NORTH TOWN ACADEMY TRUST

Transcription

1 Registered number: NORTH TOWN ACADEMY TRUST GOVERNORS' REPORT AND FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 AUGUST

2 CONTENTS Page Reference and administrative details of the academy, its governors and advisers 1 Governors' report 2-7 Governance statement 8-10 Statement on regularity, propriety and compliance 11 Governors' responsibilities statement 12 Independent auditors' report Independent reporting accountant's assurance report on regularity Statement of financial activities 17 Balance sheet 18 Cash flow statement 19 Notes to the financial statements 20-36

3 REFERENCE AND ADMINISTRATIVE DETAILS OF THE ACADEMY, ITS GOVERNORS AND ADVISERS FOR THE PERIOD ENDED 31 AUGUST Governors M Snowden, Head Teacher (appointed 7 July 2011) 1,2,3 C Greenslade, Chair (appointed 7 July 2011) 1,2,3 R Carpenter, Vice Chair (appointed 7 July 2011) 2 A Packer-Hughes (appointed 7 July 2011) 2,3 C Bearman (appointed 7 July 2011, resigned 11 September ) 2 P Crowe (appointed 7 July 2011, resigned 8 September 2011) B Baigent (appointed 7 July 2011) 1,3 G Lewis (appointed 1 August 2011) 1,2 D Nevell (appointed 1 August 2011) 1 L May, Staff Governor (appointed 1 August 2011) 3 M Ruffett, Staff Governor (appointed 1 August 2011, resigned 30 October 2011) E Hartley-Criddle (appointed 6 December 2011) 2 S Lloyd (appointed 6 December 2011) 3 E Martin (appointed 29 March ) V Farrow, Staff Governor (appointed 10 July ) H Kohlman, Staff Governor (appointed 10 July ) Company registered number Principal and Registered office 1 Teaching and Learning Committee 2 Personnel Committee 3 Policies Committee North Town Primary School Staplegrove Road Taunton Somerset TA1 1DF Company secretary Auditors Bankers Lucy Reynolds Bishop Fleming Chartered Accountants Statutory Auditors 2nd Floor Stratus House Emperor Way Exeter Business Park Exeter EX1 3QS Lloyds TSB Taunton Somerset TA1 1HN Solicitors Porter Dodson Solicitors The Quad Blackbrook Park Avenue Taunton Somerset TA1 2PX Page 1

4 GOVERNORS' REPORT FOR THE PERIOD ENDED 31 AUGUST The Governors present their annual report together with the financial statements and auditors' report of the charitable company for the period ended 31 August. STRUCTURE, GOVERNANCE AND MANAGEMENT Constitution The Academy (which was incorporated on 7 July 2011 and opened as an Academy on 1 August 2011) is a charitable 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. The Governors act as the Trustees for the charitable activities of North Town Academy Trust and are also the directors of the charitable company for the purposes of company law. Details of the Governors who served throughout the period, 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 Company in the event of it being wound up while he/she is a member, or within one year after he/she ceases to be a member, such amount as may be required, not exceeding 10, for the debts and liabilities contracted before they cease to be a member. Governors' Indemnities The Academy has indemnity insurance for Governors and Officers liability via Bluefin Insurance Services Limited. The limit of indemnity is 5,000,000. Principal Activity The Academy s principal activity is the operation of a primary school and to advance for the public benefit education in the United Kingdom, in particular to establishing, maintaining, carrying on, managing and developing a school offering a broad and balanced curriculum. GOVERNORS Method of recruitment and appointment or election of Governors The Academy Trust shall have the following Governors as set out in its articles of association and funding agreement. Up to 4 Governors appointed by members, 2 Staff Governors where the total number of Governors (including the Head Teacher) who are employees of the Academy Trust does not exceed one third of the total number of Governors, a minimum of 2 parent Governors with a maximum of 4 parent Governors, the Head Teacher, additional Governors can be appointed by the Secretary of State. Governors will have a term of office of 4 years, except for the Head Teacher or any such Governor who was appointed to serve as a Governor of North Town Primary School as the predecessor school, in which case the term of office shall be specified at the time of their appointment. A Governor may be re-appointed or re-elected. Policies and Procedures adopted for the Induction and Training of Governors The Academy buys the services of Porter Dodson Solicitors who provide regular training events and bespoke training for governing bodies on request. All new Governors have an induction meeting. Governors are given access to an online governor portal on the school's site where they can obtain copies of policies, improvement plans, minutes and other documents they will need to undertake their role as governors. A training event was held for Governors covering roles and responsibilities of the Governing Body of an academy. New Governors are provided with a governor induction pack and a mentor. The training and induction provided for new Governors depends on their existing experience. Page 2

