CLIFF PARK SCHOOLS TRUST LTD

Transcription

1 Registered number: CLIFF PARK SCHOOLS TRUST LTD ANNUAL REPORT AND FINANCIAL STATEMENTS

2 CONTENTS Page Reference and administrative details of the academy, its trustees and advisers 1 Trustees' report 2-8 Governance statement 9-14 Statement on regularity, propriety and compliance 15 Trustees' responsibilities statement 16 Independent auditors' report Independent reporting accountant's assurance report on regularity Statement of financial activities Balance sheet 23 Cash flow statement 24 Notes to the financial statements 25-49

3 REFERENCE AND ADMINISTRATIVE DETAILS OF THE TRUST, ITS MEMBERS/ TRUSTEES AND ADVISERS Trustees Claire Blamey 1,2 Jacqueline Cutchey 1 Simon Gilbert-Barnham 1 Suzanne Mitchell 2 Barry Nicholls 1,2 Phillip Reid (resigned 14 April ) 2 Martin Steele 2 Emma Stevenson (resigned 23 October 2014) 1,2 Alleisha Turner (appointed 4 February ) Peter Shields (appointed 20 July ) 1 Registered Member of the company 2 Members of the Operations Committee Company registered number Principal and registered office Cliff Park Infant School, Orde Avenue, Gorleston-on-sea, Norfolk, NR31 6SZ Chief executive officer S Mitchell Independent auditors MA Partners LLP, 7 The Close, Norwich, Norfolk, NR1 4DJ Bankers Lloyds Bank plc, 25 Gresham Street, London, EC2V 7HN Solicitors Stone King, Thirty Station Road, Cambridge, CB1 2RE Page 1

4 TRUSTEES' REPORT The Trustees present their annual report together with the audited financial statements and Auditors' report of Cliff Park Schools Trust Ltd ("the Trust") for the period 1 September 2014 to 31 August. The annual report serves the purposes of both a trustees' report and a directors' report under company law. The Trust operates 2 primary academies in Gorleston, Great Yarmouth. In the school census of May Cliff Park Infant School had a roll of 257, and Cliff Park Junior School had a roll of 338. Structure, governance and management a. CONSTITUTION The Trust is a company limited by guarantee and an exempt charity. The Trust's memorandum and articles of association are the primary governing documents of the Trust. The Trustees of Cliff Park Schools Trust Ltd are also the directors of the charitable company for the purposes of company law. The charitable company is known as Cliff Park Schools Trust. Details of the Trustees who served during the year are included in the Reference and Administrative Details on page 1. b. MEMBERS' LIABILITY Each member of the Trust undertakes to contribute to the assets of the Trust 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. c. TRUSTEES' INDEMNITIES A Trustee may benefit from any indemnity insurance purchased at the Trust's expense to cover the liability of the Directors which by virtue of any rule of law would otherwise attach to them in respect of any negligence, default or breach of trust or breach of duty of which they may be guilty in relation to the Trust. Full details are contained in the Articles of Association as 6.3. The current indemnity insurance is valid until 31 March 2016 with the DfE Risk Protection Arrangement. d. METHOD OF RECRUITMENT AND APPOINTMENT OR ELECTION OF TRUSTEES Trustees are recruited according to the skills and experience they can bring to the Trust. We require a mix of skills in order to fulfil our aims, as well as complying with any legal requirements. We use the SGOSS service assist with our requirements for Trustees, and our own business and networking contacts to identify suitable candidates. Prospective Trustees are invited to visit the schools and are in effect 'interviewed' for the position of Trustees. We operate strict recruitment procedure expected from any organisation that involves children, and expect Trustees to adhere to any requirements in this regard. The Trustees are expected to adhere to the Nolan Principles: The Seven Principles of Public Life, these being selflessness, integrity, objectivity, accountability, openness, honesty and leadership. Page 2

