WREAKE VALLEY ACADEMY TRUST

Transcription

1 Registered number: (England and Wales) WREAKE VALLEY ACADEMY TRUST TRUSTEES' REPORT AND FINANCIAL STATEMENTS

2 CONTENTS Page Reference and Administrative Details 1-2 Trustees' Report 3-10 Governance Statement Statement on Regularity, Propriety and Compliance 16 Statement of Trustees Responsibilities 17 Independent Auditor s Report on the Financial Statements Independent Reporting Accountant's Report on Regularity Statement of Financial Activities Incorporating Income and Expenditure Account 23 Balance Sheet Statement of Cash Flows 26 Notes to the Financial Statements, incorporating Statement of Accounting Policies and other notes to the Financial Statements 27 52

3 REFERENCE AND ADMINISTRATIVE DETAILS Members Ms Carol Chambers Mr Russell Horsley (Resigned 26 February 2018) Ms Cassandra Soulsby (Appointed 26 February 2018) Mr Antony Pinnock Trustees Ms Mishelle Bennett (Appointed 14 June 2018) Mr Alvin Boivin (Term ended 10 April 2018) Ms Carol Chambers (Chair of Trustees) Mrs Julie Dealey (Appointed 14 June 2018) Mrs Lisa Glover (Resigned 14 December 2017) Mr Russell Horsley (Chair of Trustees until resigned 26 February 2018) Mr Antony Pinnock (Principal and Accounting Officer) Mrs Jane Middleton Mr Mark Measures (Term ended 17 March 2018 re-appointed 23 May 2018) Dr James Myers (Resigned 26 June 2018) Mrs Lucy Pathan (Resigned 31 August 2018) Mr Matthew Reid Ms Cassandra Soulsby (Vice Chair of Trustees) Mr Yasin Tayebjee (Resigned 5 October 2017) Miss Michelle Wilkinson (Resigned 11 September 2018) Company Secretary Mr Andrew Winter Senior Leadership Team Mr Antony Pinnock, Principal Mr David Hunt, Assistant Principal Ms Belinda Nuttall, Assistant Principal Mr Yasin Naujeer, Assistant Principal Ms Nicola Morland, Vice Principal Mr Andrew Winter, Business Manager Company Name Wreake Valley Academy Trust Registered Office Wreake Valley Academy Trust Parkstone Road Syston Leicester LE7 1LY Company Registered Number (England & Wales) Page 1

4 REFERENCE AND ADMINISTRATIVE DETAILS (continued) Independent Auditor MHA MacIntyre Hudson 11 Merus Court Meridian Business Park Leicester LE19 1RJ Bankers The Co-operative Bank Plc Market Place Leicester LE1 5EN Solicitors Browne Jacobson LLP Mowbray House Castle Meadow Road Nottingham NG5 1BJ Page 2

5 TRUSTEES' REPORT The Trustees present their annual report together with the financial statements and auditors report of the charitable company for the year ended 31 August The annual report serves the purposes of both a Trustees Report, and a Directors Report under company law. The Academy Trust operates an Academy for pupils aged 11 to 19 serving a catchment area in the Wreake Valley. It has a pupil capacity of 1,482 and had a roll of 815 in the school census on 24 May The Academy Trust has reached an agreement with the Department for Education to transfer the operation of Wreake Valley Academy Trust into the Bradgate Education Partnership Trust with effect from 1 September 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 Wreake Valley Academy Trust are also the directors of the charitable company for the purposes of company law. The charitable company is known as Wreake Valley Academy Trust. Details of the Trustees who served throughout the year 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 Trustees benefit from indemnity insurance to cover the liability of the Trustees 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 16,200 ( ,960) (part of RPA). Method of Recruitment and Appointment or Election of Trustees The Articles of Association state that the following Trustees may be appointed: One Trustee appointed by the Trust Members. Four Parent Trustees elected by parents of registered pupils at the Academy Trust. Up to six Community Trustees appointed by the Board of Trustees. One Staff Trustee elected by staff employed in the Academy Trust. The Principal. Except for the Principal, Trustees are subject to retirement after 4 years of service but are eligible for re-appointment or re-election at the meeting at which they retire. The Board of Trustees actively seeks to recruit new Trustees with the relevant skills to enable the Board to effectively discharge its duties. Candidates are made fully aware of the expectations that the role of a Trustee entails and the significant time commitment involved as well as the training that is required. Page 3

