THE JHS ACADEMY TRUST

Transcription

1 Registered number: THE JHS ACADEMY TRUST TRUSTEES' REPORT AND FINANCIAL STATEMENTS

2 CONTENTS Page Reference and Administrative Details 1 Trustees' Report 2-7 Governance Statement 8-10 Statement on Regularity, Propriety and Compliance 11 Statement of Trustees' Responsibilities 12 Independent Auditors' Report on the Financial Statements Independent Reporting Accountant's Assurance Report on Regularity Statement of Financial Activities Incorporating Income and Expenditure Account 17 Balance Sheet 18 Statement of Cash Flows 19 Notes to the Financial Statements 20-35

3 REFERENCE AND ADMINISTRATIVE DETAILS OF THE ACADEMY, ITS MEMBERS, TRUSTEES AND ADVISERS Members Trustees Mr S Taylor Mr B Griffiths Dr M Wilson Mrs J Cherry Mr S Hibberd Mr J Marchant Mr J Shields Mrs K Neal Miss T Nicholls, Assistant Headteacher (Appointed 15 December 2015) Mrs D Harris, Chair of Finance Committee Mrs L Jefferey Dr M Wilson, Executive Principal Mr M Beston Mr D Trueman Mr B Griffiths, Chair Mrs C Nye Mr J Carey, Headteacher Ms R Smith Senior Leadership Team Company name Registered office Principal operating office Mr J Carey, Headteacher Mr R Freeman, Deputy Headteacher Miss L Illingworth, Deputy Headteacher Ms T Nicholls, Associate Deputy Headteacher Mr R Swinnerton, Assistant Headteacher Mr R Poddington, Assistant Headteacher Mr D Back, Assistant Headteacher Ms T Kane, School Business Manager The JHS Academy Trust Shipswright Drive Thundersley Benfleet Essex SS7 1RQ Leinster Road Laindon Basildon Essex SS15 5NX Company registered number Independent Auditors Price Bailey LLP Chartered Accountants Statutory Auditors Causeway House 1 Dane Street Bishop's Stortford Hertfordshire CM23 3BT Page 1

4 TRUSTEES' REPORT The Trustees present their Annual Report together with the financial statements and Auditor s Report of The JHS Academy Trust (the Academy, the Trust or 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 Charitable Company operates an Academy School for pupils aged serving a catchment area in Laindon/Basildon. It has a pupil capacity of 900 and had a roll of 808 in the 2015 school census. Structure, Governance and Management The Academy Trust is a company limited by guarantee and an exempt charity. The Charitable Company s Memorandum and Articles of Association are its primary governing documents. The Trustees of The Charitable Company are also the Directors for the purposes of company law. The terms Trustee, Director and Governor are interchangeable. The Charitable Company is known as The James Hornsby School (the School). Details of the Trustees who served during the year are included in the Reference and Administrative Details section. 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 and Officers Indemnities In accordance with normal commercial practice the Academy has purchased insurance to protect Trustees and Officers from claims arising from negligent acts, errors or omissions occurring whilst on Academy business. The insurance provides cover up to 5,000,000 on any one claim and details of the costs are disclosed in Note 12 to the accounts. Method of Recruitment and Appointment or Election of Trustees The Member composition of the Academy Trust is set out in the Memorandum and Articles of Association. The Members of the Trust are responsible for the appointment of the Trustees except for two Parent Trustees and two Staff Trustees who will be appointed through an election process by the Board of Trustees. In the event that these posts are not filled, the Members of the Trust are able to appoint to these positions. Except for the Executive Principal and the Headteacher, Trustees are subject to retirement after 4 years of service but are eligible for re-appointment or re-election at the meeting which they retire. The arrangements are as set out in the Articles and Funding Agreement. Trustees are appointed for a fixed term. The Headteacher is an ex officio member of the Governing Body. Parent Trustees and the staff Trustees are elected to office or appointed if there are insufficient candidates offering themselves for election. The Articles of Association make provision for 14 Trustees (2 Parents, 2 Staff Teaching, 1 Local Authority, 7 Sponsor Academy, the Headteacher and Executive Principal). Policies and Procedures Adopted for the Induction and Training of Trustees The Charitable Company is committed to providing adequate opportunities for Trustees to undertake and receive suitable training so as to enable them to perform their role effectively. To this end the Trust provides all Trustees with the opportunity to attend training sessions which cover the main elements of the position, including the legal framework and Trustee Responsibilities. Each year all members of the Board of Trustees are offered updates on relevant legal issues and changes to legislation etc. The topics covered are regularly reviewed to ensure that Trustees are kept up to date as far as possible. The Board of Trustees has appointed a Lead Trustee for training and access to training is available from Essex County Council via a Service Level Agreement with Trustee Services. All new Trustees are entitled to an induction to the role, according to their need, which may include, introductory sessions, mentoring and formal courses. This process will involve a meeting with the Chairman of Trustees and Headteacher. All Trustees are provided with a handbook plus copies of policies and procedure documents that are appropriate to the role they undertake as Trustees with particular emphasis on the committee work that they will undertake. Page 2

