FELTHAM COMMUNITY COLLEGE (A COMPANY LIMITED BY GUARANTEE) ANNUAL REPORT AND FINANCIAL STATEMENTS YEAR ENDED 31 AUGUST 2013

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1 Feltham Community College Financial Information FELTHAM COMMUNITY COLLEGE (A COMPANY LIMITED BY GUARANTEE) ANNUAL REPORT AND FINANCIAL STATEMENTS YEAR ENDED 31 AUGUST 2013 We have completed our compilation work, as agents, on these accounts, which are the sole responsibility of the directors. The accounts are draft and may still be subject to material changes. We do not accept responsibility for any reliance which may be placed upon them. COMPANY REGISTRATION NUMBER: (ENGLAND AND WALES)

2 FINANCIAL STATEMENTS CONTENTS PAGE Reference and Administrative Details 1 Governors Report 2-7 Governance Statement 8-10 Statement on Regularity, Propriety and Compliance 11 Statement of Governors Responsibilities 12 Independent Auditors Report Statement of Financial Activities incorporating Income & Expenditure Account 17 Balance Sheet 18 Cash Flow Statement 19 Notes to the Financial Statements 20-34

3 REFERENCE AND ADMINISTRATION DETAILS Registered charity name Feltham Community College Company registration number Principal and registered office Chairman of Governors Feltham Community College Browells Lane Feltham Greater London TW13 7EF Nicolas Grant Other governors (Trustees) Kenneth Batty (resigned 17 July 2013) Mark Bayliss (resigned 16 October 2012) Victoria Eadie (Headteacher and Accounting Officer) Victoria Griffin Joanna Houghton Paul Jabbal Sureshkumar Kandangwa Jason Lockwood Harprit Sekhon Marjorie Semple (Responsible Officer) David Snaddon Susan Stone Karen West Penny Wilson Charlene Woodcock (resigned 11 October 2012) Company Secretary John Dixon (resigned 1 October 2012) Penny Davies (appointed 1 October 2012) Principle finance officer Independent Auditor Bankers Solicitors John Dixon Day Smith and Hunter Batchworth House Batchworth Place Church Street Rickmansworth WD3 1JE HSBC Group Plc 8-14 Canada Square London E14 5HQ Browne Jacobson LLP 44 Castle Gate Nottingham NG1 7BJ 1

4 GOVERNORS REPORT The Governors present their annual report together with the financial statements and auditors report of Feltham Community College (the Charitable Company) for the year ended 31 August 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 governors act as trustees for the charitable activities of Feltham Community College and are also the directors and members of the Charitable Company for the purposes of company law. The Charitable Company is known as Feltham Community College. Details of the governors who served throughout the year except as noted are included in the Reference and Administrative Details on page 1. Members Liability Each member of the Charitable Company undertakes to contribute to the assets of the Charitable Company in the event of it being wound up while they are a member, or within one year after they cease to be a member, such amount as may be required, not exceeding 10, for the debts and liabilities contracted before they ceased to be a member. Governors Indemnities In accordance with normal commercial practice the Academy has purchased Governors liability insurance to protect them from claims arising from negligent acts, errors or omissions occurring whilst acting in good faith on Academy business. Principal Activities The principal object and activity of the charitable company is the operation of Feltham Community College, to provide education for pupils of differing abilities between the ages of 11 and 19. Method of Recruitment and Appointment or Election of Governors The members of the Academy Trust comprise the signatories to the Memorandum, one person appointed by the Secretary of State (in the event that the Secretary of State appoints a person for this purpose), the Chair of Governors and the Headteacher. The number of governors shall be not less than three but (unless otherwise determined by ordinary resolution) shall not be subject to any maximum. The Academy Trust shall have the following governors: up to one governor (appointed under Article 50 of the Articles of Association), up to one LA governor, six parent governors, up to two staff governors, up to four partnership governors, up to three community governors, the Head Teacher, any additional governors, up to one Co-opted governor. The Members may appoint up to one Governor save that no more than one third of the total number of individuals appointed as governors shall be employees of the Academy Trust (including the Head Teacher). 2