5 GOVERNORS' REPORT (continued) FOR THE PERIOD ENDED 31 AUGUST Organisational Structure From the outset, a new management structure was introduced to ensure the effective and efficient running of the Academy. This consists of three levels: the Governors, the strategic leadership team and those with specific leadership responsibilities. The aim of the management structure is to distribute responsibility and encourage involvement in decision-making at all levels. The Governors are responsible for setting general policy, adopting a development plan and budget, monitoring the Academy through close liaison with and reporting from the Head Teacher and through personal observations by visits to the school, making major decisions about the strategic direction of the Academy including capital expenditure and involvement in staff appointments in consultation with the Head Teacher. The Governors are appointed in line with Articles within the Memorandum of Association. When appointing new Governors, the Governing Body recognises the need to have a wide range of skills amongst the Governors. The strategic leadership team is led by the Head Teacher and he is supported by the deputy head, the Chair of Governors, the business manager, the early years leader, the SENCo and the standards and well-being leaders. These strategic leaders manage the Academy implementing the policies agreed by the Governors and reporting back to them on progress. The Head Teacher, assisted by other key staff, is responsible for the authorisation of spending within agreed budgets and the appointment of staff. The Head Teacher is the Accounting officer. Risk management The Governors have assessed the major risks to which the Academy is exposed and a risk register has been established. The Governors are implementing systems to assess risks that the Academy faces, especially in the operational area (e.g. in relation to teaching, school trips, child protection, health and safety) and to the control of finance. They are reviewing internal operating systems and internal financial controls in order to minimize risk. Where significant financial risk still remains they have ensured that adequate insurance cover is in place. Connected Organisations, including Related Party There are no related parties which either control or significantly influence the decisions and operations of North Town Academy Trust. There are no sponsors or formal Parent Teacher Associations associated with the Academy. OBJECTIVES AND ACTIVITIES Objects and Aims The main objectives of the Academy during the period ended 31 August were: to deliver high quality education and care to all pupils within the Academy; to maintain and enhance the standard of achievement of all pupils; to include and meet the needs of all pupils; to conduct the Academy s business in accordance with the highest standards of integrity, probity and transparency; to provide value for money. Objectives, Strategies and Activities The Academy s main strategy is to: Create a stimulating and enriching environment based on the enjoyment of learning, which is also a safe space for children to thrive. Provide a broad, creative and experiential curriculum that is well resourced, based on the use of digital technology whenever appropriate and develops key skills and a breadth of knowledge. We endeavour to inculcate an appreciation of the world around them, both in terms of a local knowledge and an understanding of the wider world, including the multicultural nature of our nation. The Academy ensures that all children have opportunities to experience academic, physical, creative, emotional Page 3

6 GOVERNORS' REPORT (continued) FOR THE PERIOD ENDED 31 AUGUST and spiritual success in their lives, and strike a balance between the traditional values of duty, service and selfdiscipline and 21st century values of transferable skills, independence, co-operation, creativity, and selfconfidence. We seek to work effectively with parents, the community and other professionals to ensure the best outcomes for all our children. Public Benefit The Governors confirm that they have complied with the requirement in the Charities Act 2011 to have due regard to the Charity Commission's general guidance on public benefit in exercising their powers or duties. They have referred to this guidance when reviewing the Academy's aims and objectives and in planning its future activities. ACHIEVEMENTS AND PERFORMANCE Achievements and Performance Key Stage 1 School Results Teacher Assessment Percentage at each level W 1 2C 2B 2A 3+ Reading Writing Mathematics National Results 2011 Teacher Assessment 2011 Percentage at each level W 1 2C 2B 2A 3+ Reading Writing Mathematics Figures may not total 100% because of rounding. Key Stage 2 School Results Subject % of pupils at each National Curriculum Level A Below English Mathematics National Results 2011 Subject % of pupils at each National Curriculum Level A Below English Mathematics Figures may not total 100% because of rounding. To ensure that standards are maintained year on year the Academy operates a programme of target setting, and curriculum monitoring and review that feed into the Academy development plan. The Academy also ensures that there are opportunities to share good practice and receive good CPD matched to the needs of the staff and the objectives of the Academy. Page 4

