Report to the Sutton Clinical Commissioning Group Governing Body

Report to the Sutton Clinical Commissioning Group Governing Body Date of Meeting: Wednesday, 8 th January 2014 Agenda No: 5.6 Attachment: 07 Title of Document: Sutton and Merton NHS CCG s Charitable Funds Report Author: Geoff Price, CFO Purpose of Report: For approval and noting Lead Director: Geoff Price Sutton and Merton Primary Care Trust transferred its charitable funds to Sutton CCG on 01 April 2013. The Sutton CCG Governing Body is the Trustee of the Sutton and Merton NHS CCGs Charitable Funds. In that regard it has set up a Charitable Funds Committee made up of two Governing Body lay members from each of Sutton and Merton CCGs to which it delegates the management of the funds. The Committee met for the first time under the chairmanship of Paul Sarfaty on 09 December 2013. Approval of the 2012/13 accounts The 2012/13 Report and Accounts were presented to that Committee. The Committee reviewed the Report and Accounts and considered the report of the Independent examiner's, Grant Thornton UK LLP, Chartered Accountants. The Committee decided to recommend approval of the report and accounts to the Sutton CCG Governing Body, as Trustee, approve the report and accounts. These are attached as appendix 1. Update on the Sutton and Merton NHS CCGs Charitable Funds At it s meeting on 9 December, in addition to recommending the 2012/13 report and accounts for approval, the new Charitable Funds Committee Noted and agreed its Terms of Reference Appointed the investment manager for 201314 Noted the administrative matters to be completed by 31 January 2014 Page 1 of 12

Agreed bids from Sutton and Merton CCGs for staff Christmas amenities from Finance Department fund set up for this purpose Considered, but did not agree, a bid for paediatric equipment on the grounds that it did not fall outside routine NHS expenditure. Considered a request from the Royal Marsden to transfer funds relating to Sutton & Merton Community Services to The Royal Marsden Cancer Charity. After discussion the Committee agreed that funds would not be transferred to the Marsden but that applications for funds could be made to the Committee In the normal way. Recommendation(s): The Governing Body is requested to Approve the 2012/13 report and accounts of the Sutton and Merton PCT Charitable Funds Note the update on the Sutton and Merton NHS CCGs Charitable Funds Committees which have previously discussed/agreed the report: None. Financial Implications: The charitable funds are operated in the furtherance of their objectives. There is no direct financial impact on the CCG. Equality Impact Assessment: Not applicable Communication Plan: Not applicable Page 2 of 12

Appendix 1 SUTTON & MERTON PRIMARY CARE TRUST CHARITY (Registration number 1100642) ANNUAL REPORT AND ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2013 Page 3 of 12

Contents 1. Trustees Annual Report 1.1 Introduction 1.2 Charity Profile and General Information 1.3 Chairman s report 2. Statement of Trustees Responsibilities 3. Independent Examiner s Report 4. The Annual Accounts Page 4 of 12