5 GOVERNORS REPORT (continued) Method of Recruitment and Appointment or Election of Governors (continued) The term of office for any governor shall be four years, save that this time limit shall not apply to the Headteacher. Subject to remaining eligible to be a particular type of governor, any governor may be re-appointed or re-elected. Policies and Procedures Adopted for the Induction and Training of Governors During the year under review the Governors held three meetings. The training and induction provided for new governors depends on their existing experience. All new governors are given a tour of the school and the chance to meet with staff and students. All governors are provided with copies of policies, procedures, minutes, accounts, budgets, plans and other documents that they will need to undertake their role as Governors. Induction tends to be done informally and is tailored specifically to the individual. Organisational Structure The structure consists of three levels: the governors, Senior Leadership Team ( SLT ), Heads of Faculty/ Departments and Year Achievement Co-ordinators. The aim of the management structure is to devolve responsibility and encourage involvement in decision making at all levels. The governors are responsible for setting general policy, adopting an annual plan and budget, monitoring the Academy by the use of budgets and making major decisions about the direction of the Academy, capital expenditure and senior staff appointments. The SLT comprises the Headteacher, Deputy Headteachers and Assistant Headteachers. These leaders work in the Academy at an executive level implementing the policies agreed by the Governors and reporting back to them. The SLT divides into two working groups: Aspirations and Wellbeing and Teaching for Learning. Each team is linked directly to named Governors who are experts in the working of that team. The SLT line manage Curriculum Faculty/department areas and Year Achievement Co-ordinators. SLT teams are responsible for the Academy s Self-Evaluation (SEF) and Academy s Development Plan. The Academy has a strong middle leadership which includes, Heads of Faculty, Heads of Department and Achievement Coordinators. Budgets are allocated to Middle Leaders for them to manage. Risk Management The governors have assessed the major risks to which the Academy is exposed, in particular those relating to the specific teaching, provision of facilities and other operational areas of the Academy, and its finances. The governors are satisfied that systems and procedures are in place to mitigate the exposure to major risks. Connected Organisations including Related Party Relationships There were two related party organisations with which Feltham Community College conducted business; Metropolitan Construction - a company owned by John Dixon s, the principle finance officer, brother AC Breeze - a company owned by David Snaddon s, a governor, brother All transactions with these related parties was conducted at arms length in accordance with the normal tendering procedures and were authorised by Victoria Eadie as Headteacher. 3

6 GOVERNORS REPORT (continued) Auditor Insofar as the governors are aware: There is no relevant audit information of which the Charitable Company s auditor is unaware; and The governors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information. Pursuant to Section 487 of the Companies Act 2006, the auditors will be deemed to be reappointed and Day Smith and Hunter will therefore continue in office. Objectives and Activities Objects and Aims The charitable company s object is specifically restricted to the following: a. To advance, for the public benefit, education in the United Kingdom. In particular but without prejudice to the generality of the foregoing by establishing, maintaining, carrying on, managing and developing a school offering a broad and balanced curriculum; and b. To promote for the benefit of individuals living in Hounslow and the surrounding area who have need by reason of their age, infirmity or disability, financial hardship or social and economic circumstances or for the public at large the provision of facilities for recreation or other leisure time activities in the interests of social welfare and with the object of improving the condition of life of the said individuals. Objectives, Strategies and Activities Feltham Community College is a large mixed Academy Trust with circa 1000 students. We have a high number of students with special educational needs and/or disabilities of whom 5% have statements of special educational needs. We have a physical disability centre as well as an autistic spectrum disorder unit and these students are fully integrated into the main school. In addition the Governors of the school have recently given approval for partnership and co-location with The Rise, an Autistic Special Free School. Around 50% of students are from a minority ethnic background and 46% are on free school meals. In 2008 FCC was a National Challenge School that failed to meet Key Stage 4 floor targets 5A*-C with English and Maths at 24%. Ofsted last inspected the school in March 2010 after just one year of vastly improved results 42% 5A* - C with English and Maths. Ofsted judged the school to be good overall. The school has since had three years of strong and sustained improvement 44%, 57%, 62% and a slight dip to 57% in the current year, Current progress and predictions demonstrate an improvement in the headline back to 61% in The sixth form has been transformed with a steep improvement in all outcomes. For the school as a whole attainment by most measures is at, or close to, national averages and progress by most measures is above national averages. To ensure that standards are continually raised we operate a programme of internal and external reviews. The latest external review was undertaken in November 2013 by Challenge Partners. This review found indicators that Feltham Community College appears to have moved to the top end of the good grade as judged by Ofsted in the predecessor s school s inspection in March 2010, with some outstanding features and very good capacity to improve further. Feltham Community College is a vibrant, dynamic, energetic school. We are a centre of excellence for innovative pedagogical development with every member of our community engaging in reflection, leadership and learning. 4

