NHS BORDERS ENDOWMENT FUND ANNUAL ACCOUNTS FOR 2011/12

Transcription

1 Appendix Borders NHS Board NHS BORDERS ENDOWMENT FUND ANNUAL ACCOUNTS FOR 2011/12 Aim The Board are requested in their role as Trustees of the Endowment Fund to note the Endowment Fund Annual Accounts for 2011/12. Background The Endowment Fund operates within NHS Borders Policy and Financial Operating Procedures for the Operation of Endowment Funds. The Policy and procedures ensure full compliance with the instructions attached to any donations or legacies made to the Fund. Compliance with the procedures ensures that any major risks involved in the administration of the Endowment Fund are identified and carefully managed. Recommendation The Board is asked to note the Endowment Fund Annual Accounts for 2011/12. Policy/Strategy Implications Consultation Consultation with Professional Committees Risk Assessment Compliance with Board Policy requirements on Equality and Diversity Resource/Staffing Implications Not Applicable Not Applicable Not Applicable Not Applicable Compliant where appropriate. Not Applicable Approved by Name Designation Name Designation Carol Gillie Director of Finance Author(s) Name Designation Name Designation Susan Swan Deputy Director of Finance 1

2 Endowment Fund Annual Accounts NHS Borders Newstead MELROSE Roxburghshire TD6 9DA Investment Advisors: Investec Wealth & Investment Ltd Forsyth House 93 George Street Edinburgh EH2 3ES Auditors: Hogg & Thorburn Chartered Accountants Moat House 14 Gala Park Galashiels TD1 1EX Tel: (01896) Fax: (01896) Tel: (0131) Fax: (0131) Tel: (01896) Fax: (01896)

3 NHS BORDERS ENDOWMENT FUND ANNUAL ACCOUNTS CONTENTS Page No. Report of the Trustees 2-11 Report of the Auditors Statement of Financial Activities for the Year Ended 31st March Balance Sheet as at 31st March Notes to the Accounts

4 NHS BORDERS ENDOWMENT FUND ANNUAL ACCOUNTS REPORT OF THE TRUSTEES The Trustees present their annual report and accounts for the year ended 31st March Membership and Administrative Details: Trustees NHS Borders is the common name of Borders Health Board. The Chair, Non-Executive Directors and Executive Directors of NHS Borders were appointed as Trustees ex officiis of the Endowment Fund, under the terms of relevant National Health Service Regulations. The Trustees for the year ended 31st March 2012 were as follows:- Chair: Vice Chair: Mr J Raine Mrs C Duthie Mrs J Edey Non-Executive Directors: Ms Pat Alexander Mr D Davidson Mr A Lucas Cllr S Scott Dr D Steele Mr J Hammond Mrs E Cameron, Employee Director Executive Directors: Mr C Campbell, Chief Executive Dr W Cameron, Medical Director Mrs J Davidson, Chief Operating Officer Dr E Baijal, Joint Director of Public Health Mrs C Gillie, Director of Finance Mrs S Wright, Director of Nursing and Midwifery Auditors The auditors for the year ended 31st March 2012 were:- Hogg & Thorburn, Chartered Accountants & Registered Auditors Moat House, 14 Gala Park, Galashiels, TD1 1EX Investment Advisors The Investment Advisors for the year ended 31st March 2012 were:- Bankers The bankers for the year ended 31st March 2012 were:- The Royal Bank of Scotland High Street, Melrose, Roxburghshire, TD6 9PF 1 st April June st July st March 2012 Brewin Dolphin Ltd Investec Wealth & Investment Ltd PO Box No 8 Forsyth House 7 Drumsheugh Gardens 93 George Street Edinburgh EH3 7QH Edinburgh EH2 3ES 2

5 Structure, Governance and Management NHS BORDERS ENDOWMENT FUND ANNUAL ACCOUNTS REPORT OF THE TRUSTEES Charitable Status HM Revenue and Customs has recognised the NHS Borders Endowment Fund as a charity for the purposes of Section 505, Income and Corporation Taxes Act Under Section 1(7) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990, the Fund is entitled to describe itself as a Scottish Charity. The Scottish Charity Number is SC Trustees Under the National Health Service Trusts (Appointment of Trustees) (Scotland) (No. 2) order 1994, the chairman, non-executive directors and executive directors of the fund are appointed trustees ex officiis for the purpose of holding any property which is to be held in trust on behalf of the fund under section 12G National Health Service (Scotland) Act Remuneration and expenses incurred by the Trustees are not charged against the Charitable Funds. The appointed Trustees work in an independent role governing the Charity. Exercise of Powers In exercising the power conferred upon them, the Trustees did secure, so far as was reasonably practicable, that the objects of the endowment and the observance of any conditions attaching thereto, including, in particular, conditions intended to preserve the memory of any person or class of persons, were not prejudiced by the exercise of that power. Operational Administration of Funds Day to day operational administration of the Endowment Funds has been delegated to the Deputy Director of Finance (Financial Accounting) for NHS Borders. During the financial year NHS Borders has enhanced the framework of the overall administration of Endowment Funds by the introduction of three key documents:- NHS Borders Endowment Fund Policy details the structure and context within which NHS Borders is empowered to accept and manage charitable funds. NHS Borders Guidance to Officers in the use of Endowment Funds exists to provide assistance to fund managers on appropriate use of charitable funds in accordance with charity legislation and within delegated limits in conjunction with NHS Borders Code of Corporate Governance. NHS Borders Financial Operating Procedure this document details day to day procedure required by the organisation for staff operating within the charitable funds function. Board of Trustees 2011/12 meetings schedule The Board of Trustees met 7 times during 2011/12 on the following dates 25 th April th May rd June th June nd September rd November th January