7 GOVERNORS' REPORT (continued) FOR THE PERIOD ENDED 31 AUGUST The Academy was inspected by Ofsted in June 2008 and was judged to be outstanding in all areas. An interim assessment was carried out by Ofsted in March 2011 which judged the Academy s performance to have been sustained. Going Concern After making appropriate enquiries, the Governing Body has a reasonable expectation that the Academy has adequate resources to continue in operational existence for the foreseeable future. For this reason it continues to adopt the going concern basis in preparing the financial statements. Key Financial Performance Indicators The main financial performance indicator is the level of reserves held at the balance sheet date. This needs to be carefully managed to ensure that the maximum amount of current year funding is spent for the benefit of pupils in that year. As EFA funding is based on pupil numbers this is also a key financial performance indicator. The new foundation year intake for 2011/12 was 60. The school is heavily over-subscribed and we anticipate that the current level of pupil numbers will be maintained or increased over the next few years. FINANCIAL REVIEW Financial Review The majority of the Academy s funding is obtained from the Education Funding Agency (EFA) in the form of recurrent grants. This funding is recognised as restricted due to its specific purposes. Any EFA funding received for fixed assets is shown in the Statement of Financial Activities as restricted income in the fixed asset fund. The restricted fixed asset fund balance is reduced by annual depreciation charges over the useful life of the assets concerned as defined in the Academy s accounting policies. The Academy also receives grants from Somerset County Council for Individually Assigned Resources to support pupils who are eligible for SEN funding. These grants are treated as restricted income. During the period ended 31 August total expenditure of 1,813,723 was covered by recurrent grant funding from the EFA and other incoming resources together totalling 1,836,254. The excess of income over expenditure was 22,531 for the period ended 31 August. All figures exclude fixed asset reserves, pension liability and movements and donations on conversion. At 1 August 2011, all buildings and assets were transferred on conversion from Somerset County Council to North Town Academy Trust at a value of 2,837,168 net of the pension liability. The asset valuation was based on the depreciated replacement cost. Financial and Risk Management Objectives and Policies The Business Committee conducts regular reviews of the actual expenditure and income against budget. The Business Committee report to the Governing Body and the report includes a review of the work conducted by the Responsible Officer. Principal Risks and Uncertainties Income and pupil numbers The main risks and uncertainties faced by the Academy are regarding future income. The Academy is funded mainly from the EFA, which is based on pupil numbers. Future pupil numbers are difficult to predict with a great degree of accuracy and this therefore results in an element of uncertainty surrounding future financing. The Academy believes the local parental preference is sufficient to attract the appropriate level of financing and future projections anticipate an increase in demand for places. The Academy is also exploring other funding streams. Fraud/mis-management The Academy appointed a Governor as the Responsible Officer (RO) to carry out checks on the financial systems and records as required by the Academy Financial Handbook. All finance staff receive training to keep Page 5

8 GOVERNORS' REPORT (continued) FOR THE PERIOD ENDED 31 AUGUST them up to date with financial practice requirements and develop their skills in this area. Cash flow The Academy considers that it has sufficient cash reserves for normal day to day operations. Reserves Policy The Governors review the reserve levels of the Academy annually. The review encompasses the nature of income and expenditure streams, the need to match income with commitments, and the nature of the reserves. The current level of reserves of 57,338 are set aside to cover unexpected costs and possible future capital projects. Investment Policy The Governors will review the financial position of the Academy and future demands for cash flow and any possible investment opportunities will be discussed in depth and the decision made appropriately. PLANS FOR FUTURE PERIODS The Academy undertakes rigorous self-evaluation every year to assess progress against a 5 year plan started in January This produces an Annual Improvement Plan that details how the academy will meet its key priorities for the year. The key priorities are: 1. Improving pupil achievement to retain the Academy s high standing in the area. 2. Improving standards of behaviour throughout the Academy. 3. Continuing to develop the quality of teaching to ensure that a high percentage of teaching is good and outstanding. 4. Continuing the transformation of the Academy s leadership to secure successful outcomes in all other areas of priority. 5. Establishing long-term business sustainability. Activities to achieve these priorities include: developing opportunities for teaching staff to improve practice through peer observation and support; creating a pupil led Behaviour policy; closing the achievement gap between different groups of pupils; leadership development with our partners at the University of Worcester; deepening relationships with other schools; reorganizing the administration of the Academy. The Academy is also exploring the possibility of expansion. Page 6

