Farlingaye High School (A company limited by guarantee)
ANNUAL REPORT AND FINANCIAL STATEMENTS
for the year ended 31 August 2015
Company Registration No. 07667407
Farlingaye High School REFERENCE AND ADMINISTRATIVE DETAILS
Members Mr T Fosker Ms S Hargadon Mr E Orme (resigned 31 August 2015) Dr L Franks
Trustees Mr T Fosker* (Chair) Ms S Hargadon* (Accounting Officer) Dr L Franks* Mr E Orme* (resigned 31 August 2015)
Governors Mr N Howe Mrs J Cowles Mr A Dalby* Mr N Edge* Mrs W Norris Mrs B Rogers (appointed 5 November 2014) Mr A Thomas* Mrs M Stevens* Mr D Williams Mrs J Newall Dr E Bond* Mrs B Jarvis*
* Members of the Finance Committee during the year
Company Secretary Mrs M Rozier
Senior Management Team: Headteacher Ms S Hargadon Deputy Headteacher Mr P Smith Deputy Headteacher Mr I Piddington Assistant Headteacher Mrs C Laird Assistant Headteacher Mr C Moran Lower School Co-ordinator Mr J Tunaley Upper School Co-ordinator Miss L Gilmour Director of Learning Support Mrs D Pritchard
Principal and Registered Office Farlingaye High School Ransom Road Woodbridge Suffolk IP12 4JX
Company Registration Number 07667407 (England and Wales)
Independent Auditor RSM UK Audit LLP (formerly Baker Tilly UK Audit LLP) Abbotsgate House Hollow Road Bury St Edmunds Suffolk IP32 7FA
Bankers Lloyds Banking Group Plc 8 Thoroughfare Woodbridge Suffolk IP12 1AF
Solicitors Eversheds Franciscan House 51 Princes Street Ipswich IP1 1UR
Page 1 Farlingaye High School CONTENTS
Page
Trustees’ Report (including the Strategic Report) 3 – 9
Governance Statement 10 - 12
Statement of Regularity, Propriety and Compliance 13
Statement of Trustees’ Responsibilities 14
Independent Auditors’ Report 15
Statement of Financial Activities incorporating Income and Expenditure Account 16
Balance Sheet 17
Cash Flow Statement 18
Accounting policies 19 – 21
Notes to the financial statements 22 – 37
Page 2 Farlingaye High School TRUSTEES’ REPORT
The trustees present their annual report together with the financial statements and auditor’s report of the Charitable Company for the year ended 31 August 2015.
The trust operates an academy for pupils aged 11 to 18 serving a catchment area in Woodbridge. It has a pupil capacity of 1,900 and had a roll of 1,875 in the school census dated 15 January 2015.
Structure, Governance and Management
Constitution Farlingaye High School is a company limited by guarantee and an exempt charity. The Charitable Company’s memorandum and articles of association dated 13 June 2011 are the primary governing documents of the Academy Trust.
Certain Governors (as set out on page 1) act as the trustees for the charitable activities of Farlingaye High School and are also the directors of the Charitable Company for the purposes of company law. The Charitable Company is known as Farlingaye High School.
Details of the trustees and governors who served throughout the year, except as noted, are included in the Reference and Administration Details on page 1.
Members’ liability Each member of the Charitable Company undertakes to contribute to the assets of the Charitable Company in the event of it being wound up while they are a member, or within one year after they cease to be a member, such amount as may be required, not exceeding £10 for the debts and liabilities contracted before they ceased to be a member.
Governors Indemnities In accordance with normal commercial practice the Academy has purchased insurance to protect Governors and officers from claims arising from negligent acts, errors or omissions whilst on Academy business. The insurance provides cover up to £1,000,000.
Method of recruitment and appointment or election of Trustees and Governors The Members of the Governing Body may appoint up to 10 Governors, and appoint Staff Governors and Teacher Governors through an advertisement to current staff, provided that the total number of Governors who are employees of the Academy does not exceed one third of the total number of Governors.
The Headteacher is treated for all purposes as an ex officio Governor. Parent Governors are elected by parents of registered pupils of the Academy, a Parent Governor must be a parent of a pupil at the time of election. Eligible parents are invited to apply for the position and a secret ballot is carried out for the election process.
The Governors can appoint up to 3 co-opted Governors, who can be co-opted having not already been appointed and who is not an employee of the Academy.
Policies and procedures adopted for the induction and training of Trustees and Governors The training and induction provided for new Governors will depend upon their existing experience but will always include a tour of the Academy and meeting students and staff. All Governors are provided with copies of policies, procedures, minutes, budget reports and school improvement plan and will have an informal meeting with the Headteacher. The Academy procures Governor Training Services from the Local Authority.
Page 3 Farlingaye High School TRUSTEES’ REPORT (continued)
Organisational structure The day to day management of the Academy is delegated to Sue Hargadon, the Headteacher who is also the Accounting Officer.
The organisational structure consists of: • The Trustees • The Governors • The Senior Management Team • Faculty Heads, Heads of Year • Assistant Head of Year
The Senior Management Team consists of the Headteacher, two Deputy Heads and five Assistant Heads. The Bursar meets separately with the Headteacher and two Deputy Heads to discuss financial matters, health and safety and site management.
All authorisation of spending within agreed budgets is delegated to the Faculty Heads and other delegated budget holders.
Any appointment of staff and pay decisions are made by the Staffing Committee, supported by the Finance Committee. The Faculty Heads co-ordinate the day to day activities within their subject area, organising the staff, facilities and students.
The Governing Body meets once a term. They have an overall framework for the governance of the Academy and determine membership, terms of reference and procedures of Committees. They receive reports, including policies from the Committees for ratification. They monitor the activities of the Committees through the minutes of their meetings. Working groups may be established to perform specific tasks.
The Finance Committee meets at least four times a year and is responsible for the monitoring of the budget, risk register and evaluating and reviewing policies in relation to financial management. They have regard to compliance, appointing the Responsible Officer and receiving their report, reviewing the annual budget and the role of the audit committee.
Connected organisations, including related party relationships The Academy has strong collaborative links with its feeder primary schools meeting regularly for professional development and support for ICT.
• The Academy is working as a partner with Kesgrave High School in the Farlingaye Kesgrave Teaching Alliance. • The Academy is a partner in the North Ipswich and Coastal Estuary Schools and Colleges (NICE) partnership. • There is a strong Parent Teacher Association, The Farlingaye High School Foundation. • The Academy Trust is connected to The Farlingaye Foundation through common control and a shared objective to provide advancement of education. The Foundation is an independent charity (registered number 1047217) with the object of raising funds for the Academy Trust.
Risk Management The Governors have assessed the major risks to which the academy is exposed, and with guidance from the Academies Financial Handbook, the Governing Body regularly reviews the risk register specifically for:
• Strategic and reputational risk • Operational risk • Compliance risk • Financial risk
Specific risks have been identified by the Governors relating to non-compliance with legislation, financial viability due to the decreasing income from the general annual grant year on year and competition from other providers for 6th form students.
Actions are in place to reduce the risk of non-compliance, with appropriate training, policies and procedures and regular reports to Governors.
Page 4 Farlingaye High School TRUSTEES’ REPORT (continued)
In respect of financial risk the budget considers the known reduction in funding, value for money is considered in all aspects, and budgets are regularly scrutinised by the Governing Body. The competition from other providers for 6th form is being addressed by offering a broad curriculum and new courses, and maintaining quality and reputation reflected in the May 2013 recent outstanding OFSTED inspection.
Other risks such as recruiting the right staff and succession planning are offset by internal opportunities and secondments for staff promotion and having a robust recruitment process in place. The other operational risk identified was with regard to ICT and information systems and data, this is reduced through a robust five year rolling replacement plan, daily backups, spreading of data across fourteen servers and a good filtering system in place to ensure only valid access is allowed.
Objectives and Activities
Objects and aims The principal object and activity of the Charitable Company is the operation of Farlingaye High School to provide education for pupils of different abilities between the ages of 11 to 18. The school is a leading edge school and is a teaching school in partnership with Kesgrave High School.
The school was deemed outstanding by OFSTED in May 2013 and continues to develop.
Objectives, strategies and activities The Academy is a self-improving school which aims to support and inspire students to achieve, through effective resources, community and partnership links, quality teaching and learning and excellent staffing.