6 NHS BORDERS ENDOWMENT FUND ANNUAL ACCOUNTS REPORT OF THE TRUSTEES Delegated Sub Committees The Endowment Fund Board of Trustees are supported in their governance of the Endowment Fund by delegated sub committees entitled the Endowment Advisory Group and the Fundraising Committee. Endowment Advisory Group The purpose of the EAG is to assist the Board of Trustees to meets it s responsibilities under charity law in respect of the stewardship of the charitable funds under its control. The EAG has an approved Terms of Reference. Membership of the Endowment Advisory Group The EAG has the following membership Chair Two Non Executive Members Chief Executive Director of Finance Employee Director Deputy Director of Finance The Investment Advisor is asked to attend meetings of the EAG as appropriate. Remit of the Endowment Advisory Group: To prepare an annual budget for Unrestricted Funds based on recommendations of Director of Finance, for approval by the Board of Trustees; To consider expenditure proposals for approval by the Board of Trustees; To monitor income and expenditure against the budget approved by Board of Trustees and report thereon on an exception basis to the Board of Trustees; To submit a Business Report to the next meeting of the Board of Trustees. EAG 2011/12 meetings schedule The Committee met 2 times during 2011/12 on the following dates:- 31st August th January 2012 The Committee is chaired by Mr John Raine, Chair of the Endowment Fund Board of Trustees. Work plan 2011/12 During 2011/12 the EAG has provided a review of the policy and guidance documents developed to support the overall governance framework of the Endowment Fund. The draft work-plan for 2012/13, to be agreed at the Board of Trustees in May 2012, will be based on the delegated remit detailed in the terms of reference of the group. Fundraising Committee The Fundraising Committee is in place to support the Trustees in all areas of fundraising. 4

7 NHS BORDERS ENDOWMENT FUND ANNUAL ACCOUNTS REPORT OF THE TRUSTEES Membership of the Fundraising Committee The Fundraising Committee has the following membership Chief Executive Employee Director Director of Finance Chief Operating Officer 1 representative from the Clinical Boards Operational Management 1 representative from Clinical Board Chairs (or clinical rep) or deputy Deputy Director of Finance Other members may be co-opted or invited to attend as agreed by the Committee. The Committee shall be serviced by the Fundraising Manager who will be required to attend each meeting. Remit of the Fundraising Committee To explore fundraising opportunities, To co-ordinate and manage fundraising and To provide a direct link to the Clinical Services within NHS Borders on all elements of fundraising To approve, monitor and report to the Trustees on the annual work plan of the Committee. Fundraising Committee 2011/12 meetings schedule The Fundraising Committee met 4 times during 2011/12 on the following dates:- 7 th April nd June th August th January 2012 The Fundraising Committee is chaired by Mrs Catherine Duthie, a Trustee of the Endowment Fund. Induction and Training of New Trustees New Trustees are given a copy of all relevant policy documents listed below:- NHS Borders Endowment Fund Policy NHS Borders Guidance for Officers in the use of Endowment Funds NHS Borders Financial Operating Procedure NHS Borders Code of Corporate Governance Induction and Training of New Trustees (continued) In conjunction with the issue of the above documentation, Trustees are supported and advised by their colleagues and given advice by the Board s Investment Advisors and Auditors on the management and accounting requirements of Endowment Funds. Related Parties Borders NHS Board is the corporate trustee of NHS Borders Charitable Endowment Fund. 5