9 GOVERNORS' REPORT (continued) FOR THE PERIOD ENDED 31 AUGUST FUNDS HELD AS CUSTODIAN TRUSTEE ON BEHALF OF OTHERS The Academy and its Governors do not act as the Custodian Trustees of any other Charity. AUDITORS In so far as the Governors are aware: there is no relevant audit information of which the charitable company s auditors are unaware; and the Governors have taken all steps that 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. The auditors, Bishop Fleming, are willing to continue in office and a resolution to appoint them will be proposed at the annual general meeting. This report was approved by order of the members of the Governing Body on 4 December and signed on its behalf by: Clare Greenslade Chair of Governors Mike Snowden Head Teacher Page 7

10 GOVERNANCE STATEMENT SCOPE OF RESPONSIBILITY As Governors, we acknowledge we have overall responsibility for ensuring that North Town Academy Trust 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 Governing Body has delegated the day-to-day responsibility to the Head Teacher, as Accounting officer, for ensuring financial controls conform with the requirements of both propriety and good financial management and in accordance with the requirements and responsibilities assigned to it in the funding agreement between North Town Academy Trust and the Secretary of State for Education. They are also responsible for reporting to the Governing Body any material weaknesses or breakdowns in internal control. GOVERNANCE The information on governance included here supplements that described in the Governors' report and in the Governors' responsibilities statement. The Governing Body has formally met 6 times during the year. Attendance during the year at meetings of the Governing Body was as follows: Governor Meetings attended Out of a possible M Snowden, Head Teacher 6 6 C Greenslade, Chair 6 6 R Carpenter, Vice Chair 6 6 A Packer-Hughes 5 6 C Bearman 6 6 P Crowe 0 1 B Baigent 4 6 G Lewis 5 6 D Nevell 6 6 L May, Staff Governor 5 6 M Ruffett, Staff Governor 1 2 E Hartley-Criddle 4 4 S Lloyd 4 4 E Martin 2 2 V Farrow, Staff Governor 1 1 H Kohlman, Staff Governor 1 1 The Business Committee is a sub-committee of the main Governing Body with delegated executive powers. Attendance at meetings in the year was as follows: Governor Meetings attended Out of a possible M Snowden 3 3 C Greenslade 3 3 R Carpenter 1 3 C Bearman 3 3 D Nevell 2 3 L May 2 3 E Martin 2 2 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 Trust 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, Page 8

11 GOVERNANCE STATEMENT (continued) effectively and economically. The system of internal control has been in place in North Town Academy Trust for the period ended 31 August and up to the date of approval of the annual report and financial statements. CAPACITY TO HANDLE RISK 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 ongoing process for identifying, evaluating and managing the Academy's significant risks that has been in place 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 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 Governing Body; regular reviews by the Business 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; identification and management of risks. The Governing Body has considered the need for a specific internal audit function and has decided not to appoint an internal auditor. However, the Governors have appointed Gaynor Lewis, a Governor, as Responsible Officer ('RO'). The RO's role includes giving advice on financial matters and performing a range of checks on the Academy's financial systems. On a termly basis, the RO reports to the Governing Body on the operation of the systems of control and on the discharge of the Governing Body's financial responsibilities. REVIEW OF EFFECTIVENESS As Accounting officer, the Head Teacher 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 Responsible Officer; the work of the external auditor; the financial management and governance self-assessment process; the work of the business management team 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 Business Committee and a plan to address weaknesses and ensure continuous improvement of the system is in place. Page 9

12 GOVERNANCE STATEMENT (continued) Approved by order of the members of the Governing Body on 4 December and signed on their behalf, by: Clare Greenslade Chair of Governors Page 10

13 STATEMENT ON REGULARITY, PROPRIETY AND COMPLIANCE As Accounting officer of North Town Academy Trust I have considered my responsibility to notify the Academy Governing Body 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 Governing Body are able to identify any material irregular or improper use of by the academy trust, 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. Mike Snowden Date: 4 December Page 11