7 GOVERNORS REPORT (continued) We ensure personalised learning opportunities in an active and creative environment which gives every student the maximum opportunity to succeed. 5

8 GOVERNORS REPORT (continued) Objectives, Strategies and Activities (continued) We provide, working in partnerships, powerful support and guidance for all our community to ensure that disadvantage does not create a barrier to future economic health, well-being and achievement. We are the facilitator school of three trio cross phase hubs working on Challenge the Gap. By the time students leave the college they will be: Resilient and independent learners with the skills to succeed in a rapidly changing world Active and responsible citizens in local, national and global settings with a social conscience and an environmental awareness Emotionally intelligent, perceptive to the needs of others, accepting of responsibility in leadership roles Creative, enterprising and imaginative with an enthusiasm to take on challenge Communicating with fluency and tolerance in different situations Leading a healthy active lifestyle We ensure all our students are prepared and skilled to meet the opportunities and challenges of the future. Our 4 key skills for a successful FCC learner are, collaboration, independence, inquisitive, reflective = resilient. The Academy has a very strong set of core values around our motto of Carpe Diem and these values form the core of our teaching, learning and ways of working together: Courage and Determination Excellence and Inspiration Friendship and Equality The Academy will achieve our aims by having the highest expectations of all in our community, with the enjoyment of learning as central to all we do, with a strong emphasis on praise and reward, by adopting a nonconfrontational approach when challenges arise, by applying our rules firmly and consistently. Staff and students are expected to take responsibility for their own development and share responsibility for a high quality environment that maximises opportunities for all. Public Benefit The Trustees confirm that they have complied with the requirements of the Charities Act 2011 to have due regard to the public benefit guidance published by the Charity Commission in determining the activities undertaken by the Charity. This report makes clear that Feltham Community College complies with the principles set out in the Charity Commission public benefit guidance. There is no harm or detriment being incurred by pursuit of the charities aims. Beneficiaries are members of the public and include women, men and children, and their communities (both faith and secular) in general. The beneficiaries are therefore appropriate to the aims. The opportunities for benefit are not unreasonably restricted by geographical or other restrictions or by the ability to pay any fees charged. People in poverty and low incomes are included in the opportunity to benefit. There are no private benefits being incurred. 6

9 GOVERNORS REPORT (continued) Achievements and Performance Financial Review, Including Key Performance Indicators 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. Most of the Academy's income is obtained from the Education Funding Agency (EFA) in the form of recurrent grants, the use of which is restricted to particular purposes. The grants received from the EFA during the year ended 31 August 2013 and the associated expenditure are shown as restricted funds in the Statement of Financial Activities. The Academy also receives grants for fixed assets from the EFA. In accordance with the Charities Statement of Recommended Practice, 'Accounting and Reporting by Charities' (SORP 2005), such grants are shown in the Statement of Financial Activities as restricted income in the fixed asset fund. The restricted fixed asset fund balance is reduced by annual depreciation charges over the expected useful life of the assets concerned. During the year ended 31 August 2013, the excess of income over expenditure for the year was 200,301 (2012: 17,713,325) (before pension scheme adjustments). At 31 August 2013 the net book value of fixed assets was 17,798,543 (2012: 17,775,898) as shown in note 12 to the financial statements. The assets were used exclusively for providing education and the associated support services to the pupils of the Academy. The Academy's non-teaching staff are entitled to membership of the Local Government Pension Scheme. The Academy's share of the Scheme's assets is currently assessed to be less than its liabilities in the Scheme, and consequently the Academy balance sheet shows a net asset of 15,732,626 (2012: 15,649,325). Financial and Risk Management Objectives and Policies As an Academy funded directly by the Department for Education funding streams are considered to be reasonably safe and secure. The risk mainly arises from changes in Government policy and funding levels. However the key risk is falling numbers. The Governors have a risk management strategy which is managed and reviewed on a regular basis. Principal risks and uncertainties The Academy is under subscribed at entry and main school numbers are declining. The Pupil Place Planning Committee for Hounslow project a shortfall in numbers will remain for the next three to four years after which time there is a strong increase in secondary school places required. This does create a medium term risk but is managed by the Academy through robust staffing and curriculum planning and costings. Sixth Form numbers have increased which helps to mitigate the decrease in Sixth Form funding. 7