5 TRUSTEES' REPORT (continued) e. POLICIES AND PROCEDURES ADOPTED FOR THE INDUCTION AND TRAINING OF TRUSTEES New Trustees are required to attend a training programme, including a tailored academy finance session. A policy for Directors, Governors and Members of Staff for Business and Personal Interests is maintained. f. ORGANISATIONAL STRUCTURE The Trust has developed its structure over the initial period of its existence. To this end we employed a consultant to help the Trust have a structure which is robust, with clear organisational lines of reporting and management, and the ability to replicate this model when new schools are added to the Trust family. g. CONNECTED ORGANISATIONS, INCLUDING RELATED PARTY RELATIONSHIPS Currently the Trust supports two schools Cliff Park Infant School and Cliff Park Junior School, both of Orde Avenue, Gorleston, Great Yarmouth, Norfolk, NR31 6SZ. We also have a business relationship with a local school in the Ormiston Academies Trust, Ormiston Venture Academy in Gorleston. Their Director of Finance, Mrs Sam Thomson, is our peer reviewer. The Trust Chief Executive Officer, Suzanne Mitchell, is currently a Governor of Cliff Park High School and a Director of Evolution Academy Trust. Objectives and Activities a. OUR VISION At Cliff Park Schools Trust we believe that everyone is entitled to be treated with respect, compassion and understanding. Our vision is to create an outstanding learning community in which all children and adults are safe, valued, actively involved and motivated to make exceptional progress. b. OBJECTIVES, STRATEGIES AND ACTIVITIES The Trust's objective is to advance for the public benefit education in the United Kingdom by establishing, maintaining, carrying on, managing and developing schools offering a broad and balanced curriculum for children of compulsory school age. Our aim is to create an outstanding learning community in which all children and adults are safe, valued, actively involved and motivated to make exceptional progress. c. PUBLIC BENEFIT Amongst other activities, the Trust will provide educational facilities and services to students of all ages and the wider community for the public benefit. Page 3

6 TRUSTEES' REPORT (continued) Strategic report Achievements and performance a. OVERALL REVIEW Achievements for the Accounting Period include the following: Both Infant and Junior schools remained a popular local choice for parents, with classes on the whole close to being full. The exception is year five which has some capacity. The Junior school showing upward trend now slightly below national figures for attainment, but above floor targets. However the following accelerated progress has been seen: Rapid and sustained improvements in the quality of teaching, through effective dissemination of good practice, monitoring and support; Effective links with Cliff Park Infant school moving closer to providing a seamless learning journey for children from The following improvements and progress has been seen across both schools since academy conversion: Attendance is good and improving; New Curriculum and assessment procedures are embedded and developing further; Children enjoy a very extensive range of enrichment opportunities including trips, after school clubs, sports activities and theatre trips; Provision of a broad and balanced curriculum in line with the National Curriculum and relevant to the children in our local community; Provision of community facilities. b. KEY PERFORMANCE INDICATORS The Infant school achieved a positive upwards trend in standards: EYFS Good Level of Development 68% 53% Yr 1 Phonics screening 64% 68% Yr 2 Reading L2 91% 93% Yr 2 Writing L2 91% 93% Yr2 Maths L2 97% 96% Yr6 Reading L4 88% 84% Yr6 Writing L4 85% 79% Yr6 Maths L4 88% 78% Yr6 RWM L4 78% 73% Pupil admission numbers to Cliff Park Infant School in September 2014 were 88 and in September were 80, and the total number of pupils on roll at the year ended 31 August 2014 was 260. Pupil admission numbers to Cliff Park Junior School in September 2014 were 86 and in September were 83, and the total number of pupils on roll at the year ended 31 August 2014 was 331. Page 4

7 TRUSTEES' REPORT (continued) c. GOING CONCERN After making appropriate enquiries, the board of Trustees has a reasonable expectation that the Trust has adequate resources to continue in operational existence for the foreseeable future. For this reason it continues to adopt the going concern basis in preparing the financial statements. Further details regarding the adoption of the going concern basis can be found in the Accounting Policies. Financial review a. OVERALL REVIEW The principal source of funding for the Trust is the General Annual Grant (GAG) funding that it receives from the EFA. For the accounting period ended 31 August the Trust received 2,290,194, 83% of which is spent on salary and supply costs to deliver the Trust s primary objective of the provision of education. The Trust also carried forward unrestricted of 525,626 and restricted (excluding the pension reserve and restricted fixed asset ) of 79,851 to the academic year. Expenditure in relation to these has been monitored on an on-going basis in accordance with maintaining and reporting a 3 year budget which is reviewed and approved by the Trustees termly. An ongoing diligent review of the Trust's costs for bought in professional and organisational services is undertaken and savings continue to be made through a robust procurement approach. This has enabled the Trust to continually save on costs whilst still investing in the educational operations. The financial position of the Trust at the end of the accounting period is detailed in the financial statements. The Trustees have a clear plan for investing the current surplus and this is outlined in the Reserves Policy. b. RESERVES POLICY The Trust is carrying forward a balance of unrestricted of 558,638; reserves which it holds for the purpose of realising the following strategic plan for expenditure over the following academic year and beyond. Re-configuration of classrooms and offices/other areas in both schools, to make best use of available space in support of the educational agenda and new leadership team structure Phase 1 of this work was focussed on office space and was completed in the Junior school in Spring, with further phases planned to focus on the classroom and learning areas layout following the completion of a new feasibility study in July. The estimated total further investment is in the region of 250, ,000, with a minimum budget of 65,000 being set aside for the next academic year. Investment into our ICT strategy, infrastructure and hardware Phase 1 of this work was completed in Autumn 2014 with the installation of a new wireless system in both schools. Phase 2 includes upgrades to our infrastructure to create an improved end user experience for our pupils and staff, with an estimated investment required of 36,000. In addition, a rolling programme over the next three years for the replacement of hardware is planned with an estimated investment required of 42,000 in -16 and 25,000 in subsequent years. Page 5

