LUBENHAM ALL SAINTS CHURCH OF ENGLAND PRIMARY SCHOOL

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1 Registered number: LUBENHAM ALL SAINTS CHURCH OF ENGLAND PRIMARY SCHOOL ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 AUGUST

2 CONTENTS Page Reference and Administrative Details of the Academy, its Trustees and Advisers 1-2 Trustees' Report 3-11 Governance Statement Statement on Regularity, Propriety and Compliance 15 Trustees' Responsibilities Statement 16 Independent Auditors' Report to the Board of Trustees of Lubenham All Saints C of E Primary School Independent Reporting Accountant's Assurance Report on Regularity to Lubenham All Saints Church of England Primary School and the Education Funding Agency Statement of Financial Activities incorporating Income & Expenditure Account Balance Sheet 23 Cash Flow Statement 24 Notes to the Financial Statements, incorporating Statement of Accounting Policies & other notes to the Financial Statements

3 REFERENCE AND ADMINISTRATIVE DETAILS OF THE ACADEMY, ITS TRUSTEES AND ADVISERS FOR THE PERIOD ENDED 31 AUGUST Trustees D Blake, Chair of Trustees (appointed 7 June 2013) 1,2 D Vivian, Trustee (appointed 7 June 2013) 1,2 S Foster, Staff Trustee (appointed 7 June 2013) R Heard, Headteacher (appointed 7 June 2013) 2 R Brand, Trustee (appointed 7 June 2013) 1 R Purdham, Trustee (appointed 7 June 2013, resigned 7 July ) 1,2 R Smith, Trustee (appointed 7 June 2013, resigned 3 September ) 1,2 S Kubis, Trustee (appointed 7 June 2013) S Meadows, Trustee (appointed 7 June 2013) H Connelly, Trustee (appointed 27 October ) 2 A Jenkins, Trustee (appointed 27 October ) 2 1 Members 2 Audit, Finance & Personnel Committee Company registration number Principal and registered office School Lane Lubenham Market Harborough LE16 9TW Senior management team R Heard, Headteacher C Holder, Senior teacher V Lingley, Business manager Independent auditors MHA MacIntyre Hudson Chartered Accountants Statutory Auditors 11 Merus Court Meridian Business Park Leicester Leicestershire LE19 1RJ Page 1

4 REFERENCE AND ADMINISTRATIVE DETAILS OF THE ACADEMY, ITS TRUSTEES AND ADVISERS FOR THE PERIOD ENDED 31 AUGUST Administrative details (continued) Bankers Lloyds Bank PLC 40 The Square Market Harborough Leicestershire LE16 7PA Solicitors Lee Bolton Monier-Williams 1 The Sanctuary Westminster London SW1P 3JT Page 2

5 TRUSTEES' REPORT FOR THE PERIOD ENDED 31 AUGUST The Trustees (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 Lubenham All Saints Church of England Primary School (the Academy) for the period ended 1 August. The Trustees confirm that the Annual Report and financial statements of the Academy comply with 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 The annual report serves the purposes of both a Trustees' Report and a Directors' Report under company law. The Trust operates an Academy for pupils aged 4 to 11 years serving a catchment area in the villages of Lubenham and Theddingworth. It has a pupil capacity of 105 and had a roll of 94 in the school census on 21 January. STRUCTURE, GOVERNANCE AND MANAGEMENT CONSTITUTION The Academy Trust is a company limited by guarantee and an exempt charity. The charitable company s memorandum and articles of association are the primary governing documents of the Academy Trust. The Trustees of Lubenham All Saints Church of England Primary School are also the Directors and Governors of the charitable company for the purposes of company law. The Charitable Company is known as Lubenham All Saints Church of England Primary School. Details of the Trustees who served throughout the year except as noted are included in the Reference and Administrative Details on page 1. 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. TRUSTEES' INDEMNITIES The Companies Act 2006 s236 requires disclosure concerning qualifying third party indemnity provisions. Governors benefit from indemnity insurance to cover the liability of the Governors which by virtue of any rule of law would otherwise attach to them in respect of any negligence, default or breach of trust or breach of duty of which they may be guilty in relation to the Academy Trust. The cost of this insurance in the year was 1,283. Page 3

