ST AIDAN S CATHOLIC PRIMARY ACADEMY REPORT OF THE GOVERNORS AND FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST AUGUST Company No

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1 REPORT OF THE GOVERNORS AND FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST AUGUST 2014 Company No Jacob Cavenagh & Skeet Chartered Accountants 5 Robin Hood Lane Sutton Surrey SM1 2SW

2 REPORT OF THE GOVERNORS AND FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST AUGUST 2014 Contents Page Reference and administrative details 1 Report of the Governors 2-15 Governance Statement Statement on Regularity, Propriety and Compliance 18 Report of the Independent Auditors 19 Report of the Reporting Accountant on Regularity 20 Statement of Financial Activities 21 Balance Sheet 22 Cash Flow Statement 23 Notes to the Financial Statements 24-38

3 REFERENCE AND ADMINISTRATIVE DETAILS Trustees Members Company Secretary Senior Management Team Bishop A Williams Bill Whiston Msnr G Stokes G McDonagh K E West V P Wogan M D J King H Brown (Principal), L Edwards d Auvergne, E Bentham, M Mackie, J Parish, J Ramsey, N Fenech. Foundation Governors W Whiston (Chair of Governors, appointed 1 November 2013) V P Wogan (appointed 1 November 2013) M Johnson (appointed 1 November 2013) K E West (appointed 1 November 2013) Fr A Sowa (appointed 1 November 2013) Capt L Rouxelin (appointed 1March 2014) G McDonagh (appointed 1 November 2013) A Gummett (appointed 1 November 2013, resigned 11 November 2013) W Duncan (appointed 1 November 2013, resigned resigned 11 November 2013) Parent Governors Mrs S Iqbal (appointed 1 November 2013, resigned October 2014) Mrs A Danaher (appointed March 2014) W Duncan (appointed 1 November 2013, resigned 11 Nov 2013) Staff Governors H Brown (appointed 1 November 2013) N Kasparis (appointed 1 November 2013, resigned July 2014)) L Mernagh (appointed 10 November 2014) Co-Opted Governors D Bright (appointed March 2014)) LA Governor Clerk to the Governors Principal and Registered Office Company Registration Number Independent Auditor Bankers Solicitors Vacancy K Davison St Aidan s Catholic Primary Academy Benton Road Seven Kings Ilford Essex IG1 4AS (England and Wales) Jacob Cavenagh & Skeet 5 Robin Hood Lane Sutton Surrey SM1 2SW Lloyds Bank plc 3 rd Floor Citymark 150 Fountain Bridge Ilford Essex IG1 2AT Winckworth Sherwood Minerva House 5 Montague Close London SE1 9BB Accounting Officer H Brown Page 1

4 REPORT OF THE GOVERNORS The Governors present their annual report together with the financial statements and auditors report of the charitable company for the period ended 31 August Structure, Governance and Management Constitution The Academy Trust is a company limited by guarantee and an exempt charity. The charitable company s Memorandum and Articles of Association are the primary governing documents of the Academy Trust. The Trustees hold the School site on trust for the Brentwood Roman Catholic Diocesan Trust. The Governors are the trustees for the charitable activities of the Academy Trust and directors of the charitable company for the purposes of company law. The charitable company is known as St Aidan s Catholic Primary Academy. Details of the Trustees and Governors who served throughout the year are included in the Reference and Administrative Details on page 1. Members Liability The Members of the Academy Trust are as set out on page 1. 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. Principal activities The Academy Trust was formed on 14 October 2013, and took over the activities of the St Aidan s Catholic Primary School with effect from that date. The net assets of the Primary School were passed to the Academy Trust and these are detailed on note 25 to the financial statements. The principal activity of the Academy Trust is to provide education to persons aged 5 to 11. Method of recruitment and appointment or election of governors The Board comprises a minimum of 3 Governors. The Board appoints new Governors in the light of specific criteria and the needs created by retirements. The Diocesan Bishop may appoint 7 Foundation Governors provided that one such Governor is the Parish Priest ex officio and no fewer than two such Governors are parents of registered pupils attending the Academy at the date of appointment. The Governing Body may also appoint one Staff Governor by means of a secret ballot of all staff provided that the number of Governors who are employees of the Academy does not exceed one third of the total number of Governors. Two Parent Governors are elected by parents of pupils registered at the Academy at the time of election. A Co-opted Governor may be appointed. The Governing Body may also appoint one other Governor. Policies and Procedures Adopted for the Induction and Training of Governors New Governors are inducted into the workings of the Academy Trust, and also of the Company as a registered charity, including Board Policy and Procedures. They are given The Charity Commission leaflets CC3 and CC3(a), Responsibility of Charity Trustees, a copy of the Memorandum and Articles of Association, the latest audited accounts and up to date management figures. Organisational structure The Governors meet at least three times a year to determine the general policy of the Academy Trust and review its overall management and control, for which they are legally responsible. The day-to-day running of the Academy Trust is delegated to the Principal, supported by other teaching members of the Senior Management Team. Page 2