8 TRUSTEES' REPORT (continued) Improvements to our car park Including consideration to ingress, the addition of a barrier to address health and safety concerns and improved ease of access for all. This has an estimated investment required of 16,000, with an estimated timing for completion of Spring Biomass boiler solution Funds are also being held in reserve to provide a solution to current design and health and safety issues with the operation of our biomass boiler following an independent review. This will be a phased approach to implementation with initial work on our back-up gas boilers costing 6,380. Costings for a full solution to upgrade the biomass boiler are currently unknown, but will be paid for from our reserves. Replacement mobile and/or nursery provision Finally, the Trust would like to replace a run-down mobile on the Infant school site, as this is becoming increasingly unfit for purpose, with or without linked consideration to nursery provision. The estimated investment required is 250,000 at this stage the Trustees are of the view that completion is subject to obtaining DfE Condition Improvement Fundng linked to the expansion of the Trust's Infant school age range. At a total panned investment for of 165,380, this would reduce the level of the Trust s free reserves to 393,258. c. DEFICIT Due to the accounting rules for the Local Government Pension Scheme under FRS17, the Trust is recognising a significant fund deficit of 600,000. This does not mean that an immediate liability for this amount crystallises, rather that this results in a cash flow effect in the form of increased employer contributions over a number of years. Since 1 April the Trust is making employer contributions of 17.8% which will increase to 18.3% from 1 April 2016, the costs for which will be met from budgeted annual income. d. INVESTMENT POLICY The Trust has a policy of investing its cash balances with a view to maximising returns through bank interest payments, alongside ensuring the safety of the investment. Page 6

9 TRUSTEES' REPORT (continued) e. PRINCIPAL RISKS AND UNCERTAINTIES The Trust maintains a risk register identifying the major risks to which it is exposed, along with associated actions and procedures to mitigate those risks. This register is monitored by the Audit committee. The principal risks facing the Trust at an operational level are addressed by its systems and financial and other controls, and the Trustees report that the financial and internal controls conform to guidelines issued by the EFA, and improvements to the wider framework of systems dealing with business risk and risk management strategy continue to be considered. The Trustees assess the principal risks and uncertainties facing the Trust as follows: The Trust lacks direction, strategy and forward planning, and failure to ensure the objectives of the Trust are met. This is being addressed through: - relevant discussions at Board level to agree strategic priorities; - planning and documentation of the Trust's strategic vision, objectives and priorities over the next 3 years with an ongoing business plan; - embedding a new leadership structure including Executive Head Teacher and leadership team. Failure to grow the Trust. This is being addressed through: - documentation of the Trust s offer and due diligence process via. appropriate documentation and on the website; - relevant networking and liaison with appropriate stakeholders, authorities and the Regional Schools Commissioner, Tim Coulson. Failure to comply with relevant employee and HR legislation. This is being addressed through: - appointing a fit for purpose HR support provider; - increasing staff knowledge through bespoke training and advice from ACAS; - subscription to monthly compliance newsletter. Failures to ensure that staff recruited to the Trust have the required skills and expertise to meet the strategic objectives of the Trust. This is being addressed through: - ongoing review of staffing and recruitment of new staff; - developing a programme of CPD across the Trust; - exploring different avenues for recruitment (e.g. employing apprentices) and working with the LA on a local recruitment strategy; - it is not felt there are any immediate threats to retaining key staff. Debtors - There are no material debtors. Cash flow - The Trust's cash flow is healthy and our long term financial planning suggests it will remain so. Page 7