6 TRUSTEES' REPORT (continued) FOR THE PERIOD ENDED 31 AUGUST METHOD OF RECRUITMENT AND APPOINTMENT OR ELECTION OF TRUSTEES The total number of Governors as set out in the Instrument of Government for Church of England Academies will be 11. The Governing Body consists of: 2 Foundation Governors, of whom: 1 is ex-officio 1 to be appointed by the Leicester Diocesan Board of Education from nominations made through the Parochial Church Council 4 Parent Governors 2 Staff Governors 1 of whom is the Headteacher 2 Community 1 Local Authority The term of office for all categories of governors is four years. The incumbent of the Parish shall be an ex-officio Foundation Governor. The Archdeacon shall appoint a Foundation Governor to act in the place of the ex-officio Governor whose governorship derives from the office named above in the event that the ex-officio Foundation Governor is unable or unwilling to act as a Foundation Governor, or there is a vacancy in the office by virtue of which his/her governorship exists. Future Governors shall be appointed or elected, as the case may be, under the Articles. Where it is not possible for such a Governor to be appointed or elected due to the fact that an Academy has not yet been established or the Headteacher has not been appointed, then the relevant Article or part thereof shall not apply. The Members may appoint Staff Governors through such process as they may determine, provided that the total number of Governors (including the Headteacher) who are employees of the Academy Trust is 2 as stated in the Instrument of Government. The Local Authority may appoint the LA Governor. The Headteacher shall be treated for all purposes as being an ex-officio Governor. The Parent Governors shall be elected by parents of registered pupils at the Academy. A Parent Governor must be a parent of a pupil at the Academy at the time when he/she is elected. The Governing Body shall make all necessary arrangements for, and determine all other matters relating to, an election of Parent Governors, including any question of whether a person is a parent of a registered pupil at the Academy. Any election of Parent Governors which is contested shall be held by secret ballot. POLICIES AND PROCEDURES ADOPTED FOR THE INDUCTION AND TRAINING OF TRUSTEES Governor induction training alongside a menu of specialised training is available through the local network of schools to support all new Governors. The Academy buys into the Local Authority Governor Development Service who offer further Governor training. A skills matrix is being developed to identify areas of strength and weakness. Support is available through the membership of Affinity Teaching School Alliance and the Harborough Collaborative Trust. Page 4

7 TRUSTEES' REPORT (continued) FOR THE PERIOD ENDED 31 AUGUST ORGANISATIONAL STRUCTURE Members oversee the work of the Governing Body and receive the annual report. The Governing Body takes a strategic role; it acts as a critical friend to the Academy and are accountable for decisions. Its aims and objectives are set out in the committee terms of reference document, and they agree to monitor and review policies, targets and priorities, thus setting a framework for the direction of the school. The Headteacher is appointed as Accounting Officer. They are responsible for education, financial procedures and the day-to-day management of the school. The senior leadership team supports the Governing Body and Headteacher in making strategic decisions. Operational decisions are also taken by the senior leadership team, in conjunction with the Governing Body. RISK MANAGEMENT The Academy Trust practices through its Board, namely the Governing Body and the constituted subcommittees, risk management principles. Any major risks highlighted at any sub-committee are brought to the main Board with proposed mitigating actions and they continue to be reported until the risk is adequately mitigated. The Governing Body accepts managed risk as an inevitable part of its operations but maintains an objective not to run unacceptable levels of risk in any area. The subjective nature of this process requires major risks to be resolved by the Governing Body collectively, whilst more minor risks are dealt with by senior executive officers. A thorough Risk Management Assessment has been conducted using guidelines provided by the EFA and has been assessed and approved via Audit, Finance & Personnel Committee and the Full Governing Body, along with the Statement of Internal Control. The assessment involved identifying the types of risk the Academy faces, prioritising them into operational and financial impacts, accessing the likelihood of the occurrence and the impact that the occurrence will have on the Academy, putting in place controls to mitigate such risks. Whilst reviewed via the Audit, Finance & Personnel Committee on an annual basis, the Risk Register is a live document reviewed regularly with Governors and management. The following controls have been adopted to mitigate risks in the Academy's key areas: Up-to-date policies and procedures; Risk matrix; Business continuity plan; Staff training; Formal agenda for all committee activity; Terms of reference for all Governing Body and delegated committees under the direction of the Governing Body; Pecuniary interests of Governors reviewed at each meeting; Comprehensive budgeting and management reporting; Established organisational structure and clear lines of reporting; Clear authorisation and approval levels; and Vetting procedures as required by law for the protection and safeguarding of the vulnerable.. Page 5