Key priorities for the year were: • To continue to maintain high exam results including those for Pupil Premium and Special Educational Needs students. • To continue to run a range of extra- curricular activities and clubs including focus fortnight. • To complete the refurbishment programme of the Creative Art toilets. • To extend the existing car park. • To update and improve the WIFI network. • To continue one to one tuition in English and Maths. • To monitor performance of all students. • To run an internal ‘Be the best you can be’ programme with Year 8. • To review the work of the Personal Learning Centre and implement changes. • To provide value for money for the funds expended. • To implement all changes to staff appraisal, performance management and staff pay. • To recruit new quality staff to replace vacant positions as they arise. • To review the work undertaken by through the Disadvantaged Student Grant. • To review Behaviour Watch programme. • Continue to work with Kesgrave High School as a Teaching School. • To make robust plans for the drop in funding from the EFA and increased staffing costs. • To review the reprographics contract and obtain value for money.
Public benefit The Trustees have complied with their duty to have due regard to exercising their powers to ensure that the Trust is for the advancement of education, which includes citizenship and sporting activities for the inhabitants of Woodbridge and the surrounding area.
Page 5 Farlingaye High School TRUSTEES’ REPORT (continued)
Strategic Report
Achievements and Performance The school had another set of outstanding exam results. The A level pass rate was 99% with 60% of grades at A*/A/B level. The school had an excellent point score of 960, and an average exam point score per entry was very high at 224.
The GCSE results were the best the school has ever achieved. An excellent 73% achieved 5A*-C including English and Maths. One third of students achieved 5A*/A grades. The school achieved the best maths results in the county for the second year running and there was a 4% increase in English results. Many less able students have also secured the grades they needed for post-16 courses.
To ensure that standards are continually assessed, the Academy operates a programme of lesson observations, which are undertaken by Faculty Heads and the Senior Management Team.
There has continued to be a focus on the Disadvantaged Students element of school funding, the co-ordinator has an excellent monitoring system in place. A good team of Maths one to one and English one to one tutors continued to support those students and borderline students to achieve the best they can.
There have been many extracurricular activities. The main school production was ‘Little Shop of Horrors’ and the Lower School Production was ‘Our Day Out’. The music department had a busy programme linking with primary schools, the Christmas concert, a summer concert, Super Rock and music tuition for over 300 students. There was a very good gym and dance show and sports awards evening. Some students participated in the bar mock trial and a range of national maths competitions. We are very well supported by parents who enjoyed the School Experience morning, a taste of a day in school, and through the Farlingaye Foundation who organised a Glitz and Glamour evening, fashion show, quiz night and craft fayre. They have donated £8,000 to the school this year to help buy a second minibus.
The staff development programme this year has reflected the school’s identified priorities and individual development for teachers. All staff attended at least 3 different sessions across the year reflecting their own professional needs. The professional development day in November was spent with all teaching staff visiting another school in order to experience new ideas and to have the opportunity to share good practice. Our work as a teaching school, as well as the Leading Edge work we engage in has meant there was a strong focus on improving teaching and learning. The Leading Edge team hosted an NQT conference and a micro-conference aimed at raising achievement at KS4 for schools across the county. We continue to make effective teaching and learning developments through our teaching school alliance.
The refurbishment programme of toilets has continued this year, the student toilets in Creative Arts have been updated with the addition of a male staff toilet. The wireless network has been updated so that the programme of ‘Bring your own Device’ can be rolled out throughout the school starting with the 6th form. The print solution for the school has been updated to ‘follow me printing’ with a more cost effective operational lease in place. New software to monitor usage has also been purchased. More of the car park has been resurfaced and the caretaker’s bungalow extended to ensure we have onsite security.
The Academy has raised the following amounts of money from fundraising activities in the year.
Miles’ Wheelchair £18,233 Readathon £2,638 Super Rock £2,146 6th form Charity Committee £6,000 Enterprise Day £1,100 Farlingaye Foundation £8,000
Financial Review Most of the Academy’s income is obtained from the Department for Education (DfE) via the EFA (Education Funding Agency) in the form of recurrent grants, the use of which is restricted to particular purposes. The grants received from the DfE during the year ended 31 August 2015 and the associated expenditure are shown as restricted funds in the Statement of Financial Activities.
The restricted fixed asset fund balance is reduced by annual depreciation charges over the useful life of the assets concerned, as defined in the Academy’s accounting policies.
Page 6 Farlingaye High School TRUSTEES’ REPORT (continued)
The Responsible Officer Service was purchased from Schools’ Choice who have visited the academy in each term with a different focus requested by the Governors. The report has rated the Academy as outstanding for financial management.
Key financial policies reviewed during the year include the Finance Policy which lays out the framework for financial management, including the financial responsibilities of the Governors, Headteacher, Bursar and budget holders as well as the delegated authority for spending.
As at 31 August 2015 the balance on the GAG restricted fund, available for future use, was £199,344 (2014: £175,969).
Net current assets at the end of the year were £1,099,521 (2014: £1,016,556). Of this £232,094 (2014: £192,880) relates to amounts ring-fenced for specific activities and therefore ‘free’ funds amount to £867,427 (2014: £823,076) at the year end.
Financial and risk management objectives and policies The Academy has a Risk Register and a Risk Management Plan. The register and plan are formally reviewed annually.
The Academy is full and in some year groups over-subscribed, the risks to revenue funding from a falling roll are small. However, the reduction in post 16 funding levels, the freeze of the Government’s overall education budget, moving to a national funding formula, changes in funding arrangements for special educational needs and the changes in national insurance contributions and pension contributions mean that budgets will become unsustainable within the next three years.
The Governors review the budget formally once a term, and receive minutes from the Finance Committee meetings. The Governors review the cashflow forecast annually unless there is cause for concern.
At the year end, the Academy had no significant liabilities arising from creditors where there would be significant effect on liquidity.
The Governing Body recognises that the defined benefit scheme deficit (Local Government Pension Scheme) represents a significant potential liability. However, the Academy is able to meet its known annual contribution commitments for the foreseeable future so the risk is minimised.
Reserves policy The Governors review the reserve levels of the Academy annually. This review encompasses the nature of income and expenditure streams, the need to match income with commitments and the nature of reserves. The level of reserves will be kept under review by the Governors.
The Governors have determined that the appropriate level of free reserves should be equivalent to one month’s wages and salary costs, approximately £590,000. The reason for this is to provide sufficient working capital to enable the Academy to manage its cash flow efficiently thus to cover delays between spending and receipt of grants, to manage annual variations in student numbers and to provide a cushion to deal with unexpected emergencies.
Free reserves at 31 August 2015 were £867,427, ahead of this target.
In addition, the Academy will seek to build up free reserves in order to contribute to any pension deficit that may arise and to develop the Academy’s longer term goals and ambitions by building up seed funding for future staffing needs, educational initiatives and capital projects and for the benefit of students of Farlingaye Academy.
Investment policy Governors are committed to ensuring all funds under their control are managed in such a way as to maximise return whilst minimising risk. Any cash not required for operating expenses is placed on deposit at the most favourable rate available from Lloyds Bank Plc. Day to day management of the surplus funds is delegated to the Headteacher and Bursar within the guidelines of the investment policy.
Page 7 Farlingaye High School TRUSTEES’ REPORT (continued)
Key performance indicators • The main financial performance indicator is the level of reserves held at the balance sheet date. In particular, the management of spending against General Annual Grant (GAG) requires close monitoring as this represents 90% of the academy’s income. • Funding is based on pupil numbers which were 1,875 which is broadly maintained from 2014. It is anticipated that this level of intake will be maintained following the successful OFSTED inspection. • Another key financial performance indicator is staffing costs as a percentage of GAG. For 2015 this was 83.2% which was in line with the budgeted level. • The school was graded as Outstanding by Ofsted in May 2013 and has maintained this standard since, with continuing improving GCSE and A level results. • The school continues to be Leading Edge and Teaching School • A level results and GCSE results were very strong including value added results. This year was the school’s best ever GCSE results.
Plans for Future Periods
• The Academy will continue to strive to provide outstanding education and improve the levels of performance of its students at all levels. The Academy will continue to attract high quality teachers and support staff in order to deliver its objectives; • The Academy will continue to work with its partner schools to improve the educational opportunities for students in the wider community. It will organise a programme of training for newly qualified teachers in the area. It is focussing on developing maths teachers with a grant of £30,000; • Continue to upgrade ICT equipment using school raised finances; • Continue our own home tutoring; • Develop new A level and GCSE courses and monitor the outcomes; • Focus on approach for ‘ Assessment without levels’; • Appoint a new Headteacher and other staff as needed; • Continue to identify ways to reduce expenditure.