5 REPORT OF THE GOVERNORS (continued) Objectives and Activities Objects and aims As per the Memorandum and Articles of Association, the Academy Trust s object is specifically restricted to the following: 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 Catholic school designated as such ( the Academy ) which shall offer a broad and balanced curriculum and shall be conducted in accordance with the principles, practices and tenets of the Catholic Church and all Catholic canon law applying thereto including any trust deed governing the use of land used by the Academy both generally and in particular in relation to arranging for religious education and daily acts of worship and having regard to any advice and following directives issued by the Diocesan Bishop. Objectives, Strategies and Activities The main objectives for the last year have been concentrated in several areas, primarily to continue to maintain and develop the Learning Environment both inside and outside the classroom, improving the standard of education throughout the school, especially with regard to our Pupil Premium children and all with regard to our Catholic ethos. To these ends we have invested in the IRIS Video Training System to aid us in improving the standard of teaching and learning in the school and there is a continuing training process for Mantle of the Expert (MoE), on which our curriculum is based, both for new staff, current practitioners in the school and, because we are now a MoE training school, staff from other schools. The Be The Best You Can initiative was launched this term and has been a great success in inspiring both the children and the staff now and for the future. Much preparation has gone into the new Primary Curriculum started in September We continue to invest in the RML system for phonics, reading and writing along with the Fresh Start programme for those in KS2 who didn t have the benefit of RML in the early years of their schooling. We are also trialing and developing the teaching of SPAG. We are improving the provision of ICT within the school and ensuring that ICT is being used effectively across the curriculum, ensuring that we maintain our position as a centre of excellence in the use of ipads in the classroom. Activities have also been carried out in the areas of raising standards in mathematics and restructuring the Leadership of the school by creating a new Senior Leadership Team and a new Middle Leadership Team. Many of our teaching assistants have now become HLTAs and others are encouraged to do so in the future. Strategies and activities have covered the following areas: Developing literacy and maths learning walls and changing interactive displays regularly Each class to participate in a school trip at least once a term to enhance the curriculum All curriculum subject leaders to be well informed and able to share and lead on their curriculum area with the whole staff and Governors All teachers and HLTAs to have new laptops and ensure hardware and software is used effectively by all staff and pupils through training and support Network with other schools using ipads and share expertise with other schools Update new Academy website weekly Ensure guided reading, developing inference skills, with clear targets Run in house refresher training for NQTs Increase percentages in phonics screening Use house forums to encourage children to explore more charities they wish to support. Children to learn about life in other countries Embed music within every year group through musical understanding and performance skills. Hold a summer concert with every year group involved Hold science days and link to National Science and Engineering Week Increase fitness levels across the school through PE schemes being used effectively and running after school clubs in football, netball, Irish dancing and Gaelic football Raising the profile and showcasing the work of talented artists The school provides Family Learning classes for parents in RML, Maths and Maths Whizz, RE and Worship and MoE. We also have termly School Improvement Meetings with invited parents and well attended Parent Consultation and Pupil Voice Meetings. We have a Breakfast Club and many after-school clubs are provided by the staff. Page 3

6 REPORT OF THE GOVERNORS (continued) Objectives and Activities (continued) Objectives, Strategies and Activities (continued) Over and above that, as a converter Academy, we have had to spend much time adapting to the new circumstances in which we find ourselves both as a school and as a Governing Body. We have been helped enormously by the input from another local academy, The Ursuline Academy. Regard to the transfer by TUPE of the whole staff, new accounting systems, new sources of services and much more have been at the forefront of both the SLT, Admin and Governing Body s attention. We have obtained a grant from the EFA to allow us to build a new suite of nine classrooms to replace some of the out-ofdate buildings we currently have to house some classes. This should improve the teaching and learning environment for a majority of the school. Public Benefit The Governors have complied with their duty to have due regard to the guidance on Public Benefit published by the Charity Commission in exercising their powers and duties. Strategic Report Achievements and Key performance indicators The majority of teaching in the school is good or better, of a high quality overall. Behaviour is good and our children learn well in a very positive and safe environment. Both RML and MoE are having a very positive effect on the teaching and learning in the school. FSM children in KS1 have improved in all subjects and in KS2 all subjects except Maths where extra effort is being concentrated. There is good progress and attainment in EYFS considering their starting points which are generally below average. Closing the Gap for KS1 Pupil Premium children is improving and for KS2 attainment at L4+ and 5+ combined is good. SEND pupils in KS1 was higher against National in all subjects and in KS2 in Reading and Writing, Maths being an area for improvement. Target Tracker is being used consistently, with staff inset and support given. Targets have been set for KS1 and KS2. ASR and RaiseonLine is better understood by leadership and governors with external input, support and training being provided. The following data sheets for 2013 are included as data for 2014 has not yet been validated. Page 4