8 TRUSTEES' REPORT (continued) FOR THE PERIOD ENDED 31 AUGUST CONNECTED ORGANISATIONS, INCLUDING RELATED PARTY RELATIONSHIPS Lubenham All Saints Church of England Primary School is part of the Harborough Collaborative Trust which is a family of schools in and around Market Harborough that provide school-to-school support, share good practice and create economies of scale to ensure value for money. The Harborough Collaborative Trust objects are specifically restricted to the following: To advance for the public benefit education in the United Kingdom by enabling the joint carrying on and development of the schools; and Promoting co-operation between them, and school improvement in respect of them, ensuring that the distinctive ethos of each school of which it enables the joint carrying on or development is upheld. OBJECTIVES AND ACTIVITIES Recognising its historic foundation, the Academy will preserve and develop its religious character in accordance with the principles of the Church of England and in partnership with the church at parish and diocesan level. The Academy aims to serve its community by providing an education of the highest quality within the context of Christian beliefs and practice. It encourages an understanding of the meaning and significance of faith and promotes Christian values through the experience it offers to all its pupils. Lubenham All Saints Church of England Primary School promotes high achievement and a positive working environment, with the following aims at the core of the school s work: To provide a happy and caring atmosphere of mutual respect which is rooted in Christian teachings; To achieve success and develop a love of learning through gaining the ability to question, think rationally and work independently; To enable every child to fulfil their potential at school and in the future; To promote healthy practices and enable all children to make informed choices; To have an attractive, stimulating and well resourced environment; To foster a sense of self esteem and confidence and celebrate each other's success; and Ensure all children and adults are included, valued and supported and enabled to contribute fully to the school community. Page 6

9 TRUSTEES' REPORT (continued) FOR THE PERIOD ENDED 31 AUGUST OBJECTIVES, STRATEGIES AND ACTIVITIES The Academy's objectives for the period ended 31 August are summarised below: To ensure that every child enjoys the same high quality education in terms of resourcing, tuition and care; To ensure enjoyment in learning; To raise the standard of educational achievement of all pupils; To improve the effectiveness of the Academy by keeping the curriculum and organisational structure under review; To provide value for money of the funds expended; To comply with all appropriate statutory and curriculum requirements; and To conduct the Academy s business in accordance with the highest standards of integrity and openness. PUBLIC BENEFIT The Governors confirm that they have referred to the guidance contained in the Charity Commission s general guidance on public benefit when reviewing the charity s aims and objectives and in planning future activities. The Governors believe that the Academy s admission policy and performance in the year provide clear evidence that the Academy is meeting its obligations as a charity to deliver public benefit. The charitable company's aims are set out in this report. The Trustees have complied with their duty under section 4 of the Charities Act 2006 to have due regard to public benefit guidance published by the Charity Commission and the Trustees have paid due regard to this guidance in deciding what activates the charitable company should undertake. STRATEGIC REPORT ACHIEVEMENTS AND PERFORMANCE Progress and standards across the key stages in the school are good. In Years 1 and 2, attainment and progress is at least in line with the national or better for reading, writing and mathematics. In Year 3 attainment and progress for mathematics are below national expectations. Pupils in this cohort received targeted interventions for mathematics. Attainment in reading and writing is in line with national expectations with progress in these subjects good or better. In Year 4 attainment in reading, writing and mathematics is at least in line with national expectations or better. Progress in reading and writing is good but below expectations in mathematics. A targeted group of pupils receive small group tuition for mathematics. In Year 5 attainment in reading, writing and mathematics is at least in line with national expectations or better. Progress in these subjects is good or better. Page 7