5 TRUSTEES' REPORT (continued) Organisational Structure The governance of the Academy is defined in the Memorandum and Articles of Association together with the Funding Agreement with the Department of Education. The Senior Leadership Team (SLT) is responsible for the day-to-day operation of the Academy, particularly organising staff, resources and students. The SLT controls the Academy on an executive level implementing policies and reporting to the Board of Trustees. The team meets frequently to discuss emerging matters and to help to develop strategies for future development to be put to the Headteacher and the Board of Trustees as required for approval. They are responsible for the authorisation of spending within agreed budgets and the appointment of staff following the vetting and safeguarding recruitment process. Each member of the SLT has specific responsibilities to assist the Headteacher to manage certain areas of the Academy. The Senior Leadership Team consisted: Mr J. Carey - Headteacher Mr R. Freeman - Deputy Headteacher Miss L. Illingworth - Deputy Headteacher Ms T. Nicholls - Associate Deputy Headteacher Mr R. Swinnerton - Assistant Headteacher Mr R. Poddington - Assistant Headteacher Mr D. Back - Assistant Headteacher Ms T. Kane - School Business Manager The Headteacher is the designated Accounting Officer of the Academy and has overall responsibility for the day to day financial management of the Charitable Company. The Headteacher has delegated responsibility for low values of expenditure to specific budget holders who are responsible for managing their own departments within their allocated budgets. A system of financial controls is in place to manage this process. The Board of Trustees, which meets on at least 4 occasions per year and each individual committee at least 3 times per year, is responsible for the strategic direction of the Academy. The Board reviews progress towards educational objectives and results; approves major expenditure requests; sets the budget for the following year; sets the organisational staffing structure; agrees the performance objectives of the Headteacher with the School Improvement Partner, and reviews them. Arrangements for setting pay and remuneration of key management personnel Key management personnel include Academy Trustees and those staff to whom the Trustees have delegated significant authority and responsibility in the day-to-day running of the Trust. Pay and remuneration of key management personnel is decided by a variety of contributory factors, such as the school group size, ISR, the pay scales for each role and the level of experience of each staff member. In addition, pay levels may be affected by nationally agreed pay awards, the ability to recruit and retain in post, all of which are in accordance with the Trust s appointment and pay policies. All amendments to key management s pay and remuneration is approved by the appropriate sub-committee and ratified by the Board of Trustees. Related Parties and other Connected Charities and Organisations Owing to the nature of the Trust's operations and the composition of the Board of Trustees being drawn from local public and private sector organisations, it is inevitable that from time to time transactions will take place with organisations in which members of the Board may have an interest. All transactions involving such organisations are conducted at arm's length and in accordance with the Academy's financial regulations and normal procedures. Any transaction where the Trustee may have a pecuniary interest is only undertaken in accordance with the at cost principle described in the Academies Financial Handbook. The Trust is sponsored by The KJS Academy Trust. Page 3