Principal Risks and uncertainties The principal risks and uncertainties facing the Academy are as follows:
Safeguarding and child protection - The Governors continue to ensure that the highest standards are maintained in the areas of selection and monitoring of staff, the operation of child protection policies and procedures, health and safety and discipline.
Financial - The Academy Trust has considerable reliance on the funding from the EFA, there is no assurance that Government policy will remain the same or that public funding will continue on the same terms. The move towards fairer funding in 2017 will provide the school with a more stable financial environment, The government have promised not to cut funding for education but the outside influences of National Insurance and pension increases together with a 1% rise in salaries have to be funded from existing formula funding. The changes in National Insurance and pension contributions will have a significant impact on the school’s budget from 2015, which could result in a reduction of teaching staff, increased teaching loads and larger group sizes, with less technician support. The school is still oversubscribed due to the exam results and the excellent reputation it has and a small expansion of admission numbers is underway.
Operational - A risk concerning Health and Safety issues which is minimised by training for staff, risk assessments, reports to the Governing body and making staff and students aware through briefings and assemblies.
School trips - A risk of an adverse incident causing a reputational risk is minimised by detailed preparation, the use of reputable companies, and all residential trips have Governor approval.
Information systems - Risks concerning the reliance of the Academy Trust on information systems and data, making sure it has system safeguards in place, is kept up to date and policies are amended to reflect the changes in technology trends
Page 8 Farlingaye High School TRUSTEES’ REPORT (continued)
External - The free schools and sixth form centre that have opened in the area have not significantly impacted on pupil numbers this year. The school is still oversubscribed due to the exam results and the excellent reputation it has. However these schools are beginning to develop and may be a cause for concern in the future.
Staffing - The success of the Academy Trust is reliant on the quality of its staff, there is a programme of professional development in place.
Fraud and mismanagement of funds - The Academy Trust has appointed a Responsible Officer to carry out checks on financial systems and records as required by the Academy Financial Handbook. All finance staff receive the appropriate training to meet the requirements of charity accounting.
Going Concern
After making appropriate enquiries, the Governing body has a reasonable expectation that the Academy Trust has adequate resources to continue in operational existence for the foreseeable future. For this reason, it continues to adopt the going concern basis in preparing the financial statements.
Fund Held as Custodian Trustee on behalf of others
The Academy Trust and its Governors do not act as the Custodian Trustees of any other Charity.
Employee consultation and disabled employees
The Academy encourages the involvement of its employees in its management through regular meetings of staff who have responsibility for the dissemination of information of particular concern to employees and for receiving their views on important matters of policy.
The Academy will employ disabled persons when they appear to be suitable for a particular vacancy and every effort is made to ensure that they are given full and fair consideration when such vacancies arise. During employment, the Academy seeks to work with employees, taking into account their personal circumstances, to ensure appropriate training, development and advancement opportunities are available to enable them to reach their full potential.
Auditors
RSM UK Audit LLP (formerly Baker Tilly UK Audit LLP) has indicated their willingness to be reappointed for another term and appropriate arrangements have been put in place for them to be deemed reappointed as auditors in the absence of an AGM.
Statement as to disclosure of information to auditors
The Trustees have confirmed that, as far as they are aware, there is no relevant audit information of which the auditors are unaware. Each of the Trustees have confirmed that they have taken all the steps that they ought to have taken as Trustees in order to make themselves aware of any relevant audit information and to establish that it has been communicated to the auditor.
The Trustees’ Report is approved by order of the Board of Trustees and the Strategic Report (included therein) is approved by the Board of Trustees in their capacity as the directors at a meeting on December 2015 and signed on its behalf by:
Mr T Fosker Chair
Page 9 Farlingaye High School GOVERNANCE STATEMENT
Scope of responsibility As Trustees, we acknowledge we have overall responsibility for ensuring that Farlingaye High School 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 misstatement or loss.
The Board of Trustees has delegated the day-to-day responsibility to the Headteacher 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 Farlingaye High School 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 Statement of Trustees’ Responsibilities. The whole Governing Body has formally met 5 times during the year. Attendance during the year at meetings of the Governing Body was as follows:
Governor Meetings attended Out of possible E Bond 3 5 J Cowles 4 5 A Dalby 4 5 N Edge 3 5 T Fosker (Chair) 5 5 L Franks 3 5 N Howe 3 5 B Jarvis 4 5 J Newall 3 5 W Norris 5 5 E Orme (resigned 31 August 2015) 4 5 B Rogers (appointed 5 November 2014) 4 4 M Stevens 3 5 A Thomas 2 5 D Williams 3 5 S Hargadon 5 5
The members of the Governing Body have changed this year with B Rogers joining and E Orme leaving.
The Finance Committee is a sub-committee of the main Governing Body. Its purpose is to assist the decision making of the Governing body, by enabling more detailed consideration to be given to the best means of fulfilling the Governing Body’s responsibility to ensure sound management of the Academy’s finance and resources, including proper planning, monitoring and probity. Attendance at meetings in the year is as follows:
Governor Meetings attended Out of possible E Bond 0 5 A Dalby 3 5 N Edge 4 5 T Fosker (Chair of Governors) 5 5 L Franks (Chair) 5 5 B Jarvis 5 5 E Orme (resigned 31 August 2015) 3 5 M Stevens 5 5 A Thomas 2 5 S Hargadon 5 5
Governance reviews A skills audit of the Governing Body was carried out in May and it showed that the Academy has a good spread of skills and knowledge on the board, covering finance, recruitment and HR, premises , health and safety, risk assessment and strategic planning. We are fortunate that the members are very experienced and supportive of the school. It has enabled us to pinpoint where additional skills are needed in the future.
Page 10 Farlingaye High School GOVERNANCE STATEMENT
Review of Value for Money As Accounting Officer the Headteacher 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 Boards 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:
Improving Educational Outcomes Targeted improvement The school works very hard to improve educational outcomes for all students. The curriculum is well supported by a robust staffing structure, and a recruitment policy to employ subject specialists. The school is fully staffed and has good contacts when additional expertise is needed.
Focus on individual students The school has a gifted and talented programme to extend the students who show talent in a particular area. Disadvantaged students all receive one to one Maths and English tuition as necessary, and have the opportunity to attend the Easter and Summer Schools that are run by our staff.
To support exam groups the staff run additional revision classes, revision breakfasts, holiday sessions, coursework evenings and residential courses for year 11.
There are over 40 clubs that are available at lunchtime, as well as numerous sporting and musical, dance and drama events after school. A late bus service is paid for by the school to enable all students to take part in extra-curricular activities.
Collaboration The school is a Teaching School and collaborate closely with Kesgrave High School. It is also part of the NICE partnership of schools, a Leading Edge school and the Headteacher is a National Leader of Education. All of these partnerships lead to a sharing of good practice and excellent continuous professional development opportunities for staff.
Financial Oversight Governance The Accounting Officer meets with the Bursar weekly and the Governors’ Finance Committee meet at least five times a year to consider reports and budget commentary. Any training for governors is available through the local authority. All purchases over £10,000 are discussed at the committee meeting and all contracts that are renewed are highlighted for ratification.
The school is fortunate that the Governors are from a wide background offering different skills to the board. It has not been too difficult to recruit new members with the right skills to the Board as required.
A benchmarking exercise was carried out this year comparing the school with other schools in the area.
The school has a community of over 2,000 people so its purchasing power is considerable, so it does not need to enter into collaborative agreements, except for utilities which are purchased through the Local Authority to obtain best value; this will be reviewed at the earliest opportunity.
The school has entered into a new printing contract to maintain cost efficiencies and a new wireless network to enable the roll out of ‘bring your own device’ for the school community.
Maximising Income Generation The academy explores every opportunity to generate income through the hire of facilities and targeted bids for premises improvements
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 on-going process designed to identify and prioritise the risks to the
Page 11 Farlingaye High School GOVERNANCE STATEMENT
achievement of Academy Trust policies, aims and objectives, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically.
The system of internal control has been in place in Farlingaye High School for the year ended 31 August 2015 and up to the date of approval of the annual report and financial statements.
Capacity to handle risk The Governing Body has reviewed the key risks to which the Academy Trust is exposed together with the operating, financial and compliance controls that have been implemented to mitigate those risks. The Governing Body is of the view that there is a formal on-going process for identifying, evaluating and managing the Academy Trust's significant risks that has been in place for the year ending 31 August 2015 and up to the date of approval of the annual report and financial statements. This process is regularly reviewed by the Governing Body.