Trustees Annual Report 1.1 Introduction 1.1.1 This is a report on the Charitable Funds held on trust by the Sutton & Merton NHS Primary Care Trust Charity. Sutton and Merton Primary Care Trust Charitable Funds was transferred on the 1 st April 2013 to a joint management arrangement with Sutton Clinical Commissioning Group. In the light of this, the Trustees consider the application of the going concern concept to the preparation of the Financial Statements remains appropriate. 1.1.2 This is the 10th annual report of this charity and is prepared in accordance with the Charities Act 2011 and the accounting and reporting requirements contained in the document Accounting by Charities; Statement of Recommended Practice 2005. It covers the year from 1 st April 2012 to 31 st March 2013 (previous financial year covered from 1 st April 2011 to 31 st March 2012). 1.2 Charity Profile and General Information 1.2.1 Sutton & Merton NHS Primary Care Trust Charity is registered as an Umbrella Charity. It was created with the funds transferred from ex South West London Community NHS Trust Charity and Merton and Sutton Health Authority Charitable Funds. The Trust is governed by a Declaration of Trust signed on the 22 nd September 2003. 1.2.2 Under the Umbrella there are 7 subsidiaries, namely the General Fund, Community Services, Ellen Terry, Sutton and Cheam Nurses, PLD Services, Orchard Hill PLD Services and Elderly Services. There are 70 designated/earmarked funds under these subsidiaries. The Charity Deed states that Sutton & Merton NHS Primary Care Trust is its sole corporate trustee and that its purpose is to hold and raise funds for any charitable purpose or purposes relating to the National Health Service. 1.2.3 During the year ended 31 st March 2013 Sutton & Merton NHS Primary Care Trust Charity exercised it s trustee role through a Charity Committee of NHS South West London Primary Care Trusts Joint Board. The Committee consisted of a Chair, and 3 members. The members of the Committee were: Mr Vidya Verma Chairman of the Committee, and Non Executive Director of the Joint Board. Mr John Simpson, Non Executive Director of the Joint Board. Mr John Thompson, Non Executive Director of the Joint Board. Page 5 of 12

Ms Jill Robinson Director of Finance, and Executive Director of the Joint Board. The Non Executive Directors were appointed to the Joint Board of NHS South West London Cluster by the Secretary of State. Training needs are identified and appropriate training is provided at the commencement of their membership on the Committee. The Charity has a range of policy and procedure documents, and these are made available to all new members. New members are inducted on to the Committee through meetings with existing members, and relevant staff from the Clinical Commissioning Group. The Committee meets periodically to consider bids for funding and considers each bid on its own merit. Outside the meeting the Director of Finance has authority to approve individual bids up to 500. Bids in excess of this amount arising between meetings of the Committee are circulated to the members for review. 1.2.4 Sutton & Merton NHS Primary Care Trust Charity registration Number is 1100642. The Charity s entry on the register held by the Charity Commissioners also records the charity s address which is: NHS Sutton Clinical Commissioning Group, Priory Crescent, Sutton,SM3 8LR. The Charity s bankers are:-lloyds TSB Group plc, City Office, Corporate & Institutional, P.O Box 72, Bailey Drive, Gillingham Business Park, Kent, ME8 0LS. The Charity s Funds are managed by Investec Wealth & Investment, 2 Gresham Street, London, EC2V 7QN. The Charity s Independent Examiners are: - Grant Thornton UK LLP, Grant Thornton House, Melton Street, Euston Square, London, NW1 2EP. 1.2.5 Powers and Restrictions i) In furtherance of the charitable funds objectives, the Trustees can exercise a broad range of powers, which are set out in the funds governing instruments. The Trustees may raise funds, acquire property and employ staff. They may co-operate with other charities, voluntary agencies or statutory authorities in furtherance of the funds objects or similar charitable purposes. They may invest the funds monies in stocks, shares, securities or any other investments in any Page 6 of 12

place they consider appropriate. They may allow such investments to be held by any clearing bank, Trust Corporation or a company of Stockbrokers, which is a member of the Stock Exchange, as nominees for the Trustees and may pay them for acting as such. ii) The Trustees may borrow money and charge the whole or part of the trust funds with repayment. They may also charge the funds with a proportion of the costs they themselves incur in administering or otherwise serving the charity. iii) The Trustees also have power to designate particular sums of money within the different funds held, whether to give effect to specific wishes donors may have expressed at the time they made their donations, or for administrative purposes, insofar as these further the objects of the main fund. iv) Furthermore, the Trustees may transfer any part of the funds to themselves, ie acting corporately as NHS South West London Cluster, for use on NHS premises. They may make similar transfers to other bodies to acquire, improve or maintain any property. v) However, in exercising these powers, the Trustees are subject to some limitations. vi) The Trustees must conform to relevant statutory regulations. They may not undertake any substantial permanent trading activities. vii) The Trustees must ensure that the investments are diversified appropriately. When making investments, the Trustees must act with the care that any prudent business person would take in doing so for any person for whom they were morally obliged to act. The Trustees must not make hazardous or speculative investments, and specifically, cannot invest in futures or trading options. viii) If transferring funds themselves or to any other body to acquire, maintain or improve property, the Trustees must have regard to wishes expressed by the original donors as to the terms of any such transfer. The Trustees should also themselves determine whether or not there should be terms attached to such transfers which will ensure that the property dealt with will continue to be used for the relevant purpose for which funds were transferred. Page 7 of 12