6 TRUSTEES' REPORT (continued) Objectives and Activities Objects and Aims The principal object and aim of the Charitable Company is the operation of the School to provide free education and care for pupils of different abilities between the ages of 11 and 16. The School aims to provide a high quality educational learning focused experience for all students and staff and to do so sets a culture of high expectations for staff and students. This creates a learning focused school and contributes to raising achievement for its students. The School regularly reviews it curriculum offer and is satisfied it offers a broad and balanced curriculum, based on student preferences, as well as providing other learning opportunities through its extensive extra-curricular programme of activities. Objectives, Strategies and Activities During the year the Trust has worked towards these aims by: ensuring that every child enjoys the same high quality education in terms of resourcing, tuition and care; raising the standard of educational attainment of all pupils; improving the effectiveness of the Academy by keeping the curriculum and organisational structure under continual review; providing value for money for the expended; complying with all appropriate statutory and curriculum requirements; and conducting the Academy s business in accordance with the highest standards of integrity. At The James Hornsby School we aim to get the best for, and from, each child. We intend to enable each child to realise his/her full academic, creative and physical potential and to develop positive social and moral values. To achieve this, our focus has and will continue to be directed towards investing in quality teachers, the right facilities and equipment to enable students to learn and, adopting a rigorous approach to analysing and acting on student data. Our students come from a range of backgrounds with 57% being eligible for the Pupil Premium Allocation. Whilst some of our students come from stable and supportive backgrounds a significant number do not. One of our principal objectives is to break the cycle of underachievement, to foster a sense of aspiration in all our students through the delivery of a first class education. Public Benefit The Trustees believe that by working towards the objects and aims of the School as detailed above, they have complied with their duty to have due regard to the guidance on public benefit published by the Charity Commission. Strategic Report Achievements and Performance The Trust continued its mission to ensure that students achieved their potential in public examinations; encouraged a wide range of extra-curricular activities; developed and retained suitable staff and guided students in suitable progression when they left the school. Specific achievements were as follows: Ofsted: Achieving a Good rating in the May Ofsted inspection, including for all categories. Pupil Progress (all pupils): Securing the new Government headline figure of Progress8 at significantly higher than national average. Disadvantaged pupils progress: Securing the new Government headline figure of Progress8 at significantly higher than national average. Learning and Teaching: Achieving Thinking School Status from Exeter University. Community: Achieving the Leading Parent Partnership Award. Student and staff numbers: Being over-subscribed with new intake of students and students and being fully staffed, Finance: securing an audited budget surplus. Page 4

7 TRUSTEES' REPORT (continued) Key Performance Indicators The Trustees receive regular information at each committee meeting to enable them to monitor the performance of the School compared to aims, strategies and financial budgets. As funding is based on pupil numbers this is a key performance indicator. Pupil numbers for 2015 were 808 (2014: 759). Another key financial performance indicator is staffing costs as a percentage of total income. For 2015/16 this was 69%. The Board of Trustees is confident that staffing levels are closely monitored to agreed Full Time Equivalent and staffing structures all approved by the Board. The Finance and Premises Committee also monitor premises costs to General Annual Grant (GAG) income, capitation spend for curriculum departments to GAG income, total income less grants and cash flow on a regular basis to ensure that the budget is set and managed appropriately. All of the above KPI s were within the parameters set by the Board. Going Concern After making appropriate enquiries, the Board of Trustees has a reasonable expectation that the 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. Financial Review The principal source of funding for the Trust is the GAG and other grants that it receives from the Education Funding agency (EFA). For the year ended 31 August the Trust received 4,999,305 of GAG and other funding. A high percentage of this income is spent on wages and salaries and support costs to deliver the Academy s primary objective of the provision of education. During the year the Trust spent 6,002,479 and transferred 54,395 to support capital new build and improvement projects on the School site. The Academy brought forward from 14/15, 98,187 restricted and 2,171,717 unrestricted funding. The carry forward for 15/16 is Nil restricted funding and 2,328,835 unrestricted funding. Due to the accounting rules for the Local Government Pension Scheme under FRS102, the Academy is recognising a significant pension fund deficit of 2,975,000. This does not mean that an immediate liability for this amount crystallises and such a deficit generally results in a cash flow effect in the form of increased employer contributions over a number of years. Reserves Policy The Trustees are aware of the requirement to balance current and future needs and always aim to set a balanced budget with annual income balancing annual expenditure. The Trustees monitor estimated year-end carry forward figures via the monthly reports from the Business Manager. The budget plan identifies how any carry forward will be allocated in the plan for the following academic year, including the identification of any earmarked for a specific project or purpose. The Academy s current level of free reserves (total less the amount held in fixed assets and restricted ) is 2,328,835. This has been built up from a mixture of locally raised income and balances transferred from the predecessor school. The Trust s balance on restricted general (excluding pension reserve) plus the balance on unrestricted at 31 August was 2,328,835. The cash balance of the Academy has been very healthy all year, ending the year with a balance of 2,615,806. A significant proportion of this cash is held against specific projects and is not available to meet normal recurring expenditure. The Trustees monitor cash flow as part of the committee Business Manager reports and attempt to hold a minimum of 300,000 to cover short term cash flow variances. Page 5

