Bedfordshire, Essex and Hertfordshire District of the Methodist Church No 34

Year ended 31 August 2014 Notes to the Accounts

1 Accounting framework and accounting policies

i Accounting framework The financial statements have been prepared under the Charities Act 2011 in accordance with the 2014 version of Accounting and Reporting by Charities: Statement of Recommended Practice (SORP) applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective from 1 January 2015) – (the Charities SORP (FRS 102) as amended by Update Bulletin 1) – in replacement for the SORP’s 2005 version specified in its related 2008 Regulations and in accordance with the “true and fair override” provision contained therein.

ii Public benefit entity The Bedfordshire, Essex and Hertfordshire (BEH) District meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy note(s) below.

iii Basis These accounts have been prepared on the basis of historical cost except that investments are shown at their market value at the end of the year, on the accruals basis to show a true and fair view of the District’s financial position and activities.

iv Content The financial information presented is relevant, reliable, comparable and complete. Where estimates are used these are based on experience, research and judgement. The accounts are expressed in £Sterling, rounded to the nearest pound.

v FRS102 SORP2015 [applies to 2016-17 onwards] This is the first year that the FRS102 SORP 2015 has applied to the District’s accounts. These accounts are compliant with FRS102 and with the FRS102 SORP 2015. The comparative figures from the previous year’s published accounts have been restated to be on the same basis: details of the adjustments appear in Notes 3 and 20 below.

vi Going concern Based on the monetary assets and human resources available at 31 August 2017, the trustees believe that the District is a going concern.

vii Consolidation The District oversees the work of ministers and lay workers in Churches and Circuits within the District but does not have control over those Circuits or Churches, ministers or lay workers except in extreme circumstances, none of which were applicable. For this reason, the financial statements of the Churches and Circuits within the District are not consolidated into these financial statements.

viii Income recognition Income is brought into account when it is more likely than not that the economic benefit of the income will accrue to BEH. No attempt is made to measure the value of services donated by volunteers. Details of how the contribution to the cost of the District Chair has been determined appears in Note 5. A similar figure appears in the Expenditure at Note 8.

Individual amounts categorised as Other income in the SOFA will be shown separately if they are considered material. 10 Bedfordshire, Essex and Hertfordshire District of the Methodist Church No 34

The District acts as agent in four matters:  the collection of quarterly assessments from circuits which are paid to the MCF  the payment of expenses of delegates from the District to the Methodist Conference  the collection taken at the spring synod on behalf of the Methodist Minsters’ Children’s Relief Fund  the cost of ministerial health checks recovered from Circuits

In all these matters the transactions are not reflected in the SOFA because there is no obligation on the District to make up any shortfall in assessments from Circuits. Sums received as Circuit assessments cannot be recognised as income in the District as they are the income of the MCF.

In accordance with the Charities SORP (FRS 102), the time of volunteers is not recognised. Further information on this matter is provided in the Trustees’ Annual Report.

ix Expenditure This is recognised when a liability is incurred, or a constructive obligation arises, that results in the payment being unavoidable. Liabilities are recognised as soon as an outflow of economic benefit is considered more likely than not under the legal or constructive obligation committing the District to pay out resources. x Grants [There are two options that are mutually exclusive: treasurers should adopt one of them:] x a Grants are recognised annually only as and when any performance conditions* attaching to the award are met, even when the award is for a recurrent grant over more than one year. All grants awarded for payment in future financial years are conditional on the Grants Committee being satisfied, on the basis of progress reports from the grantee, that the grant's achievements to date justify the payment of further instalments of that grant. Such commitments are noted as contingent liabilities and included within the District Advance Fund or other relevant designated fund in these accounts. x b Grants are recognised in full when the award is made once the District accepts that there is a legal or constructive obligation to make the payment and that such payment is probable.

[*Where a condition remains within the control of the District, then the District retains the discretion to avoid the grant expenditure and a liability is not recognised. Where a performance condition of substance has been communicated to the grant recipient as part of the funding agreement, then a constructive obligation is not considered to arise for payments relating to periods subsequent to the review date. Where it becomes clear that a payment is possible, not probable, then a liability for the commitment is not recognised and the funding commitment is disclosed as a contingent liability.]

xi VAT Since the District is not VAT registered, all input VAT is charged with the expenses to which it refers.