10 GOVERNORS REPORT (continued) Reserves policy The Academy's unrestricted general fund is its funds after excluding restricted funds. Free reserves are therefore the resources the Academy has or can make available to spend for any or all of the Academy's purposes once it has met its commitments and covered its other planned expenditure. More specifically unrestricted general reserves represent income to the Academy which is to be spent at the trustees' discretion in furtherance of any of the Academy's objects but which is not yet spent, committed or designated. The Academy's current level of unrestricted general reserves is 211,825 (2012: 82,992). Demand on the Academy s restricted general reserves will vary over the coming years. The Academy s long term policy is that an appropriate level of reserves should be built up to provide sufficient working capital to cover delays between spending and receipt of grants and to provide a cushion to deal with unexpected emergencies such as urgent maintenance. In addition such a reserve can be used to help deal with fluctuations in income caused by changes in student numbers or fluctuations caused by changes to the funding formula. The Academy's current level of restricted general reserves is 119,258 (2012: 146,565 deficit). Investment policy The Governors have resolved to invest any funds available in a short term (no more than 3 months) low risk bank deposit account. Plans for Future Years The Academy will continue striving to improve the levels of performance of its students at all levels and will continue its efforts to ensure all students are secure in their next steps on leaving the Academy with regard to employment or continuing in training or formal education. The Academy continuously strives to be at the forefront of innovation in education and we are perpetually revising our curriculum offer to suit the needs of our students. Funds held as Custodian Trustee of Behalf of Others There are no asset or arrangements which are segregated or held under the safe custody of the trustees. Approved by order of the Board of Governors on.. and signed on its behalf by:.. Nicholas Grant (Chairman of Governors) 8

11 GOVERNANCE STATEMENT Scope of Responsibility As governors, we acknowledge we have overall responsibility for ensuring that Feltham Community College has an effective and appropriate system of control, financial and otherwise. However, such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss. The governing body has delegated the day-to-day responsibility to the Head Teacher, as accounting officer, for ensuring financial controls conform with the requirements of both propriety and good financial management and in accordance with the requirements and responsibilities assigned to it in the funding agreement between Feltham Community College and the Secretary of State for Education. They are also responsible for reporting to the governing body any material weaknesses or breakdowns in internal control. Governance The information on governance included here supplements that described in the governors Report and in the Statement of governors responsibilities. The governing body has formally met three times during the year. Attendance during the year at meetings of the governing body was as follows: Governor Meetings attended Out of a possible Kenneth Batty (resigned 17 July 2013) 3 3 Mark Bayliss (resigned 16 October 2012) - - Victoria Eadie 3 3 Nicolas Grant 3 3 Victoria Griffin 2 3 Joanna Houghton 2 3 Paul Jabbal 1 3 Sureshkumar Kandangwa 2 3 Jason Lockwood 3 3 Harprit Sekhon 3 3 Marjorie Semple 3 3 David Snaddon 3 3 Susan Stone 3 3 Karen West 3 3 Penny Wilson 3 3 Charlene Woodcock (resigned 16 October 2012) - - Finance Committee The Finance Committee is a sub-committee of the main governing body. Its purpose is to consider strategic financial issues on behalf of the Governing Body. It has a general role to advise the Headteacher on all matters relating to the finances of the Academy and to abide by the requirements and guidelines of the Education Funding Agency. It also has delegated authority from the Governing Body to authorise expenditure up to 100,000. It was also agreed that the Finance Committee would take on the roles and responsibilities of an Audit Committee. 9