8 NHS BORDERS ENDOWMENT FUND ANNUAL ACCOUNTS REPORT OF THE TRUSTEES Risk Review The Endowment Fund operates within a governance framework which consists of three documents: NHS Borders Endowment Fund Policy NHS Borders Guidance for Officers in the use of Endowment Funds NHS Borders Financial Operating Procedure The above documents were fully reviewed and authorised by Trustees during financial year Adherence to the governance framework in place ensures compliance of the operation of the Endowment Fund in line with Charities legislation and guidance from the Office of the Scottish Charity Regulator (OSCR). The procedure documents, in conjunction with NHS Borders Code of Corporate Governance, detail how decisions and approval is given regarding appropriate expenditure of the Endowment Fund. Compliance with all the governance framework documents ensures that any major risks involved in the administration of the Endowment Fund are identified and carefully managed. Acknowledgements The Trustees wish to express their gratitude to the individuals and organisations who have generously donated monies to the Endowment Fund. Objectives and Principle Activities Purpose Endowment funds are held for purposes relating to health services or research within the Scottish Borders region, subject to any specified directions prohibiting such expenditure which may have been issued by Scottish Ministers. No property assets are held by the Charity. The Endowment Fund will continue to be funded by donations and legacies received from patients, their relatives and the general public. Income and expenditure is monitored in total and expenditure can only be incurred once an appropriate and agreed fund balance has been identified. In addition income generated through specific Fundraising Appeals and fundraising activities will be coordinated by the Fundraising Manager. It is not NHS Borders Endowment Fund Policy to make general grant of funds to other organisations. Achievements and Performance Fundraising The key objectives and achievements for fundraising for 2011/12 were The annual fundraising plan for 2011/12 is derived from the 3 year fundraising plan which is fully aligned with NHS Borders vision, values and corporate objectives. Delivery of the plan is the responsibility of the Fundraising Manager. The Fundraising office became a substantive function within NHS Borders during 2011/12. Fundraising (continued) This paper reports the performance of fundraising against the objectives set out in the 2011/12 annual fundraising plan. 6

9 NHS BORDERS ENDOWMENT FUND ANNUAL ACCOUNTS REPORT OF THE TRUSTEES Annual Fundraising Plan 2011/12 Objectives 1) To plan, launch and coordinate the Margaret Kerr Unit Appeal, to raise 1m by April 2013 for the new specialist inpatient palliative care unit at the Borders General Hospital. 2) To secure an additional 200,000 funding from Charitable Trusts, by April 2012, to support the development of The Margaret Kerr Unit, with the remaining 200,000 required from this income stream to be secured during Financial Year 2012/13. 3) To secure 3.1m of firm pledges for the Palliative Care / Stroke Unit development, before the June 30 th 2011 Board meeting. 4) To co-ordinate the draw-down of 3.1 pledged funds, in line with the funding requirements of the project plan, for the Palliative Care / Stroke Unit development. 5) To maintain active involvement with the mental health growing space project team, and secure additional funds if required. 6) To maintain active involvement with the Ward 15/SCBU Development project team, ensuring appropriate use of funds raised, and report progress to donors on a regular basis. 7) To close the Kidney Dialysis Appeal and submit an end of project report by December 2011 to the relevant committees. 8) To continue to manage the ongoing activities of the fundraising office, including support of level 1-3 fundraising activity, voluntary sector liaison and supporting NHS Borders Fundraising Committee and Endowment Fund Board of Trustees. Details of the key objectives which have been achieved are noted below: 1. The public fundraising appeal to raise the final million pounds required for The Margaret Kerr Unit was launched on September 1 st This followed a relatively short planning period during which the appeal plan was approved by the Fundraising Committee in August As the detailed finalised costing for the project could not be confirmed by the Principal Supply Chain Partner until December 1 st 2011 the appeal target was set at 1 million, which was the estimated achievable sum possible for the appeal. The appeal launch was a considerable success, both in terms of media coverage generated and the speed in which donations started to filter through. This was also due in part to the previous publicity around the project that had been achieved at various stages of the business case development and securing of significant high level donations. 7

10 NHS BORDERS ENDOWMENT FUND ANNUAL ACCOUNTS REPORT OF THE TRUSTEES Objectives (continued) 2. At financial year end 2011/12 the final million balance stood at 340,792. This includes 39,050 generated from charitable trusts that were not included in the 3.1m pledged funds required by the board, and are reported under objective 3. In addition to the 39,050 received and banked, a pledge of 10,000 has been made by The Stafford Trust which will be available during April 2012, and there are two applications awaiting decisions during May and June 2012 that, if successful, will be capable of generating significant sums, possibly in excess of 100,000 each. A donation of 40,000 from the Hugh Fraser Foundation has also been received, which was included in the reported 3.5 of assured funds that was reported to the Board in the full business case in January The implementation of the Growing Space Project has encountered delay in progress during 2011/12. The project team continue to work to conclude approvals for risk, health and safety to enable the scheme to commence within the timescale required by the funding partners Awards for All. Investment Management and Performance In accordance with the NHS Borders Endowment Fund Policy the Trustees have the power to invest in such stocks, shares, investments and property in the UK as they see fit, after taking in to account any ethical considerations. During financial year 2011/12 Investec Wealth & Investment Ltd were appointed as investment advisors following review and agreement of a revised Investment Policy. NHS Borders Endowment Fund Board of Trustees direct within the Investment Policy that the Investment Advisor adopt a medium risk investment strategy based on balancing income, capital growth and reasonable risk. The current market value of the investment portfolio is noted as 2,330,033 at 31st March 2012 with a further 180,000 representing cash currently awaiting investment. During Financial Year 2011/12 income generated was 71,676 ( 47,443 dividends received 2010/11) which is equivalent to an overall income return on capital employed of 2.85%. Investment Income generated by the portfolio is retained by the Investment Advisor for further investment, Trustees can request the Investment Income be made available should Endowment Fund projects require this resource. Since transfer of the Investment Portfolio to Investec Wealth & Investment Ltd dividends and investment income are reinvested within the fund, direct payment of the dividends and investment income can be requested should the Trustees require access to the funds. In addition to the Investment policy review during financial year 2011/12 the NHS Borders Endowment Fund Board of Trustees reviewed cash balances held within the Endowment Fund bank accounts. In order to protect and maximise funds available within the Endowment Fund the Trustees authorised that higher interest bearing term deposit accounts be created. Approval was also given to a planned tender exercise to be completed during 2012/13 for future cash requirements. Investment of funds within the Endowment Portfolio will be made on a socially responsible basis and the Endowment Fund will specifically not hold investments in organisations whose main activity is the manufacture or promotion of alcohol, gambling, tobacco or armaments. 8