8 TRUSTEES' REPORT (continued) Investment Policy An Investment Policy was approved by the Board of Trustees in September It is reviewed on an annual basis. The aim of the policy is to ensure that the Academy does not immediately need to cover anticipated expenditure are invested to maximise the Academy s income but with minimal risk. The aim is to research where may be deposited applying prudency in ensuring there is minimum risk. The Academy does not consider the investment of surplus as a primary activity, rather as good stewardship and as and when circumstances allow. Principal Risks and Uncertainties The Trustees maintain a risk register identifying the major risks to which the Academy is exposed, and identifying actions and procedures to mitigate those risks. A formal review of the risk register process is undertaken on an annual basis and the internal control systems and the exposure to said risks are monitored on behalf of the Trustees at each Finance & Resources committee meeting. The principal risks facing the Trust are outlined below; those facing the Academy at an operational level are addressed by its systems and by internal financial and other controls. The Trustees report that the Trust s financial and internal controls conform to guidelines issued by the EFA, and that improvements to the wider framework of systems dealing with business risk and risk management strategy continue to be made and formally documented. It is recognised that systems can only provide reasonable but not absolute assurance that major risks have been adequately managed. As an academy school, the level of financial risk is low. Cash flows can be reliably forecast, monitored and reported. Staff costs make up the majority of expenditure and are relatively stable with contingencies in place to cover such items as sickness and maternity. The Trustees assess the other principal risks and uncertainties facing the Trust as follows: the Academy has considerable reliance on continued Government funding through the EFA and there is no assurance that Government policy or practice will remain the same or that public funding will continue at the same levels or on the same terms; failures in governance and/or management - the risk in this area arises from potential failure to effectively manage the Academy's finances, internal controls, compliance with regulations and legislation, statutory returns, etc. The Trustees continue to review and ensure that appropriate measures are in place to mitigate these risks; reputational - the continuing success of the Academy is dependent on continuing to attract applicants in sufficient numbers by maintaining the highest educational standards. To mitigate this risk Trustees ensure that student progress and outcomes are closely monitored and reviewed; safeguarding and child protection - the Trustees continue to ensure that the highest standards are maintained in the areas of selection and monitoring of staff, the operation of child protection policies and procedures, health & safety and discipline; staffing - the success of the Academy is reliant on the quality of its staff and the Trustees monitor and review policies and procedures and recruitment to ensure continued development and training of staff as well as ensuring there is clear succession planning; fraud and mismanagement of - The Academy has appointed EES for Schools to carry out independent and external checks on financial systems and records as required by the Academy Financial Handbook. All finance staff receive training to keep up to date with financial practice requirements and develop their skills in this area; financial instruments the Academy only deals with bank balances, cash and trade creditors, with limited trade (and other) debtors. The risk in this area is considered to be low; and defined benefit pension liability as the Government has agreed to meet the defined benefit pension liability of any school ceasing to exist the main risk to the Academy is an annual cash flow funding of part of the deficit. Trustees take these payments into account when setting the annual budget plan. The Academy has continued to strengthen its risk management process throughout the year by improving the process and ensuring staff awareness. Page 6