6 TRUSTEES' REPORT (continued) Policies and Procedures Adopted for the Induction and Training of Trustees New Trustees are required to attend an internal induction meeting with the Chair of Trustees and the Clerk to Trustees. The induction programme is delivered by the Clerk, as prescribed in the Induction Policy. Mentors are provided for all new Trustees. In addition, there is an expectation that all new Trustees attend further induction training provided by the Local Authority Governor Development Service. All Trustees are given the opportunity to attend any number of training sessions set out through a training programme included in a Service Level Agreement provided by Leicestershire Governor Development Service. In addition, bespoke courses are made available to address areas of development. Online training is made available with a wide selection of training modules. During the reporting period a variety of training has been undertaken by Trustees. Details can be provided upon request. Throughout the year, during the course of normal business activities, all Trustees are offered updates on relevant issues and changes in legislation etc. The topics covered are regularly reviewed to ensure that Trustees are kept up-to-date as far as possible and refresher sessions are made available. Organisational Structure The Board of Trustees is responsible for the strategic direction of the Academy Trust. The Board of Trustees reviews progress towards educational objectives and results. They also set the budget for the following year. The Trustees reserve the responsibility for themselves with regard to, for example: approving the first formal budget plan of the financial year; approving a Health and Safety Policy at the recommendation of the Resources Committee; agreeing a Pay Policy on the recommendation of the Resources Committee; and establishing Disciplinary and Capability procedures on the recommendations of the Resources Committee. During the reporting year there were 3 committees in place to which specific responsibilities are delegated by the main the Board of Trustees. Resources Committee - the function of the committee is to implement, monitor and evaluate the structure of the Academy Trust, to include standards, achievement, curriculum, staffing, leadership and management. This committee is also responsible for monitoring and evaluating the financial management and property matters, including the health and safety of the Academy Trust as well as acting as an Audit Committee. Outcomes Committee the function of this committee is to implement, monitor and evaluate the delivery of the structure of the Academy Trust, to include achievement, care and guidance, teaching and learning, leadership and management, behaviour management and attendance. Risk Management Committee the function of this committee is to review the principal risks to which the Academy Trust is exposed, to formulate a proposed action plan to mitigate those risks and to oversee implementation of the plan. Arrangements for Setting Pay and Remuneration of Key Management Personnel The Principal of the Academy Trust has his performance reviewed annually and the pay range is determined by the Individual Salary Range (ISR) related to the size and complexity of the school. The point within that range is determined by robust performance management processes completed by a committee of Trustees with support from an independent School Improvement Consultant. A separate committee of Trustees then consider whether to approve the recommendations made by the Performance Management Committee. Page 4