11 Financial Review and Results for the Year NHS BORDERS ENDOWMENT FUND ANNUAL ACCOUNTS REPORT OF THE TRUSTEES Legacies and Donations The Fund receives numerous generous legacies and donations throughout the year and ensures all monies received are allocated to an appropriate fund as requested. At each quarterly meeting, the Endowment Fund Board of Trustees is advised of any donations and legacies over 5,000 in value which have been received by the Endowment Fund. Details of legacies received are noted separately within NHS Borders Endowment Fund Annual Accounts. Endowment Fund Expenditure Endowment Fund expenditure relates to items relevant to the purpose of the Charity, predominantly patient and staff welfare, and the promotion of healthcare. Outgoings are consistent with requirements contained within the guidance document in place for Officers in the use of NHS Borders Endowment Funds. Approval of expenditure must adhere to regulations contained within Borders Health Board Code of Corporate Governance specific to the Endowment Funds Financial Scheme of Delegation. Fund Balances The Endowment Funds record an in-year surplus of 656,332 (surplus figure of 212,645 in 2010/11). The current year position can be analysed as follows: Donations and Legacies Endowment Funds have been in receipt of legacies and donations totalling 834,803 during 2011/12, the level of this category of income may often fluctuate and there has been an increase of 61% against the 2010/11 total of 515,706, this can be attributed, in the main, to the many generous donations received for the Margaret Kerr Unit Appeal. Fundraising Income Fundraising banked income totalled 794,703 in 2011/12 ( 179, /11). A separate section on fundraising activities is included in this report. Fund Expenditure Main categories are detailed as follows Equipment, furniture and fittings totalling 326,669 Primarily incurred against the purchase of the following items of medical equipment Digital Specimen Radiography System 69,275 Paxman Scalp Coolers 28,912 Birthing Bed 16,485 Chest Pluera equipment 16,002 Wd15 High Dependency Unit Development Costs 65,413 Laprascopic Equipment 10,348 Expenditure relating to the development, and enabling works, for Margaret Kerr Unit project totalling 448,953 Reserves Policy Restricted Funds No reserves are held since the funds donated are for specific purposes. Activity on any fund will cease when those funds are exhausted. 9

12 NHS BORDERS ENDOWMENT FUND ANNUAL ACCOUNTS REPORT OF THE TRUSTEES Plans for future periods The Fundraising Committee has implemented a 3 year rolling programme of fundraising activity aligned to the delivery of the Corporate Objectives of NHS Borders. The main element of the Fundraising Plan over the 3 year period 2011/12 to 2013/14 is detailed as the Margaret Kerr Unit Appeal and further detail is included separately within this report under the heading of Achievements and Performance. The Endowment Advisory Group work plan to oversee the development and approval of the Endowment Fund budget plan will be achieved through the provision of dedicated support to Fund Managers during 2012/13 thus ensuring that existing fund balances and additional incoming resources can be maximised for the Charity s purpose. Trustees' responsibilities statement The trustees are responsible for preparing the Trustees Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). The law applicable to charities in Scotland requires the trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources of the charity for that period. In preparing these financial statements, the trustees are required to: select suitable accounting policies and then apply them consistently; observe the methods and principles in the Charities SORP; make judgements and estimates that are reasonable and prudent; state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in operation. The trustees are responsible for keeping accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 and the provisions of the charity s constitution. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The trustees are responsible for the maintenance and integrity of the charity and financial information included on the charity s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 10

13 Statement as to disclosure of information to Auditors So far as the Trustees are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the Charity's auditors are unaware, and each member has taken all the steps that they ought to have taken as a Trustee in order to make themselves aware of any relevant audit information and to establish that the Charity's auditors are aware of that information. Signed on behalf of the Trustees John Raine Chair Date Calum Campbell Chief Executive Date 11