The risk and control framework The Academy 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 Governing Body; • regular reviews by the Finance 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 Governing Body has considered the need for a specific internal audit function and has decided to procure a Responsible Officer service from Schools’ Choice (previously the Local Authority) which will be carried out on a termly basis. The Responsible Officer’s role includes giving advice on financial matters, best practice and performing a range of checks on the Academy Trust’s financial systems. On a termly basis, the Responsible Officer produces reports for the board of governors on the operation of the systems of control and on the discharge of the board of governors’ financial responsibilities.
The Responsible Officer has delivered the schedule of work as planned and any items raised have been reviewed and reported on at the next meeting of the Finance Committee. There have been no material control issues raised during these audits.
Review of effectiveness As Accounting Officer, the Headteacher 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 responsible officer; • the work of the external auditor; • the financial management and governance self-assessment process; • the work of the Bursar who has 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 Finance Committee and a plan to address weaknesses and ensure continuous improvement of the system is in place.
Approved by order of the members of the Governing Body on December 2015 and signed on its behalf by:
Mr T Fosker Ms S Hargadon Chair Accounting Officer
Page 12 Farlingaye High School STATEMENT ON REGULARITY, PROPRIETY AND COMPLIANCE
As Accounting Officer of Farlingaye High School I have considered my responsibility to notify the Academy Trust Governing Body and the Education Funding Agency of material irregularity and non-compliance with EFA terms and conditions of funding, under the funding agreement in place between the academy trust and the Secretary of State. As part of my consideration I have had due regard to the requirements of the Academies Financial Handbook.
I confirm that I and the Academy Trust Governing Body are able to identify any material irregular or improper use of funds by the Academy Trust, or material non-compliance with the terms and conditions of funding under the Academy Trust’s funding agreement and the Academies Financial Handbook.
I confirm that no instances of material irregularity, impropriety or funding non-compliance have been discovered to date. If any instances are identified after the date of this statement, these will be notified to the board of trustees and EFA.
Ms S Hargadon Accounting Officer
December 2015
Page 13 Farlingaye High School STATEMENT OF TRUSTEES’ RESPONSIBILITIES
The Trustees who are also the directors of the Charitable Company for the purposes of company law are responsible for preparing the Trustees’ Report (including the Strategic Report) and the financial statements in accordance with the Academies Accounts Direction 2014 to 2015 issued by the Education Funding Agency, United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) and applicable law and regulations.
Company law requires the trustees to prepare financial statements for each financial year. Under company law the trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Charitable Company and of its incoming resources and application of resources, including its income and, expenditure, for that period. In preparing these financial statements, the trustees are required to:
• select suitable accounting policies and then apply them consistently; • observe the methods and principles in the Charities SORP; • make judgments and estimates that are reasonable and prudent; • state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Charitable Company will continue in business.
The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the Charitable Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Charitable Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Charitable Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Trustees are responsible for ensuring that in its conduct and operation the Charitable Company applies financial and other controls, which conform with the requirements both of propriety and of good financial management. They are also responsible for ensuring grants received from the EFA/DfE have been applied for the purposes intended.
The Trustees are responsible for the maintenance and integrity of the corporate and financial information included on the Charitable Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Approved by order of the members of the Board of Trustees on……………..December 2015 and signed on its behalf by:
Mr T Fosker Chair
Page 14 Farlingaye High School INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF FARLINGAYE HIGH SCHOOL
We have audited the financial statements of Farlingaye High School for the year ended 31 August 2015 on pages 16 to 37. 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 2015 issued by the Education Funding Agency.
This report is made solely to the charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of trustees and auditor As explained more fully in the Statement of Trustees’ Responsibilities set out on page 14, the trustees (who act as directors of the charitable company 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 (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements A description of the scope of an audit of financial statements is provided on the Financial Reporting Council’s website at http://www.frc.org.uk/auditscopeukprivate
Opinion on financial statements In our opinion the financial statements: - give a true and fair view of the state of the charitable company’s affairs as at 31 August 2015 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; - have been prepared in accordance with the Companies Act 2006; and - have been prepared in accordance with the Academies Accounts Direction 2014 to 2015 issued by the Education Funding Agency.
Opinion on other requirement of the Companies Act 2006 In our opinion the information given in the Trustees’ Report and the incorporated Strategic Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: - the charity has not kept adequate accounting records, or returns adequate for our audit have not been received from branches not visited by us; or - the financial statements are not in agreement with the accounting records and returns; or - certain disclosures of trustees’ remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
HANNAH CATCHPOOL (Senior Statutory Auditor) For and on behalf of RSM UK Audit LLP (formerly Baker Tilly UK Audit LLP), Statutory Auditor Chartered Accountants Abbotsgate House Hollow Road Bury St Edmunds Suffolk IP32 7FA
December 2015
Page 15 Farlingaye High School STATEMENT OF FINANCIAL ACTIVITIES (INCLUDING INCOME AND EXPENDITURE ACCOUNT AND STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES) for the year ended 31 August 2015
Restricted Restricted Unrestricted general fixed asset Total Total Notes funds funds funds 2015 2014 £ £ £ £ £ INCOMING RESOURCES Incoming resources from generated funds: Voluntary income 1 26,109 76,135 - 102,244 123,393 Investment income 9,173 - - 9,173 14,652 Activities for generating funds 3 14,569 - - 14,569 8,351 Income from charitable activities: Academy Trust’s educational operations 2 408,315 8,955,749 - 9,364,064 9,379,469
Total incoming resources 458,166 9,031,884 - 9,490,050 9,525,865
RESOURCES EXPENDED Charitable activities: Academy Trust’s educational operations 5 414,415 8,878,643 388,325 9,681,383 10,614,068 Governance costs 6 - 16,422 - 16,422 16,094
Total resources expended 4 414,415 8,895,065 388,325 9,697,805 10,630,162
NET INCOMING/(OUTGOING) RESOURCES BEFORE TRANSFERS 43,751 136,819 (388,325) (207,755) (1,104,297)
Gross transfers between funds 15 - (147,605) 147,605 - -
NET INCOME/(EXPENDITURE) FOR THE YEAR 43,751 (10,786) (240,720) (207,755) (1,104,297)
OTHER RECOGNISED GAINS AND LOSSES Actuarial gains/(losses) on defined benefit scheme 21 - 23,000 - 23,000 (596,000)
NET MOVEMENT IN FUNDS 43,751 (12,214) (240,720) (184,755) (1,700,297)
RECONCILIATION OF FUNDS Total funds brought forward 823,676 (1,080,916) 10,479,868 10,222,628 11,922,925
TOTAL FUNDS CARRIED FORWARD 15 867,427 (1,068,702) 10,239,148 10,037,873 10,222,628
All of the Academy Trust’s activities derive from continuing operations during the above two financial years.
Page 16 Farlingaye High School BALANCE SHEET 31 August 2015 Company Registration No. 07667407
Notes 2015 2014 as restated £££ £ FIXED ASSETS Tangible assets 10 10,318,915 10,586,839
CURRENT ASSETS Debtors 11 125,629 243,331 Investments 1,050,976 750,000 Cash at bank and in hand 365,717 646,265
1,542,322 1,639,596
CREDITORS: Amounts falling due within one year 12 (442,801) (623,040)
NET CURRENT ASSETS 1,099,521 1,016,556
TOTAL ASSETS LESS CURRENT LIABILITIES 11,418,436 11,603,395
CREDITORS: Amounts falling due after more than one year 14 (52,563) (79,767)
NET ASSETS EXCLUDING PENSION LIABILITY 11,365,873 11,523,628
Pension scheme liability 21 (1,328,000) (1,301,000)
NET ASSETS INCLUDING PENSION LIABILITY 10,037,873 10,222,628
FUNDS OF THE ACADEMY TRUST: RESTRICTED FUNDS Fixed asset fund 15 10,239,148 10,479,868 General fund 15 259,298 220,084
Restricted funds excluding pension reserve 10,498,446 10,699,952
Pension reserve 15 (1,328,000) (1,301,000)
TOTAL RESTRICTED FUNDS 9,170,446 9,398,952
TOTAL UNRESTRICTED FUNDS 15 867,427 823,676
TOTAL FUNDS 10,037,873 10,222,628
The financial statements on pages 16 to 37 were approved by the governors and authorised for issue on …. December 2015, and are signed on their behalf by:
Mr T Fosker Chair
Page 17 Farlingaye High School CASH FLOW STATEMENT for the year ended 31 August 2015
Notes 2015 2014 as restated £ £
NET CASH FLOW FROM OPERATING ACTIVITIES 18 158,860 (310,444)
Returns on investments and servicing of finance: Investment income 9,173 14,652
Capital expenditure: Payments to acquire tangible fixed assets (120,401) (59,205)
Financing: Salix loan repayments (27,204) (27,204)
Management of liquid resources: (Deposit)/withdrawal of funds on investment 24 (300,976) 800,000
(DECREASE)/INCREASE IN CASH IN THE YEAR 19 (280,548) 417,799
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
(Decrease)/increase in cash in the year 19 (280,548) 417,799 Cash outflow from change in funds 19 27,204 27,204
Movement in net funds (253,344) 445,003 Net funds at 1 September 539,294 94,291
Net funds at 31 August 285,950 539,294
Page 18 Farlingaye High School ACCOUNTING POLICIES for the year ended 31 August 2015
Basis of Preparation The financial statements have been prepared under the historical cost convention in accordance with applicable United Kingdom Accounting Standards, the Statement of Recommended Practice (‘SORP 2005’) ‘Accounting and Reporting by Charities’, the Academies: Accounts Direction 2014 to 2015 issued by the Education Funding Agency and Companies Act 2006. A summary of the principal accounting policies, which have been applied consistently, except where noted, is set out below.