7 TRUSTEES' REPORT (continued) The Senior Leadership Team of the Academy Trust have their pay determined within the ISR applying the same rules as to the Principal, the point they are paid at within the range is determined through a performance management process with the Principal, overseen by a committee of Trustees. Again, recommendations are then taken to the Trustee s Pay Committee for consideration. The pay of the School Business Manager is determined by reference to Leicestershire County Council s Job Evaluation Scheme, which was adopted by the Academy Trust on conversion. Two Trustees are also in employment at Wreake Valley Academy Trust. One is employed as a Teacher. His salary is determined in accordance with our Teacher s Pay Policy which allows for performance related pay progression based upon annual reviews. The second Trustee is employed as a member of Support staff and her salary is determined by reference to Leicestershire County Council s Job Evaluation Scheme. Trade union facility time Relevant union officials Number of employees who were relevant Full-time equivalent employee number union officials during the relevant period 4 4 Percentage of time spent on facility time Percentage of time 0% 4 1%-50% - 51%-99% - 100% - Percentage of pay bill spent on facility time Number of employees Total cost of facility time Total pay bill Percentage of the total pay bill spent on facility time, calculated as: (total cost of facility time total pay bill) x 100 Nil Nil Nil Paid trade union activities Time spent on paid trade union activities such as a percentage of total paid facility time hours calculated as: (total hours spent on paid trade union activities by relevant union officials during the relevant period total paid facility time hours) x 100 Nil Page 5

8 TRUSTEES' REPORT (continued) Related Parties and other Connected Charities and Organisations Wreake Valley Academy Trust is an independent company without influence or control by any other organisations. Trustees have declared related party relationships, and no trading activities have taken place with any declared party. OBJECTIVES AND ACTIVITIES The Principal is the designated Accounting Officer of the Academy Trust and has overall responsibility for the day-to-day financial management of the charitable company. The Principal has delegated responsibility for low values of expenditure to specific budget holders who are each responsible for managing their own departments within the constraints of their allocated budgets. A system of financial controls is in place to manage this process. The Principal manages the Academy Trust on a daily basis supported by a Senior Leadership Team. The Principal and Senior Leadership Team meet frequently to discuss emerging matters and to help to develop strategies for future development to be put to the Board of Trustees as required for approval. Each member of the Senior Leadership Team has specific responsibilities to assist the Principal to manage certain aspects of the Academy Trust. Objects and Aims The Academy Trust s objects are specifically restricted to the following: to advance for the public benefit, education, by establishing, maintaining operating and developing a school offering a broad and balanced curriculum; and to promote for the benefit of individuals living in the surrounding area, the provision of facilities for recreation or other leisure time activities. The aims of the school include: ensuring that learning opportunities should be of the highest quality enabling students to exceed their academic targets; to prepare young people for lifelong learning; and to provide a broad and diverse curriculum. Objectives, Strategies and Activities Summer 2018 results showed record attainment (above the national average) for students achieving a standard pass in English and Maths. Progress 8 rose and is now classified as average. Maths results remain well above the national for P8. At Key Stage 3 the mastery curriculum continues to impact positively, with student outcomes continuing to show improvement. Post 16 outcomes remain strong with value added at the national. All students who wanted a university place were able to gain one, with many students choosing to follow higher level apprenticeships. Performance management and performance related pay continue to be used robustly with a new quality assurance system put in to place to monitor subject faculty performance. Page 6

9 TRUSTEES' REPORT (continued) Public Benefit The Board of Trustees have complied with their duty to have due regard to the guidance on Public Benefit published by the Charity Commission in exercising their powers and duties. The activities undertaken to further the Academy Trust s purpose for the Public Benefit include raising the educational achievement of students attending the Academy. The Academy Trust has developed its curriculum to reflect Progress 8 and to match projected student numbers, ensuring continued student success. The Academy Trust has been involved with the training of teachers and has taken on a number of trainees to ensure that well qualified teachers are joining the profession. The Academy Trust hosts the South Charnwood and Melton Behaviour Partnership which provides curriculum guidance and behaviour support to seven schools in our locality. The Academy Trust continues to collaborate with other schools, particularly with regard to the standardisation of GCSE levels. Quality assurance dialogues also take place with our partner secondary school, The Roundhill Academy. We have continued to extend the range of facilities available to the public and this year we have refurbished our tennis courts, these are now used by a local club on Saturday mornings. STRATEGIC REPORT Achievements and Performance The number of students achieving a standard pass or better in English and Maths is above the national and Progress 8 has risen substantially. KS3 has consolidated strong improvements in outcomes across the school. KS5 achievements remain strong overall with Maths and Further Maths being particularly strong. Key Performance Indicators Whilst this summer saw a substantial rise in GCSE Progress 8 (P8) to broadly average, the school received an Ofsted Inspection in June 2018 and on the back of lower 2017 results the school was graded as good for the Sixth Form and Requires Improvement overall. To provide the Academy with further support in order to improve outcomes, the Academy Trust has sought to join the Bradgate Education Partnership Trust. Main school attendance has plateaued at around 94% and we have set a target of 96% which is just above the national figure. GCSE performance has improved substantially with the number of students achieving a standard pass in English and Maths now above the national average. A Level results remain strong with value added at national average. Trustees remain mindful of the requirement to ensure that they achieve best value from the Academy Trust s expenditure. Staffing costs are our greatest expense and Trustees have worked hard to ensure that costs remain within acceptable margins. For this year Trustees are pleased to report that costs were contained below 80% of revenue income and therefore within the agreed Performance Indicator. Page 7