9 TRUSTEES' REPORT (continued) Plans for Future Periods The James Hornsby School strive to continually improve levels of attainment and progress for all students, equipping them with the qualifications, skills and character to follow their chosen pathway, whether into further or higher education or employment. The curriculum, the quality of teaching and learning and informed interventions are consistently reviewed to help every child achieve their potential. The school will continue with its strategies to maintain the number of applications made for admission to the Academy and continue to focus on progressing from Good to 'Outstanding' Ofsted status. Funds Held as Custodian Trustee on Behalf of Others None. Auditor Insofar 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. The Auditors, Price Bailey LLP, are willing to continue in office and a resolution to appoint them will be proposed at the Annual General Meeting. The Trustees Report, incorporating a Strategic Report, was approved by the Board of Trustees on 14 December and signed on the Board s behalf by: Mr B Griffiths Chair of Governors Page 7

10 GOVERNANCE STATEMENT SCOPE OF RESPONSIBILITY As Trustees, we acknowledge we have overall responsibility for ensuring that The JHS 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 Headteacher, as Accounting Officer, for ensuring financial controls conform with the requirements of both propriety and good financial management and in accordance with the requirements and responsibilities assigned to it in the funding agreement between The JHS 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 4 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 Mrs J Cherry 3 4 Mr S Hibberd 4 4 Mr J Marchant 4 4 Mr J Shields 3 3 Mrs K Neal 4 4 Miss T Nicholls 3 3 Mrs D Harris 4 4 Mrs L Jefferey 4 4 Dr M Wilson 2 4 Mr M Beston 4 4 Mr D Trueman 3 4 Mr B Griffiths 4 4 Mrs C Nye 2 4 Mr J Carey 4 4 Ms R Smith 1 1 The only changes to the Board of Trustees were the appointment of two new staff Governors (Miss T. Nicholls and Mr J. Shields) to replace two existing members who left the Schools employment. The Board of Trustees continually review their effectiveness. An external assessment of governance was included within the Ofsted Inspection conducted in May. The report concluded that: Governors were effective and highly experienced; Governors had a very accurate view of the quality of teaching and provided robust scrutiny and challenge in ensuring that under-performance is addressed and effective teaching rewarded; and Governors were skilled in the use of assessment information and used this effectively to check on the progress of all students. The Board of Trustees intend to undertake a self-evaluation during the /17 academic year. The Finance and General Purposes Committee is a sub-committee of the main Board of Trustees. Its purpose is to address financial matters and: Assist the decision making of the Board of Trustees, by enabling more detailed consideration to be given to the best means of fulfilling the Board s responsibility to ensure sound management of the Academy s finance and resources, including proper planning, monitoring and probity. Make appropriate comments and recommendations on such matters to the Board on a regular basis. Review the internal and external financial statements and reports to ensure they reflect best practice. Consider all relevant reports by the appointed external Auditor and/or other authorised auditor, including reports on the company s accounts, achievement of value for money and the response of any management letters. Review with effectiveness of the Schools internal control system established to ensure the aims, objectives and key performance targets of the organisation are achieved in the most economic, effective and environmentally preferable manner. Page 8

11 GOVERNANCE STATEMENT (continued) There were no changes in the composition of the Finance & Resources Committee and there were no particular challenges. Attendance at meetings in the year was as follows: Trustee Meetings attended Out of a possible Mrs D Harris, Chair of Finance Committee 3 3 Dr M Wilson 2 3 Mr J Carey 3 3 Mr B Griffiths 3 3 Mrs J Cherry 3 3 Mr S Hibberd 2 3 Mrs K Neal 0 3 Mr D Trueman 1 3 REVIEW OF VALUE FOR MONEY As Accounting Officer, the Headteacher has responsibility for ensuring that the 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 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 Trust has delivered improved value for money during the year by: A review of staffing structures to match a changing curriculum which has enabled the school to achieve a surplus budget whilst not impacting on our students; Considering purchase options in relation to short and long term benefits and implementing competitive tendering to achieve best value in terms of services, quality and costs; and Utilising the in-house skills of Facilities, ICT and Media staff to develop the school and save on external costs. The following points demonstrate the success of the actions taken: Progress8 is significantly higher than national (+0.28); Attendance is up and above the national average (95.7%); and The school is oversubscribed. 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 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 The JHS Academy Trust for the year 1 September 2015 to 31 August and up to the date of approval of the annual report and financial statements. CAPACITY TO HANDLE RISK The Board of Trustees has reviewed the key risks to which the 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 Trust's significant risks, that has been in place for the year 1 September 2015 to 31 August and up to the date of approval of the annual report and financial statements. This process is regularly reviewed by the Board of Trustees. Page 9