11 Bedfordshire, Essex and Hertfordshire District of the Methodist Church No 34

xii Tangible fixed assets These are capitalised if they can be used for more than one year, and individually cost at least £1,000. The freehold property is shown in the accounts at cost in 2006, of which the land component is deemed to be £180,000. No depreciation is provided on the building because the trustees consider the current residual fair value of the manse building (on the assumption that it had reached the end of its useful economic life by the year-end) to be not less than its cost to date. The property has been reviewed for impairment.

xiii Investments The investments of BEH are held by the Trustees for Methodist Church Purposes (TMCP) as custodian trustees. The valuations, at market value, are those provided by TMCP. The unrealised gains arising on investments at the end of the year are shown in the SOFA and in Note 22 below.

xiv Receivables and Payables; Bank and Cash Debtors are stated at the amounts owed to the District or prepaid. Creditors are initially recognised at settlement amount after any trade discounts, where normal credit terms apply, or amount advanced to the District. Subsequently creditors that are current liabilities are measured at the cash or other consideration expected to be paid. The liquid funds of bank balances and deposit account balances are shown at the realisable values.

[xv Loans Where concessionary loans (ie free of interest) are made to (or received by) the District to further its charitable purposes, and are repayable after more than one year, they are initially recognised at the amount paid [or received], with the carrying value adjusted in subsequent years to reflect repayments and any accrued interest, adjusted for any impairment, if necessary.

Where there is objective evidence of impairment, an immediate impairment loss is recognised in the Statement of Financial Activities. Subsequent reversals of an impairment loss that objectively relate to an event occurring after the impairment loss was recognised, are recognised immediately in the Statement of Financial Activities]

xvi Methodist Church Fund The District acts as agent for the Methodist Church Fund (MCF) by collecting its assessments on Circuits and does not, therefore, include the assessments in the SOFA. If a Circuit is late in paying its MCF assessment to the District but such sum is received before the quarterly transfer to the MCF, the amount paid late will be shown as a debtor in the District’s accounts.

xviii Transition to FRS 102 Other than the reclassification of expenditure between categories (Note 3), and restatement of the comparative figure for opening funds of the prior year in respect of the change of accounting policy by accrual of unpaid instalments of multi-year grants (Note 20), no restatement of items has been required in making the transition to FRS 102 section 1A.

2 Glossary of terms

CFB: Central Finance Board of the Methodist Church manages a Common Deposit Fund and a series of pooled investment funds for Methodist entities in Great Britain and provides investment advice to those entities Church: a group of members from fewer than 10 to more than 300 12 Bedfordshire, Essex and Hertfordshire District of the Methodist Church No 34

Circuit: a group of Methodist Churches near each other, typically between 10 and 30 CMTF: Circuit Model Trust Fund Connexion: The Methodist Church in GB which includes the Head Office at Methodist Church House, all Methodist Districts, Circuits and Churches in Great Britain District: a group of contiguous Circuits, usually between 15 and 30 DAF: District Advance Fund DPC: District Policy Committee FRS: Financial Reporting Standard MCF: Methodist Church Fund MMPS: Methodist Ministers’ Pension Scheme PASLEMC: Pensions and Assurance Scheme for Lay Employees of the Methodist Church SOFA: Statement of Financial Activities SORP: Statement of Recommended Practice TMCP: Trustees for Methodist Church Purposes, the legal owner and Custodian Trustee of all Methodist Model Trust property, including Legacies, Endowments and Accumulated Funds

3 Prior year

3.1 Restatement of comparative figures

In preparing the accounts the trustees have considered where, in applying the accounting policies required by the Charities SORP(FRS102), any comparative figures have needed restatement. No restatements were required other than the reclassification between categories of expenditure. A reconciliation of opening balances is therefore not required.