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16 REPORT OF THE GOVERNORS (continued) Strategic Report (continued) Achievements and Key performance indicators (continued) All staff including the Head Teacher have had a performance review and the outcomes reviewed and pay decisions made by the Pay Committee. All have had attainment targets set for the following year. As mentioned above, we will be improving the learning environment by the next academic year with nine new classrooms. In line with a previous OFSTED inspection in 2012 the quality of marking of pupils work has improved ensuring that pupils have a better understanding of what they have achieved and what needs to improve. There has been a marked improvement in the presentation of work, although handwriting, although much improved, still needs improvement in consistency across the school. Planning has improved across the school so that high attainers are consistently challenged with harder work. Overall attainment in both key stages has shown an upward trend over the last three years. Pupil Premium spending is having a positive result all areas. Pupil attendance is very good at 96.1%. Going concern After making appropriate enquiries, the Governors have 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. Financial Review Total incoming resources for the period were 7,661,213; thus at the end of this period s trading, the Academy Trust had total assets less current liabilities of 5,824,754, of which free reserves (unrestricted general funds less funds which can only be generated on the sale of a fixed asset for charitable purposes) were 21,937. The Academy Trust s net assets were 5,824,754, including the Academy Trust s share of the net liabilities of the London Borough of Redbridge Pension Fund of 382,000 at 31 August Reserves policy The Governors have established a general reserve policy to afford some protection to the Academy Trust and its charitable programme and to provide time to adjust to changing financial circumstances. General Reserves are not restricted or designated for use on a particular programme or for some other defined or designated purpose. The balance on General Reserves represents sufficient resources for the current activities of the Academy Trust to continue in the event of a significant drop in income, and to provide flexibility to undertake future capital projects. Investment powers and policy These are governed by the Memorandum and Articles of Association, which permit surplus funds to be invested in any investments, security or property as may be thought fit and as may be prescribed by law. The Academy Trust s investment objective is to maximise the return on its investment funds while maintaining maximum security and a high degree of liquidity. To meet this objective the Academy Trust invests in call deposits with a high security rating and either fixed interest rates or with a fixed relationship to base rate Principal risks and uncertainties Risk Management The Governors have considered and reviewed the major risks to which the Academy Trust is exposed, and have established systems and procedures to mitigate those risks. A Statement on Internal Control has been included in the Governance Statement which expands on these systems and procedures. Page 14

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18 GOVERNANCE STATEMENT Scope of Responsibility As Governors, we acknowledge we have overall responsibility for ensuring that St Aidan s Catholic Primary Academy 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 the business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss. The Governors have delegated day-to-day responsibility to H Brown, as Accounting Officer, for ensuring financial controls conform to 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 St Aidan s Catholic Primary Academy and the Secretary of State for Education. They are also responsible for reporting to the Governors 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 Governors have formally met three times during the period. Attendance during the year at meetings of the Governors is as follows: Governor Meetings attended Out of a possible W Whiston 3 3 V P Wogan 3 3 N Kasparis 3 3 M Johnson 3 3 K E West 3 3 Fr A Sowa 2 3 L Rouxelin 2 2 A Gummett 1 1 W Duncan 1 1 A Danaher 2 2 G McDonagh 2 3 H Brown 3 3 S Iqbal 1 3 D Bright 2 3 All Governors also sit on the Resources Committee. There is a separate Pay Committee which reports to governors. Further to the FMGS (Financial Management and Governance Self-assessment) endorsed by the board and submitted to the EFA, no review of the Governing Body has taken place in the year from conversion apart from ensuring that suitable governors have replaced those who left soon after conversion. All have been replaced apart from the most recent departures of a Parent Governor and our Parish Priest who has moved on to a different Diocese. An election for a replacement parent will take place soon and we will be meeting with our new Parish Priest in the near future once he returns from his trip to Poland to discuss whether he or his fellow priest will join as ex-officio Foundation Governor. We have used SGOSS from time to time to fill positions we found hard to fill at times. They have found four excellent governors for us over time. We conducting a review currently, a year after we converted as we thought that a good time to conduct one to ascertain our performance as an Academy Governing Body. Decisions will then be made as to what training and external input we require. We have recently joined the NGA as a body and will be taking full advantage of their various offers of training and review. We intend to conduct a further full review within a year to assess our performance and what impact any input has had on it. This may well be conducted by the NGA. The Purpose of the System of Internal Control The system of internal control is designed to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an ongoing process designed to identify and prioritise the risks to the achievement of Academy Trust policies, aims and objectives, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically. The system of internal control has been in place in St Aidan s Catholic Primary Academy for the period ended 31 August 2014 and up to the date of approval of the annual report and the financial statements. Additional reconciliation procedures were identified and introduced to demonstrate effective control and oversight of the accounting system. Page 16

