Registered number: 07667407
FARLINGAYE HIGH SCHOOL (A company limited by guarantee)
GOVERNORS' REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2016 FARLINGAYE HIGH SCHOOL (A company limited by guarantee)
CONTENTS
Page
Reference and administrative details 1 - 2
Governors' report 3 - 12
Governance statement 13 - 15
Statement on regularity, propriety and compliance 16
Statement of Governors' responsibilities 17
Independent auditors' report on the financial statements 18 - 19
Independent auditors' assurance report on regularity 20 - 21
Statement of financial activities incorporating income and expenditure account 22
Balance sheet 23 - 24
Statement of cash flows 25
Notes to the financial statements 26 - 48 FARLINGAYE HIGH SCHOOL (A company limited by guarantee)
REFERENCE AND ADMINISTRATIVE DETAILS OF THE ACADEMY TRUST, ITS GOVERNORS AND ADVISERS FOR THE YEAR ENDED 31 AUGUST 2016
Governors
Mr T Fosker (Chair until 10 October 2016) # Mrs S Hargadon (Accounting Officer) (resigned 31 August 2016) Dr L Franks (Chair from 10 October 2016) # Dr A Sievewright (Accounting Officer) (appointed 1 September 2016) Dr E Bond *# (resigned 31 August 2016) Mr N Howe # Mr A Dalby * Mrs W Norris Mr A Thomas (resigned 3 November 2015) Mr D Williams Mrs B Jarvis* Mrs J Cowles Mr N Edge* Mrs B Rogers Mrs M Stevens* Mrs J Newall Mr C Sharman (appointed 25 November 2015) Mrs K Thomas (appointed 25 November 2015)
* Members of the Finance Committee during the year # Members of the Academy Trust during the year
Company registered number
07667407
Company name
Farlingaye High School
Principal and registered office
Farlingaye High School, Ransom Road, Woodbridge, Suffolk, IP12 4JX
Page 1 FARLINGAYE HIGH SCHOOL (A company limited by guarantee)
REFERENCE AND ADMINISTRATIVE DETAILS OF THE ACADEMY TRUST, ITS GOVERNORS AND ADVISERS FOR THE YEAR ENDED 31 AUGUST 2016
Advisers (continued)
Company secretary
Mrs M Rozier
Senior management team
Ms S Hardagon, Headteacher (until 31 August 2016) Dr A Sievewright, Headteacher (from 1 September 2016) Mr P Smith, Deputy Headteacher Mr I Piddington, Deputy Headteacher (until 31 August 2016) Mrs C Laird, Assistant Headteacher Mr C Moran, Assistant Headteacher Mr J Tunaley, Lower School Co-ordinator Miss L Gilmour, Upper School Co-ordinator (until 31 August 2016) and Deputy Headteacher (from 1 September 2016) Mrs P Tyndale-Hardy, Head of 6th Form and Assistant Headteacher (from 1 September 2016) Mrs D Pritchard, Director of Learning Support
Independent auditors
Larking Gowen, 1 Claydon Business Park, Great Blakenham, Ipswich, Suffolk, IP6 0NL
Bankers
Lloyds Banking Group Plc, 8 Thoroughfare, Woodbridge, Suffolk, IP1 1UR
Solicitors
Eversheds, Franciscan House, 51 Princes Street, Ipswich, Suffolk, IP1 1UR
Page 2 FARLINGAYE HIGH SCHOOL (A company limited by guarantee)
GOVERNORS' REPORT FOR THE YEAR ENDED 31 AUGUST 2016
The Governors and Members present their annual report together with the financial statements and auditor's report of the charitable company for the year 1 September 2015 to 31 August 2016. The Annual report serves the purposes of both a Governors' report, and a Directors' report under company law.
Structure, governance and management a. CONSTITUTION
The Academy Trust is a charitable company limited by guarantee and an exempt charity.
The charitable company's Memorandum of Association is the primary governing document of the academy trust.
The Governors are the trustees and are the directors for company law.
The charitable company is known as Farlingaye High School.
Details of the Governors and Members who served during the year are included in the Reference and administrative details on page 1.
The Academy Trust was incorporated on 13 June 2011 and commenced trading on that date. The principal object of the Academy Trust is to provide education for pupils of different abilities between the ages of 11 to 18.
There have been no changes in the objectives since the last annual report. b. 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. c. 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 Trust does not exceed one third of the total number of Governors.