The following adjustments – exclusively to expenditure - show how the allocation of costs for 2012-13 has been restated so that the costs are shown on the same bases as the accounts for 2013-14. Per 2012-13 as previously Prior year As restated in stated adjustment 2013-14 £ £ £ Salaries 38,766 31,491 70,257 Chair's manse 5,290 5,290 Office accommodation 16,651 16,651 Stationery, post, telephone 4,188 553 4,741 Chair's expenses 5,001 -1,072 3,929 Synods and Committees 6,681 6,681 Methodist Conference 686 686 Training 21,581 220 21,801 Insurance 1,097 1,097 Grants and donations 115,250 115,250 Benevolence 1,800 1,800 Provision for bad debt 4,516 4,516 New Communities (CCDO) 28,483 -25,200 3,283 Oher outgo 5,963 -701 5,262 Ecumenical 15,235 15,235

Year ended 31 August 2014 Notes to the Accounts Safeguarding 9,334 -6,291 3,043 Professional fees 0 1,000 1,000 Total expenditure 280,522 0 280,522

3.2 Comparative SOFA from previous year’s accounts, as now restated

General District Other Fund Advance Designated Other Funds Fund Funds (Restricted) Total £ £ £ £ £ Income and Endowments Donations and legacies 521 521 Other trading activities 0 Income from investments 2,884 9,318 564 3,222 15,988 Assessments on Circuits 74,792 74,792 Contributions from Circuit Model Trust Funds 110,050 110,050 Connexional Advance & Priority Fund distribution 0 Grants received 25,983 5,000 30,983 Contribution to the cost of the Chair 0 Income from Charitable Activities 103,659 119,368 6,085 3,222 232,334 Other income 3,150 3,150

Total income and endowments 106,809 119,368 6,085 3,222 235,484

Expenditure Salaries 70,257 70,257 Chair's manse 5,290 5,290 Office accommodation 16,651 16,651 Stationery, post, telephone, administration 3,500 997 20 224 4,741 Chair's expenses 3,929 3,929 Synods and Committees 6,681 6,681 Methodist Conference 686 686 Training 21,801 21,801 Insurance 1,097 1,097 Grants and donations 1,525 110,727 2,998 115,250 Benevolence 1,800 1,800 Provision for bad debt 4,516 4,516 New Communities (CCDO) 3,283 3,283 Other outgoings -4,539 9,803 5,264 Ecumenical 15,235 15,235 Safeguarding 3,043 3,043 Professional fees 1,000 1,000 Total charitable expenditure 155,755 111,724 9,823 3,222 280,524 14 Bedfordshire, Essex and Hertfordshire District of the Methodist Church No 34

Net income before investment gains -45,796 7,644 -3,788 - -45,040 Inter-fund transfers 45,870 -35,200 -10,670 - - Investment gains/(losses) 8,191 8,191

Net income/(expenditure) for year 74 -27,556 -14,408 8,191 -36,849

3.3 Balance Sheet at 31 August 2013

4 Assessments on Circuits

The District is made up of the following Circuits: 34-1 North Bedfordshire 34-4 South Bedfordshire 34-6 Colchester 34-7 Tendring 34-9 Chelmsford 34-10 Southend and Leigh 34-11 South Essex 34-12 Herts and Essex Border Ecumenical Area 34-13 St Albans and Welwyn 34-14 West Hertfordshire and Borders 34-15 North Hertfordshire 34-18 Bishop’s Stortford

All Circuits paid their assessments to the District and to the MCF during the year or shortly after its end. An assessment on Circuits is annually determined by Districts by reference to the number of staff in the Circuits and the number of Church members but may also take into account a Circuit’s ability to pay.

Contributions to the Methodist Church Fund (MCF)

In addition to the assessments on the Circuits to help defray the costs of running the District, the District acted as agent for the Methodist Church Fund which levied assessments on the Circuits in this District totalling £524,112 (2012-13: £522,056) all of which were collected or shown as debtors at the end of the year and paid over to the MCF in the year. No balance was held at the end of the year; no fee is received for this service which is performed at nearly nil cost to the District. These sums collected for and remitted to the MCF do not appear elsewhere in these financial statements.