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23 STATEMENT OF FINANCIAL ACTIVITIES (including the Income and Expenditure Account) FOR THE PERIOD ENDED 31ST AUGUST 2014 Restricted Restricted Unrestricted General Fixed Asset Total Funds Funds Funds 2014 Note Incoming resources Incoming resources from generated funds: Voluntary income 3 3,441 4,103-7,544 Assets transferred from predecessor school 25 92,415 (284,000) 5,749,000 5,557,415 Investment Income Incoming resources from charitable activities Funding for the Academy s educational operations 5-1,581, ,065 2,060,775 Other incoming resources 6 35, ,309 Total incoming resources 131,335 1,301,813 6,228,065 7,661,213 Resources expended 7 Cost of generating funds: Cost of generating voluntary income 1, ,603 Fundraising trading Charitable activities: Academy s educational operations 9 9,385 1,675,500 47,351 1,732,236 Governance costs 10-4,620-4,620 Total resources expended 10,988 1,680,120 47,351 1,738,459 Net incoming/(outgoing) resources before transfers 8 120,347 ( 378,307) 6,180,714 5,922,754 Gross transfers between funds ( 98,410) 98, Net income/(expenditure) for the period 21,937 ( 279,897) 6,180,714 5,922,754 Other recognised gains and losses Actuarial (losses) on defined benefit pension schemes - ( 98,000) - ( 98,000) Net movement in funds 21,937 ( 377,897) 6,180,714 5,824,754 Reconciliation of funds Total funds carried forward at 31 August ,937 ( 377,897) 6,180,714 5,824,754 The company has no other recognised gains and losses for the period. All activities were acquired during the current period. Page 21

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25 CASH FLOW STATEMENT FOR THE PERIOD ENDED 31ST AUGUST Note Net cash inflow from operating activities 21 6,816,862 Returns on investment and servicing of finance 22 ( 170) Capital expenditure 23 (6,252,074) Increase in cash in the period ,618 Reconciliation of net cash flow to movement in net funds: Net funds at 31 August ,618 Page 23

26 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST AUGUST ACCOUNTING POLICIES Accounting convention The financial statements have been prepared under the historical cost convention as modified by the revaluation of fixed assets, in accordance with applicable United Kingdom Accounting Standards, the Charity Commission Statement of Recommended Practice: Accounting and Reporting by Charities issued in 2005, the Academies Accounts Direction 2013 to 2014 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 Governors have considered the budgets and cashflows for a period of 12 months from the date of the approval of the accounts and these have been documented accordingly. Based on these projections the Governors have concluded that all liabilities for this period can be met as they fall due, and have consequently adopted the going concern basis for preparing the financial statements. Incoming resources Grants receivable All grants, including the General Annual Grant (GAG) and grants given for capital expenditure, 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 Income from donations is recognised on a receivable basis where there is certainty of receipt and the amount can be reliably measured. Donations in kind are recognised at the open market value of the services provided. Conversion to an Academy Trust All assets transferred from the predecessor school on establishment of the Academy Trust are included in the financial statements at their fair value at the date of transfer. Resources expended Expenditure is allocated to expense headings either on a direct cost basis or apportioned according to time spent. Costs of generating funds These are costs incurred in attracting voluntary income. Charitable activities This comprises all expenditure directly related to the objects of the charity and includes any expenditure incurred in support of these activities. Governance costs This comprises all expenditure on the management and administration of the charity, including the audit fee, bad debts and bank charges. Operating leases Rentals under operating leases are charged to the Statement of Financial Activities as they fall due. Taxation The school is exempt from taxation on its charitable activities and accordingly no provision is made for taxation. Page 24