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11 GOVERNANCE STATEMENT SCOPE OF RESPONSIBILITY As Trustees, we acknowledge we have overall responsibility for ensuring that Cliff Park Schools Trust Ltd has an effective and appropriate system of control, financial and otherwise. However such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss. The board of trustees has delegated the day-to-day responsibility to the Chief Executive, as accounting officer, for ensuring financial controls conform with the requirements of both propriety and good financial management and in accordance with the requirements and responsibilities assigned to it in the funding agreement between Cliff Park Schools Trust Ltd and the Secretary of State for Education. They are also responsible for reporting to the board of trustees any material weaknesses or breakdowns in internal control. GOVERNANCE The information on governance included here supplements that described in the Trustees' report and in the Trustees' responsibilities statement. The board of trustees has formally met 6 times during the year. Attendance during the year at meetings of the board of trustees was as follows: Trustee Meetings attended Out of a possible Claire Blamey 6 6 Jacqueline Cutchey 6 6 Simon Gilbert-Barnham 6 6 Suzanne Mitchell 5 6 Barry Nicholls 5 6 Phillip Reid (i) 5 5 Martin Steele 6 6 Emma Stevenson (ii) 1 1 Alleisha Turner 3 4 (i) Termination of appointment as Trustee 14 April. (ii) Termination of appointment as Trustee 23 October Governance reviews: At the end of the last reporting period the Trust had begun to act on the outcomes of a governance review by Cranwell Consultancy, an external company specialising in advising and supporting academy schools and Multi Academy Trust s. The review recommended a number of strategies to enable the Trust to drive strong, sustainable, performance in both the Infant and Junior schools; fulfilling the Trust s vision for its role within the local community. There has been a strong focus on implementing the outcomes and improvements, including the key recommendation to appoint an Executive Head Teacher to be responsible, with the Trustees, for the strategic direction of the Trust through a rigorous process of evaluation of all aspects of the schools work and detailed strategic planning. Mrs Suzanne Mitchell, the Trust CEO, was appointed to this post effective from the 1 October 2014 and quickly appointed two Heads of School into new posts effective from the 1 January. To complete the Senior Leadership Team a new Teaching and Learning Assessment lead, with remit across the Trust, was recruited to start work in the new post from the 1 September. In all aspects this new governance structure has bedded in well and is proving effective. Page 9

12 GOVERNANCE STATEMENT (continued) The trustees have also considered the composition and skills of the board of Trustees during the period which has resulted in the changes to Trustees outlined in the Governance Statement. This has also ensured it complies with all clauses of the company's Articles of Association, amendments to which were approved by special resolution effective from the 20 May. The Trust was continuing to actively recruit new Trustees at the end of the reporting period, and plan to continually review its effectiveness and composition going forward to ensure it drives strong, sustainable strategies which contribute to improved teaching and learning standards and attainment. The Operations Committee is a sub-committee of the main board of trustees. Its purpose is: To review and monitor budget projections/medium term financial plans to ensure the Trust s budget is realistic and any financial decisions are sustainable To recommend to the Directors approval of the annual budget plan and cash flow forecasts for the forthcoming financial year as appropriate in accordance with the timescales dictated by the Education Funding Agency To receive the most recent monthly management reports, to facilitate the monitoring of the schools actual financial performance and cash flow compared with budgeted forecasts, take remedial action as necessary and report to the Directors To make decisions on requests from other committees that will have an impact on the Trust s financial position To make decisions on expenditure within the Committee s delegated powers To make decisions on virements within agreed budgets, within the Committee s delegated powers, and authorising budgetary adjustments made To advise the Directors on the appropriateness of proposed virements outside the Committee s delegated powers To review benchmarking data, in order to compare the Trusts financial performance with other similar schools To review annually the Trusts Finance Policy, Scheme of Delegation and Terms of Reference To review annually on-going contracts as appropriate To review and agree premises lettings charges, in line with the Lettings policy To ensure that all financial controls and audit requirements are adhered to in line with the Academies Financial Handbook. The Trust also runs a dedicated Audit committee, which is another sub-committee of the main board of trustees. Its purpose is: To ensure that all financial controls and audit requirements are adhered to in line with the Academies Financial Handbook To advise the Board of Directors on the adequacy and effectiveness of the Trust s systems of internal control and it s arrangements for risk management, control and governance processes Monitor the effectiveness of auditors, and advise the Board of Directors on the appointment, reappointment, dismissal and remuneration of auditors To review and comment on the Trust s risk register To review and comment on the planned programme of auditing by the Trust s responsible Officer, any additional assurance / auditing work by either the Trust s accountants or other external bodies To review and comment on the content of audit reports and monitor the implementation of agreed action plans To ensure that all allegations of fraud and irregularity are appropriately investigated and control weaknesses addressed To review the committee s membership and effectiveness on an annual basis to ensure it has appropriate skills and relevant experience To monitor and advise on the effectiveness of the Trust s processes and policies in complying with relevant legislation and guidance, to ensure it operates to high standards of propriety and regularity and reduces the risk of compliance failures. Page 10