Year ended 31 August 2014 Notes to the Accounts 5 Cost of Chair and trustees

The Chair of District chairs meetings of the District Policy Committee (DPC). The members of the DPC are the trustees of the District. The stipend, employer’s NIC and employer’s pension contributions of the Chair of District are paid by the Methodist Connexion. The Chair’s other costs are met mostly by the District. 2013-14 2012-13 £ £ Stipend of Chair of District, Rev Anne Brown 27,765 27,180 Employer's National Insurance contributions 2,519 2,689 Employer's pension contributions 5,975 5,784 Cash cost paid by the Connexion (see SOFA, line 6) 36,259 35,653 Notional estimate of cost of providing manse 19,000 18,300 Chair's expenses 3,412 n/a Total cost 58,671 53,953

Since the stipend-related costs above (ie £36,259; 2012-13 £35,653) are borne by the Connexion, they appear both in the Income of the District and the Expenditure of the District (See Note 8). It should be noted that the chair is required to occupy the District manse. The manse is provided by BEH District and the District maintains the property. The sum of £19,000 (2012-13: £18,300) was determined by enquiry of local letting agents and does not appear elsewhere in these accounts. The Chair of District is the sole paid key management person but is supported by members of the DPC.

No accrual is made for the Chair’s entitlement to a sabbatical as her functions are undertaken by a Deputy Chair at minimal extra cost to the District.

Payments to trustees

It is District policy to offer to reimburse members of the District Policy Committee and others involved in the administration of District affairs for expenditure properly incurred in carrying out their duties. The Chair of the District undertakes the primary executive role within the District. Apart from the Chair of District no member of the District Policy Committee was in receipt of any payment for work undertaken on behalf of the District, although certain travelling and administration costs were reimbursed whenever this was requested.

None of the trustees is an employee of the District. Travel expenses have been reimbursed to some five (2012-13: five) trustees (members of the District Policy Committee (DPC)) who, in aggregate, have received the cost of travel incurred in attending meetings of the DPC and this amounted to £541 (2012-13: not available).

6 Other income

The District does not undertake fundraising.

A sum of £10,000 was received from the District’s insurers in connection with the misappropriation (See Note 12 Misappropriation). None of the remaining individual amounts

Year ended 31 August 2014 Notes to the Accounts categorised as Other income (£2,544) in the SOFA is considered material and none is listed separately.

Each year the District Synod invites donations from the members of synod for the Methodist Ministers’ Children’s Relief Association. The amount donated and paid over in the year was £482 (2012-13: £499).

7 Grants and donations and related support costs

Grants and donations totalling £164,219 were made during the year (2012-13: £135,568).

2013-14 2012-13 £ £ From General Fund 19,359 From DAF (see Note 20(b)) 126,348 From Rock Trust 3,009 To Ecumenical and New Communities 15,503 Total 164,219 135,568

Details of the recipients of grants paid by the District during the year may be found on the District website, www.behdistrict.org.uk.

Expenditure on charitable activities through the District Advance Fund

This fund receives formulaically determined contributions from the Circuit Model Trust Funds held by Circuits within the District and redistributes the monies to grantees in the District through relevant grants as assessed by the District Grants Committee. During the year the following grants were made:

To £ For £ Churches 69,667 Projects 1,600 Circuits 54,881 Ministry 141,748 Institutions 124,548 General 18,900 Individuals 1,800 Sub total 126.348 BEH District 35,900 Total 162,248 162,248

The income of the fund was £150,894 (net of costs) during the year, some £11,354 short of the total paid out in grants in the year. This shortfall was drawn from reserves.

The Grants Committee is aware that grant applications must demonstrate public benefit.

The support costs for grant-funding to third parties are insignificant (principally because the secretary of the Grants Committee is a volunteer and undertakes the vast majority of this work) and are not separately disclosed.

8 Salaries and associated costs

Gross salaries paid to four (2012-13: four) part time employees were as follows:

2013-14 2012-13 £ £ Gross pay 56,793 Employer's National Insurance contributions 4,423 Employer's pension contributions to defined contribution schemes 2,460 Total costs of 4 staff 63,676 70,257* Cost of Chair (see Note 5) 36,259 35,653 Total staff costs 99,935 105.910

Total weekly contractual hours for 4 staff 68 88

No employees received employee benefits that totalled more than £60,000. There is no accrual for holiday pay as it is immaterial; the holiday year ends on 31 August. All staff are paid at or above the living wage.