14 GOVERNORS' RESPONSIBILITIES STATEMENT FOR THE PERIOD ENDED 31 AUGUST The Governors (who act as trustees for charitable activities of North Town Academy Trust and are also the directors of the charitable company for the purposes of company law) are responsible for preparing the Governors' report and the financial statements in accordance with the Annual Accounts Requirements issued by the Education Funding Agency, United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) and applicable law and regulations. Company law requires the Governors to prepare financial statements for each financial year. Under company law the Governors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period. In preparing these financial statements, the Governors are required to: select suitable accounting policies and then apply them consistently; observe the methods and principles of the Charities SORP; make judgments and accounting estimates that are reasonable and prudent; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in operation. The Governors are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company's transactions and disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Governors are responsible for ensuring that in its conduct and operation the charitable company applies financial and other controls, which conform with the requirements both of propriety and of good financial management. They are also responsible for ensuring grants received from the EFA/DfE have been applied for the purposes intended. The Governors are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Approved by order of the members of the Governing Body and signed on its behalf by: Clare Greenslade Chair of Governors Date: 4 December Page 12

15 INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NORTH TOWN ACADEMY TRUST We have audited the financial statements of North Town Academy Trust 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 Annual Accounts Direction 2011/12 issued by the Education Funding Agency. This report is made solely to the Academy's Members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act Our audit work has been undertaken so that we might state to the Academy's Members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Academy and its Members, as a body, for our audit work, for this report, or for the opinion we have formed. RESPECTIVE RESPONSIBILITIES OF GOVERNORS AND AUDITORS As explained more fully in the Governors' responsibilities statement, the Governors (who are also the directors of the Academy for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors. SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS 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 Governors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Governors' report to identify material inconsistencies with the audited financial statements. 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 Annual Accounts Direction 2011/12 issued by the Education Funding Agency. OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006 In our opinion the information given in the Governors' report for the financial period for which the financial statements are prepared is consistent with the financial statements. Page 13

16 INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NORTH TOWN ACADEMY TRUST MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or the financial statements are not in agreement with the accounting records and returns; or certain disclosures of Governors' remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit. Tim Borton FCA DChA (Senior Statutory Auditor) for and on behalf of Bishop Fleming Chartered Accountants Statutory Auditors 2nd Floor Stratus House Emperor Way Exeter Business Park Exeter EX1 3QS 13 December Page 14

17 INDEPENDENT REPORTING ACCOUNTANT'S ASSURANCE REPORT ON REGULARITY TO NORTH TOWN ACADEMY TRUST AND THE EDUCATION FUNDING AGENCY In accordance with the terms of our engagement letter dated 19 October and further to the requirements of the Education Funding Agency (EFA) as included in the Academies: Accounts Direction, we have carried out an engagement to obtain limited assurance about whether the expenditure disbursed and income received by North Town Academy Trust during the period 7 July 2011 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 North Town Academy Trust and the EFA in accordance with the terms of our engagement letter. Our work has been undertaken so that we might state to North Town Academy Trust and the 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 North Town Academy Trust and the EFA, for our work, for this report, or for the conclusion we have formed. RESPECTIVE RESPONSIBILITIES OF NORTH TOWN ACADEMY TRUST'S ACCOUNTING OFFICER AND THE REPORTING ACCOUNTANT'S The Accounting officer is responsible, under the requirements of North Town Academy Trust's funding agreement with the Secretary of State for Education dated 1 August 2011, and the Academies Financial Handbook as published by DfE in, 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. 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 7 July 2011 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 issued by the 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 15

18 INDEPENDENT REPORTING ACCOUNTANT'S ASSURANCE REPORT ON REGULARITY TO NORTH TOWN ACADEMY TRUST AND THE EDUCATION FUNDING AGENCY (continued) 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 7 July 2011 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. Bishop Fleming Chartered Accountants 2nd Floor Stratus House Emperor Way Exeter Business Park Exeter EX1 3QS 13 December Page 16