10 TRUSTEES' REPORT (continued) FOR THE PERIOD ENDED 31 AUGUST In Year 6 attainment in reading, writing and mathematics is at least in line with national expectations. Progress in these subjects is good or better with the exception of reading which was less than expected during the year. During the year the School Business Manager completed the Certificate of School Business Management through the National College. This has benefited the school at a strategic level, for example by providing detailed analysis of the school cleaning service to improve it further. An SEN LSA has been employed to provide 1:1 support for a pupil with high level needs. The school has received a number of charter marks during the year, including: Bronze level Eco Schools Award; Renewal of the Leicestershire Beyond Bullying Award to 2017; and Renewal of Enhanced Healthy Schools status (for emotional well-being). Improvements to the premises during the year have included the refurbishment of the infant, junior and staff toilet facilities plus enhancements to security systems and lighting. As an Academy, it is important to build links with other institutions. We are a member of the Harborough Collaborative Trust which aims to improve the quality of education for all the children in Market Harborough and surrounding villages. The school is part of the Affinity Teaching School Alliance, which supports both our self evaluation and the training of staff. We have strong links with the University of Northampton and have hosted initial teacher training students. We aim to maintain strong links with the local community. Our Parent Support Advisor has supported two families this year. The Parent-Teacher organisation, PALS have organised a wide range of activities for children, adults and families. As a result of these activities, the Academy has benefited from new ICT equipment, books, gardening resources and transport to educational visits. Local clergy visit school assemblies on a regular basis and the school holds its Harvest Festival and Leavers Service at All Saints Church in the parish. We have also developed international links with a school in Sri Lanka. KEY PERFORMANCE INDICATORS Under s417(6) of the Companies Act 2006 the School Business Manager ensures regular benchmarking to analyse the Academy's spending against other schools nationally using key performance indicators including information relating to environmental and employee matters. GOING CONCERN After making appropriate enquiries, the Board of Trustees has a reasonable expectation that the Academy Trust 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 statement. Further details regarding the adoption of the going concern basis can be found in the Statement of Accounting Policies. Page 8

11 TRUSTEES' REPORT (continued) FOR THE PERIOD ENDED 31 AUGUST FINANCIAL REVIEW The Academy's financial position is good. Spending this year has been on improving the educational standards of all the children. The principle source of income is from the Department for Education which has supported various curriculum based projects. The Academy s main income is obtained from the Education Finance Authority (EFA) in the form of recurrent grants, the use of which is restricted to particular purposes. The grants received from the EFA during the period ended August and associated expenditure, are shown as restricted funds in the Statement of Financial Activities. The Academy also receives grants for fixed assets from the EFA. In accordance with the Charities Statement of Recommended Practice (SORP), such grants are shown in the Statement of Financial Activities as restricted income in the fixed asset fund. The restricted fixed asset fund balance will be reduced by annual depreciation charges over the expected useful life of the assets concerned. Additionally, the Academy also generated funds from other sources these funds are shown as unrestricted funds in the Statement of Financial Activities. RESERVES POLICY The Academy has set a level of reserves to minimise any financial risks facing the school, such as delays between spending and receipt of grants or unexpected emergencies. The Academy has allocated a budget to cover building and maintenance needs of an emergency nature. The policy regularly reviews the nature of income and expenditure streams and the need to match income with commitments. It agrees to identify and maintain an appropriate level of free reserves and this has been set at 10,000 and should never be more than 20,000. It also will consider setting aside funds for significant projects that cannot be met by future income alone. The pension reserve is in deficit due to the Academy s share of the LGPS liabilities exceeding its share of the assets. Plans to eliminate the deficit are incorporated into the Academy's plans as detailed above by additional contributions Discuss on reserves will be an agenda item at the first Finance Governor Committee meeting of each spring term. At 31 August the total funds comprised: Unrestricted 23,000 Restricted Fixed asset funds 43,000 GAG 6,000 Pension reserve ( 71,000) 1,000 Page 9