One of the four part time employees was engaged exclusively in safeguarding matters, another in representing denominations on discussions about new community developments and two provided secretarial assistance at the District office.

Pensions

Most ordained presbyters and deacons are members of the Methodist Ministers’ Pension Scheme (MMPS). This is a defined benefit scheme. The Supreme Court held in 2014 that Methodist ministers (which term includes presbyters and deacons) are not employees of the Church. For simplicity, however, when dealing with National Insurance Contributions and pension contributions, the terms ‘employer’ and ‘employee’ are used as they would be in an employing body.

On the other hand lay employees are contractually employees and have the option of joining the Pension and Assurance Scheme for Lay Employees of the Methodist Church (PASLEMC), The Pensions Trust or some other arrangement. PASLEMC is a defined benefit scheme and the employing Churches and Circuits contribute as employers to this scheme.

The Connexion accounts for both the MMPS and PASLEMC pension schemes and shows the figures in the annual Methodist Church in Great Britain accounts. The MMPS is in deficit but a plan for removal of the deficit has been proposed and is being implemented. Details of the deficits on these schemes can be found in the Annual Report and Accounts of The Methodist Church at www.methodist.org.uk [COMPLETE THE LINK]

Additional pension liability

Subsequent to the year end trustees have settled a current and future liability to the Baptist Union Pension Fund which is in deficit. A member of the fund was employed by BEH and by one of its predecessor Districts, London North East, for some years. The member served the New Communities initiative that was supported by other denominations and the East Anglia District of the Methodist Church so the cost of the shortfall will be spread among four denominations (seven entities). The total liability is £25,377, with the share underwritten by the Beds, Essex and Herts District being about £7,000. No provision has been made for this sum in the 2013-14 accounts . There can be no future claim relating to this member. [Note to District Treasurers: A provision should have been made in 2013-14.]

9 Property costs

2013-14 2012-13 £ £ District office, rent and services 16,422 16,651 Chair’s manse 9,319 5,290 Total 25,741 21,941

10 Office expenses (General fund)

2013-14 2012-13 £ £ Printing, postage and stationery 2,505 2,637 Telephone 1,507 1,551 Insurance 883 1,097 Safeguarding 2,942 3,043 Other 984 553 Total charged to General Fund 8,821 8,881 TMCP charges 1,204 1,241 Total 10,025 10,122

11 Synods, Committees, Conference

2013-14 2012-13 £ £ Synods 2,473 2,838 Conference 139 686 Committees 3,449 3,843 Chair’s travel 3,413 3,929 Total 9,474 11,296 19 Bedfordshire, Essex and Hertfordshire District of the Methodist Church No 34

12 Other outgoings

2013-14 2012-13 £ £ Professional fees 11,413 1,000 Provision for bad debts 500 4,516 Sundry outgoings 0 4,021 Total charged to General Fund 11,913 9,537 Training (charged to Designated Fund) 12,236 21,801 Total 24,149 31,338

Misappropriation

During this financial year the District discovered that it had been subject to a misappropriation of funds each year from 2007-08 to 2013-14. In order to determine the level of this misappropriation it has been necessary to re-cast most of the accounts for these years and to arrange for most of the years since the District was registered as a charity to be examined by the newly appointed independent examiner. This has been a lengthy exercise which is continuing.

A number of matters need emphasis:  whilst the aggregate sum (£20,003 at 31 August 2014) is considerable it has not put the future of the District in jeopardy  there has been some tightening of financial control to reduce the prospect of further misappropriations  no creditors are at risk of being unpaid  a civil case against the attorneys of the alleged perpetrator is still in progress. (A criminal case cannot proceed as the alleged perpetrator lacks legal capacity and is unfit to plead.)  a debtor has been raised for the aggregate sum misappropriated at each balance sheet date and a provision for bad debts of 50% of that sum has been made. During the year £1000 was misappropriated and an additional provision of £500 has been made  because of the nature of this misappropriation and that the perpetrator’s attorneys have sought to challenge the extent of the misappropriation it is inevitable that there is some uncertainty about how much of the misappropriation will be recovered by the District  the lawyers’ costs have been written off as incurred

13 Investment management

During the year the District paid £1,204 to TMCP, the custodians of the District’s investments (District Advance Fund, Manse Fund and Rock Trust (2013-14: £1,241). The sum of £1,204 was levied at 0.2% on the value of the funds at the end of the year and is shown as allocated to the three groups of funds: £942, £22 and £240 at line 24 in the SOFA. See Note 10 above.