12 Attendance at the meetings in the year was as follows: FELTHAM COMMUNITY COLLEGE GOVERNANCE STATEMENT (continued) Governor Meetings attended Out of a possible Victoria Eadie 3 4 Joanna Houghton 3 4 Jason Lockwood 4 4 Harprit Sekhon 4 4 David Snaddon 4 4 Karen West 4 4 Penny Wilson 2 4 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 on-going 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 placed in Feltham Community College for the year to 31 August 2013 and up to the date of approval of the annual report and financial statements. Capacity to Handle Risk The governing body has reviewed the key risks to which the academy trust is exposed together with the operating, financial and compliance controls that have been implemented to mitigate those risks. The governing body is of the view that there is a formal on-going process for identifying, evaluating and managing the academy trust s significant risks that has been in place for the year ended 31 August 2013 and up to the date of approval of the annual report and financial statements. This process is regularly reviewed by the governing body. The Risk and Control Framework The Academy 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 governing body; Regular reviews by the Finance Committee of reports which indicate financial performance against the forecasts and of major purchase plans, capital works and expenditure programmes; Setting targets to measure financial and other performance; Clearly defined purchasing (asset purchase or capital investment) guidelines; Delegation of authority and segregation of duties; Identification and management of risks. The governing body has considered the need for a specific internal audit function and has decided to appoint an internal auditor. The governors have appointed Marjorie Semple, a governor, as Responsible Officer (RO). The RO s role includes giving advice on financial matters and performing a range of checks on the academy trust s financial systems. On a regular basis, the RO reports to the governing body on the operation of the systems of control and on the discharge of the governing body s financial responsibilities. In the year, the RO function has been fully achieved in accordance with the Education Funding Agency s requirements. 10

13 GOVERNANCE STATEMENT (continued) 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 responsible officer (delegated to Day, Smith and Hunter); The work of the external auditor; The financial management and governance self-assessment process; 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 by the Finance Committee and a plan to address weaknesses and ensure continuous improvement of the system is in place. Approved by order of the members of the Board of Governors on... and signed on its behalf by:.. Nicolas Grant (Chairman of Governors).. Victoria Eadie (Accounting Officer) 11

14 STATEMENT ON REGULARITY, PROPRIETY AND COMPLIANCE As accounting officer of Feltham Community College I have considered my responsibility to notify the academy trust governing body and the Education Funding Agency (EFA) of material irregularity, impropriety and noncompliance with EFA terms and conditions of funding, under the funding agreement in place between the academy trust and the Secretary of State. As part of my consideration I have had due regard to the requirements of the Academies Financial Handbook. I confirm that I and the academy trust governing body are able to identify any material irregular or improper use of funds 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... Victoria Eadie (Accounting Officer) 12

15 STATEMENT OF GOVERNORS RESPONSIBILITIES The governors (who act as trustees for charitable activities of Feltham Community College and are also the directors of the Charitable Company for the purposes of company law) are responsible for preparing the Governors Annual Report, statement of internal controls 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 laws and regulations. Company law requires the governors to prepare financial statements for each financial year. Under company law the governors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Charitable Company and of the incoming resources and application of resources, including its income and expenditure, of the Charitable Company for that year. In preparing these financial statements, the governors are required to: select suitable accounting policies and then apply them consistently; observe the methods and principles in the Charities SORP; make judgements 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 operation. The governors are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the Charitable Company and enable them to ensure that the financial statements comply with the Companies Act They are also responsible for safeguarding the assets of the Charitable Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The governors are responsible for ensuring that in its conduct and operation the Charitable Company applies financial and other controls, which conform with the requirements both of propriety and of good financial management. They are also responsible for ensuring grants received from the Education Funding Agency/Department for Education have been applied for the purposes intended. The governors are responsible for the maintenance and integrity of the corporate and financial information included on the Charitable Company s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Approved by order of the members of the Board of Governors on. and signed on its behalf by:.. Nicholas Grant Chairman of Governors 13

16 INDEPENDENT AUDITOR S REPORT ON THE FINANCIAL STATEMENTS TO THE GOVERNING BODY We have audited the financial statements of Feltham Community College for the year to 31 August 2013 on pages 17 to 34. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) and the Academies Accounts Direction 2013 issued by the Education Funding Agency. This report is made solely to the charitable company'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 charitable company'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 charitable company and the charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of trustees and auditors As explained more fully in the Statement of Governors Responsibilities, the governors (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 (APB 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 charitable company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the governors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the reports and financial statements to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. 14