12 TRUSTEES' REPORT (continued) FOR THE PERIOD ENDED 31 AUGUST PRINCIPAL RISKS AND UNCERTAINTIES The Governing Body 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 Governing Body is of the view that there is a formal on-going process for identifying, evaluating and managing the Academy s significant risks that has been in place since incorporation as an Academy Trust on 1 July 2013 for the period ending 31 August and up to the date of approval of the annual report and financial statements. This process is regularly reviewed by the Governing Body. The principal risks facing the Academy are included in the Risk Register and include: Strategic and Reputational Risks; Operational Risks; Compliance Risk; and Financial Risks. Control measures are in place to manage the identified risks, the key risks being that of reduced pupil numbers, that affect the level of funding and possible future Government cuts. Active promotion of the Academy is maintained and budgets monitored carefully over a 3 year period to manage any reduction in funding. The Academy Trust practices through its Board, namely the Governing Body and the constituted subcommittees, risk management principles. Any major risks highlighted at any sub-committee are brought to the main Board with proposed mitigating actions and they continue to be reported until the risk is adequately mitigated. The Governing Body accepts managed risk as an inevitable part of its operations but maintains an objective not to run unacceptable levels of risk in any area. The subjective nature of this process requires major risks to be resolved by the Governing Body collectively, whilst more minor risks are dealt with by senior executive officers. PLANS FOR FUTURE PERIODS The School Improvement Plan outlines how the school will further improve pupil progress particularly in reading and progress of those children in receipt of the pupil premium. The Academy has also recently reviewed its existing curriculum in the light of the new National Curriculum introduced in September and as such will purchase further ipads and ICT resources to support this. The school is currently undergoing work with the architect and property service in order to make a bid to the capital maintenance fund for remodelling of the internal building and possible provision of a new classroom. The School will be applying for the Artsmark Award and Bronze level Food for Life Partnership Award and work on this will be planned during the year. It is also hoped to achieve Level 5 of the RHS Campaign for School Gardening. FUNDS HELD AS CUSTODIAN TRUSTEE ON BEHALF OF OTHERS The Academy does not currently act as a Custodian Trustee. Page 10

13 TRUSTEES' REPORT (continued) FOR THE PERIOD ENDED 31 AUGUST DISCLOSURE OF INFORMATION TO AUDITORS In so far thetrustees are aware: AUDITORS there is no relevant audit information of which the charitable company's auditors is unaware, and the Trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information. The auditors, MHA MacIntyre Hudson, have indicated their willingness to continue in office. The Designated Trustees will propose a motion re-appointing the auditors at a meeting of the Trustees. This report, incorporating the Strategic Report, was approved by order of the Board of Trustees, as the company directors, on 10 December and signed on the board's behalf by:... D Blake Chair of Trustees Page 11

14 GOVERNANCE STATEMENT SCOPE OF RESPONSIBILITY As Trustees, we acknowledge we have overall responsibility for ensuring that Lubenham All Saints 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 Trustees has delegated the day-to-day responsibility to the Headteacher, 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 Lubenham All Saints Church of England Primary School and the Secretary of State for Education. They are also responsible for reporting to the Board of Trustees any material weaknesses or breakdowns in internal control. GOVERNANCE The information on governance included here supplements that described in the Trustees' Report and in the Trustees' Responsibilities Statement. The Board of Trustees has formally met 4 times during the period. Attendance during the period at meetings of the Board of Trustees was as follows: Trustee Meetings attended Out of a possible D Blake, Chair of Trustees 4 4 R Smith, Trustee 3 3 R Purdham, Trustee 3 3 D Vivian, Trustee 4 4 R Brand, Trustee 4 4 S Meadows, Trustee 3 4 S Foster, Staff Trustee 3 4 S Kubis, Trustee 4 4 R Heard, Headteacher 4 4 H Connelly, Trustee 3 3 A Jenkins, Trustee 2 2 The Board of Trustees takes a strategic role, it act as a critical friend to the Academy and is accountable for its decisions. The Trustees have set aims and objectives and they agree to monitor and review policies, targets and priorities, thus setting a framework for the direction of the Academy. The composition has changed in that the terms of office of two Governors have ended, and one Governor resigned during the last year. Two new Governors have been recruited. At present there is one vacancy for a Parent Governor. There is also one vacancy for an Local Authority Governor; the Local Authority are currently recruiting for this role on our behalf. The Audit, Finance & Personnel Committee is a sub-committee of the main Board of Trustees. Its purpose is to: In consultation with the Headteacher, to draft and recommend the first formal budget plan to the full Governing Body each financial year; To monitor monthly expenditure and take remedial action as necessary; To establish and maintain an up-to-date 3 year financial plan; To monitor all spending within the school in liaison with the appropriate committees; To make decisions on expenditure following recommendations from other committees or areas of delegated responsibility; To report any significant variances from the budget to the governing body; To approve any virement decisions (transfers within budget headings) within agreed limits of 5,000 per annum; To set a charging and remissions policy, for activities and for lettings of the school premises and grounds if applicable; Page 12