10 TRUSTEES' REPORT (continued) 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 statements. Further details regarding the adoption of the going concern basis can be found in the Statement of Accounting Policies. The need to ensure long term financial security for Wreake Valley Academy Trust was a consideration in seeking to transfer the Academy Trust to the Bradgate Education Partnership Trust. FINANCIAL REVIEW The Academy Trust brought forward retained earnings of 359,000 from the previous year. Activities during the year resulted in the reserves reducing such that the total carried forward to 2018/19 was 215,000. The main element of income was the school budget share and related grants receivable from the Education Skills & Funding Agency. The deficit on the pension reserve relates to the support staff pension scheme where, unlike the teachers scheme, separate assets are held to fund future liabilities. Trustees are pleased to report that the deficit reduced for the second consecutive year as a result of an increased employer contribution rate. The deficit can be met in the longer term from any combination of increased employer or employee contributions, increased government funding or changes to scheme benefits. The restricted will be spent in accordance with the terms of the particular. Unrestricted are for use in the general purposes of the Academy Trust, at the discretion of the Trustees. Reserves Policy In setting the initial budget plan for 2017/18 the Academy Trust earmarked minimal for reserves. Through the year, the Academy Trust took steps to increase its reserves in the light of a difficult long term financial outlook, and through prudent spending, the level of planned reserves was increased to 4% of GAG. With regard to Capital Funds, the Trustees are developing a long term strategic vision for capital maintenance and improvement. With this in mind short term capital expenditure has been limited to urgent works. A capital reserve fund is also being established to ensure the replacement of the 3G pitch carpet once it reaches the end of its life. At 31 August 2018 the total comprised: Unrestricted: 133,000 Restricted: Fixed asset 14,775,000 Pension reserve ( 2,948,000) Other Nil ,960,000 = As described above, we anticipate moderate increases in future levels of funding arising from changes to the National Funding Formula however it is expected that the finances of the Academy Trust will become increasingly tight as costs outstrip funding increases. The Trustees will continue to review long term financial planning and seek to retain appropriate for future plans where this can be achieved without compromising the quality of education offered to our students Page 8