17 INDEPENDENT AUDITOR S REPORT ON THE FINANCIAL STATEMENTS TO THE GOVERNING BODY (continued) Opinion on financial statements In our opinion the financial statements: give a true and fair view of the state of the charitable company's affairs as at 31 August 2013 and of its incoming resources and application of resources, including its income and expenses, 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 Have beeen prepared in accordance with the Academies Accounts Direction 2013 issued by the EFA Opinion on other matter prescribed by the Companies Act 2006 In our opinion the information given in the Governors Report and Governance Statement for the financial year for which the financial statements are prepared are consistent with the financial statements. 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 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. RICHARD L. LIM FCA (Senior Statutory Auditor) For and on behalf of Day Smith and Hunter Chartered Accountants Batchworth House Batchworth Place Church Street Rickmansworth Hertfordshire WD3 1JE.. 15

18 INDEPENDENT AUDITOR S REPORT ON REGULARITY TO FELTHAM COMMUNITY COLLEGE AND THE EDUCATION FUNDING AGENCY In accordance with the terms of our engagement letter dated 17 October 2013 and further to the requirements of the Education Funding Agency (EFA) as included in the Academies Accounts Direction 2013, we have carried out an engagement to obtain limited assurance about whether the expenditure disbursed and income received by Feltham Community College during the year to 31 August 2013 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 Feltham Community College and the EFA in accordance with the terms of our engagement letter. Our work has been undertaken so that we might state to Feltham Community College 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 Feltham Community College and the EFA, for our work, for this report, or for the conclusion we have formed. Respective responsibilities of Feltham Community College s accounting officer and the reporting auditor The accounting officer is responsible, under the requirements of Feltham Community College s funding agreement with the Secretary of State for Education dated 29 October 2011 and the Academies Financial Handbook, extant from 1 September 2012, for ensuring that expenditure disbursed and income received is applied for the purposes intended by Parliament and the financial transactions conform to the authorities which govern them. Our responsibilities for this engagement are established in the United Kingdom by our profession s ethical guidance and are to obtain limited assurance and report in accordance with our engagement letter and the requirements of the Academies Accounts Direction 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 to 31 August 2013 have not been applied to purposes intended by Parliament or that the financial transactions do not conform to the authorities which govern them. Approach We conducted our engagement in accordance with the Academies Accounts Direction 2013 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 trust s income and expenditure. The work undertaken to draw to our conclusion includes: A review of the controls procedures in place to monitor and control income and expenditure A discussion with the Principle Finance Officer to substantiate any claims made by the Accounting Officer A review of the nominal ledger for any inappropriate expenses 16

19 INDEPENDENT AUDITOR S REPORT ON REGULARITY TO FELTHAM COMMUNITY COLLEGE 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 to 31 August 2013 has not been applied to purposes intended by Parliament and the financial transactions do not conform to the authorities which govern them. RICHARD L. LIM FCA (Senior Statutory Auditor) For and on behalf of DAY SMITH & HUNTER Chartered Accountants Batchworth House Batchworth Place Church Street Rickmansworth Hertfordshire WD3 1JE.. 17

20 INCOMING RESOURCES FELTHAM COMMUNITY COLLEGE STATEMENT OF FINANCIAL ACTIVITIES FOR THE Restricted Restricted Unrestricted General Fixed Asset Total Total Funds Funds Funds Notes Incoming resources from generated funds: Voluntary income 2 13,000 27, , ,824 74,232 Assets transferred from local authority on conversion ,774,129 Activities for generating funds 3 336, , ,821 Investment income 4 1, , Incoming resources from charitable activities: Funding for the academy s educational operations 5-8,733, ,746 8,839,894 7,975,080 TOTAL INCOMING RESOURCES 350,084 8,760, ,795 9,446,802 25,995,030 RESOURCES EXPENDED Costs of generating funds: Costs of generating voluntary income Fundraising trading Charitable activities: Academy s educational operations 7 75,191 9,033, ,512 9,215,467 8,268,120 Governance costs 8-31,034-31,034 13,585 TOTAL RESOURCES EXPENDED 6 75,191 9,064, ,512 9,246,501 8,281,705 NET INCOMING/(OUTGOING) RESOURCES BEFORE TRANSFERS 274,893 (303,875) 229, ,301 17,713,325 Gross transfers between funds 16 (146,060) 352,698 (206,638) - - NET INCOME FOR THE YEAR 128,833 48,823 22, ,301 17,713,325 OTHER RECOGNISED GAINS AND LOSSES Inherited deficit on defined benefit pension Scheme (1,554,000) Actuarial loss on defined benefit pension scheme 16 - (117,000) - (117,000) (510,000) NET MOVEMENT IN FUNDS 128,833 (68,177) 22,645 83,301 15,649,325 RECONCILIATION OF FUNDS Total funds brought forward at 1 September 82,992 (2,209,565) 17,775,898 15,649,325 - Total funds carried forward at 31 August 211,825 (2,277,742) 17,798,543 15,732,626 15,649,325 All of the Academy Trust s activities derive from continuing operations during the above financial year. A Statement of Total Recognised Gains and Losses is not required as all gains and losses are included in the Statement of Financial Activities. The notes on pages 20 to 34 form part of these financial statements. 18