None of the remaining individual amounts – aggregated as ‘Other’ above - is considered material and none is listed separately.

The sum of £5,861 (2012-13: £8,191) represents an unrealised gain in the invested funds of The Rock Trust. More information can be found in Note 22 Restricted Fund. 20 Bedfordshire, Essex and Hertfordshire District of the Methodist Church No 34

14 Transfers between funds

During the year £35,900 was withdrawn from the District Advance Fund to contribute to the funding of the following: ecumenical work, safeguarding, training and administrative assistance.

15 Manse and other property

The value of the District manse in Bishop’s Stortford is believed to be considerably greater than its historical cost in 2006 shown in the accounts. There is no depreciation on the manse as the impairment review at the end of the year confirmed that the current residual market value of the building was greater than the carrying value of that part of the asset’s cost to date.

Plant and Fixtures and Assets under Land Buildings machinery fittings construction Total £ £ £ £ £ £ Cost or valuation Balance brought forward at 1 September, at cost 180,000 300,000 20,000 500,000 Additions in the year Revaluations in the year Less: Disposals in the year Transfers between categories Balance carried forward at 31 August 2014 180,000 300,000 20,000 500,000

16 Debtors and prepayments

With the exception of items marked thus (*) all sums shown as Debtors at 1 September 2013 were received during the following year. All sums paid in advance at 1 September 2013 were for activities (principally deposits for training courses) that have been held during 2013-14. Similarly, it is expected that payments in advance at 1 September 2014 will be expensed in 2014-15.

Debtors were made up as follows: 2013-14 2012-13 £ £ Trade debtors Circuit assessments received late 5,641 New Communities donation received late 2,000 Ministers' health check reimbursements 1,162 468* 6,803 2,468 Prepayments and accrued income Payments in advance 685 58 685 58 21 Bedfordshire, Essex and Hertfordshire District of the Methodist Church No 34

Year ended 31 August 2014 Notes to the Accounts Other debtors Debt arising from misappropriation 20,003 19,003 Less: Provision for doubtful debts 10,002 -9,501 Debtors net of provisions 10,001 9,502 Concessionary loans to individuals 630 2,850 Loans to churches 5,100 5,100* Sundry 30 15,731 17,482 Total (net) 23,219 20,008

Concessionary loans are made by the District to further its charitable purposes. The loans to individuals are free of interest and are being repaid by monthly standing order. The loan of £5,100 is to one church that is currently unable to repay the sum involved. It is fully expected that this amount will be recovered in due course and no provision is made for this as a doubtful debt.

17 Trustees for Methodist Church Purposes

The funds that support the District Advance Fund and the Manses Fund are held by TMCP in Trustees Interest Funds on which interest is credited to the accounts each month. These are regarded as medium and long term investments.

TMCP is the legal owner and Custodian Trustee of all Methodist Model Trust property, including Legacies, Endowments and Accumulated Funds. Trust property is held for and on behalf of local Managing Trustees who are responsible for the day to day management of trust property. TMCP ensure that, through providing guidance and acting under their direction, the Managing Trustees comply with charity law and Methodist law and policy as determined by the Methodist Conference.

18 Central Finance Board (CFB) and Cash at Bank

The District has two current accounts at HSBC plc, an authorised institution. The sums held on those accounts are immediately available. In addition the District has three deposit accounts at CFB, a common deposit fund. Interest is earned on these accounts and credited monthly; the sums deposited can be withdrawn without notice and without loss of interest. These sums are viewed as being liquid.