11 TRUSTEES' REPORT (continued) Investment Policy The Academy Trust manages its cash by reviewing its short term requirements for needed to pay its creditors. Funds are routinely transferred to bank accounts held with bankers giving the best possible returns at the time. The Academy Trust will not place cash assets in stocks, shares, bonds or other such investment schemes. Cash assets will only be invested in interest bearing deposit accounts. Cash flow and investments are managed using the following principles: deposit and/or transfer all and receipts into the Academy Trust s Deposit Account bearing an interest rate; regularly monitor cash flow and current account balances to ensure immediate financial commitments can be met (payroll and creditor payments) and then transfer appropriate to the current account to meet forthcoming commitments; the Academy Trust will always seek to avoid its current account going overdrawn; where long term surpluses can be identified, these may be invested in other banking products such as fixed term notice accounts (e.g. 90 days notice), only to 90% of the long term surplus, to allow for any contingency; and periodically (at least annually) review interest rates and compare with other investment opportunities. Principal Risks and Uncertainties Trustees are developing increasingly more robust systems for assessing and managing risks. Our risk register shows the major risks to which the Academy Trust is exposed are as follows: Performance risk mitigated by internal self review, employment of a School Improvement Partner and robust performance management procedures. In addition, we have developed Raising Achievement Plans focussing on key areas. Loss of reputation this is mitigated by striving for ever improving outcomes, in-house self-evaluation of performance to ensure school improvement and adherence to policies designed to ensure consistency of approach. Loss of (or reduction in) funding arising from a loss of student numbers, reduction in central government funding rates, unbudgeted increases in teaching or support staff costs or unbudgeted major capital repairs. These are mitigated by effective planning and a recognition of the link between performance, reputation and student numbers. Skills and knowledge strategy amongst the Trustees - The Board continues to ensure the appointment of Trustees with the right skills required to undertake the role, and to provide for the ongoing development of Trustees. Loss of members of staff and expertise (either suddenly or gradually over time). This is mitigated by a range of personnel policies, including performance management linked to pay and rewards, together with a programme of continuing professional development designed to ensure succession planning, particularly for Middle Management staff. The Academy Trust practices through its Board, namely the Trustees and the constituted committees, 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. Page 9

12 TRUSTEES' REPORT (continued) The Board of Trustees 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 Board of Trustees collectively, whilst more minor risks are dealt with by senior executive officers. FUNDRAISING The Academy Trust is required to report on its approach to fundraising to support its objectives. During the reporting period the Academy Trust has not undertaken fundraising for its own purposes and has funded its activities predominantly through Government grants and traded activity. PLANS FOR FUTURE PERIODS The Academy Trust has continued to review its status as a standalone converter academy and formal discussions with a number of possible Multi-Academy Trusts and also other schools looking to collaborate within a new trust have been held. As a consequence, the Academy Trust has reached agreement with the Department for Education, to transfer the operation of Wreake Valley Academy Trust into the Bradgate Education Partnership Trust with effect from 1 September FUNDS HELD AS CUSTODIAN TRUSTEE ON BEHALF OF OTHERS The Academy Trust acts as banker for a group of schools within the Melton and Syston area (the Melton Behaviour Partnership Trust) who work collectively and in partnership to provide appropriate educational opportunities for those students whose behaviour may prove challenging or disruptive to the learning of other students. At the end of the reporting period, the Partnership owed totalling 50,262 to the Academy Trust. AUDITOR In so far as the Trustees are aware: there is no relevant audit information of which the charitable company s auditor 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. Trustees Report, incorporating a Strategic Report, was approved by order of the Board of Trustees, as the company directors, on 26 November 2018 and signed on the Board s behalf by: Carol Chambers Chair of Trustees 26 November 2018 Page 10

13 GOVERNANCE STATEMENT SCOPE OF RESPONSIBILITY As Trustees, we acknowledge we have overall responsibility for ensuring that Wreake Valley 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 Board of Trustees has delegated the day-to-day responsibility to the Principal, 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 Wreake Valley Academy Trust 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 Statement of Trustees Responsibilities. The Board of Trustees has formally met 8 times during the year. Attendance during the year at meetings of the Board of Trustees was as follows: Trustee Meetings attended Out of a possible Ms Mishelle Bennett (Appointed 14 June 2018) Mr Alvin Boivin (Term ended 10 April 2018) Ms Carol Chambers (Chair) Mrs Julie Dealey (Appointed 14 June 2018) Mrs Lisa Glover (Resigned 14 December 2017) Mr Russell Horsley (Resigned 26 February 2018) Mr Antony Pinnock (Principal and Accounting Officer) Mrs Jane Middleton Mr Mark Measures Dr James Myers (Resigned 26 June 2018) Mrs Lucy Pathan (Resigned 31 August 2018) Mr Matthew Reid Ms Cassandra Soulsby Mr Yasin Tayebjee (Resigned 5 October 2017) Miss Michelle Wilkinson (Resigned 11 September 2018) Page 11