27 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST AUGUST 2014 (continued) 1 ACCOUNTING POLICIES (continued) Tangible fixed assets Tangible fixed assets acquired since the Academy was established are included in the financial statements at cost. Assets transferred from the predecessor school on establishment of the Academy are included in the financial statements at their fair value at the date of transfer. Where the Academy enjoys the rights and responsibilities of ownership, the fair value of the freehold property is recognised in the Academy accounts despite the legal title to the freehold property being held by a third party. This treatment is in accordance with Financial Reporting Standard 5. 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 lives. The related grants are credited to a restricted fixed asset fund in the Statement of Financial Activities and carried forward in the Balance Sheet. The depreciation on such assets is charged in the Statement of Financial Activities over the expected useful economic life of the related asset on a basis consistent with the depreciation policy. Depreciation Depreciation is provided on all tangible fixed assets at rates calculated to write off the cost of fixed assets, less their estimated residual value, over their expected useful lives on the following bases: Freehold buildings and improvements 2% straight line Fixtures and equipment 25% straight line Freehold land is not depreciated. Pensions Benefits Retirement benefits to employees of the academy trust 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 unfunded 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 17, 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 recognised as they are paid each year. The LGPS 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 finance costs or credits adjacent to interest. Actuarial gains and losses are recognised immediately in other gains and losses. Page 25

28 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST AUGUST 2014 (continued) 1 ACCOUNTING POLICIES (continued) Fund accounting Unrestricted income funds represent those resources which may be used towards meeting any of the charitable objects of the academy trust at the discretion of the Governors. Restricted fixed asset funds are resources which are to be applied to specific capital purposes imposed by the Education Funding Agency where the asset acquired or created is held for a specific purpose. Restricted general funds comprise all other restricted funds received and include grants from the Education Funding Agency and Department for Education. Transfers between funds are shown gross. If a transfer is made from a restricted fund there will be a full explanation of the nature and reason for the transfer. 2 GENERAL ANNUAL GRANT (GAG) Under the funding agreement with the Secretary of State, the academy rust was not subject to a limit on the amount of GAG that it could carry forward at 31 August VOLUNTARY INCOME Restricted Restricted Unrestricted General Fixed Asset Total Funds Funds Funds 2014 Governor s Fund 3, ,441 Other donations - 4,103-4,103 3,441 4,103-7,544 4 INVESTMENT INCOME Unrestricted Restricted Restricted General General Fixed Asset Total Funds Funds Fund 2014 Short-term deposits (UK) Page 26

29 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST AUGUST 2014 (continued) 5 FUNDING FOR ACADEMY S EDUCATIONAL OPERATIONS Restricted Restricted Unrestricted General Fixed Asset Total Funds Funds Funds 2014 DfE / EFA revenue grants: General Annual Grant (GAG) - 1,451,114-1,451,114 Start-up grants - 25,000-25,000 Transferred from predecessor school - 97,018-97,018 Other DfE / EFA grants , ,065-1,573, ,065 2,052,197 Other Government grants: Local authority grants Special educational projects - 8,578-8,578-8,578-8,578-1,581, ,065 2,060,775 6 OTHER INCOMING RESOURCES Restricted Restricted Unrestricted General Fixed Asset Total Funds Funds Funds 2014 Breakfast Club 12, ,314 Absence Insurance Claims 8, ,105 Other Income 1, ,051 Visits 13, ,205 Music Tuition , ,309 7 RESOURCES EXPENDED Non pay expenditure Staff Other Total Costs Premises Costs 2014 Costs of generating voluntary income - - 1,603 1,603 Academy s educational operations Direct costs 1,182, ,420 1,333,209 Allocated support costs 102, , , ,027 1,284, , ,091 1,732,236 Governance costs including allocated support costs - - 4,620 4,620 1,284, , ,314 1,738,459 8 NET INCOMING RESOURCES 2014 This is stated after charging: Operating leases 1,893 Fees payable to auditor: audit 3,245 other services 1,375 Depreciation 49,348 Page 27

30 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST AUGUST 2014 (continued) 9 CHARITABLE ACTIVITIES: Academy s educational operations Restricted Restricted Unrestricted General Fixed Asset Total Funds Funds Funds 2014 Direct costs: Teaching and educational support staff costs - 1,184,743-1,184,743 Educational supplies - 139, ,081 Visits 7, ,243 Other direct costs 2, ,142 9,385 1,323,824-1,333,209 Allocated support costs: Support staff costs - 102, ,116 Depreciation - 1,997 47,351 49,348 Maintenance of premises and equipment - 39,931-39,931 Equipment hire under operating leases - 1,893-1,893 Cleaning - 11,803-11,803 Rent and rates - 13,304-13,304 Light and heat - 20,568-20,568 Insurance - 20,286-20,286 Printing, postage and stationery - 1,723-1,723 Telephone and IT - 2,603-2,603 Catering - 38,355-38,355 Bank interest and charges Other support costs - 97,067-97, ,676 47, ,027 9,385 1,675,500 47,351 1,732, GOVERNANCE COSTS Restricted Restricted Unrestricted General Fixed Asset Total Funds Funds Funds 2014 Legal and professional fees Auditor s remuneration: Audit of financial statements - 3,245-3,245 Preparation of accounts - 1,375-1,375 Support staff costs Governors reimbursed expenses ,620-4,620 Page 28