Going Concern After making appropriate enquiries, the Trustees have a reasonable expectation that the Academy Trust has adequate resources to continue in operational existence for the foreseeable future. For this reason, it continues to adopt the going concern basis in preparing the financial statements.
Incoming resources All incoming resources are recognised when the Academy Trust has entitlement to the funds, certainty of receipt and the amount can be measured with sufficient reliability.
Grants receivable Grant income is 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 funds on the balance sheet.
The general annual grant (‘the GAG’) from the DfE, which is intended to meet recurrent costs, is recognised on a receivable basis and is credited directly to the Statement of Financial Activities to the extent of the entitlement of the funds.
Capital grants are recognised as voluntary income on a receivable basis to the extent there is entitlement.
Other grants from government agencies and other bodies are recognised in the period in which they are receivable to the extent the conditions of funding have been met. Where income is received in advance of entitlement of receipt its recognition is deferred and included in creditors as deferred income. Where entitlement occurs before income is received the income is accrued.
Donations Donations are included on a receivable basis where there is certainty of receipt and the amount can be reliably measured.
Other income Other income including hire of facilities and income from trips and activities, is recognised in the period it is receivable and to the extent the goods have been provided or the completion of the service.
Interest receivable Interest receivable is included in the Statement of Financial Activities on a receivable basis, and is stated inclusive of related tax credits.
Resources expended All 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 to each activity cost category on a basis consistent with the use of resources, with central staff costs allocated on the basis of time spent, and depreciation charges on the portion of the asset’s use.
Charitable activities are costs incurred on the Academy Trust’s educational operations.
Page 19
Farlingaye High School ACCOUNTING POLICIES for the year ended 31 August 2015 (continued)
Governance costs include the costs attributable to the Academy Trust’s compliance with constitutional and statutory requirements, including audit, strategic management and Governors’ meetings and reimbursed expenses.
All resources expended are inclusive of irrecoverable VAT.
Fund accounting Unrestricted income funds represent those resources which may be used towards meeting any of the charitable objects of the Academy Trust at the discretion of the Governors.
Restricted General funds are resources subject to specific restrictions imposed by funders or donors, and include grants from the Education Funding Agency and Department for Education.
Restricted Fixed Assets Funds are resources which are to be applied to specific capital purposes imposed by the Education Funding Agency, Department for Education and other funders, where the asset acquired or created is held for a specific purpose.
Tangible fixed assets Tangible fixed assets costing £1,000 or more are capitalised at cost and are carried at cost net of depreciation and any provision for impairment.
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. Where the related grants require the asset to be held for a specific purpose they are credited to a restricted fixed asset fund in the Statement of Financial Activities and carried forward in the Balance Sheet, with this amount being reduced over the useful economic life of the related asset on a basis consistent with the depreciation policy.
Depreciation is provided on all tangible fixed assets other than land, at rates calculated to write off the cost of each asset over its expected useful lives, as follows:
Leasehold Land over the life of the lease Leasehold Buildings 15-50 years straight line Furniture and equipment 10 years straight line Computer equipment and software 3 years straight line Plant and machinery 5-17 years straight line
A review for impairment of a fixed asset is carried out if events or changes in circumstances indicate that the carrying value of any fixed asset may not be recoverable. Shortfalls between the carrying value of fixed assets and their recoverable amounts are recognised as impairments. Impairment losses are recognised in the Statement of Financial Activities.
Investments Current asset investments includes funds held within deposit accounts which does not meet the definition of cash under FRS1.
Taxation The Academy Trust is considered to pass the tests set out in Paragraph 1 Schedule 6 Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the Academy Trust is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 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.
Leased assets Rentals under operating leases are charged on a straight-line basis over the lease term.
Page 20 Farlingaye High School ACCOUNTING POLICIES for the year ended 31 August 2015 (continued)
Pension benefits Retirement benefits to employees of the Academy Trust are provided by the Teachers’ Pension Scheme (‘TPS’) and the Local Government Pension Scheme (‘LGPS’). These are defined benefit schemes, are contracted out of the State Earnings Related Pension Scheme (SERPS) (until April 2016), and the assets are held separately from those of the Academy Trust.
The TPS is an unfunded scheme and contributions are calculated so as to spread the cost of pensions over employees’ working lives with the Academy Trust in such a way that the pension cost is a substantially level percentage of current and future pensionable payroll. The contributions are determined by the Government Actuary on the basis of quinquennial valuations using a prospective benefit method. As stated in Note 21, the TPS is a multi employer scheme and the Academy Trust is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis. The TPS is therefore treated as a defined contribution scheme and the contributions recognised as they are paid each year.
The LGPS is a funded scheme and the assets are held separately from those of the Academy Trust in separate trustee administered funds. Pension scheme assets are measured at fair value and liabilities are measured on an actuarial basis using the projected unit method and discounted at a rate equivalent to the current rate of return on a high quality corporate bond of equivalent term and currency to the liabilities. The actuarial valuations are obtained at least triennially and are updated at each balance sheet date. The amounts charged to operating surplus are the current service costs and gains and losses on settlements and curtailments. They are included as part of staff costs. Past service costs are recognised immediately in the Statement of Financial Activities if the benefits have vested. If the benefits have not vested immediately, the costs are recognised over the period until vesting occurs. The expected return on assets and the interest cost are shown as a net finance amount of other finance costs or credits adjacent to interest. Actuarial gains and losses are recognised immediately in other gains and losses.
Agency arrangements The Academy Trust acts as an agent in the administering of 16-19 Bursary Funds from EFA. Related payments received from the EFA and subsequent disbursements to students are excluded from the statement of financial activities to the extent that the Academy Trust does not have a beneficial interest in the individual transactions. The allowance of 5% as a contribution to administration costs is however recognised in a statement of financial activities. Where funds have not been fully applied in the year then an amount will be included in amounts due to the EFA.