12 THE RISK AND CONTROL FRAMEWORK GOVERNANCE STATEMENT (continued) The Trust s system of internal financial control is based on a framework of regular management information and administrative procedures including the segregation of duties and a system of delegation and accountability. In particular, it includes: comprehensive budgeting and monitoring systems with an annual budget and periodic financial reports which are reviewed and agreed by the Board of Trustees; regular reviews by the Finance and General Purposes Committee of reports which indicate financial performance against the forecasts and of major purchase plans, capital works and expenditure programmes; setting targets to measure financial and other performance; clearly defined purchasing (asset purchase or capital investment) guidelines; delegation of authority and segregation of duties; and identification and management of risks. The Board of Trustees has considered the need for a specific internal audit function and has decided to appoint EES for Schools as Internal Auditor. The role of EES includes giving advice on financial matters and performing checks on the Academy s financial systems including; Governance and Financial Management, Governance and Financial Reporting, Governance and Financial Accounting, Banking, Payroll and Expenses, Income, Assets and Expenditure. The checks carried out by EES also include : examination of the internal financial management of the Sports Centre; and examination of the internal financial management of the School Games Organiser Programme. On a termly basis EES reports to the Board of Trustees on the operation of the systems of control and on the discharge of the Board of Trustee financial responsibilities. EES has delivered their schedule of work as planned and no material issues were identified. REVIEW OF EFFECTIVENESS As Accounting Officer, the Headteacher 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 Auditors; the financial management and governance self-assessment process; and the work of the executive managers within the 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 by the Finance and General Purposes Committee and a plan to address weaknesses and ensure continuous improvement of the system is in place. Approved by the Board of Trustees on 14 December and signed on their behalf, by: Mr B Griffiths Chair of Trustees Mr J Carey Accounting Officer Page 10

13 STATEMENT ON REGULARITY, PROPRIETY AND COMPLIANCE As Accounting Officer of The JHS Academy Trust I have considered my responsibility to notify the Board of Trustees and the Education Funding Agency (EFA) of material irregularity, impropriety and non-compliance with EFA 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 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 EFA. Mr J Carey Accounting Officer Date: 14 December Page 11

14 STATEMENT OF TRUSTEES' RESPONSIBILITIES The Trustees (who act as Governors of The James Hornsby School and are also the Directors of the Charitable Company for the purposes of company law) are responsible for preparing the Trustees' Report (including the Strategic Report) and the financial statements in accordance with the Annual Accounts Direction 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 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 2015 to ; make judgments and accounting estimates that are reasonable and prudent; state whether applicable UK Accounting Standards (FRS 102) 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 the EFA/DfE have been applied for the purposes intended. The Trustees are responsible for the maintenance and integrity of the corporate and financial information included on the Charitable Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Approved by the Board of Trustees on 14 December and signed on its behalf by: Mr B Griffiths Chair of Governors Page 12

15 INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS TO THE MEMBERS OF THE JHS ACADEMY TRUST We have audited the financial statements of The JHS Academy Trust for the year ended 31 August which comprise the Statement of Financial Activities Incorporating Income and Expenditure Account, the Balance Sheet, the Statement of Cash Flows 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) including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Academies Accounts Direction 2015 to 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 TRUSTEES AND AUDITORS As explained more fully in the Trustees' Responsibilities Statement, the Trustees (who are also the Directors of the Charitable Company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors. SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Academy's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Trustees; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Trustees' Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our Report. OPINION ON FINANCIAL STATEMENTS In our opinion the financial statements: give a true and fair view of the state of the Academy's affairs as at 31 August and of its incoming resources and application of resources, including its income and expenditure, for the 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 2015 to issued by the Education Funding Agency. OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006 In our opinion the information given in the Trustees' Report, incorporating the Strategic Report, for the financial year for which the financial statements are prepared is consistent with the financial statements. Page 13