14 INDEPENDENT AUDITOR S REPORT TO THE TRUSTEES OF THE BORDERS HEALTH BOARD ENDOWMENT FUND FOR THE YEAR ENDED 31 MARCH 2012 We have audited the financial statements of the Borders Health Board Endowment Fund for the year ended 31 March 2012, which comprise the Statement of Financial Activities, the Balance Sheet and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and Financial Reporting Standard for Smaller Entities (effective April 2008) (United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities). This report is made solely to the charity s trustees, as a body, in accordance with section 44 (1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and regulation 10 of the Charities Accounts (Scotland) Regulations 2006 (as amended). Our audit work has been undertaken so that we might state to the charity s trustees 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 charity and its trustees 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 Trustees Responsibilities Statement set out on page 8, the trustees are responsible for the preparation of financial statements which give a true and fair view. We have been appointed as auditor under section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and report in accordance with regulations made under that Act. 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 charity s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the trustees; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Report of the Trustees 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. 12

15 INDEPENDENT AUDITOR S REPORT TO THE TRUSTEES OF THE BORDERS HEALTH BOARD ENDOWMENT FUND (Cont.) FOR THE YEAR ENDED 31 MARCH 2012 Opinion on financial statements In our opinion the financial statements: give a true and fair view of the state of the charity s affairs as at 31 March 2012 and of its incoming resources and application of resources, for the year then ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities; and have been prepared in accordance with the requirements of the Charities and Trustee Investment (Scotland) Act 2005 and regulation 8 of the Charities Accounts (Scotland) Regulations 2006 (as amended). Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Charity Accounts (Scotland) Regulations 2006 (as amended) requires us to report to you if, in our opinion: the information given in the Trustees Annual Report is inconsistent in any material respect with the financial statements; or proper accounting records have not been kept; or the financial statements are not in agreement with the accounting records and returns; or we have not received all the information and explanations we require for our audit. Hogg & Thorburn Chartered Accountants and Statutory Auditors Moat House 14 Gala Park Galashiels TD1 1EX Date Hogg & Thorburn is eligible to act as an auditor in terms of section 1212 of the Companies Act

16 NHS BORDERS ENDOWMENT FUND BOARD OF TRUSTEES ANNUAL ACCOUNTS STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 MARCH 2012 Note Unrestricted Restricted 2011/ /11 Incoming resources Incoming resources from generated funds Donations and Gifts 0 654, , ,187 Fundraising 0 794, , ,182 Legacies 2b 0 180, ,779 63,519 Investment income 17, ,720 48,634 Total incoming resources 12,13 17,720 1,629,506 1,647, ,522 Resources expended Costs of generating funds Press, Publicity & Fundraising ,410 38,626 19,171 Investment management costs 9, ,946 5,030 Charitable activities Functional costs 4, , , ,282 Governance costs 10 3,960 15,543 19,503 29,179 Total resources expended 18,820 1,010,643 1,029, ,662 Net incoming/outgoing resources before transfers (1,101) 618, , ,861 Gross transfers between funds Net incoming/outgoing resources before (1,101) 618, , ,861 other recognised gains and losses Other recognised gains/losses Gains/losses on investment assets Realised 38,570 38,570 (40,396) Unrealised (16,744) (16,744) 131,146 Net Movement in funds 20, , , ,611 Reconciliation of funds Total funds brought forward 1,036,370 1,947,967 2,984,337 2,640,727 Total funds carried forward 4,5 1,057,095 2,566,829 3,623,924 2,984,338 14

17 NHS BORDERS ENDOWMENT FUND BOARD OF TRUSTEES ANNUAL ACCOUNTS BALANCE SHEET AS AT 31 MARCH 2012 Fixed Assets Note As at As at Investments 3 2,330,033 1,968,611 Current Assets Debtors 7 147,228 19,323 Cash at Bank 1,388,524 1,171,500 1,535,751 1,190,823 Liabilities Creditors: Amounts falling due 8 (241,860) (175,097) within one year Net Current Assets 1,293,891 1,015,726 Total Assets less Current Liabilities 3,623,924 2,984,337 The Funds of NHS Borders Endowment Fund Restricted Income Funds 4 2,566,829 1,947,967 Unrestricted Income Funds 5 1,057,095 1,036,370 Total NHS Borders Endowment Funds 3,623,924 2,984,337 These accounts were approved by the Trustees on 19th June 2012 and were signed on their behalf by: Chair Mr John Raine Chief Executive Mr Calum Campbell 15