1.2. 6 Risk Policy The Committee is responsible for reviewing the major risks to which the Charity is exposed and ensure that systems have been established to mitigate these risks. The risks will be identified under three main headings: 1.2. 7 Reserves Policy Financial Risk Operational Risk Compliance Risk Reserves are the resources the Charity has or can make available to spend, for any or all of the Charity s purposes, once it has met its commitments and covered its other planned expenditure. The policy is to maintain unrestricted reserves at a level to represent eighteen months expenditure, approximately 250,000. At 31 March 2013 unrestricted reserves were 945,000. The policy is reviewed on an annual basis. 1.2.8 Grant Giving Policy Future spending plans had not been finalized at the date of this report. 1.2.9 Investment Policy The general objective is to achieve a medium-risk balance between capital and income growth on a portfolio of investments. This is to be achieved by investing prudently and cautiously in a broad range of fixed interest securities and equities which are quoted on a recognized Investment Exchange and unit trusts which are authorized under the Financial Services Act 1986. The performance of the investments shall be measured against a basket of relevant indices, including but not limited to the WM Charities Unconstrained Fund (excluding property). 1.2.10 Related Party Transactions During the year none of the Trustees or members of the key management staff or parties related to them has undertaken any material transactions with the Sutton and Merton PCT Charity. Page 8 of 12

The Sutton and Merton PCT Charity has made revenue payments to Sutton and Merton Primary Care Trust where the Trustees were also members of Primary Care Trust Board. 1.2.11 Connected Organisations Sutton and Merton PCT was the only connected organization and was the corporate Trustee of the Sutton and Merton PCT Charity. 1.3 Chairman s Report 1.3.1 The objects of the Charity relate to the application of income received, and where permissible any capital held, to any charitable purpose or purposes relating to the National Health Service. It aims to provide comfort and services to the patients and staff over and above what is provided by the exchequer. To meet these objects the trustees invite and receive donations from the public. Furthermore, the trustees meet regularly to review the investments, which are held by the Investment Manager, to consider applications for financial assistance to be met from charitable funds held and to monitor approved expenditure. 1.3.2 As the 2011 Charities Act restricts the holding of excessive reserves the Charity Committee deliberately allows spending to be in excess of income received during the year. During 2012/2013, expenditure exceeded income (before investment gains) by 76,736, as noted in the Statement of Financial Activities. 1.3.3 Charity Highlights in 2012/2013 The charity did not set a formal budget at the beginning of the financial year as expenditure was driven by the bids received during the year. Overall spend is controlled by the requirement to maintain reserves at a pre agreed level. This level is set out in the Reserves Policy detailed above in 1.2.7. Trust income is determined by the performance of the investments managed by Investec Wealth & Investment. The spread of the investments is determined by the Investment Policy. The remaining income of the Trust is from legacies and bequests and is therefore ad hoc in nature. During 2012/2013 The Charity paid 123,376 in grants and management fees which included: Patients Welfare and Amenities The Charity spent 88k on patient s welfare. Staff Welfare and Amenities 4k was spent on staff welfare and amenities, which includes Christmas events, Long Service Awards, Retirement parties and Gifts, Staff Development and Training etc. Page 9 of 12