31 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST AUGUST 2014 (continued) 11 STAFF COSTS AND GOVERNORS REMUNERATION 2014 Staff costs Wages and salaries 1,004,832 Social security costs 74,716 Pension costs 135,128 1,214,676 Supply teacher costs 69,062 1,283,738 Staff numbers The average number of persons (including senior management team) employed by the academy during the period was as follows (on a full-time equivalent basis): 2014 No. Charitable activities Teaching staff 19 Administration support and management Governors remuneration and expenses The staff Governors receive remuneration only in respect of services they provide undertaking the roles of teaching staff and support staff, not in respect of their services as Governors. Other Governors did not receive any payments, other than expenses, from the Academy Trust in respect of their role as Governors. The value of staff Governors remuneration was as follows: H Brown 85,000-90,000 N Kasparis 35,000-40,000 During the period ended 31 August 2014, no travel and subsistence expenses were reimbursed to Governors. Trustees and Officers Insurance 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 of Professional Indemnity ( 2,000,000), Directors and Officers ( 2,000,000) and Legal Costs ( 1,000,000) and the cost for the year ended 31 August 2014 was 2,089. Higher paid staff In addition, the following number of staff received remuneration above 60,000 as follows: 60,000-70,000 1 Three of the above employees participated in the Teacher s Pension Scheme. During the period ended 31 August 2014 employer s pension contributions for these staff amounted to 22,144. Additional related party transactions No other related party transactions took place in the period of account. Page 29

32 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST AUGUST 2014 (continued) 12 TANGIBLE FIXED ASSETS Freehold Furniture, land and Freehold fittings & buildings improvements equipment Total Cost or valuation On incorporation Additions - 12,341 11,668 24,009 Assets transferred on conversion from predecessor school 5,749, ,749,000 Change in market value of property At 31st August ,749,000 12,341 11,668 5,773,009 Depreciation On incorporation Charge for the period 47, ,890 49,348 Released for disposals At 31st August , ,890 49,348 Net book value At 31st August ,701,649 12,234 9,778 5,723,661 During the period the freehold land and buildings were included as part of the net assets transferred from the Primary School at market valuation determined by G Tyerman MRICS of Mouchel, on behalf of the Education Funding Agency. 13 DEBTORS 2014 Other debtors 14,248 Prepayments and accrued income 14,516 28, CREDITORS: Amounts falling due within one year 2014 Other creditors 9,943 Accruals and deferred income 100, ,289 At the balance sheet date the academy trust was holding FSM Grant and Academic Pupil Premium related to the academic year. Page 30

33 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST AUGUST 2014 (continued) 15 FUNDS Balance at Incoming Resources Gains, losses 31 August resources expended and transfers 2014 Restricted general funds General Annual Grant (GAG) 1,451,114 (1,549,524) 98,410 - Start-up grants Other DfE/EFA grants 130,596 ( 130,596) - - Other Government Grants School Fund 4, ,103 Pension reserve ( 284,000) - (98,000) ( 382,000) 1,301,813 (1,680,120) 410 ( 377,897) Restricted fixed asset funds DfE/EFA capital grants 5,749, ,749,000 Capital expenditure from GAG 479,065 ( 47,351) - 431,714 Private Sector Capital Sponsorship ,228,065 ( 47,351) - 6,180,714 Total restricted funds 7,529,878 (1,727,471) 410 5,802,817 Unrestricted funds Unrestricted general funds 118,183 ( 8,846) (98,410) 10,927 Governor s Fund 13,152 ( 2,142) - 11,010 Total unrestricted funds 131,335 ( 10,988) (98,410) 21,937 Total funds 7,661,213 (1,738,459) (98,000) 5,824,754 Funds The General Annual Grant (GAG) must be used for the normal operating costs of the Academy Trust. Other restricted funds comprise funds received from the DfE, Local Government and named charitable trusts to fund expenditure incurred by the Academy in its ordinary operational activities. The Restricted fixed asset fund includes all transactions related to the purchase of capitalised assets with capital grants and assets transferred from the predecessor school. 16 ANALYSIS OF NET LIABILITIES BETWEEN FUNDS Restricted Restricted Unrestricted General Fixed Asset Total Funds Funds Funds Funds Tangible fixed assets 22,012-5,701,649 5,723,661 Net current liabilities ( 75) 4, , ,093 Pension scheme liability - (382,000) - ( 382,000) Total net assets 21,937 (377,897) 6,180,714 5,824,754 Page 31