16 INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS TO THE MEMBERS OF THE JHS 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 Trustees' remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit. Mr Gary Miller (Senior Statutory Auditor) for and on behalf of Price Bailey LLP Chartered Accountants Statutory Auditors Causeway House 1 Dane Street Bishop's Stortford Hertfordshire CM23 3BT 16 December Page 14

17 INDEPENDENT REPORTING ACCOUNTANTS' ASSURANCE REPORT ON REGULARITY TO THE JHS ACADEMY TRUST AND THE EDUCATION FUNDING AGENCY In accordance with the terms of our engagement letter dated 20 August 2013 and further to the requirements of the Education Funding Agency (EFA) as included in the Academies Accounts Direction 2015 to, we have carried out an engagement to obtain limited assurance about whether the expenditure disbursed and income received by The JHS Academy Trust during the year 1 September 2015 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 The JHS 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 The JHS 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 The JHS Academy Trust and the EFA, for our work, for this report, or for the conclusion we have formed. RESPECTIVE RESPONSIBILITIES OF THE JHS ACADEMY TRUST'S ACCOUNTING OFFICER AND THE REPORTING ACCOUNTANT The Accounting Officer is responsible, under the requirements of The JHS Academy Trust's funding agreement with the Secretary of State for Education dated 28 September 2012, and the Academies Financial Handbook extant from 1 September 2015, 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 2015 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 1 September 2015 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 2015 to 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. The work undertaken to draw to our conclusion includes: Consideration and corroboration of the evidence supporting the Accounting Officers statement on regularity, propriety and compliance. Evaluation of the general control environment of the Academy Trust, extending the procedures required for financial statements to include regularity. Discussions with and representations from the Accounting Officer and other key management personnel. An extension of substantive testing from our audit of the financial statements to cover matters pertaining to regularity, propriety and compliance in particular checking that selected items were appropriately authorised, and appropriate. Page 15

18 INDEPENDENT REPORTING ACCOUNTANTS' ASSURANCE REPORT ON REGULARITY TO THE JHS 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 year 1 September 2015 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. Reporting Accountant Price Bailey LLP Chartered Accountants 16 December Page 16

19 STATEMENT OF FINANCIAL ACTIVITIES INCORPORATING INCOME AND EXPENDITURE ACCOUNT INCOME FROM: Note Unrestricted Restricted Restricted fixed asset Total As restated Total 2015 Donations and capital grants 2-14,226 16,960 31, ,530 Charitable activities 3-4,982,345-4,982,345 5,044,580 Other trading activities 4 271, , ,670 Investments 5 2, ,962 11,383 TOTAL INCOME 274,739 4,996,571 16,960 5,288,270 5,781,163 EXPENDITURE ON: Charitable activities 76,426 5,182, ,495 6,002,479 6,107,230 TOTAL EXPENDITURE 6 76,426 5,182, ,495 6,002,479 6,107,230 NET INCOME / (EXPENDITURE) BEFORE TRANSFERS 198,313 (185,987) (726,535) (714,209) (326,067) Transfers between 16 (41,195) (13,200) 54, NET INCOME / (EXPENDITURE) BEFORE OTHER RECOGNISED GAINS AND LOSSES 157,118 (199,187) (672,140) (714,209) (326,067) Actuarial gains/(losses) on defined benefit pension schemes 21 - (900,000) - (900,000) 57,000 NET MOVEMENT IN FUNDS 157,118 (1,099,187) (672,140) (1,614,209) (269,067) RECONCILIATION OF FUNDS: Total brought forward 2,171,717 (1,875,813) 10,325,793 10,621,697 10,890,764 TOTAL FUNDS CARRIED FORWARD 2,328,835 (2,975,000) 9,653,653 9,007,488 10,621,697 Page 17