18 NHS BORDERS ENDOWMENT FUND BOARD OF TRUSTEES ANNUAL ACCOUNTS NOTES TO THE ACCOUNTS 1. ACCOUNTING POLICIES The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Endowment Fund accounts. Basis of Preparation The accounts have been prepared in compliance with the Charities Accounts (Scotland) Regulations 2006, Accounting and Reporting by Charities: Statement of Recommended Practice (SORP) 2005 and Charities and Trustees Investment (Scotland) Act 2005, in accordance with applicable accounting standards; and under the historical cost accounting rules as modified by the revaluation of investments to market value. Incoming resources All incoming resources are recognised once the charity has entitlement to the resources and it is certain that the resources will be received and the monetary value of incoming resources can be measured with sufficient reliability. All income received is credited to a specific fund following instructions given by the individual donating to, or fundraising for, the Charity. Incoming resources are included gross of any tax recoverable amounts. Income which has no restrictions attached is included in the General (Unrestricted) Fund of the Charity. Incoming resources from legacies Legacies are accounted for as incoming resources either upon receipt or where the receipt of the legacy is to all intents and purposes certain; this will be once confirmation has been received from the representatives of the estate(s) that the payment of the legacy will be made once all conditions attached to the legacy have been satisfied and NHS Borders is assured that the amount of incoming resource is known. Resources expended Resources expended are accounted for on an accruals basis, and in accordance with restrictions of funds. Transfers between funds are actioned following appropriate authorisation from the Fund Manager initiating the transfer. No reserves are held since the funds donated are for specific purposes. Activity on any fund cease when those funds are exhausted. Resources are expended through NHS Borders exchequer funds with reimbursement being transacted to the Charity on a monthly basis. Administration costs are based on 1% of the average fund balances over the accounting period charged against each individual fund. 2011/12 16,388 (2010/11 25,869) Investments During financial year 2011/12 the Investment Portfolio was transferred to Investec Wealth & Investment Ltd, since transfer dividends and investment income are reinvested within the portfolio fund, direct payment of the dividends and investment income can be requested should the Trustees require access to the funds. Investments are stated at market value at the balance sheet date. Cost of generating funds The cost of generating funds are the direct costs associated with raising funds and include fundraising costs and Investment Management fees when applicable. Fundraising costs are those incurred in seeking voluntary income and include direct costs such as publicity,marketing and consumables. 16

19 NHS BORDERS ENDOWMENT FUND BOARD OF TRUSTEES ANNUAL ACCOUNTS NOTES TO THE ACCOUNTS 1. ACCOUNTING POLICIES (continued) VAT Any irrecoverable VAT is charged to the statement of financial activities. Goods purchased that are to be used solely in medical research, diagnosis, training or treatment may be zero rated for VAT purposes when purchased wholly from charitable funds. The charity is not separately registered for VAT. As permitted by HM Revenue & Customs (HMRC) under the NHS Contracted Out Services Regulations, VAT on relevant invoices paid from Endowment Funds is reclaimed using Borders Health Board's own VAT registration reference. Amounts reclaimed relevant to Endowment Funds are always credited back to the Charity. Governance and administration Governance costs comprise all costs identifiable as wholly or mainly attributable to ensuring the public accountability of the charity and its compliance with regulation and good practice. This would include costs related to statutory audit requirements. Administration costs have been separately noted and apportioned to the relevant category. Realised and unrealised gains and losses Investments are revalued on a quarterly basis and all gains and losses are taken to the Statement of Financial Activities as they arise. Any realised gains and losses on revaluation or disposal are combined in the Statement of Financial Activities. Realised gains and losses on investments are calculated as the difference between sales proceeds and the book cost, unrealised gains and losses are calculated as the difference between the market value at the year end and the book cost. Unrealised gains are treated as unrestricted funds. Pensions NHS Borders Endowment Funds has no directly paid employees and therefore has no pension contribution liability. Taxation NHS Borders Endowment Funds has charitable status and are exempt from income tax under Section 505 of the Income and Corporation Taxes Act 1988 and capital gains tax under Section 256 of the Taxation of Chargeable Gains Act 1992 and NHS Borders (Borders Health Board) is entitled to describe itself as a Scottish charity. Charitable activities Costs of charitable activities comprise all costs identified as wholly or mainly incurred in the pursuit of the charitable objectives. These costs, where not wholly attributable, are apportioned between the categories of charitable expenditure in addition to direct costs. The total costs of each category of charitable expenditure therefore includes support costs and the apportionment of overheads, as shown in note 2a Income and Expenditure Statement. 17

20 NHS BORDERS ENDOWMENT FUND BOARD OF TRUSTEES ANNUAL ACCOUNTS NOTES TO THE ACCOUNTS 2a. INCOME AND EXPENDITURE ACCOUNT YEAR ENDED 31 MARCH 2012 Note As at As at Incoming resources Donations and Gifts 654, ,187 Fundraising 794, ,182 Legacies 2 180,779 63,519 Investment income 17,720 48,634 Total incoming resources 1,647, ,522 Resources expended Charitable activities Equipment, furniture & fittings 326, ,633 Margaret Kerr Unit Appeal ,953 0 Staff Welfare 2,593 22,983 Patient Welfare 107,681 61,325 Training 27,699 53,318 Other 47,793 21,464 Administration Costs of generating funds Cost of generating voluntary income 14 38,626 19,171 Investment management costs Portfolio Fee 9,946 5,030 Governance costs Administration 10 19,503 29,179 Total resources expended 1,029, ,661 Surplus for the Year per Statement of Financial Activities 617, ,861 Realised gains/losses on investment assets 38,570 (40,396) 656, ,465 All activities relate to continuing operations. 18