21 BALANCE SHEET AS AT 31 AUGUST 2013 Notes Fixed assets Tangible fixed assets 12 17,798,543 17,775,898 Current assets Stock 13 15,000 - Debtors , ,158 Cash at bank and in hand 578, , ,552 1,182,237 Creditors: amounts falling due within one year 15 (547,469) (1,178,810) Net current assets 331,083 3,427 Net assets excluding pension liability 18,129,626 17,779,325 Pension scheme liability 24 (2,397,000) (2,130,000) Net assets including pension liability 15,732,626 15,649,325 Funds of the academy: Restricted income funds Fixed asset funds 16 17,798,543 17,775,898 General funds ,258 (145,565) Pension reserve 16 (2,397,000) (2,064,000) Total restricted funds 15,520,801 15,566,333 Unrestricted income funds General funds ,825 82,992 Total funds 15,732,626 15,649,325 The financial statements on pages 16 to 34 were approved by the governors, and authorised for issue on and are signed on their behalf by:.. Nicholas Grant (Chairman of Governors) Registered Company Number: The notes on pages 20 to 34 form part of these financial statements. 19

22 CASH FLOW STATEMENT Notes Net cash (outflow)/inflow from operating activities 19 (69,640) 663,179 Returns on investments and servicing of finance: Interest received 20 1, Net cash inflow from returns on investments and servicing of finance 1, Capital expenditure: Payments to acquire tangible fixed assets 21 - (16,868) Net cash outflow from capital expenditure - (16,868) (Decrease)/Increase in cash 22 (68,638) 647,079 Net funds at 1 September ,079 - Net funds at 31 August , ,079 The notes on pages 20 to 34 form part of these financial statements. 20

23 1. Statement of Accounting policies Basis of Preparation FELTHAM COMMUNITY COLLEGE NOTES TO THE FINANCIAL STATEMENTS The financial statements have been prepared under the historical cost convention in accordance with applicable United Kingdom accounting standards, the Charity Commission Statement of Recommended Practice: Accounting and Reporting by Charities (SORP 2005), the Academies Accounts Direction issued by the EFA and the Companies Act A summary of the principal accounting policies, which have been applied consistently, except where noted, is set out below. Going Concern The trustees assess whether the use of going concern is appropriate i.e. whether there are any material uncertainties related to events or conditions that may cast significant doubt on the ability of the company to continue as a going concern. The trustees make this assessment in respect of a period of one year from the date of approval of the financial statements. Incoming resources All incoming resources are recognised when the Academy has entitlement to the funds, certainty of receipt and the amount can be measured with sufficient reliability. Grants Receivable Grants are included in the Statement of Financial Activities on a receivable basis. The balance of income received for specific purposes but not expended during the year is shown in the relevant funds on the balance sheet. Where income is received in advance of entitlement of receipt its recognition is deferred and included in creditors as deferred income. Where entitlement occurs before income is received, the income is accrued. Donations Donations are recognised on a receivable basis where there is certainty of receipt and the amount can be reliably measured. Other Income Other income, including the hire of facilities and the sale of school uniform, is recognised in the period it is receivable and to the extent the goods have been provided or on completion of the service. Donated Services and Gifts in Kind The value of donated services and gifts in kind provided to the academy trust are recognised at their open market value in the period in which they are receivable as incoming resources, where the benefit to the academy trust can be reliably measured. An equivalent amount is included as expenditure under the relevant heading in the Statement of Financial Activities, except where the gift in kind was a fixed assets in which case the amount included in the appropriate fixed asset category and depreciated over the useful economic life in accordance with academy trust s policies. Fixed assets transferred to the Academy, from the predecessor establishment, on the date of conversion were included under incoming resources from generated funds. The land and buildings were independently valued at the date of conversion, on a depreciated replacement cost basis in accordance with Financial Reporting Standard