19 STATEMENT OF FINANCIAL ACTIVITIES (incorporating income and expenditure account and statement of recognised gains and losses) FOR THE PERIOD ENDED 31 AUGUST INCOMING RESOURCES Unrestricted Note Restricted Restricted fixed asset Total Incoming resources from generated : Transfer from local authority on conversion 3 34,807 (454,000) 3,256,361 2,837,168 Other voluntary income 3 9,927 1,420 22,079 33,426 Activities for generating 4 58, ,058 Investment income Incoming resources from charitable activities - 1,766,723-1,766,723 TOTAL INCOMING RESOURCES 102,918 1,314,143 3,278,440 4,695,501 RESOURCES EXPENDED Costs of generating : Fundraising expenses and other costs 51, ,530 Charitable activities 12 1,851 1,773,913 70,823 1,846,587 Governance costs 8-15,481-15,481 TOTAL RESOURCES EXPENDED 11 53,381 1,789,394 70,823 1,913,598 NET INCOMING RESOURCES / (RESOURCES EXPENDED) BEFORE TRANSFERS 49,537 (475,251) 3,207,617 2,781,903 Transfers between Funds 21 - (36,948) 36,948 - NET INCOME FOR THE YEAR 49,537 (512,199) 3,244,565 2,781,903 Actuarial gains and losses on defined benefit pension schemes - (109,000) - (109,000) NET MOVEMENT IN FUNDS FOR THE YEAR 49,537 (621,199) 3,244,565 2,672,903 Total at 7 July TOTAL FUNDS AT 31 AUGUST 49,537 (621,199) 3,244,565 2,672,903 All of the Academy Trust'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 20 to 36 form part of these financial statements. Page 17

20 REGISTERED NUMBER: BALANCE SHEET AS AT 31 AUGUST FIXED ASSETS Note Tangible assets 18 3,222,486 CURRENT ASSETS Debtors 19 19,207 Cash at bank and in hand 87, ,693 CREDITORS: amounts falling due within one year 20 (27,276) NET CURRENT ASSETS 79,417 TOTAL ASSETS LESS CURRENT LIABILITIES 3,301,903 Defined benefit pension scheme liability 28 (629,000) NET ASSETS INCLUDING PENSION SCHEME LIABILITIES 2,672,903 FUNDS OF THE ACADEMY Restricted : General 21 7,801 Fixed asset 21 3,244,565 Restricted excluding pension liability 3,252,366 Pension reserve (629,000) Total restricted 2,623,366 Unrestricted 21 49,537 TOTAL FUNDS 2,672,903 The financial statements were approved by the Governors, and authorised for issue, on 4 December and are signed on their behalf, by: Clare Greenslade Mike Snowden The notes on pages 20 to 36 form part of these financial statements. Page 18

21 CASH FLOW STATEMENT FOR THE PERIOD ENDED 31 AUGUST Note Net cash flow from operating activities 23 89,501 Returns on investments and servicing of finance Capital expenditure and financial investment 24 (36,948) Cash transferred on conversion to an academy trust 26 34,807 INCREASE IN CASH IN THE PERIOD 87,486 All of the Academy Trust's activities derive 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 87,486 MOVEMENT IN NET FUNDS IN THE PERIOD 87,486 NET FUNDS AT 31 AUGUST 87,486 The notes on pages 20 to 36 form part of these financial statements. Page 19

22 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 issued by the EFA, applicable accounting standards and the Companies Act COMPANY STATUS The Academy is a company limited by guarantee. In the event of the Academy being wound up, the liability in respect of the guarantee is limited to 10 per member of the Academy. 1.3 FUND ACCOUNTING Unrestricted income represent those resources which may be used towards meeting any of the charitable objects of the Academy at the discretion of the Governors. Restricted fixed asset are resources which are to be applied to specific capital purposes imposed by the Department for Education where the asset acquired or created is held for a specific purpose. Restricted general comprise all other restricted received and include grants from the Department for Education. Investment income, gains and losses are allocated to the appropriate fund. 1.4 INCOMING RESOURCES All incoming resources are included in the Statement of financial activities when the Academy is legally entitled to the income and the amount can be quantified with reasonable accuracy. Grants are included in the Statement of financial activities on a receivable basis. The balance of income received for specific purposes but not expended during the period is shown in the relevant on the Balance sheet. Where income is received in advance of entitlement of receipt, its recognition is deferred and included in creditors as deferred income. Where entitlement occurs before income is received, the income is accrued. Sponsorship income provided to the Academy which amounts to a donation is recognised in the Statement of financial activities in the period in which it is receivable, where there is certainty of receipt. The value of donated services and gifts in kind provided to the Academy are recognised at their open market value in the period in which they are receivable as incoming resources, where the benefit to the Academy can be reliably measured. An equivalent amount is included as expenditure under the relevant heading in the Statement of financial activities, except where the gift in kind was a fixed asset in which case the amount is included in the appropriate fixed asset category and depreciated over the useful economic life in accordance with the Academy's policies. Donations are recognised on a receivable basis where there is certainty of receipt and the amount can be reliably measured. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation. Page 20