21 NHS BORDERS ENDOWMENT FUND BOARD OF TRUSTEES ANNUAL ACCOUNTS NOTES TO THE ACCOUNTS 2b LEGACIES The Board gratefully acknowledges the generosity of the people who have bequeathed funds to benefit patient and staff amenities in the Borders:- Douglas James Scott 1,000 J B Tweedie (Interim Payment) 60,000 J B Tweedie (Final Payment) 31,090 William Whellans 98, /11 Endowment Legacy share to Macmilan ( 10,000) (a) 180,779 (a) NHS Borders Endowment Funds agreed a share of a legacy balance to Macmillan Cancer Support receipted during 2010/11, the share was transacted during 2011/12. 19

22 NHS BORDERS ENDOWMENT FUND BOARD OF TRUSTEES ANNUAL ACCOUNTS NOTES TO THE ACCOUNTS 3. INVESTMENTS The investments at 31 March are analysed as follows: Wider Range Market Book Value Cost UK - Fixed & Variable Interest British Funds 622, ,488 Debenture & Loan Stocks - - Convertibles - - UK - Equities 736, ,058 Overseas Investments 515, ,775 Other Investments - Unit Trusts 455, ,047 2,330,033 1,923,368 20

23 NHS BORDERS ENDOWMENT FUND BOARD OF TRUSTEES ANNUAL ACCOUNTS NOTES TO THE ACCOUNTS 4. RESTRICTED FUNDS 2011/ /11 Total Total Balance at 1 April 1,947,967 1,697,680 Movement in Funds Incoming Resources 1,629, ,290 Outgoing Resources/Utilised (1,010,643) (441,959) Transfers between Funds , ,331 Unrealised Gain/(Loss) in Investment Assets 0 4,956 Net Movement in Funds 618, ,287 Balance at 31 March 2,566,829 1,947,967 The Restricted Funds include amounts set aside for use across clinical and non clinical services in the Scottish Borders region as specified by the donors. 5. UNRESTRICTED FUNDS 2011/ /11 Total Total Balance at 1 April 1,036, ,047 Movement in Funds Incoming Resources 56,290 56,232 Outgoing Resources/Utilised (18,820) (94,055) Transfers between Funds ,470 (37,823) Unrealised (Loss)/Gain in Investment Assets (16,744) 131,146 Net Movement in Funds 20,725 93,323 Balance at 31 March 1,057,095 1,036,370 The Unrestricted Funds represent amounts set aside to ensure the continuing revenue operations and activities of the NHS Borders Endowment Fund, and have not been specified by the donors. There are no designated funds within unrestricted funds. 6. ANALYSIS OF NET ASSETS BETWEEN FUNDS Unrestricted Restricted 2011/12 Funds Funds Total Balance as at 31 March per Notes 4 & 5 1,057,095 2,566,829 3,623,924 Investments 2,330,033-2,330,033 Net Current Assets (1,272,938) 2,566,829 1,293,891 1,057,095 2,566,829 3,623,924 21

24 NHS BORDERS ENDOWMENT FUND BOARD OF TRUSTEES ANNUAL ACCOUNTS NOTES TO THE ACCOUNTS 7. DEBTORS ANALYSIS 2011/ /11 Total Total Gift aid 10,067 6,020 Donations 6,906 0 Legacies 129,779 0 Investment Qtr 4 Dividend 0 12,314 Other debtors Total Debtors 147,227 19, CREDITOR ANALYSIS 2011/ /11 Total Total Creditors 178, ,306 Other accruals and deferred income 63,704 29,791 Total Creditors 241, ,097 22

25 NHS BORDERS ENDOWMENT FUND BOARD OF TRUSTEES ANNUAL ACCOUNTS NOTES TO THE ACCOUNTS 9. Analysis of Specific Charitable Funds Endowment Fund Balance Balance as at B/fwd Payments Receipts Transfers Specific Restricted Funds Palliative Care In-Patient Unit 60, ,462 1,076, ,998 1,036,570 Haemodialysis Fund 26,940 1,409 34, , ,245 Border Cancer Services 122, , ,269 10, ,378 BGH General 163,584 38,288 1, ,598 BGH Chaplaincy Centre 76,361 5, ,309 Palliative Fund 119,696 14,824 13,053 50,000 67,925 Oncology Fund 83,395 27,149 20,920 10,000 67,166 Ward 15/SCBU HD Development 122,647 65,413 7, ,292 Gamma Camera Fund 36,576 2, ,731 Special Care Baby Unit 23,224 5,952 13, ,815 Staff Rest Room Fund 22, ,894 Pharmacy Development General 19,287 2,004 2, ,827 Lung Fund 18,126 1,791 3, ,334 Speech & Language Therapy Fund ,390 28,402-8,767 18,466 Cauldshields 17,524 1,940 1, ,025 Placenta Fund 3,931 16,947 30, ,984 Heart Fund 24,155 11,947 4, ,962 Primary & Community Services Board 24, ,767 15,549 Andrew Lang Unit 22,104 7, ,275 DME Research & Development Fund 11, ,877 Leukaemia & Allied Disorders 9, , ,993 Mental Health Growing Project 9, , ,740 Laboratory Fund 9, , ,566 Ward 11 Community Hospital/Palliative Care (W 14) 26, ,987 0 Cancer Support Cars 7,979 17,805 17, , Dialysis Appeal 98,261 11, , ,072 0 Zambia Training & Development 3,919 15,866 20, ,022 Stroke Fund 37,287 12,186 13,116 30,000 8,217 Anonymous Legacy 314, ,471 0 Hawick Community Hospital 2,113 13,115 11, Aromatherapy General 42,029 32, ,306 DME In-Patient Stroke Fund 5, , Other restricted funds 380, , , ,287 1,947,967 1,159,458 1,778, ,566,829 The specific fund balances as reported above detail closing balances of 10,000 or above, the funds detailed include cumulative fund movements during 2011/12 greater than 10,000. 2,566,829 The NHS Borders General Endowments Fund (Unrestricted) exists for the organisation as a whole to hold donations where the donor has made the donation for the benefit of NHS Borders but has not specified how the funds are to be expended. The Trustees use advice given by the Endowment Advisory Group and Trustees' discussion in deciding collectively how to utilise the resources available. There are at present over 400 individual Specific (Restricted) Funds where title of each fund is generally indicative of the particular speciality, where the donor has expressed a wish as to how the donation should be used. Typical uses relate to patient amenities/activities, equipment, training and research in line with the NHS Borders Endowment Policy. 23