24 NOTES TO THE FINANCIAL STATEMENTS (continued) 1. Statement of Accounting policies (continued) Resources Expended All expenditure is recognised in the period in which a liability is incurred and has been classified under headings that aggregate all costs related to that category. Where costs cannot be directly attributed to particular headings they have been allocated on a basis consistent with the use of resources, with central staff costs allocated on the basis of time spent, and depreciation charges on the portion of the asset s use. Other support costs are allocated based on the spread of staff costs. Costs of Generating Funds These are costs incurred in attracting voluntary income, and those incurred in letting and other activities that raise funds. Charitable Activities These are costs incurred on the Academy Trust s educational operations. Governance Costs These include the costs attributable to the Academy Trust s compliance with constitutional and statutory requirements, including audit, strategic management and Governors' meetings and reimbursed expenses. Tangible Fixed Assets Assets, or combined groups of similar assets, costing 2,000 or more are capitalised as tangible fixed assets and are carried at cost, net of depreciation and any provision for impairment. Where tangible fixed assets have been acquired with the aid of specific grants, either from the government or from the private sector, they are included in the Balance Sheet at cost and depreciated over their expected useful economic life. The related grants are credited to a restricted fixed asset fund in the Statement of Financial Activities and carried forward in the Balance Sheet. Depreciation on such assets is charged to the restricted fixed asset fund in the Statement of Financial Activities so as to reduce the fund over the useful economic life of the related asset on a basis consistent with academy trust s depreciation policy. Depreciation is provided on all tangible fixed assets other than freehold land and buildings, at rates calculated to write off the cost of each asset on a straight line basis over its expected useful lives, as follows: Equipment, fixtures and fittings 20% on cost Computer equipment 33% on cost Motor Vehicles 20% on cost The Academy maintains its freehold buildings in such a state of repair that in the opinion of the Governors their residual values at the date of acquisition and subsequent improvements will always be at least equal to their book values. Consequently no depreciation is charged on such property. 22

25 NOTES TO THE FINANCIAL STATEMENTS (continued) 1. Statement of Accounting policies (continued) Tangible Fixed Assets (continued) A review for impairment of a fixed asset is carried out if events or changes in circumstances indicate that the carrying value of any fixed asset may not be recoverable. Shortfalls between the carrying value of fixed assets and their recoverable amounts are recognised as impairments. Impairment losses are recognised in the Statement of Financial Activities. Operating lease transactions Rentals under operating leases are charged on straight line basis over the lease term. Stock Unsold uniforms and catering stocks are valued at the lower of cost or net realisable value. Taxation The academy trust is considered to pass the tests set out in Paragraph 1 Schedule 6 of the Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation purposes. Accordingly, the academy trust is exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes. The company was acknowledged as a charitable company for tax purposes by HMRC on 7 March Pensions Benefits Retirement benefits to employees of the Academy are provided by the Teachers' Pension Scheme ( TPS ) and the Local Government Pension Scheme ( LGPS ). These are defined benefit schemes, are contracted out of the State Earnings-Related Pension Scheme (SERPS), and the assets are held separately from those of the academy trust. The TPS is an unfounded scheme and contributions are calculated so as to spread the cost of pensions over employees working lives with the academy trust in such a way that the pension cost is a substantially level percentage of current and future pensionable payroll. The contributions are determined by the Government Actuary on the basis of quinquennial valuations using a prospective benefit method. As stated in note 24, the TPS is a multi-employer scheme and the academy trust is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis. The TPS is therefore treated as a defined contribution scheme and the contributions are recognised as they are paid each year. The LPGS is a funded scheme and the assets are held separately from those of the academy trust in separate trustee administered funds. Pension scheme assets are measured at fair value and liabilities are measured on an actuarial basis using the projected unit method and discounted at a rate equivalent to the current rate of return on a high quality corporate bond of equivalent term and currency to the liabilities. The actuarial valuations are obtained at least triennially and are updated at each balance sheet date. The amounts charged to operating surplus are the current service costs and gains and losses on settlements and curtailments. They are included as part of staff costs. Past service costs are recognised immediately in the Statement of Financial Activities if the benefits have vested. If the benefits have not vested immediately, the costs are recognised over the period until vesting occurs. The expected return on assets and the interest cost are shown as a net finance amount of other 23