23 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 AUGUST 1. ACCOUNTING POLICIES (continued) 1.5 RESOURCES EXPENDED All expenditure is recognised in the period in which a liability is incurred and has been classified under headings that aggregate all costs related to that category. Where costs cannot be directly attributed to particular headings they have been allocated on a basis consistent with the use of resources, with central staff costs allocated on the basis of time spent, and depreciation charges allocated on the portion of the asset's use. Other support costs are allocated based on the spread of staff costs. Costs of generating are costs incurred in attracting voluntary income, and those incurred in trading activities that raise. Charitable activities are costs incurred in the Academy's educational operations. Governance costs include the costs attributable to the Academy's compliance with constitutional and statutory requirements, including audit, strategic management and Governors' meetings and reimbursed expenses. All resources expended are inclusive of irrecoverable VAT. 1.6 TANGIBLE FIXED ASSETS AND DEPRECIATION All assets costing more than 1,000 are capitalised. Where tangible fixed assets have been acquired with the aid of specific grants, either from the government or from the private sector, they are included in the Balance sheet at cost and depreciated over their expected useful economic life. The related grants are credited to a restricted fixed asset fund in the Statement of financial activities and are carried forward in the Balance sheet. Depreciation on such assets is charged to the restricted fixed asset fund in the Statement of financial activities so as to reduce the fund over the useful economic life of the related asset on a basis consistent with the Academy's depreciation policy. Tangible fixed assets are stated at cost less depreciation. Depreciation is not charged on land. Depreciation on other tangible fixed assets is provided at rates calculated to write off the cost of those assets, less their estimated residual value, over their expected useful lives on the following bases: L/Term Leasehold Property - 2% Straight Line, land is not depreciated Fixtures and fittings - 20% Straight Line Computer equipment % Straight Line 1.7 TAXATION The Academy is considered to pass the tests set out in Paragraph 1 Schedule 6 of the Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the Academy is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes. Page 21

24 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 AUGUST 1. ACCOUNTING POLICIES (continued) 1.8 PENSIONS Retirement benefits to employees of the Academy are provided by the Teachers' Pension Scheme ("TPS") and the Local Government Pension Scheme ("LGPS"). These are defined benefit schemes, are contracted out of the State Earnings-Related Pension Scheme ("SERPS"), and the assets are held separately from those of the Academy. The TPS is an unfunded scheme and contributions are calculated so as to spread the cost of pensions over employees' working lives with the Academy in such a way that the pension cost is a substantially level percentage of current and future pensionable payroll. The contributions are determined by the Government Actuary on the basis of quinquennial valuations using a prospective benefit method. As stated in note 28, the TPS is a multi-employer scheme and the Academy is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis. The TPS is therefore treated as a defined contribution scheme and the contributions recognised as they are paid each year. The LGPS is a funded scheme and the assets are held separately from those of the Academy in separate trustee administered. Pension scheme assets are measured at fair value and liabilities are measured on an actuarial basis using the projected unit method and discounted at a rate equivalent to the current rate of return on a high quality corporate bond of equivalent term and currency to the liabilities. The actuarial valuations are obtained at least triennially and are updated at each balance sheet date. The amounts charged to operating surplus are the current service costs and gains and losses on the settlements and curtailments. They are included as part of staff costs. Past service costs are recognised immediately in the Statement of financial activities if the benefits have vested. If the benefits have not vested immediately, the costs are recognised over the period vesting occurs. The expected return on assets and the interest cost are shown as a net finance amount of other finance costs or credits adjacent to interest. Actuarial gains and losses are recognised immediately in other gains and losses. 1.9 CONVERSION TO AN ACADEMY TRUST The conversion from a state maintained school to an academy trust involved the transfer of identifiable assets and liabilities and the operation of the school for NIL consideration and has been accounted for under the acquisition accounting method. The assets and liabilities transferred on conversion from North Town Primary School to an academy trust have been valued at their fair value, being a reasonable estimate of the current market value that the Governors would expect to pay in an open market for an equivalent item. Their fair value is in accordance with the accounting policies set out for academy. The amounts have been recognised under the appropriate balance sheet categories, with a corresponding amount recognised in the Statement of financial activities and analysed under unrestricted, restricted general and restricted fixed asset. Further details of the transaction are set out in note 26. Page 22