Page 21 Farlingaye High School NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 August 2015
1 VOLUNTARY INCOME
Restricted Unrestricted Restricted fixed asset 2015 2014 funds funds funds Total Total £ £ £ £ £
Donations 26,109 39,835 - 65,944 90,641 Devolved formula capital grant - 36,300 - 36,300 32,752
26,109 76,135 - 102,244 123,393
Page 22
Farlingaye High School NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 August 2015 (continued)
2 FUNDING FOR ACADEMY TRUST’S EDUCATIONAL OPERATIONS Restricted Unrestricted Restricted fixed asset 2015 2014 funds funds funds Total Total £ £ £ £ £ DfE/EFA REVENUE GRANTS: General annual grant (GAG) - 8,456,987 - 8,456,987 8,568,835 Pupil premium - 263,898 - 263,898 182,291 National Leaders of Education - 11,500 - 11,500 5,370 Rates relief - 59,224 - 59,224 36,292 Insurance funding - 14,478 - 14,478 - Summer School - 4,875 - 4,875 7,000 School to school support fund - 5,000 - 5,000 - Bursary administration fee 1,551 - - 1,551 -
1,551 8,815,962 - 8,817,513 8,799,788
OTHER GOVERNMENT GRANTS:
Looked after children - 37,800 - 37,800 17,713 Special Educational Needs - 66,251 - 66,251 62,917 Other income - 35,736 - 35,736 28,841
- 139,787 - 139,787 109,471
TOTAL FUNDING FOR THE 1,551 8,955,749 - 8,957,300 8,909,259 ACADEMY’S EDUCATIONAL OPERATIONS
OTHER INCOME Insurance claims 39,989 - - 39,989 44,880 Items sold 32,845 - - 32,845 27,652 Exam re-sit fees 23,426 - - 23,426 19,872 Music tuition and exams 65,851 - - 65,851 60,164 Teaching staff 11,000 - - 11,000 11,406 School productions and shows 16,053 - - 16,053 17,312 Other income 34,425 - - 34,425 21,673 Trips and visits 183,175 - - 183,175 267,251
406,764 - - 406,764 470,210
408,315 8,955,749 - 9,364,064 9,379,469
Page 23 Farlingaye High School NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 August 2015 (continued)
3 ACTIVITIES FOR GENERATING FUNDS Restricted Unrestricted Restricted fixed asset 2015 2014 funds funds funds Total Total £ £ £ £ £
Hire of facilities 14,569 - - 14,569 8,351
4 RESOURCES EXPENDED
Non-pay expenditure Total Total Staff costs Premises Other costs 2015 2014 £ £ £ £ £ Academy’s educational operations: Direct costs 6,422,531 388,325 454,353 7,265,209 7,205,460 Allocated support costs 1,119,307 379,342 917,525 2,416,174 3,408,608
7,541,838 767,667 1,371,878 9,681,383 10,614,068
Governance costs including allocated support costs - - 16,422 16,422 16,094
7,541,838 767,667 1,388,300 9,697,805 10,630,162
Net incoming/(outgoing) resources for the year are stated after 2015 2014 charging: £ £
Operating leases - plant and machinery 36,023 37,726 Fees payable to RSM UK Audit LLP (formerly Baker Tilly UK Audit LLP) and its associates for: - audit 9,150 11,325 - other services 7,272 4,769 Depreciation – owned assets 388,325 374,385
Page 24 Farlingaye High School NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 August 2015 (continued)
5 CHARITABLE ACTIVITIES – ACADEMY’S EDUCATIONAL OPERATIONS
2015 2014 £ £
DIRECT COSTS Teaching and educational support staff costs 6,397,267 6,234,172 Depreciation 388,325 374,385 Pupil transport 36,945 42,872 Educational supplies 122,958 201,523 Examination fees 219,355 196,207 Staff development 17,302 24,572 Educational consulting 52,819 82,710 Staff expenses 4,974 31,075 Agency teaching 25,264 17,944
7,265,209 7,205,460
ALLOCATED SUPPORT COSTS Support staff costs 1,119,307 1,114,723 Staff expenses - 4,588 Pupil recruitment and support 113,555 108,561 Staff recruitment and support 32,325 12,995 Maintenance of premises and equipment 267,274 1,065,335 Bank interest and charges 542 521 Rent, rates and water 45,698 52,809 Cleaning 28,530 21,662 Heating and light 74,082 94,857 Security and transport 5,334 3,558 Insurance 114,502 111,963 Catering 48,768 47,563 Technology 101,522 187,112 Supplies, printing and telephone 199,715 186,403 Finance costs 1,000 5,000 Items for resale 29,260 24,046 Professional fees 54,549 56,216 Donations 26,958 22,399 Trips and visits 153,253 288,297
2,416,174 3,408,608
9,681,383 10,614,068
Page 25 Farlingaye High School NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 August 2015 (continued)
6 GOVERNANCE COSTS 2015 2014 £ £
Auditors remuneration 9,150 11,325 Other costs 7,272 4,769
16,422 16,094
7 STAFF NUMBERS AND COSTS
Staff costs 2015 2014 £ £ Staff costs during the year were:
Wages and salaries 6,086,111 6,192,539 Social security costs 427,005 423,594 Pension costs 1,003,458 732,762
Total staff costs 7,516,574 7,348,895
Agency staff 25,264 17,944
Total 7,541,838 7,366,839
Staff numbers
The average number of persons (including senior management team) employed by the Academy Trust during the year was as follows: 2015 2014 No No
Teachers 121 129 Administration and support 209 247 Management 8 8
338 384
The average number of persons (including senior management team) employed by the Academy Trust during the year expressed as full-time equivalents was as follows: 2015 2014 No No
Teachers 112 115 Administration and support 100 102 Management 8 8
220 225
The staff numbers disclosed above includes seven members of staff on maternity leave (2014: seven).
Page 26 Farlingaye High School NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 August 2015 (continued)
7 STAFF NUMBERS AND COSTS (continued)
The number of employees whose emoluments fell within the following bands was:
2015 2014 £ £
£60,001 - £70,000 2 1 £70,001 - £80,000 - 1 £100,001 - £110,000 1 1
3 3
All of the employees above participate in the Teachers’ Pension Scheme which is a defined benefit scheme. During the year ended 31 August 2015 pension contributions for these employees amounted to £33,370 (2014 - £34,000).
8 TRUSTEES’ REMUNERATION AND EXPENSES
Principal and staff trustees only receive remuneration in respect of services they provide undertaking the roles of Principal and staff members under their contracts of employment and not in respect of their services as trustees. Other trustees did not receive any payments from the Academy Trust in respect of their role as trustees.
Other Trustees have not received any remuneration or reimbursement of expenses during the year.
Salary and expenses Pension Total 2014 £ £ £ £
Headteacher 102,040 14,388 116,428 115,274
Principal and staff trustees only receive remuneration in respect of services they provide undertaking the roles of Headteacher and staff members under their contracts of employment and not in respect of their services as trustees. Other trustees did not receive any payments or reimbursement of expenses from the Academy Trust in respect of their role as trustees.
9 GOVERNORS’ AND OFFICERS’ INSURANCE
In accordance with normal commercial practice the Academy Trust has purchased insurance to protect governors and officers from claims arising from negligent acts, errors or omissions occurring whilst on Academy Trust business. The insurance provides cover up to £1,000,000 on any one claim and the cost of this insurance is included in the total insurance cost.
Page 27 Farlingaye High School NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 August 2015 (continued)
10 TANGIBLE FIXED ASSETS Computer Furniture equipment Leasehold land Plant and and and and buildings machinery equipment software Total £ £ £ £ £ Cost: 1 September 2014 10,999,593 298,514 281,445 115,355 11,694,907 Additions - 20,141 10,564 89,696 120,401
31 August 2015 10,999,593 318,655 292,009 205,051 11,815,308
Depreciation: 1 September 2014 908,504 77,934 58,943 62,687 1,108,068 Charged in the year 291,376 31,529 28,930 36,490 388,325
31 August 2015 1,199,880 109,463 87,873 99,177 1,496,393
Net book value: 31 August 2015 9,799,713 209,192 204,136 105,874 10,318,915
31 August 2014 10,091,089 220,580 222,502 52,668 10,586,839
11 DEBTORS 2015 2014 £ £
Trade debtors 11,224 952 Prepayments and accrued income 93,875 157,938 Other debtors 20,530 84,441
125,629 243,331
12 CREDITORS: Amounts falling due within one year 2015 2014 £ £
Trade creditors 54,847 282,166 Salix loan 27,204 27,297 Other creditors 128,041 - Accruals and deferred income 232,709 313,577
442,801 623,040
Page 28 Farlingaye High School NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 August 2015 (continued)
13 DEFERRED INCOME £
Deferred income at 1 September 2014 146,178 Resources deferred in the year 128,236 Amounts released from previous years (146,178)
Deferred income at 31 August 2015 128,236
Deferred income at 31 August 2015 is in respect of amounts received for which the academy is not yet fully entitled to, including trip income, received during the year which relates to future years.
14 CREDITORS: Amounts falling due after more than one year 2015 2014 £ £
Salix loan 52,563 79,767
Included within the above are amounts falling due as follows: £ £ In 1 - 2 years 27,204 27,204 In 2 - 5 years 25,359 52,563
52,563 79,767
The Salix loan is secured on the assets to which it relates, is repayable in monthly instalments, and attracts no interest charge.