14 GOVERNANCE STATEMENT (continued) During the year ended 31 August 2018 there have been a number of changes to the Academy Trust s Board. The Chair of Trustees, Russell Horsley took a sabbatical period. Initially the Vice Chair Carol Chambers stepped up to Acting Chair with Cassandra Soulsby stepping up to Acting Vice Chair to provide stability for the Academy Trust Board in the short term. Russell Horsley was unable to return to the role of Chair and resigned from his position on 26 February 2018, at which time an election was held with Carol Chambers and Cassandra Soulsby being voted in to the positions of Chair and Vice Chair respectively. Alvin Boivin decided not to stand for reelection when his term came to an end due to his increased work commitments. Lucy Pathan retired from governance after eight years. James Myers resigned from the Board due to employment relocation. Mark Measures was re-elected as a Parent Trustee when his term ended. New Trustees Mishelle Bennett and Julie Dealey were recruited with skills in Finance and the interpretation of data to support the Board with the skills they required. Committees were reviewed and revised to address the school priorities using the findings of the previous skills audit along with the application details from new Trustees. The information was also used to determine links to departmental subject areas within the school, which addressed the Academy Trust s priorities for the year. In addition, the information was used to create a plan for training and development for the Board of Trustees and individual Trustees. The Board of Trustees agreed to delay the annual self evaluation process from the Summer term due to the transfer of the Academy Trust to the Bradgate Education Partnership Trust. The Resources Committee is a sub-committee of the main Board of Trustees. Its purpose is to: to review and recommend to the Board of Trustees the approval of the Academy Trust s annual budget and to consider and approve where necessary proposals for changes to the budget once set; to establish and maintain an up-to-date 3 year financial plan; to receive regular reports on financial progress of the Academy Trust and to consider a budget position statement including virement decisions at least termly and to report significant anomalies from the anticipated position to the Board of Trustees; to ensure that the Academy Trust operates within the Financial Regulations of the Education Skills & Funding Agency and audits are carried out as appropriate; to establish and periodically review all finance related policies and procedural documents such as Pay Policy, Charges and Remissions, Lettings, Risk Register as per the policy review schedule; to ensure suitable arrangements are in place for audits of income and expenditure transactions, compliance with policy and procedure, and for the integrity of the Academy Trust s internal controls; to receive reports from appointed auditors, to investigate any material concerns and to ensure appropriate remedial action is taken with regard to all matters identified in said reports; and to serve as an Audit Committee. Page 12

15 GOVERNANCE STATEMENT (continued) During this year the key foci of the Resources Committee have been to ensure the long term financial stability of the Academy Trust and, as part of this, to monitor the performance of its plan to increase income through letting out the premises and facilities to external users. Trustees are pleased to report that this objective was met. Attendance at Resources Committee meetings in the year was as follows: Trustee Meetings attended Out of a possible Mr Alvin Boivin (Term ended 10 April 2018) 3 3 Ms Carol Chambers (Chair of Trustees) 0 6 Mrs Jane Middleton 6 6 Mr Antony Pinnock (Principal and Accounting Officer) Mr Yasin Tayebjee (Resigned 5 October 2017) Miss Michelle Wilkinson (Resigned 11 September 2018) REVIEW OF VALUE FOR MONEY As Accounting Officer, the Principal has responsibility for ensuring that the Academy Trust delivers good value in the use of public resources. The Accounting Officer understands that value for money refers to the educational and wider societal outcomes achieved in return for the taxpayer resources received. The Accounting Officer considers how the Academy Trust s use of its resources has provided good value for money during each academic year, and reports to the Board of Trustees where value for money can be improved, including the use of benchmarking data where appropriate. The Accounting Officer for the Academy Trust has delivered improved value for money during the year by following the Academy Trust s Finance Policy and obtaining quotations and tenders where appropriate, and by benchmarking the cost of goods and services against published data. Educational outcomes GCSE performance has improved substantially with the number of students achieving a standard pass in English and Maths which is above the national average. A Level results remain strong with value added at national average. The Academy Trust hosts the Melton Behaviour Partnership which brokers student support for a number of local secondary schools. The Academy Trust continues to work with a number of teaching schools and has provided placements for several trainee teachers. Financial Governance and Oversight The Academy Trust s Trustees take an active role in monitoring its financial performance and have been using the more detailed financial information provided by the school s leaders/managers to maintain a sharp focus on achieving value for money Page 13