15 GOVERNANCE STATEMENT (continued) To establish and review ordering and payment systems; To enter into contracts above a financial limit of 5,000; To monitor all expenditure of voluntary funds kept on behalf of the Governing Body; To determine whether sufficient funds are available for pay increments as recommended by the Headteacher or the Headteacher s Performance Management Group; Make decisions in respect of service agreements; To receive, and where appropriate respond to reports from Auditors; To receive reports from the School Business Manager; To ensure that all of the above actions remain within the SFVS financial guidelines and requirements of the EFA and Auditors; To identify and implement efficiency savings; To identify and implement opportunities for generating income; To ensure adherence to the Best Value Statement; and To ensure all decisions are made in line with the Academy Equality Policy and legislation. This Committee is also tasked with the reviewing the overall risk profile of the Academy for appropriateness and to monitor the risk management techniques employed at all levels within the Academy. The Committee shall make whatever recommendations to the Board that it deems appropriate within the context of its terms of reference. The terms of office of Miss R. Purdham and Mr. R. Smith ended during the period. Mrs. H. Connelly and Mr. A. Jenkins have therefore been appointed to serve on the Finance Committee. Attendance at meetings in the period was as follows Trustee Meetings attended Out of a possible Miss R Purdham 6 8 Mr D Blake 9 9 Mr D Vivian 9 9 Mr R Smith 6 8 Mrs R Heard 9 9 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 all 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. The system of internal control has been in place in Lubenham All Saints Church of England Primary School for the period 1 July 2013 to 31 August and up to the date of approval of the annual report and financial statements. CAPACITY TO HANDLE RISK The Board of Trustees 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 Trustees 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 period 1 July 2013 to 31 August and up to the date of approval of the annual report and financial statements. This process is regularly reviewed by the Board of Trustees. Page 13

16 GOVERNANCE STATEMENT (continued) 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: comprehensive budgeting and monitoring systems with an annual budget and periodic financial reports which are reviewed and agreed by the Board of Trustees; regular reviews by the Finance and General Purposes Committee of reports which indicate financial performance against the forecasts and of major purchase plans, capital works and expenditure programmes; setting targets to measure financial and other performance; clearly defined purchasing (asset purchase or capital investment) guidelines. delegation of authority and segregation of duties; and identification and management of risks. The Board of Trustees has considered the need for a specific internal audit function and has decided to appoint Leicestershire County Council as internal auditor. The internal auditor's role includes giving advice on financial matters and performing a range of checks on the Academy's financial systems. On a semi-annual basis, the internal auditor reports to the Board of Trustees on the operation of the systems of control and on the discharge of the Board of Trustees' financial responsibilities. The internal auditors have delivered their schedule of works as planned and agreed in the Service Level Agreement, they have provided details of any material control issues arising as a result of the auditors work and describe what remedial action is required to be taken to rectify any issues. This report is received and reviewed by the Finance Committee and reported to the full Board of Trustees. REVIEW OF EFFECTIVENESS As Accounting Officer, the Headteacher has responsibility for reviewing the effectiveness of the system of internal control. During the period in question the review has been informed by: the work of the internal auditor; 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 internal control by the Finance Committee and a plan to ensure continuous improvement of the system is in place. Approved by order of the members of the Board of Trustees on 10 December and signed on its behalf, by:... D Blake Chair of Trustees... R Heard Accounting Officer Page 14