Page 29 Farlingaye High School NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 August 2015 (continued)
15 FUNDS
At 1 At 31 RESTRICTED GENERAL September Incoming Resources Gains and August FUNDS 2014 resources expended losses Transfers 2015 £ £ £ £ £ £
General Annual Grant (GAG) 175,969 8,456,987 (8,286,007) - (147,605) 199,344 Pension reserve (1,301,000) - (50,000) 23,000 - (1,328,000)
(1,125,031) 8,456,987 (8,336,007) 23,000 (147,605) (1,128,656)
Pupil Premium 5,546 263,898 (269,444) - - - Summer School 5,524 4,875 (7,958) - - 2,441 Rates Relief - 59,224 (37,224) - - 22,000 Insurance funding - 14,478 (14,478) - - - DFC Capital Grant - 36,300 (36,300) - - - Special Educational Needs 3,000 66,251 (69,251) - - - Looked after children 24,346 37,800 (39,114) - - 23,032 Other 5,699 92,071 (85,289) - - 12,481
(1,080,916) 9,031,884 (8,895,065) 23,000 (147,605) (1,068,702)
RESTRICTED FIXED ASSET FUNDS Transfer from local authority on conversion 10,202,169 - (300,573) - -9,901,596 Salix loan transferred on conversion (106,971) - - - 27,204 (79,767) Capital expenditure post conversion 384,670 - (87,752) - 120,401 417,319
10,479,868 - (388,325) - 147,605 10,239,148
TOTAL RESTRICTED FUNDS 9,398,952 9,031,884 (9,283,390) 23,000 - 9,170,446
UNRESTRICTED FUNDS Unrestricted funds 823,676 458,166 (414,415) - - 867,427
TOTAL FUNDS 10,222,628 9,490,050 (9,697,805) 23,000 - 10,037,873
Page 30 Farlingaye High School NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 August 2015 (continued)
15 FUNDS (continued)
The specific purposes for which the funds are to be applied are as follows:
The General Annual Grant (GAG) must be used for the normal running costs of the Academy. Under the funding agreement with the Secretary of State, the academy trust was not subject to a limit on the GAG that it could carry forward at 31 August 2015.
The Pension reserve represents the Academy’s net liability in respect of the Local Government Pension Scheme.
The Pupil Premium income represents an additional grant to support those students on free school meals and who are from service families. Costs incurred for this purpose, such as additional teaching and support staff expenses, have been set off against this income.
The DFC capital grant represents funds received for general maintenance costs of the Academy. Costs of relevant projects have been set against this fund.
Looked after children income has been received from the County Council responsible for the student, if they have been continuously cared for by that County Council. Any costs that have been specifically incurred by that ‘looked after child’ have been set off against the income.
Summer School was received to provide a Summer School for primary school students, due to start at the school in the next year, who receive, or have previously received free school meals.
Special Educational Needs funding is High Needs Tariff funding received to support students with significant special educational needs beyond mainstream school funding.
Rates relief represents funding received via the EFA to cover a proportion of the Academy Trust’s expenditure on rates.
Insurance represents funding received via the EFA to cover a proportion of the Academy Trust’s expenditure on insurance.
Assets transferred from the local authority on conversion of £9,901,596 represent the net book value of leasehold land and buildings and other assets transferred from the predecessor school upon becoming an academy. Expenditure during the year of £300,573 is in respect of depreciation on these transferred assets.
Salix loan transferred on conversion of £79,767 represents the amount owed in respect of a loan taken out to fund the purchase of assets pre-conversion, which was transferred from the predecessor school upon becoming an Academy. The transfer during the year of £27,204 represents repayments made on this loan in the year.
Capital expenditure post conversion represents fixed assets purchased from that grant funding.
Page 31 Farlingaye High School NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 August 2015 (continued)
16 ANALYSIS OF NET ASSETS BETWEEN FUNDS Restricted Restricted Unrestricted General fixed asset funds funds funds Total funds £ £ £ £
Tangible fixed assets - - 10,318,915 10,318,915 Net current assets 867,427 259,298 (27,204) 1,099,521 Long term liabilities - - (52,563) (52,563) Pension scheme liability - (1,328,000) - (1,328,000)
867,427 (1,068,702) 10,239,148 10,037,873 TOTAL NET ASSETS
17 FINANCIAL COMMITMENTS
OPERATING LEASES
At 31 August the Academy Trust had annual commitments under non-cancellable operating leases as follows: 2015 2014 £ £ Other: Expiring within one year 6,130 4,400 Expiring within two and five years inclusive - 31,382 Expiring in over five years 17,291 -
23,421 35,782
18 RECONCILIATION OF NET INCOME TO NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 2015 2014 £ £
Net expenditure (207,755) (1,104,297) Depreciation (note 10) 388,325 374,385 Interest receivable (9,173) (14,652) FRS 17 pension cost less contributions payable (note 21) 49,000 (21,000) FRS 17 pension finance costs (note 21) 1,000 5,000 Decrease in debtors 117,702 270,525 (Decrease)/increase in creditors (180,239) 179,595
NET CASH INFLOW/(OUTFLOW) FROM OPERATING 158,860 (310,444) ACTIVITIES
Page 32 Farlingaye High School NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 August 2015 (continued)
19 ANALYSIS OF CHANGES IN CASH AND NET FUNDS At At 1 September Other 31 August 2014 Cash flows changes 2015 as restated £ £ £ £
Cash in hand and at bank 646,265 (280,548) - 365,717
Debt due within one year (27,204) 27,204 (27,204) (27,204) Debt due after one year (79,767) - 27,204 (52,563)
539,294 (253,344) - 285,950
20 MEMBERS’ LIABILITY
Each member of the charitable company undertakes to contribute to the assets of the company in the event of it being wound up while he/she is a member, or within one year after he/she ceases to be a member, such amount as may be required, not exceeding £10 for the debts and liabilities contracted before he/she ceases to be a member.
21 PENSION AND SIMILAR OBLIGATIONS
The Academy’s employees belong to two principal pension schemes: the Teachers’ Pension Scheme England and Wales (TPS) for academic and related staff; and the Local Government Pension Scheme (LGPS) for non-teaching staff, which is managed by Suffolk County Council. Both are defined-benefit schemes.
The pension costs are assessed in accordance with the advice of independent qualified actuaries. The latest actuarial valuation of the TPS was 31 March 2012 and of the LGPS 31 March 2013.
There were no outstanding or prepaid contributions at either the beginning or the end of the financial year.
Teachers’ Pension Scheme
The Teachers' Pensions Scheme (“TPS”) is a statutory, contributory, defined benefit scheme, governed by the Teachers' Pensions Regulations 2010, and from 1 April 2014 by the Teachers’ Pensions Scheme Regulations 2014. The TPS is an unfunded scheme and members contribute on a 'pay as-you-go' basis, and along with employers' contributions, are credited to the Exchequer.
Valuation of the Teachers’ Pensions Scheme Not less than every four years the Government Actuary (“GA”), using normal actuarial principles, conducts a formal actuarial review of the TPS. The aim of the review is to specify the level of future contributions. Actuarial scheme valuations are dependent on assumptions about the value of future costs, design of benefits and many other factors.
The latest actuarial valuation was carried out as at 31 March 2012 in accordance with the Public Service Pensions (Valuations and Employer Cost Cap) Directions 2014. The valuation being published in June 2014. The key elements of the valuation and subsequent consultation are:
• Total liabilities of the Scheme (pensions currently in payment and the estimated cost of future benefits) amounted to £191,500 million • Value of the notional assets (estimated future contributions together with the proceeds from the notional investments held at the valuation date) was £176,600 million • Assumed real rate of return is 3.0% in excess of prices and 2% in excess of earnings • Rate of real earnings growth is assumed to be 2.75% • Assumed nominal rate of return is 5.06%
Page 33 Farlingaye High School NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 August 2015 (continued)
21 PENSION AND SIMILAR OBLIGATIONS (continued)
Teachers’ Pension Scheme (continued)
During the year the employer contribution rate was 14.1%.
The TPS valuation for 2012 determined an employer rate of 16.4% from 1 September 2015 and an employer cost cap of 10.9%. The employer contribution rate will be payable until the next valuation as at March 2016, whereupon the employer contribution rate is expected to be reassessed and will be payable from 1 April 2019.
The pension costs paid to TPS in the year amounted to £755,458 (2014: £481,762).
Under the definitions set out in Financial Standards (FRS 17) Retirement Benefits, the TPS is a multi- employer pension scheme. The Academy Trust is unable to identify its share of the underlying assets and liabilities of the scheme.