13 GOVERNANCE STATEMENT (continued) Finally, the Trust also runs a dedicated Pay and Personnel committee, which is another sub-committee of the main board of trustees. Its purpose is: To review the staffing structure and related salary costs of all staff members other than the Executive Head Teacher To review and advise the board of trustees on approval of HR and Pay related policies To review the Trust pay and performance management policies, at least annually, and advise the board of Trustees on approval To ensure that a regular staff performance management process is undertaken for all staff, at least annually To review and approve as appropriate recommendations for increases in teaching staff pay increments, in accordance with the process outlined in the Trust pay policy. This will be undertaken annually by the end of October, in line with the timings of the performance management process (staff appraisals) To review all staff salaries at least annually, making recommendations for approval by the board of trustees as appropriate To undertake a salary review of any member of staff at any other time as directed by the Executive Head Teacher or board of trusteess, making recommendations for approval by the board of trustees as appropriate To determine appropriate salary ranges for member of the leadership group To deal with any pay related staff grievance or appeal, either following a decision made by the committee or otherwise. In the case of appealing against a pay committee decision, the staff member should be requested to set out in writing to the Chair (with a copy to the clerk) the grounds for the appeal within 10 days of being informed of the decision. Attendance at meetings of these sub-committees in the year was as follows: Trustee Meetings attended Out of a possible Claire Blamey 6 6 Suzanne Mitchell 6 6 Barry Nicholls 6 6 Phillip Reid 1 5 Martin Steele 6 6 Jacqueline Cutchey 6 6 Page 11

14 GOVERNANCE STATEMENT (continued) REVIEW OF VALUE FOR MONEY As accounting officer, the Chief Executive has responsibility for ensuring that the academy trust delivers good value in the use of public resources. The accounting officer understands that value for money refers to the educational and wider societal outcomes achieved in return for the taxpayer resources received. The accounting officer considers how the trust s use of its resources has provided good value for money during each academic year, and reports to the board of trustees where value for money can be improved, including the use of benchmarking data where available. The accounting officer for the academy trust has delivered improved value for money during the year by: Centralisation of all financial management processes for both schools with an experienced Finance Manager, with support from a new Finance Assistant Both monthly management reporting and termly budget revisions are overseen, reviewed and challenged where necessary by the school governing bodies and the Trust Operations committee to ensure spending is in line with agreed strategies and achieve value for money Centralisation of all employee recruitment under a single role for both schools The Trust has appraised key services over the period, balancing the need for quality and fitness for purpose with realising savings through re-tendered contracts (e.g. outsourced catering and grounds maintenance) The Trust has continued to employ the use of a trusted building consultancy company, who have project managed and provided CDM co-ordination for key high profile and cost premises maintenance projects ensuring robust competitive tendering policies are followed at all times In general the Trust has achieved better service and reduced cost by continuing to move services away from the Local Authority The Trust is aware of relevant benchmarking data, and takes this into account when determining strategies and priorities for reviewing bought in services The Trust has continued to realise savings and economies of scale on many day to day educational services by simply combining individual school subscriptions and contracts previously bought separately The Trust has generated renewable energy income through Ofgem RHI payments, generated through its use of a biomass boiler on site THE PURPOSE OF THE SYSTEM OF INTERNAL CONTROL The system of internal control is designed to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an ongoing process designed to identify and prioritise the risks to the achievement of Trust policies, aims and objectives, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically. The system of internal control has been in place in Cliff Park Schools Trust Ltd for the year 1 September 2014 to 31 August and up to the date of approval of the annual report and financial statements. CAPACITY TO HANDLE RISK The board of trustees has reviewed the key risks to which the Trust is exposed together with the operating, financial and compliance controls that have been implemented to mitigate those risks. The board of trustees is of the view that there is a formal ongoing process for identifying, evaluating and managing the Trust's significant risks, that has been in place for the year 1 September 2014 to 31 August and up to the date of approval of the annual report and financial statements. This process is regularly reviewed by the board of trustees. Page 12