26 NHS BORDERS ENDOWMENT FUND BOARD OF TRUSTEES ANNUAL ACCOUNTS NOTES TO THE ACCOUNTS 10. Analysis of Governance/Administration Costs Unrestricted Restricted 2011/ /11 Auditors' Remuneration - Fee 2, ,150 2,090 Storage of Archive Files ,175 Cost of Proof Reading Documents BHB Administration Charge (1%) ,543 16,388 25,869 Bank Charges Software Licence ,960 15,543 19,503 29,179 The Administration Charge is an allocation of overhead and related support costs charged yearly and is payable to Borders Health Board. The charge is set at 1% based on the average balance held throughout the year. Auditors Remuneration Auditors Remuneration for the audit for the year ended 31st March 2012 is 2,150 (2010/11 2,090) 11. Trustee Remuneration & Expenses Remuneration and expenses incurred by the Trustees or any persons connected with them are not charged against the Charitable Funds. The appointed Trustees work in an independent role governing the Charity. 24

27 NHS BORDERS ENDOWMENT FUND BOARD OF TRUSTEES ANNUAL ACCOUNTS NOTES TO THE ACCOUNTS 12. Analysis of voluntary income General Specific (Unrestricted) (Restricted) Total Total Funds Funds Donations from individuals 0 1,448,727 1,448, ,369 Legacies 0 180, ,779 63,519 Grants Total 0 1,629,506 1,629, , Analysis of investment income General Specific (Unrestricted) (Restricted) Total Total Funds Funds Bank interest 1, ,092 1,191 Investment dividends 16, ,628 47,443 17, ,720 48,634 25

28 NHS BORDERS ENDOWMENT FUND BOARD OF TRUSTEES ANNUAL ACCOUNTS NOTES TO THE ACCOUNTS 14. Margaret Kerr Unit (MKU) Appeal NHS Endowment Fund Board of Trustees approved the fundraising appeal to provide Borders Health Board with the Margaret Kerr Unit, a Specialist Inpatient Palliative Care Unit and Stroke Refurbishment project at Borders General Hospital, Melrose. Commitments The Appeal has committed to raise 4.113m to cover the costs of the Project. 2011/12 Expenditure Expenditure incurred in 2011/12 can be analysed as follows. Expenditure incurred as Project Management and Professional Services have been charged from NHS Borders Board through secondment arrangements to the MKU Project. Costs of staffing are detailed with calculated whole time equivalent figures. w.t.e. 1. Feasibility,Design and Construction 361, Project Management and Professional Services Staff Costs Gross Pay ,100 Staff Costs Employers National Insurance 6,254 Staff Costs Employers Superannuation 9,604 86, , Cost of Fundraising Appeal Staff Costs Gross Pay ,943 Staff Costs Employers National Insurance 1,384 Staff Costs Employers Superannuation 2,830 Publicity and materials 13,469 38,626 Total Costs as per Note 2b Income and Expenditure Statement 487, Employee emoluments NHS Borders Endowment Funds has no employees, however there is an arrangement with NHS Borders for seconded staff, details of which are given at note 14. There were no high paid staff (earning over 60,000). 16. Controlling Party & Related Party Transactions Borders NHS Board are the corporate trustee of the NHS Borders Endowment Fund and by virtue of appointment to the Board the members are Trustees of the Endowment Fund. There are no transactions with the Trustees or their related organisations during the year other than NHS Borders Board. All of the charity's transactions are related to Borders Health Board. Further disclosure is provided at note 14 regarding the Margaret Kerr Unit. 26