16 GOVERNANCE STATEMENT (continued) THE PURPOSE OF THE SYSTEM OF INTERNAL CONTROL The system of internal control is designed to manage risk to a reasonable level rather than to eliminate 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, effectively and economically. The system of internal control has been in place in Wreake Valley Academy Trust for the year ended 31 August 2018 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 Trust 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 Trust's significant risks that has been in place for the year ended 31 August 2018 and up to the date of approval of the annual report and financial statements. This process is regularly reviewed by the Board of Trustees. THE RISK AND CONTROL FRAMEWORK The Academy Trust s system of internal financial control is based on a framework of regular management information and sound administrative procedures which include 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 Resources 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 auditors. The internal auditor's role includes giving advice on financial matters and performing a range of checks on the Academy Trust's financial systems. In particular the checks carried out in the current period included: testing of payroll systems; testing of purchase systems; and testing of control account / bank reconciliations. On an 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 agreement requires them to carry out procedures to check the soundness of internal controls within the Academy Trust and to report to the Resources Committee or the full Board accordingly. This provides assurance on the discharge of the Trust Board s financial responsibilities. The Board of Trustees is responsible for agreeing an action plan and monitoring that the action plan is successfully implemented. During the review, no control issues were identified as requiring improvement. Page 14

17 GOVERNANCE STATEMENT (continued) REVIEW OF EFFECTIVENESS As Accounting Officer, the Principal has responsibility for reviewing the effectiveness of the system of internal control. During the year in question the review has been informed by: the work of the internal auditor; the work of the external auditor; and the work of the executive managers within the Academy Trust 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 and a plan to address weaknesses and ensure continuous improvement of the system has been actioned. Approved by order of the members of the Board of Trustees on 26 November 2018 and signed on its behalf by: Carol Chambers Chair of Trustees Antony Pinnock Accounting Officer Page 15

18 STATEMENT ON REGULARITY, PROPRIETY AND COMPLIANCE As Accounting Officer of Wreake Valley Academy Trust I have considered my responsibility to notify the Academy Trust Board of Trustees and the Education and Skills Funding Agency (ESFA) of material irregularity, impropriety and non-compliance with ESFA terms and conditions of funding, under the funding agreement in place between the Academy Trust and the Secretary of State for Education. 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 Trust Board of Trustees 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 Trust 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 ESFA... Antony Pinnock Accounting Officer 26 November 2018 Page 16

19 STATEMENT OF TRUSTEES' RESPONSIBILITIES The Trustees (who act as Governors of Wreake Valley Academy Trust and are also the directors of the charitable company for the purposes of company law) are responsible for preparing the Trustees' Report and the financial statements in accordance with the Annual Accounts Direction published by the Education and Skills Funding Agency, United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) and applicable laws 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 2015 and the Academies Accounts Direction 2017 to 2018; 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; and 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 ESFA/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 and signed on its behalf by:... Carol Chambers Chair of Trustees 26 November 2018 Page 17