20 FIXED ASSETS THE JHS ACADEMY TRUST REGISTERED NUMBER: BALANCE SHEET AS AT 31 AUGUST 2015 Note Tangible assets 12 9,639,925 10,325,793 CURRENT ASSETS Debtors , ,274 Cash at bank and in hand 2,615,806 2,638,130 2,824,833 2,836,404 CREDITORS: amounts falling due within one year 14 (368,270) (443,000) NET CURRENT ASSETS 2,456,563 2,393,404 TOTAL ASSETS LESS CURRENT LIABILITIES 12,096,488 12,719,197 CREDITORS: amounts falling due after more than one year 15 (114,000) (123,500) NET ASSETS EXCLUDING PENSION SCHEME LIABILITIES 11,982,488 12,595,697 Defined benefit pension scheme liability 21 (2,975,000) (1,974,000) NET ASSETS INCLUDING PENSION SCHEME LIABILITIES 9,007,488 10,621,697 FUNDS OF THE ACADEMY Restricted income : Restricted income 16-98,187 Restricted fixed asset 16 9,653,653 10,325,793 Restricted income excluding pension liability 9,653,653 10,423,980 Pension reserve (2,975,000) (1,974,000) Total restricted income 6,678,653 8,449,980 Unrestricted income 16 2,328,835 2,171,717 TOTAL FUNDS 9,007,488 10,621,697 The financial statements were approved by the Trustees, and authorised for issue, on 14 December and are signed on their behalf, by: Mr B Griffiths Chair of Governors The notes on pages 20 to 35 form part of these financial statements. Page 18

21 Cash flows from operating activities STATEMENT OF CASH FLOWS 2015 Note Net cash provided by operating activities 18 29, ,489 Returns on investments and servicing of finance - interest received Dividends, interest and rents from investments 2,962 2,933 Payments to acquire tangible fixed assets (54,395) (643,535) Net cash used in investing activities (51,433) (640,602) Cash flows from financing activities: Cash inflows from new borrowing - 152,000 Net cash provided by financing activities - 152,000 Change in cash and cash equivalents in the year (22,324) (139,113) Cash and cash equivalents brought forward 2,638,130 2,777,243 Cash and cash equivalents carried forward 2,615,806 2,638,130 Page 19

22 NOTES TO THE FINANCIAL STATEMENTS 1. ACCOUNTING POLICIES A summary of the principal accounting policies adopted (which have been applied consistently, except where noted), judgements and key sources of estimation uncertainty, is set out below. 1.1 Basis of preparation of financial statements The financial statements of the Trust, which is a public benefit entity under FRS 102, have been prepared under the historical cost convention in accordance with the Financial Reporting Standard Applicable in the UK and Republic of Ireland (FRS 102), the Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (Charities SORP (FRS 102)), the Academies Accounts Direction 2015 to issued by EFA, the Charities Act 2011 and the Companies Act The JHS Academy Trust constitutes a public benefit entity as defined by FRS 102. First time adoption of FRS 102 These financial statements are the first financial statements of The JHS Academy Trust prepared in accordance with Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Charities SORP 2015 (SORP 2015). The financial statements of The JHS Academy Trust for the year ended 31 August 2015 were prepared in accordance with previous Generally Accepted Accounting Practice ( UK GAAP ) and SORP Some of the FRS 102 recognition, measurement, presentation and disclosure requirements and accounting policy choices differ from previous UK GAAP. Consequently, the Trustees have amended certain accounting policies to comply with FRS 102 and SORP Reconciliations to previous UK GAAP for the comparative figures are included in note Company status The Trust is a company limited by guarantee. The Members of the Company are the Trustees named on page 1. In the event of the Trust being wound up, the liability in respect of the guarantee is limited to 10 per Member of the Trust. 1.3 Fund accounting Unrestricted income represent those resources which may be used towards meeting any of the charitable objects of the Trust at the discretion of the Trustees. 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 with restrictions imposed by the funder and include grants from the Department for Education. Page 20