15 GOVERNANCE STATEMENT (continued) THE RISK AND CONTROL FRAMEWORK The Trust s system of internal financial control is based on a framework of regular management information and administrative procedures including the segregation of duties and a system of delegation and accountability. In particular, it includes: comprehensive budgeting and monitoring systems with an annual budget and periodic financial reports which are reviewed and agreed by the board of trustees; regular reviews by the Operations Committee of reports which indicate financial performance against the forecasts and of major purchase plans, capital works and expenditure programmes; setting targets to measure financial and other performance; clearly defined purchasing (asset purchase or capital investment) guidelines. delegation of authority and segregation of duties; identification and management of risks. The board of trustees has considered the need for a specific internal audit function and has decided not to appoint an internal auditor. However, the Trustees have appointed Sam Thomson, the Financial Director of Ormiston Venture Academy to perform peer review. The peer reviewer's role includes giving advice on financial matters and performing a range of checks on the Trust's financial systems. In particular the checks carried out in the current period included: testing of payroll systems - tracing a sample of salary payments to detailed personnel records to verify correct amount paid - checking amendments to the payroll are appropriately authorised and source documentation exists - reviewing final payroll print for appropriate authorisation testing of income systems - reviewing grant funding receipts and checking amounts received agree to source documentation - reviewing non-grant income to ensure appropriate action has been taken on overdue amounts, ensuring primary records reconcile to monies collected and that monies collected have been banked promptly and are correctly recorded in accounts system testing of purchase systems - tracing a sample of purchase transactions through the system, ensuring appropriate controls have been documented and accurate accounting records maintained - reviewing documentation to ensure correct quotation / tender processes have been followed where required On an annual basis, the reviewer reports to the board of trustees, through the audit committee, on the operation of the systems of control and on the discharge of the board of trustees' financial responsibilities. REVIEW OF EFFECTIVENESS As accounting officer, the Chief Executive has responsibility for reviewing the effectiveness of the system of internal control. During the year in question the review has been informed by: the work of the peer reviewer; the work of the external auditors; the financial management and governance self-assessment process; the work of the executive managers within the Trust who have responsibility for the development and maintenance of the internal control framework. The accounting officer has been advised of the implications of the result of their review of the system of internal control by the Operations and Audit Committees and a plan to address weaknesses and ensure continuous improvement of the system is in place. Page 13

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19 INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CLIFF PARK SCHOOLS TRUST LTD We have audited the financial statements of Cliff Park Schools Trust Ltd for the year ended 31 August which comprise the Statement of financial activities, the Balance sheet, the Cash flow statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law, United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) and the Academies Accounts Direction 2014 to issued by the Education Funding Agency. This report is made solely to the Trustees, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act Our audit work has been undertaken so that we might state to the Trustees those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Trustees for our audit work, for this report, or for the opinion we have formed. RESPECTIVE RESPONSIBILITIES OF TRUSTEES AND AUDITORS As explained more fully in the Trustees' responsibilities statement, the Trustees (who are also the directors of the charitable Trust for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors. SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Trust's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Trustees; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Trustees' report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. OPINION ON FINANCIAL STATEMENTS In our opinion the financial statements: give a true and fair view of the state of the charitable Trust's affairs as at 31 August and of its incoming resources and application of resources, including its income and expenditure, for the year then ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and have been prepared in accordance with the requirements of the Companies Act 2006 and the Academies Accounts Direction 2014 to issued by the Education Funding Agency. Page 17

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21 INDEPENDENT REPORTING ACCOUNTANTS' ASSURANCE REPORT ON REGULARITY TO CLIFF PARK SCHOOLS TRUST LTD AND THE EDUCATION FUNDING AGENCY In accordance with the terms of our engagement letter dated 22 September 2014 and further to the requirements of the Education Funding Agency (EFA) as included in the Academies Accounts Direction 2014 to, we have carried out an engagement to obtain limited assurance about whether the expenditure disbursed and income received by Cliff Park Schools Trust Ltd during the year 1 September 2014 to 31 August have been applied to the purposes identified by Parliament and the financial transactions conform to the authorities which govern them. This report is made solely to Cliff Park Schools Trust Ltd and EFA in accordance with the terms of our engagement letter. Our work has been undertaken so that we might state to Cliff Park Schools Trust Ltd and EFA those matters we are required to state in a report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Cliff Park Schools Trust Ltd and EFA, for our work, for this report, or for the conclusion we have formed. RESPECTIVE RESPONSIBILITIES OF CLIFF PARK SCHOOLS TRUST LTD'S ACCOUNTING OFFICER AND THE REPORTING ACCOUNTANT The accounting officer is responsible, under the requirements of Cliff Park Schools Trust Ltd's funding agreement with the Secretary of State for Education dated 27 March 2013, and the Academies Financial Handbook extant from 1 September 2014, for ensuring that expenditure disbursed and income received is applied for the purposes intended by Parliament and the financial transactions conform to the authorities which govern them. Our responsibilities for this engagement are established in the United Kingdom by our profession's ethical guidance and are to obtain limited assurance and report in accordance with our engagement letter and the requirements of the Academies Accounts Direction 2014 to. We report to you whether anything has come to our attention in carrying out our work which suggests that in all material respects, expenditure disbursed and income received during the year 1 September 2014 to 31 August have not been applied to purposes intended by Parliament or that the financial transactions do not conform to the authorities which govern them. APPROACH We conducted our engagement in accordance with the Academies Accounts Direction 2014 to issued by EFA. We performed a limited assurance engagement as defined in our engagement letter. The objective of a limited assurance engagement is to perform such procedures as to obtain information and explanations in order to provide us with sufficient appropriate evidence to express a negative conclusion on regularity. A limited assurance engagement is more limited in scope than a reasonable assurance engagement and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in a reasonable assurance engagement. Accordingly, we do not express a positive opinion. Our engagement includes examination, on a test basis, of evidence relevant to the regularity and propriety of the Trust's income and expenditure. Page 19