25 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 AUGUST 2. GENERAL ANNUAL GRANT (GAG) Result and Carry Forward for the Year GAG Allocation for current year 1,592,205 Total GAG Available to spend 1,592,205 Recurrent expenditure from GAG (1,547,456) Fixed assets purchased from GAG (36,948) GAG Carried forward to next year 7,801 Maximum permitted GAG carried forward at end of current year (12% allocation for current year) (168,289) GAG to surrender to DfE (160,488) (12% rule breached if result is positive) No breach 3. VOLUNTARY INCOME Unrestricted Restricted Total Transfer from local authority on conversion 34,807 2,802,361 2,837,168 Donations 9,927 14,808 24,735 Government grants - 8,691 8,691 Subtotal 9,927 23,499 33,426 Voluntary income 44,734 2,825,860 2,870, ACTIVITIES FOR GENERATING FUNDS Unrestricted Restricted Total Lettings 6,528-6,528 Trip income 51,530-51,530 58,058-58,058 Page 23

26 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 AUGUST 5. INVESTMENT INCOME Unrestricted Restricted Total Bank interest INCOMING RESOURCES FROM CHARITABLE ACTIVITIES Unrestricted Restricted Total Education - 1,766,723 1,766,723 FUNDING FOR ACADEMY'S EDUCATIONAL OPERATIONS DfE/EFA revenue grant Unrestricted Restricted Total General Annual Grant - 1,592,205 1,592,205 Start up Grants - 25,000 25,000 Other DfE/EFA grants - 24,213 24,213 Other government grants - 1,641,418 1,641,418 Special Educational Needs - 125, , , ,305 Total - 1,766,723 1,766, EXPENDITURE BY CHARITABLE ACTIVITY SUMMARY BY FUND TYPE Unrestricted Restricted Total Education 1,851 1,844,736 1,846,587 Page 24

27 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 AUGUST 8. GOVERNANCE COSTS Unrestricted Restricted Total Auditors' remuneration - 4,350 4,350 Legal and Professional - 10,791 10,791 Other costs ,481 15, DIRECT COSTS Education Pension finance costs 26,000 Educational supplies 55,935 Staff development 19,114 Other costs 2,027 Supply teachers 45,102 Wages and salaries 861,893 National insurance 56,668 Pension cost 159,719 1,226, SUPPORT COSTS Education Other costs 22,824 Recruitment and other staff costs 21,306 Maintenance of premises and equipment 159,148 Cleaning 6,566 Rent and rates 11,313 Heat and light 23,029 Insurance 27,781 Security and transport 3,124 Catering 20,816 Technology costs 21,675 Office overheads 20,458 Legal and professional 46,285 Bank interest and charges 401 Wages and salaries 140,192 National insurance 6,218 Pension cost 18,170 Depreciation 70, ,129 Page 25

28 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 AUGUST 11. ANALYSIS OF RESOURCES EXPENDED BY EXPENDITURE TYPE Staff costs Depreciation Other costs Total Costs of activities for generating ,530 51,530 COSTS OF GENERATING FUNDS ,530 51,530 Education 1,242,860 70, ,904 1,846,587 Governance ,481 15,481 1,242,860 70, ,915 1,913, ANALYSIS OF RESOURCES EXPENDED BY ACTIVITIES Activities undertaken directly Support costs Total Education 1,226, ,129 1,846, NET INCOMING RESOURCES / (RESOURCES EXPENDED) This is stated after charging: Depreciation of tangible fixed assets: - owned by the charity 70,823 Auditors' remuneration 4,350 During the period, no Governors received any reimbursement of expenses. During the period, one Governor received benefits in kind to the value of 241. Page 26