34 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST AUGUST 2014 (continued) 17 STAFF PENSIONS The Academy Trust s employees belong to two principal pension schemes: the Teachers Pension Scheme England and Wales ( TPS ) for academic and related staff, and the Local Government Pension Scheme ( LGPS ) for non-teaching staff, which is managed by the London Borough of Redbridge Pension Fund. Both are defined benefit schemes. The pension costs are assessed in accordance with the advice of independent qualified actuaries. The latest actuarial valuation on the TPS was 31 March 2012 and of the LGPS was 31 March The total pension cost to the Academy Trust during the period ended 31 August 2014 was 135,128 of which 75,722 relates to the TPS and 59,406 relates to LGPS. At the year-end nil was accrued in respect of contributions to these schemes. Teachers Pension Scheme The Academy Trust participates in the Teachers' Pension Scheme (England and Wales) ("the TPS") for its teaching staff. The pension charge for the year includes contributions payable to the TPS of 75,722. The TPS is an unfunded multi-employer defined benefits pension scheme governed by the Teachers' Pensions Regulations 2010 and, from 1 April 2014, the Teachers' Pension Scheme Regulations Members contribute on a "pay as you go" basis with contributions from members and the employer being credited to the Exchequer. Retirement and other pension benefits are paid by public funds provided by Parliament. The employer contribution rate is set following scheme valuations undertaken by the Government Actuary Department. The latest valuation report in respect of the TPS was prepared at 31 March 2012 and was published in June This report confirmed that the employer contribution rate for the TPS will increase from 14.1% to 16.4% although, recognising that teaching establishments work on an academic and not financial year, the Government has deferred the implementation of this increase to 1 September The Department of Education is also proposing that scheme administration costs will be devolved to scheme employers in the form of an administration charge. The Department provisionally estimates that the administration charge will be 0.08% of the employers' salary costs which would increase the employer payment rate from 16.4% to 16.48%. The next revision to the employer contribution rate is not expected to take effect until 1 April This will follow on from the next actuarial valuation which is due at 31 March This valuation will also determine the opening balance of the cost cap fund and provide an analysis of the cost cap as required by the Public Service Pensions Act Page 32

35 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST AUGUST 2014 (continued) 17 STAFF PENSIONS (continued) Local Government Pension Scheme The Academy Trust is one of several employing bodies included within the Local Government Pension Scheme ( LGPS ). The LGPS is a funded defined benefit scheme, with the assets held in separate trustee-administered funds. Contributions to the scheme are determined by a qualified actuary on the basis of triennial valuations using the projected unit method. The total contribution made for the year ended 31 August 2014 was 75,910 of which employer s contributions totalled 59,406 and employees contributions totalled 16,504. The agreed contribution rates for future years are at least 6.5% for employees and 23.1% for employers. The net liabilities transferred over from the predecessor school amounted to 284,000 at 1 November The following information is based upon a full actuarial valuation of the fund at 31 August 2014 by a qualified actuary: Principal Actuarial Assumptions At 31 August 2014 Rate of increase in salaries 3.4% Rate of increase in pensions 2.6% Discount rate for scheme liabilities 3.7% Expected return on assets 5.1% The current mortality assumptions include sufficient allowance for future improvements in mortality rates. The assumed life expectations on retirement age 65 are: Retiring today Males Females Retiring in 20 years Males Females At 31 August years 24.1 years 24.3 years 26.7 years Page 33

36 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST AUGUST 2014 (continued) 17 STAFF PENSIONS (continued) The Academy Trust s share of the assets and liabilities of the Scheme and the expected rates of return were: Expected return at 31 August 2014 Fair value at 31 August 2014 % Equities 6.3% 332,000 Bonds 3.1% 172,000 Property 4.5% 51,000 Cash 3.3% 17,000 Total market value of assets 572,000 Present value of scheme liabilities funded (954,000) Deficit in the Scheme (382,000) None of the fair values of the assets shown above include any of the Academy Trust s own financial instruments or any property occupied by, or other assets used by, the Academy Trust. The expected return on assets is based on the long-term future expected investment return for each asset class at the beginning of the period. The actual return on Scheme assets in the period was 37,000. Amounts recognised in the Statement of Financial Activities 2014 Current service cost (net of employee contributions) 353,000 Transfer of LGPS deficit upon conversion (note 25) (284,000) Expected return on pension scheme assets (22,000) Interest on pension liabilities 29,000 Total operating charge 76,000 The actuarial gains and losses for the current period are recognised in the Statement of Financial Activities. The cumulative amount of actuarial gains and losses recognised in the Statement of Financial Activities is a loss of 98,000. Page 34