20 INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS TO THE MEMBERS OF WREAKE VALLEY ACADEMY TRUST OPINION We have audited the financial statements of Wreake Valley Academy Trust (the 'Academy') for the year ended 31 August 2018 which comprise the Statement of Financial Activities incorporating Income and Expenditure Account, the Balance Sheet, the Statement of Cash Flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law, United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', the Charities SORP 2015 and the Academies Accounts Direction 2017 to 2018 issued by the Education and Skills Funding Agency. In our opinion the financial statements: give a true and fair view of the state of the Academy Trust's affairs as at 31 August 2018 and of its incoming resources and application of resources, including its income and expenditure for the year then ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and have been prepared in accordance with the requirements of the Companies Act 2006, the Charities SORP 2015 and the Academies Accounts Direction 2017 to 2018 issued by the Education and Skills Funding Agency. BASIS FOR OPINION We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Academy Trust in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. CONCLUSIONS RELATING TO GOING CONCERN We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where: the Trustees' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or the Trustees have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Academy Trust ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. Page 18

21 INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS TO THE MEMBERS OF WREAKE VALLEY ACADEMY TRUST OTHER INFORMATION The Trustees are responsible for the other information. The other information comprises the information included in the Trustees' Report, other than the financial statements and our Auditor's Report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. OPINION ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006 In our opinion, based on the work undertaken in the course of the audit: the information given in the Trustees' Report (incorporating the Strategic Report and Directors' Report) for which the financial statements are prepared is consistent with the financial statements; and the Trustees' Report has been prepared in accordance with applicable legal requirements. MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION In the light of our knowledge and understanding of the Academy and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees' Report including the Strategic Report. We have nothing to report in respect of the following matters in relation to which 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. RESPONSIBILITIES OF TRUSTEES As explained more fully in the Trustees' Responsibilities Statement set out on page 17, the Trustees (who are also the Directors of the Academy Trust 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 and for such internal control as the Trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Page 19

22 INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS TO THE MEMBERS OF WREAKE VALLEY ACADEMY TRUST In preparing the financial statements, the Trustees are responsible for assessing the Academy Trust's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Trustees either intend to liquidate the Academy Trust or to cease operations, or have no realistic alternative but to do so. AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditor's Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: This description forms part of our Auditor's Report. USE OF OUR REPORT This report is made solely to the Academy Trust'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 Trust's members those matters we are required to state to them in an Auditor's 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 Trust and its members, as a body, for our audit work, for this report, or for the opinions we have formed. 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 LE19 1RJ Date: 18 December 2018 Page 20

23 INDEPENDENT REPORTING ACCOUNTANT'S ASSURANCE REPORT ON REGULARITY TO WREAKE VALLEY ACADEMY TRUST AND THE EDUCATION & SKILLS FUNDING AGENCY In accordance with the terms of our engagement letter dated 21 August 2018 and further to the requirements of the Education & Skills Funding Agency (ESFA) as included in the Academies Accounts Direction 2017 to 2018, we have carried out an engagement to obtain limited assurance about whether the expenditure disbursed and income received by Wreake Valley Academy Trust during the year ended to 31 August 2018 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 Wreake Valley Academy Trust and the ESFA in accordance with the terms of our engagement letter. Our work has been undertaken so that we might state to Wreake Valley Academy Trust and the ESFA 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 Wreake Valley Academy Trust and the ESFA, for our work, for this report, or for the conclusion we have formed. RESPECTIVE RESPONSIBILITIES OF WREAKE VALLEY ACADEMY TRUST'S ACCOUNTING OFFICER AND THE REPORTING ACCOUNTANT The Accounting Officer is responsible, under the requirements of Wreake Valley Academy Trust's funding agreement with the Secretary of State for Education dated 27 March 2012, and the Academies Financial Handbook extant from 1 September 2017, 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 2017 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 year ended 31 August 2018 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 2017 to 2018 issued by the ESFA. 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 21