furtherance of the Charity s objects, and represent investment management fees. (iv) Charitable Activities Costs of charitable activities comprise all costs incurred in the pursuit of the charitable objects of the Charity. These costs, where not wholly attributable, are apportioned between the categories of charitable expenditure. (v) Governance Costs Governance costs comprise all costs identifiable as wholly or mainly attributable to ensuring the public accountability of the Charity and its compliance with regulation and good practice. These costs include costs related to statutory audit together with an apportionment of overhead and support costs. (e) Fixed Asset Investments Investments are stated at market value as at the balance sheet date. Investments held for sale at 2014 have been re-categorised as Current Assets. The Statement of Financial Activities includes the net gains and losses arising on revaluation and disposals throughout the year. Quoted stocks and shares are included in the balance sheet at mid-market price, excluding dividend. (f) Realised Gains and Losses All gains and losses are taken to the Statement of Financial Activities as they arise. Realised gains and losses on investments are calculated as the difference between sales proceeds and opening market value (purchase date if later). Unrealised gains and losses are those gains / losses arising from increases or decreases in the value of investments that have not been sold (and hence unrealised) at the financial year end. These are calculated as the difference between the carrying value at the year end and opening market value (or purchase date if later). Unrealised gains and losses are allocated across the appropriate funds (i.e. those funds for which investments are held) according to the closing value of funds at the period end. 2. Cash Flow Statement The preparation of a cash flow statement is a requirement of FRS 1 for all charities above the small companies thresholds. The current thresholds are any two of the following conditions: Annual turnover exceeding 6.5m (gross income) Net balance sheet total exceeding 3.6m Number of employees exceeding 50 The Charity does not meet any of the above conditions and hence it has taken advantage of the exemption allowed not to produce a cash flow statement. 20

24 3. Analysis of Voluntary Income Unrestricted Funds Restricted Funds 2013/14 Total 2012/13 Total Donations from individuals Legacies Staff Lottery Income Fundraising Income Total Material legacies are disclosed in Note Gross Income from Investments Gross Income Earned from all types of Investment Fixed asset investments Current asset investments and cash held on deposit 1 1 Total Analysis of Support and Governance Costs Total Income from investments held in the UK 2013/14 Total /13 Total 000 Financial administration from Taunton and Somerset NHS Foundation Trust Audit fees Of the 43,799 financial administration bought from the Trust there is a 50/50 split resulting in a 21,899 charge based on the number of hours used between governance costs and support for the charitable activities of the Charity. Audit fees of 6,815 are fully allocated to governance costs. 5.1 Governance Costs Salaries and related costs Stationery and other related costs 2013/14 Total 2012/13 Total Audit Fees - statutory audit 7 7 Total