17 STATEMENT ON REGULARITY, PROPRIETY AND COMPLIANCE As Accounting Officer of Lubenham All Saints Church of England Primary School I have considered my responsibility to notify the Academy Board of Trustees 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. I confirm that I and the Academy Board of Trustees 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. I confirm that no instances of material 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 Trustees and EFA.... R Heard Accounting Officer 10 December Page 15

18 TRUSTEES' RESPONSIBILITIES STATEMENT FOR THE PERIOD ENDED 31 AUGUST The Trustees (who act as governors of Lubenham All Saints 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 Trustees' Report (including the Strategic Report) and the financial statements in accordance with the Annual Accounts Direction published by the Education Funding Agency, United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) and applicable law and regulations. Company law requires the Trustees to prepare financial statements for each financial year. Under company law the Trustees 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 Trustees 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; state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in business. The Trustees 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 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 Trustees 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 Trustees 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 Trustees on 10 December and signed on its behalf by:... D Blake Chair of Trustees Page 16

19 INDEPENDENT AUDITORS' REPORT TO THE BOARD OF TRUSTEES OF LUBENHAM ALL SAINTS CHURCH OF ENGLAND PRIMARY SCHOOL We have audited the financial statements of Lubenham All Saints Church of England Primary School for the period ended 31 August 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 issued by the Education Funding Agency. This report is made solely to the Academy's Trustees, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act Our audit work has been undertaken so that we might state to the Academy's Trustees 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 Trustees, as a body, for our audit work, for this report, or for the opinion we have formed. RESPECTIVE RESPONSIBILITIES OF TRUSTEES AND AUDITORS As explained more fully in the Trustees' Responsibilities Statement, the Trustees (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 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 Academy's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Trustees; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Trustees' Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. 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 and of its incoming resources and application of resources, including its income and expenditure, for the period 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 issued by the Education Funding Agency. OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006 In our opinion the information given in the Trustees' Report, incorporating the Strategic Report, for the financial period for which the financial statements are prepared is consistent with the financial statements. Page 17

20 INDEPENDENT AUDITORS' REPORT TO THE BOARD OF TRUSTEES OF LUBENHAM ALL SAINTS 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 Trustees' remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit. Robert Nelson BA FCA DChA (Senior Statutory Auditor) for and on behalf of MHA MacIntyre Hudson Chartered Accountants Statutory Auditors 11 Merus Court Meridian Business Park Leicester Leicestershire LE19 1RJ 17 December Page 18

21 INDEPENDENT REPORTING ACCOUNTANTS' ASSURANCE REPORT ON REGULARITY TO LUBENHAM ALL SAINTS CHURCH OF ENGLAND PRIMARY SCHOOL AND THE EDUCATION FUNDING AGENCY In accordance with the terms of our engagement letter dated 15 April and further to the requirements of the Education Funding Agency (EFA) as included in the Academies Accounts Direction 2013 to, we have carried out an engagement to obtain limited assurance about whether the expenditure disbursed and income received by Lubenham All Saints Church of England Primary School during the period 1 July 2013 to 31 August 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 Lubenham All Saints 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 Lubenham All Saints 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 Lubenham All Saints Church of England Primary School and EFA, for our work, for this report, or for the conclusion we have formed. RESPECTIVE RESPONSIBILITIES OF LUBENHAM ALL SAINTS CHURCH OF ENGLAND PRIMARY SCHOOL'S ACCOUNTING OFFICER AND THE REPORTING ACCOUNTANT The Accounting Officer is responsible, under the requirements of Lubenham All Saints Church of England Primary School's funding agreement with the Secretary of State for Education dated 1 June 2013, and the Academies Financial Handbook extant from 1 September 2012, 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. 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 period 1 July 2013 to 31 August 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 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 all 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 19