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23 STATEMENT OF FINANCIAL ACTIVITIES (Incorporating Income and Expenditure Account and Statement of Total Recognised Gains and Losses) INCOMING RESOURCES Note Unrestricted Restricted Restricted fixed asset Total Total ended 31 August 2014 Incoming resources from generated : Voluntary income 2 1,714 7,977-9,691 4,284,739 Activities for generating 3 106, , ,489 Investment income 4 4, ,819 2,488 Incoming resources from charitable activities 5 17,775 2,914,414-2,932,189 3,853,283 TOTAL INCOMING RESOURCES 130,527 2,922,391-3,052,918 8,305,999 RESOURCES EXPENDED Charitable activities 263 2,881, ,153 2,995,119 3,773,768 Governance costs ,517-18,598 79,505 TOTAL RESOURCES EXPENDED ,900, ,153 3,013,717 3,853,273 NET INCOMING RESOURCES BEFORE TRANSFERS 130,183 22,171 (113,153) 39,201 4,452,726 Page 21

24 STATEMENT OF FINANCIAL ACTIVITIES (continued) Note Unrestricted Restricted Restricted fixed asset Total Total ended 31 August 2014 Transfers between Funds 20 (97,171) (78,395) 175, NET INCOME FOR THE YEAR 33,012 (56,224) 62,413 39,201 4,452,726 Actuarial gains and losses on defined benefit pension schemes - 10,000-10,000 (180,000) NET MOVEMENT IN FUNDS FOR THE YEAR 33,012 (46,224) 62,413 49,201 4,272,726 Total at 1 September ,626 (465,149) 4,212,249 4,272,726 - TOTAL FUNDS AT 31 AUGUST 558,638 (511,373) 4,274,662 4,321,927 4,272,726 All activities relate to continuing operations. The Statement of Financial Activities includes all gains and losses recognised in the year. The notes on pages 25 to 49 form part of these financial statements. Page 22

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26 CASH FLOW STATEMENT ended 31 August 31 August 2014 Note Net cash flow from operating activities , ,685 Capital expenditure and financial investment 23 (175,566) (97,166) (DECREASE)/INCREASE IN CASH IN THE YEAR (11,117) 796,519 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS ended 31 August 31 August 2014 (Decrease)/Increase in cash in the year (11,117) 796,519 MOVEMENT IN NET FUNDS IN THE YEAR (11,117) 796,519 Net at 1 September ,519 - NET FUNDS AT 31 AUGUST 785, ,519 The notes on pages 25 to 49 form part of these financial statements. Page 24

27 NOTES TO THE FINANCIAL STATEMENTS 1. ACCOUNTING POLICIES 1.1 Basis of preparation of financial statements The financial statements have been prepared under the historical cost convention, with the exception of investments which are included at market value. The financial statements have been prepared in accordance with the Statement of Recommended Practice (SORP), 'Accounting and Reporting by Charities' published in March 2005, the Academies Accounts Direction 2014 to issued by EFA, applicable accounting standards and the Companies Act Company status The Trust is a company limited by guarantee. The members of the company are the Trustees named on page 1. In the event of the Trust being wound up, the liability in respect of the guarantee is limited to 10 per member of the Trust. 1.3 Fund accounting Unrestricted income represent those resources which may be used towards meeting any of the charitable objects of the Trust at the discretion of the Trustees. Restricted fixed asset are resources which are to be applied to specific capital purposes imposed by funders where the asset acquired or created is held for a specific purpose. Restricted general comprise all other restricted received and include grants from the Department for Education. Page 25