37 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST AUGUST 2014 (continued) 17 STAFF PENSIONS (continued) Movements in the present value of defined benefit obligations 2014 Opening defined benefit obligation (744,000) Current service cost (69,000) Interest cost (29,000) Contributions by members (16,000) Actuarial losses (96,000) Estimated benefits paid - At 31 August 2014 (954,000) Movements in the fair value of the Academy Trust s share of Scheme assets 2014 Opening fair value of employer assets 460,000 Expected return on assets 22,000 Contributions by members 16,000 Contributions by the employer 59,000 Actuarial gains 15,000 Estimated benefits paid - At 31 August ,000 Amounts for the current period 2014 Fair value of scheme assets 572,000 Present value of defined benefit obligation (954,000) Deficit (382,000) Experience gains on assets 15,000 Experience losses on liabilities - Projected pension expense for the year ended 31 August Current service cost 88,000 Interest on obligation 37,000 Expected return on scheme assets (31,000) Total 94,000 The estimated value of employer contributions for the year ended 31 August 2015 is 63,000. Page 35

38 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST AUGUST 2014 (continued) 17 STAFF PENSIONS (continued) Sensitivity analysis The sensitivities regarding the principal assumptions used to measure the scheme liabilities are: Approximate % increase/ (decrease) to employer liability Approximate monetary amount % 0.5% decrease in Real Discount Rate 11% 108,000 1 year increase in member life expectancy 3% 29, % increase in the Salary Increase Rate 5% 50, % increase in the Pension Increase Rate 6% 55,000 It must be appreciated in accordance with the Charity Commission publication, Charity Reserves and Defined Pension Schemes that where, under Financial Reporting Standard 17, a charity discloses a significant pension fund deficit, this does not mean that an immediate liability for this amount crystallises. Similarly, where a pension surplus is disclosed, this does not create an immediately realisable asset than can be released straight away and expended on the purposes of the charity. In particular, the disclosure of a pension liability does not mean that an equivalent amount is already committed and is no longer available to the Governors to further the charity s objectives. 18 OBLIGATIONS UNDER OPERATING LEASES At 31 August 2014 the Academy had annual commitments under non-cancellable operating leases as follows: Equipment, Land and Fixtures and buildings Fittings In two to five years - 1,972 After five years CAPITAL COMMITMENTS Included in grants receivable is 479,065 from the Education Funding Agency to be used for the building of a new classroom block. 20 OTHER PROFESSIONAL SERVICES PROVIDED BY THE AUDITORS In common with many other businesses of our size and nature we use our auditors to prepare and submit returns to the tax authorities, assist with the preparation of our financial statements and provide other services. Page 36

39 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST AUGUST 2014 (continued) 21 RECONCILIATION OF NET INCOME TO NET CASHFLOW FROM OPERATING ACTIVITIES Net income 5,824,754 Depreciation 49,348 Capital grants from DfE and other capital income 479,065 Interest Receivable 170 FRS17 pension cost less contributions payable 382,000 (Increase) in debtors (28,764) Increase in creditors 110,289 6,816, RETURNS ON INVESTMENT AND SERVICING OF FINANCE 2014 Interest Received CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT 2014 Purchase of tangible fixed assets 5,773,009 Capital grants from DfE/EFA 479,065 Net cash inflow from capital expenditure and financial investment 6,252, ANALYSIS OF CHANGES IN NET FUNDS At 31 Cash August flows 2014 Cash at bank and in hand 564, ,618 Bank loans and mortgages - - Total net funds 564, ,618 Page 37

40 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST AUGUST 2014 (continued) 25 CONVERSION TO AN ACADEMY TRUST On 1 November 2013 St Aidan s Catholic Primary School converted to Academy Trust status under the Academies Act 2010 and all the operations and assets and liabilities were transferred to St Aidan s Catholic Primary Academy from Redbridge Borough Council for nil consideration. The transfer has been accounted for using the acquisition method. The assets and liabilities transferred were valued at their fair value and recognised in the balance sheet under the appropriate headings with a corresponding net amount recognised as net income in the Statement of Financial Activities as voluntary income. The following table sets out the values of the identifiable assets and liabilities transferred and an analysis of their recognition in the Statement of Financial Activities: Restricted Restricted Unrestricted General Fixed Asset Total Funds Funds Funds Funds Tangible fixed assets: Freehold land and buildings - - 5,749,000 5,749,000 Other tangible fixed assets ,749,000 5,749,000 Budget surplus on LEA funds Budget surplus on other school funds 92, ,415 LGPS pension deficit - (284,000) - (284,000) Borrowing obligations Other identified assets and liabilities Total net assets 92,415 (284,000) 5,749,000 5,557,415 Page 38