Accordingly, the Academy Trust has taken the exemption in FRS 17 and has accounted for its contributions to the scheme as if it were a defined-contribution scheme. The Academy Trust has set out above the information available on the scheme and the implications for the Academy Trust in terms of the anticipated rates.
Local Government Pension Scheme
The LGPS is a funded defined-benefit scheme, with the assets held in separate trustee-administered funds. The total contribution made for the year ended 31 August 2015 was £369,000 (2014: £338,000), of which employer’s contributions totalled £299,000 (2014: £272,000) and employees’ contributions totalled £70,000 (2014: £66,000). The agreed contribution rates for future years are 24.8% for employers and a variable % for employees dependent on the salary of individuals.
Principal and Actuarial Assumptions 31 August 31 August 2015 2014 % pa % pa
Pension increase rate 2.7% 2.7% Salary increase rate 4.6% 4.5% Expected return on assets 3.8% 5.5% Discount rate 3.8% 3.7%
The sensitivities regarding the principal assumptions used to measure the scheme liabilities are set out below: Approximate Approximate % increase to monetary Employer amount Change in assumptions at 31 August 2015: Liability (£’000)
0.5% decrease in Real Discount Rate 13% 537 1 year increase in member life expectancy 3% 127 0.5% increase in the Salary Increase Rate 6% 249 0.5% increase in the Pension Increase Rate 6% 272
Page 34 Farlingaye High School NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 August 2015 (continued)
21 PENSION AND SIMILAR OBLIGATIONS (continued)
Local Government Pension Scheme (continued)
The current mortality assumptions include sufficient allowance for future improvements in mortality rates. The assumed life expectations on retirement age 65 are:
Males Females Retiring today 22.4 years 24.4 years Retiring in 20 years 24.3 years 26.9 years
The Academy’s share of the assets and liabilities in the scheme and the expected rates of return were:
Expected Expected return at Fair value at return at Fair value at 31 August 31 August 31 August 31 August 2015 2015 2014 2014 % pa £ % pa £
Equities 3.8% 1,953,000 6.4% 1,693,000 Bonds 3.8% 612,000 3.4% 523,000 Property 3.8% 321,000 4.5% 249,000 Other 3.8% 29,000 3.3% 25,000
TOTAL MARKET VALUE OF ASSETS 2,915,000 2,490,000
Present value of scheme liabilities - Funded (4,243,000) (3,791,000)
DEFICIT IN THE SCHEME (1,328,000) (1,301,000)
The actual return on the scheme assets for the year to 31 August 2015 was £104,000. The expected return on assets is based on the long-term future expected investment return for each asset class as at the beginning of the year.
The return on the Fund in market value terms for the year to 31 August 2015 is estimated based on actual Fund returns as provided by the Administering Authority and index returns where necessary.
Amounts recognised in the statement of financial activities 2015 2014 £ £ Analysis of pension costs
Current service cost 348,000 251,000
Total operating charge 348,000 251,000
Analysis of pension finance (costs)/income
Interest cost (147,000) (127,000) Expected return on pension scheme 146,000 122,000
Net pension finance costs (1,000) (5,000)
Page 35 Farlingaye High School NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 August 2015 (continued)
21 PENSION AND SIMILAR OBLIGATIONS (continued)
Local Government Pension Scheme (continued)
The actuarial gains and losses for the current period are recognised in the statement of financial activities. The cumulative amount of actuarial gains and losses recognised in the statement of financial activities since the adoption of FRS 17 is a £772,000 loss (2014: £795,000 loss).
Movements in the present value of defined benefit obligations 2015 2014 were as follows: £ £
At 1 September 3,791,000 2,632,000 Current service cost 348,000 251,000 Interest cost 147,000 127,000 Contributions by scheme participants 70,000 66,000 Actuarial (gains)/losses (65,000) 758,000 Estimated benefits paid (48,000) (43,000)
At 31 August 2015 4,243,000 3,791,000
Movements in the fair value of Academy’s share of scheme assets:
At 1 September 2,490,000 1,911,000 Expected return on scheme assets 146,000 122,000 Contributions by employer 299,000 272,000 Contributions by scheme participants 70,000 66,000 Actuarial losses (42,000) 162,000 Estimated benefits paid (48,000) (43,000)
At 31 August 2015 2,915,000 2,490,000
The estimated value of employer contributions for the year ended 31 August 2016 is £294,000.
The history of experience adjustments is as follows: 2015 2014 2013 2012 £ £ £ £
Present value of defined benefit obligations (4,243,000) (3,791,000) (2,632,000) (2,155,000) Fair value of share of scheme assets 2,915,000 2,490,000 1,911,000 1,390,000
Deficit in the scheme (1,328,000) (1,301,000) (721,000) (765,000)
Experience adjustments on share of scheme assets (42,000) 162,000 134,000 (78,000)
Experience adjustments on scheme liabilities 5,000 (125,000) - -
Page 36 Farlingaye High School NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 August 2015 (continued)
22 AGENCY ARRANGEMENTS
The Academy Trust administers the disbursement of the new discretionary support for learners, 16-19 Bursary Funds, on behalf of the EFA. In the year it received £31,018 (2014: £26,246) and disbursed £30,278 (2014: £38,369), an amount of £13,258 (2014: £12,518) repayable to the EFA at 31 August 2015 is included in accruals and deferred income. The Academy Trust retained a beneficial interest in individual transactions such that £1,551 (2014: £1,252) has been recognised in income and expenditure in the statement of financial activities.
23 RELATED PARTY TRANSACTIONS
Owing to the nature of the Academy’s operations and the composition of the Board of Trustees being drawn from local public and private sector organisations, transactions may take place in which a trustee has an interest. All transactions involving such organisations are conducted at arms-length and in accordance with the Academy’s financial regulations and normal procurement procedures.
For the year to 31 August 2015 the Academy Trust had donations from Farlingaye Foundation a connected charity as defined in the Trustees Report, amounting to £12,033 (2014: £nil).
24 PRIOR YEAR ADJUSTMENT
Upon reflection of the terms of short term deposits held by the Academy Trust the Trustees have reclassified these deposits from cash at bank to current asset investments.
The impact of this reclassification is as follows:
2014 as previously Prior year 2014 reported adjustment as adjusted £ £ £
Current asset investments - 750,000 750,000 Cash at bank and in hand 1,396,265 (750,000) 646,265
25 CAPITAL COMMITMENTS 2015 2014 £ £
Contracted for, but not provided in the financial statements 73,365 -
Page 37 Farlingaye High School
INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON REGULARITY TO FARLINGAYE HIGH SCHOOL AND THE EDUCATION FUNDING AGENCY
In accordance with the terms of our engagement letter dated 18 August 2014 and further to the requirements of the Education Funding Agency (‘EFA’) as included in the Academies Accounts Direction 2014 to 2015, we have carried out an engagement to obtain limited assurance about whether the expenditure disbursed and income received by Farlingaye High School during the period 1 September 2014 to 31 August 2015 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 Farlingaye High School and the EFA in accordance with the terms of our engagement letter dated 18 August 2014. Our work has been undertaken so that we might state to the Farlingaye High School and the 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 the Farlingaye High School and the EFA, for our work, for this report, or for the conclusion we have formed.
Respective responsibilities of Farlingaye High School’s accounting officer and the reporting accountant
The accounting officer is responsible, under the requirements of Farlingaye High School funding agreement with the Secretary of State for Education 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 2015. 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 period 1 September 2014 to 31 August 2015 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 2015 issued by the 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 academy trust’s income and expenditure.
Our work included identification and assessment of the design and operational effectiveness of the controls, policies and procedures that have been implemented to ensure compliance with the framework of authorities including high level financial control areas and areas assessed of presenting a higher risk of impropriety. We undertook detailed testing, based on our assessment of risk of material irregularity, where such controls, policies and procedures apply to classes of transactions. This work was integrated with our audit on the financial statements to the extent evidence from the conduct of that audit supports the regularity conclusion.
Farlingaye High School
INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON REGULARITY TO FARLINGAYE HIGH SCHOOL AND THE EDUCATION FUNDING AGENCY
Conclusion
In the course of our work, nothing has come to our attention which suggests that in all material respects the expenditure disbursed and income received during the period 1 September 2014 to 31 August 2015 has not been applied to purposes intended by Parliament and the financial transactions do not conform to the authorities which govern them.
RSM UK AUDIT LLP (FORMERLY BAKER TILLY UK AUDIT LLP) Chartered Accountants Abbotsgate House Hollow Road Bury St Edmunds Suffolk IP32 7FA
December 2015