28 NOTES TO THE FINANCIAL STATEMENTS 1. ACCOUNTING POLICIES (continued) 1.4 Incoming resources All incoming resources are included in the Statement of financial activities when the Trust has entitlement to the, certainty of receipt and the amount can be measured with sufficient reliability. Grants are included in the Statement of financial activities on a receivable basis. The balance of income received for specific purposes but not expended during the period is shown in the relevant 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. General Annual Grant is recognised in full in the year for which it is receivable and any unspent amount is reflected as a balance in the restricted general fund. Capital grants are recognised when receivable and are not deferred over the life of the asset on which they are expended. Unspent amounts of capital grant are reflected in the balance in the restricted fixed asset fund. The value of donated services and gifts in kind provided to the Trust are recognised at their open market value in the period in which they are receivable as incoming resources, where the benefit to the Trust can be reliably measured. An equivalent amount is included as expenditure under the relevant heading in the Statement of financial activities, except where the gift in kind was a fixed asset in which case the amount is included in the appropriate fixed asset category and depreciated over the useful economic life in accordance with the Trust's policies. Donations are recognised on a receivable basis where there is certainty of receipt and the amount can be reliably measured. Other income, including the hire of facilities, is recognised in the period in which it is receivable and to the extent the goods have been provided or on completion of the service. 1.5 Resources expended Expenditure is recognised in the period in which a liability is incurred and has been classified under headings that aggregate all costs related to that category. Where costs cannot be directly attributed to particular headings they have been allocated on a basis consistent with the use of resources, with central staff costs allocated on the basis of time spent, and depreciation charges allocated on the portion of the asset's use. Other support costs are allocated based on the spread of staff costs. Charitable activities are costs incurred in the Trust's educational operations. Governance costs include the costs attributable to the Trust's compliance with constitutional and statutory requirements, including audit, strategic management and Trustees' meetings and reimbursed expenses. All resources expended are inclusive of irrecoverable VAT. Page 26

29 NOTES TO THE FINANCIAL STATEMENTS 1. ACCOUNTING POLICIES (continued) 1.6 Going concern The Trustees assess whether the use of going concern is appropriate, i.e. whether there are any material uncertainties related to events or conditions that may cast significant doubt on the ability of the Trust to continue as a going concern. The Trustees make this assessment in respect of a period of one year from the date of approval of the financial statements. 1.7 Tangible fixed assets and depreciation All assets costing more than 1,000 are capitalised. Where tangible fixed assets have been acquired with the aid of specific grants, either from the government or from the private sector, they are included in the Balance sheet at cost and depreciated over their expected useful economic life. The related grants are credited to a restricted fixed asset fund in the Statement of financial activities and are carried forward in the Balance sheet. Depreciation on such assets is charged to the restricted fixed asset fund in the Statement of financial activities so as to reduce the fund over the useful economic life of the related asset on a basis consistent with the Trust's depreciation policy. Where tangible fixed assets have been acquired with unrestricted, depreciation on such assets is charged to the unrestricted fund. Tangible fixed assets are stated at cost less depreciation. Depreciation is not charged on freehold land. Depreciation on other tangible fixed assets is provided at rates calculated to write off the cost of those assets, less their estimated residual value, over their expected useful lives on the following bases: Leasehold land and buildings - 50 years straight line Fittings and equipment years straight line Computer equipment years straight line On 1 April 2013, the Trust became party to a lease agreement for the school property. The lease is for a period of 125 years and substantially all the risks and rewards of ownership have been transferred to the Trust. As such the school property has been recognised as a fixed asset in the Balance Sheet at a depreciated replacement cost of 4,189,531. The corresponding entry has been recognised as voluntary income in the Statement of Financial Activities. The depreciated replacement cost at 1 April 2013 was based upon a desktop valuation carried out by Mouchel on behalf of the EFA which valued the land and buildings at 4,120,000 at 31 March Taxation The Trust is considered to pass the tests set out in Paragraph 1 Schedule 6 of the Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the Trust is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes. Page 27

30 NOTES TO THE FINANCIAL STATEMENTS 1. ACCOUNTING POLICIES (continued) 1.9 Pensions Retirement benefits to employees of the Trust are provided by the Teachers' Pension Scheme ("TPS") and the Local Government Pension Scheme ("LGPS"). These are defined benefit schemes and the assets are held separately from those of the 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 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 26, the TPS is a multi-employer scheme and the 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 Trust in separate trustee administered. 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. 2. VOLUNTARY INCOME Unrestricted Restricted Total Total ended 31 August 2014 Donations 1,714 7,977 9,691 7,929 Transferred on conversion (note 25) ,276,810 Voluntary income 1,714 7,977 9,691 4,284,739 Page 28

31 NOTES TO THE FINANCIAL STATEMENTS 3. ACTIVITIES FOR GENERATING FUNDS Unrestricted Restricted Total Total ended 31 August 2014 Catering income 34,686-34,686 70,143 Clubs income 13,450-13,450 16,884 Rental income Trip income 5,680-5,680 31,810 Photography commission Music tuition 3,000-3,000 3,217 Lettings 12,372-12,372 23,935 Sales of educational materials Insurance claims 30,672-30,672 14,774 Other income 4,733-4,733 3, , , , INVESTMENT INCOME Unrestricted Restricted Total Total ended 31 August 2014 Investment income 4,819-4,819 2,488 Page 29