22 INDEPENDENT REPORTING ACCOUNTANTS' ASSURANCE REPORT ON REGULARITY TO LUBENHAM ALL SAINTS CHURCH OF ENGLAND PRIMARY SCHOOL AND THE EDUCATION FUNDING AGENCY (continued) The work undertaken to draw our conclusions includes: a review of the objectives and activities of the academy, with reference to the income streams and other information available to us as auditors of the academy; testing of a sample of grants received and other income streams; testing of a sample of payments to suppliers and other third parties; testing of a sample of payroll payments to staff; evaluating the internal control procedures and reporting lines, and testing as appropriate; and reviewing the Minutes of the meetings of the Governing Body and other evidence made available to us, relevant to our consideration of regularity. CONCLUSION In the course of our work, nothing has come to our attention which suggests that in all material respects the expenditure disbursed and income received during the period 1 July 2013 to 31 August have not been applied to purposes intended by Parliament and the financial transactions do not conform to the authorities which govern them. MHA MacIntyre Hudson Chartered Accountants Statutory Auditors 11 Merus Court Meridian Business Park Leicester Leicestershire LE19 1RJ 17 December Page 20

23 STATEMENT OF FINANCIAL ACTIVITIES (Incorporating Income and Expenditure Account and Statement of Total Recognised Gains and Losses) FOR THE PERIOD ENDED 31 AUGUST INCOMING RESOURCES Unrestricted funds Note Restricted funds Restricted fixed asset funds 14 month period ended 31 August Incoming resources from generated funds: Local Authority surplus transferred on conversion Pension deficit transferred on conversion 2 - (34) - (34) School fund transferred on conversion Fixed assets transferred on conversion Other voluntary income Activities for generating funds Funding for the Academy Trust's educational operations TOTAL INCOMING RESOURCES RESOURCES EXPENDED Costs of activities for generating funds Charitable activities Governance costs TOTAL RESOURCES EXPENDED NET INCOMING / (OUTGOING) RESOURCES BEFORE TRANSFERS 23 (24) Page 21

24 STATEMENT OF FINANCIAL ACTIVITIES (continued) FOR THE PERIOD ENDED 31 AUGUST Unrestricted funds Note Restricted funds Restricted fixed asset funds 14 month period ended 31 August Transfers between Funds 17 - (6) 6 - NET INCOME / (EXPENDITURE) FOR THE PERIOD 23 (30) Actuarial losses on defined benefit pension schemes - (35) - (35) NET MOVEMENT IN FUNDS FOR THE PERIOD 23 (65) 43 1 Total funds at 1 July TOTAL FUNDS AT 31 AUGUST 23 (65) 43 1 All of the Academy's activities derive from acquisitions in the current financial period. The Statement of Financial Activities includes all gains and losses recognised in the period. The notes on pages 25 to 45 form part of these financial statements. Page 22

25 REGISTERED NUMBER: BALANCE SHEET AS AT 31 AUGUST FIXED ASSETS Note Tangible assets CURRENT ASSETS Debtors Cash at bank 42 CREDITORS: amounts falling due within one year 16 (41) NET CURRENT ASSETS 29 TOTAL ASSETS LESS CURRENT LIABILITIES 72 Defined benefit pension scheme liability 23 (71) NET ASSETS INCLUDING PENSION SCHEME LIABILITY 1 FUNDS OF THE ACADEMY Restricted funds: Restricted funds 17 6 Restricted fixed asset funds Restricted funds excluding pension liability 49 Pension reserve Total restricted funds Unrestricted funds TOTAL FUNDS 1 70 (71) (22) The financial statements were approved by the Trustees, and authorised for issue, on 10 December and are signed on their behalf, by:... D Blake Chair of Trustees... R Heard Accounting officer The notes on pages 25 to 45 form part of these financial statements. Page 23

26 CASH FLOW STATEMENT FOR THE PERIOD ENDED 31 AUGUST Note Net cash flow from operating activities Capital expenditure and financial investment 20 (6) Cash transferred on conversion to an Academy Trust INCREASE IN CASH IN THE PERIOD 42 All of the cash flows are derived from acquisitions in the current financial period. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS FOR THE PERIOD ENDED 31 AUGUST Increase in cash in the period 42 MOVEMENT IN NET FUNDS IN THE PERIOD 42 NET FUNDS AT 31 AUGUST 42 The notes on pages 25 to 45 form part of these financial statements. Page 24

27 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 AUGUST 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 issued by EFA, applicable accounting standards and the Companies Act A summary of the principal accounting policies, which have been applied consistently, except where noted, is set out below. 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 Trustees. 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 and the Education Funding Agency. Investment income, gains and losses are allocated to the appropriate fund. Page 25