19 Creditors and accrued expenses

2013-14 2012-13 £ £ Creditors: Expenses reimbursement 4,125 630 Independent examinations 2,580 2,000 22 Bedfordshire, Essex and Hertfordshire District of the Methodist Church No 34

Year ended 31 August 2014 Notes to the Accounts Publications 231 Total creditors 6,936 2,630 Accruals: PAYE and pension contributions 1,333 1,535 Taxation and Social Security 1,333 1,535 Total 8,269 4,165

Maturity analysis of basic financial instruments Accrued at Accrual made Accrued at 01-Sep-13 Paid in year in year 31-Aug-14 Trade creditors Expenses reimbursed 630 630 4,125 4,125 Independent examinations 2,000 580 2,580 Publications 231 231 Taxation and Social Security 1,535 1,535 1,333 1,333 Total 4,165 2,165 6,269 8,269

It is expected that all sums accrued at 31 August 2014 will be paid during the year to 31 August 2015.

20 Grant Commitments and the District Advance Fund

Expenditure on charitable activities: District Advance Fund The trustees have this year decided to change their policy concerning future commitments on DAF grants. Until last year, where grants were payable in annual instalments the commitment for unpaid grant amounts as covered by the DAF was explained by way of Note in the accounts, as it was necessary for the grantee to provide a satisfactory report on the achievements of activities funded by previous instalments of the multi-year grant award before any further instalments would be paid. It is now the District’s policy to recognise committed grants immediately as expenditure out of this fund and thus accrue the unpaid amounts at the year-end as liabilities.

The following analyses are available to explain the effect of this change of policy on the comparative figure for BEH’s opening reserves as at 1 September 2012: 2011-12 £ End of year commitments to pay one-off grants or the first instalment in a future year 115,537 Anticipated second or subsequent instalments where the first instalment was paid in 2011-12 or earlier 192,752

Total anticipated commitment at 31 August 2012 308,289

Grants payable by future year as at 1 September 2012: 2012-13 (current liability) 208,115 2013-14 (long term liability) 84,674 2014-15 (long term liability) 15,500 100,174

Total anticipated commitment at 31 August 2012 308,289 23 Bedfordshire, Essex and Hertfordshire District of the Methodist Church No 34

This total of anticipated grants of £308,289 was comfortably within the balance of £498,390 in the DAF as at 1 September 2012. In the following year and subsequent years, further sums were and are expected to be credited to the DAF from the CMTF levies of those years.

The award of a grant by the District does not create a contractual relationship but does create an operational liability if not made subject to performance conditions creating uncertainty as to the probability of future years’ grant instalments being paid. It is now judged that such future instalments of grant will probably be paid and so the amounts due are no longer classified as Designated Reserves but instead are recognised as expenditure of the year when awarded.

No institution received grants of such materiality that they should be separately disclosed in these accounts.

21 Unrestricted Funds

21.1 General Fund – balance £624,366 at 31 August 2014 (2013: £628,207)

The purpose of the fund is for use at the discretion of the trustees in the furtherance of the general objectives of the District and which have not been designated for other purposes. About 80% of this fund is held as a freehold property, the District manse for the Chair of District. During the year £2,427 was paid out as grants and donations from the General Fund.

21.2 Other Designated Funds – balance £26,975 at 31 August 2014 (2013: £38,864, including two funds since reclassified as restricted)

These funds are to serve specific purposes but are not restricted by any document or deed to that purpose alone. These funds comprise:

The Manse Fund – balance £10,326 (2013: £10,244) is available to meet major upgrades in the accommodation at the District manse.

The Benevolence Fund – balance £16,649 (2013: £13,758) provides financial support to ministers and lay people in the District in need of support. There is also a restricted fund for benevolence and all of the income into that fund during 2013-14 was disbursed in the year.

22 Restricted Funds - balance £137,818 at 31 August 2014 (2013: £120,187)

The Rock Trust, a restricted fund, exists to support residential and other activities undertaken by young people who currently live in the former London NE District of the Methodist Church. All the fund’s assets are managed by TMCP and the net income (after charges) is paid direct to the administrators of the Rock Trust. Grants are awarded by the trustees of the Rock Trust, being the trustees of the District.

This is made up as follows: 2014: £ 2013: £ CFB Managed Mixed Fund 93,329 87,467 Trustees Interest Fund 32,720 32,720 Total 126,049 120,187 24 Bedfordshire, Essex and Hertfordshire District of the Methodist Church No 34

The trustees have this year decided to reclassify two of the designated funds – the Training Fund and the Community Fund – as restricted funds, since the funds receive income which must be spent on the purposes of the funds.