. Governance costs Independent Examiner s Fee 4k. Management Charges 12k Fund Manager s Fee 15k Financial Review During the year there was a net increase in the funds of 119k (Unrestricted funds increased in value by 64k and Restricted funds increased by 55k). The net value of the investments held increased by 73k from 1,723k to 1,796k Investment performance The performance of the investments is shown on a quarterly basis in the table below. Performance is benchmarked against the WM Charities Unconstrained Fund excluding property. 2012/2013 Quarter Portfolio Performance Benchmark Variance June 2.4% 1.9% 0.5% September 4.2% 3.5% 0.7% December 3.2% 2.9% 0.3% March 8.8% 8.6% 0.2% Investment Policy The Trust investment policy excludes investment in tobacco or those companies involved in the manufacture of land mines. 1.3.4 Future Plans As agreed at a meeting of NHS South West London Primary Care Trusts Joint Board on September 14 th 2012,,management of the Sutton and Merton Primary Care Trust Charitable Funds, was transferred on the 1 st April 2013 to Sutton Clinical Commissioning Group. 2. Statement of trustees' responsibilities The trustees are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations. Charity law requires the trustees to prepare financial statements for each financial year. Under that law the trustees have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). The financial statements are required by law to give Page 10 of 12

a true and fair view of the state of affairs of the charity and of its incoming resources and application of resources for that period. In preparing those financial statements, the trustees are required to: a. select suitable accounting policies and then apply them consistently; b. make judgments and estimates that are reasonable and prudent; c. prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in business. The trustees are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the charity and to enable them to ensure that the financial statements comply with the requirements of the Charities Act 1993. 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 report was approved, and authorized for issue by the Board of Trustees on the 08 January 2014 and signed on their behalf by: Brendan Hudson Chair 3. Independent examiner's report to the Sutton Clinical Commissioning Group, the trustee of Sutton and Merton NHS CCG Charity I report on the accounts of Sutton and Merton NHS Primary Care Trust Charity for the year ended 31 March 2013, which are set out on pages 13 to 20 This report is made solely to the trustee, as a body, in accordance with section 149 and the regulations made under section 154 of the Charities Act 2011 (the Act). My work has been undertaken so that I might state to the charity's trustee those matters I am required to state to them in an independent examiner's report and for no other purpose. To the fullest extent permitted by law, I do not accept or assume responsibility to anyone other than the charity and the charity's trustee, as a body, for my work, for this report, or for the opinions I have formed. Respective responsibilities of trustee and examiner The charity s trustee is responsible for the preparation of the accounts. The charity s trustee considers that an audit is not required for this year (under section 144(2) of the Act) and that an independent examination is needed. It is my responsibility to: examine the accounts under section 149 of the Act; to follow the procedures laid down in the general Directions given by the Charity Commission under section 149(5) of the Act; and Page 11 of 12

to state whether particular matters have come to my attention. SCCG GB 08.01.14 Att 07 Basis of independent examiner's statement My examination was carried out in accordance with the General Directions given by the Charity Commission. An examination includes a review of the accounting records kept by the charity and a comparison of the accounts presented with those records. It also includes consideration of any unusual items or disclosures in the accounts, and seeks explanations from you as trustee concerning any such matters. The procedures undertaken do not provide all the evidence that would be required in an audit, and consequently no opinion is given as to whether the accounts present a 'true and fair' view and the report is limited to those matters set out in the statement below. Independent examiner's statement In connection with my examination, no matter has come to my attention, i) which gives me reasonable cause to believe that in any material respect, the requirements: ii) - to keep accounting records in accordance with section 130 of the Act; and - to prepare accounts which accord with the accounting records and to comply with the accounting requirements of the Act; have not been met. Or to which, in my opinion, attention should be drawn in order to enable a proper understanding of the accounts to be reached. Susan M Exton CPFA GRANT THORNTON UK LLP Chartered Accountants London Euston 08 January 2014 Page 12 of 12