The Training Fund – balance £13,387 (2013: £475) meets some of the costs of training ministers and lay people in the district.

The Community Fund – balance £(1,864) (2013: £2,477) is used to make representations to developers about providing opportunities for a Christian presence.

In addition, a Benevolence Fund which is restricted has been created to recognise that some donations are specifically for the Benevolence Fund. There is also a designated fund for benevolence.

The market valuations for the Rock Trust have been provided by TMCP. The funds of the Benevolence Fund, the Training Fund and the Community Fund are held on deposit at CFB.

23 Summary of movements on significant individual funds

Balance at Balance at Gains/ Fund 01-Sep-13 Income Expenditure Transfers Losses 31-Aug-14 £ £ £ £ £ £ General Fund 628,207 120,169 153,514 29,504 624,366 District Advance Fund (Designated) 162,545 151,836 127,290 -35,900 151,191 Manse 10,244 102 20 10,326 Benevolence (Designated) 13,758 11,089 14,348 6,150 16,649 Development 11,910 94 12,235 231 - Training 475 13,143 -13,618 - Community 2,477 18,300 22,641 1,864 - Total other designated 38,864 42,728 49,244 -5,373 26,975 Total unrestricted funds 829,616 314,733 330,048 -11,769 0 802,532 Rock Trust 120,187 3,249 3,249 5,862 126,049 Benevolence (Restricted) 246 246 Training - - 246 13,633 13,387 Community - - - -1,864 -1,864 Total restricted 120,187 3,495 3,495 11,769- 5,862 137,818

Total Funds 949,803 318,228 333,543 0 5,862 940,350

[Note 24 is provided as it improves transparency.] 25 Bedfordshire, Essex and Hertfordshire District of the Methodist Church No 34

24 Connected organisations and related parties

All of the District trustees are members of one or another Church and Circuit within the District and may be trustees in their Churches and/or Circuits.

Connected organisations include the Methodist Connexion, Circuits and Churches within the District, other Methodist Districts in Great Britain, the Methodist Ministers’ Children’s Relief Association, CFB and TMCP, except as reported in Note 5. All of these entities have their own trustees or directors and autonomous administration such that BEH has no significant influence over any of them, nor they over BEH. They are, therefore, not considered related parties.

Names of Connected Organisations Receipts Payments Adjustments £ £ £

Donee: Methodist Church Fund (524,112) Donee: Methodist Ministers’ Children’s Relief Association 482 (482) Donor: Circuits within BEH (assessments on Circuits} 596,914 (72,802) Donor/Donee: Circuits within BEH (levies/grants) 146.496 (54,881) (1800) Donor/Donee: Churches within BEH (grants) 246 (69,667) (246)

There were no related party transactions.

26 Volunteer contributions

Every entity (Connexion, District, Circuit, Church) within the Methodist Church in GB is heavily reliant on volunteers who contribute their skills, time and money in the furtherance of the work of the Church. Principally this contribution is by serving on committees of the District that deal with mission, manses, finance, policy, grants, training, development. We are grateful to all of them for their help and commitment.

27 Capital commitments and contingent liabilities

There were no capital commitments or contingent liabilities at the year end (2012-13: nil).

28 Operating Lease lessee-commitments

The District had commitments for the following:

 Office accommodation rental (six month periodic review tenancy) c.£4,500 In addition there are short term leasing obligations (within one year) as follows:  Reprographic equipment at the District office c.£500  Telephones at the District office and the District manse c.£300  Security alarm system at the manse c.£100  Membership of the local Residents’ Association c.£250

Year ended 31 August 2014 Notes to the Accounts Similar sums to the above applied at 31 August 2013.

[As a requirement not mentioned by the SORP, FRS102-20.16 says a lessee “shall [disclose] (a) the total of future minimum lease payments under non-cancellable operating leases [(i) for the next] year, [(ii) for years 2-5] and (iii) later than five years; and (b) lease payments recognised as an expense”.]

29 Independent examiner

An accrual has been made for the fee of the independent examiner in the sum of £600 for the year (2012-13: £1,000). The independent examiner provided no additional services during the year.

JGC 16th edition 20160327