The Headteacher is treated for all purposes as an ex officio trustee. Parent trustees 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 Trustees can appoint up to 3 co-opted trustees, who can be co-opted having not already been appointed and who are not an employee of the Academy.
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GOVERNORS' REPORT (continued) FOR THE YEAR ENDED 31 AUGUST 2016 d. POLICIES AND PROCEDURES ADOPTED FOR THE INDUCTION AND TRAINING OF GOVERNORS
The training and induction provided for new trustees will depend upon their existing experience but will always include a tour of the academy and to meet students and staff. All trustees are provided with copies of policies, procedures, minutes, budget reports and school improvement plan and will have an informal meeting with the Head. The academy purchases the Governor Training Service from Schools’ Choice and training is also available from the auditors for members of the Finance Committee. e. PAY POLICY FOR KEY MANAGEMENT PERSONNEL
The trust sets pay for key management staff in line with the leadership bandings that are set for the size of school, the number of pupils on role with the addition of a sixth form. The Governing Body have a pay review subcommittee for the Head teacher’s pay who meet annually to consider the performance of the Headteacher against agreed criteria. They will make any recommendations to the Governing Body at the Autumn meeting. The arrangements for Deputy Headteachers and Assistant Headteachers is that an annual review of their performance is carried out by the Chair of Governors and the Headteacher as delegated by the Full Governing Body in the Scheme of Delegation. All staff have a job description and all performance will be linked to that document and the School Development plan.
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GOVERNORS' REPORT (continued) FOR THE YEAR ENDED 31 AUGUST 2016 f. ORGANISATIONAL STRUCTURE
The day to day management of the Academy Trust is delegated to the Headteacher, who is also the accounting officer.
The organisational structure consists of: - The Members - The Governors - Committees of the Governing Body - The Senior Management Team - Faculty Heads, Heads of Year - Assistant Head of Year
The Senior Management Team consists of the members listed in the Legal and administrative details on page 1. 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 appointments 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 areas, organising the staff, facilities and students.
The Governing Body meets once a term. they have an overall framework for the governance of the Academy Trust and determine the membership, terms of reference and procedures of the Committees. They receive reports 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. Since 10 October 2016, all Governors have also been appointed as Directors of the Academy Trust.
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 the 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. g. CONNECTED ORGANISATIONS, INCLUDING RELATED PARTY RELATIONSHIPS
The Academy has strong collaborative links with its feeder primary schools meeting regularly and hold professional development sessions together.
The Academy is working as a partner with Kesgrave High School in the Farlingaye Kesgrave Teaching Alliance. Details of this arrangement can be found in note xxx of the Financial Statements.
The Academy is a partner in the NICE partnership, this has ceased during the year ended 31 August 2016..
There is a strong Parent Teacher Association, The Farlingaye High School Foundation. h. GOVERNORS' INDEMNITIES
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 whilst on Academy Trust business. The insurance provides cover up to £1,000,000.
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GOVERNORS' REPORT (continued) FOR THE YEAR ENDED 31 AUGUST 2016
Strategic report
Objectives and Activities a. OBJECTS AND AIMS
The principle object and activity of the Academy Trust is the operation of Farlingaye High School to provide education for pupils of different abilities between the ages of 11 to 18 serving a catchment area in Woodbridge. The School is a leading edge school and is a teaching school in partnership with Kesgrave High School. It has a pupil capacity of 1950 and had a roll of 1935 in the school census dated 18 May 2016.
The school was deemed outstanding by Ofsted in May 2013 and continues to develop.
The Academy Trust’s objective is specifically restricted to the following: • To advance for the public benefit education in the United Kingdom, in particular but without prejudice to the generality of the foregoing by establishing, maintaining, carrying on, managing and developing a school offering a broad and balanced curriculum. • Promoting for the benefit of the inhabitants of Woodbridge and the surrounding area the provision of facilities for recreation or other leisure time occupation of individuals who have need of such facilities by reason of their youth, age, infirmity or disablement, financial hardship or social and economic circumstances or for the public at large in the interests of social welfare and with the object of improving the condition of life of the said inhabitants. b. OBJECTIVES, STRATEGIES AND ACTIVITIES
The school is a self-improving school which aims to support and inspire our 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 SEND students • To continue to run a range of extra- curricular activities and clubs including focus fortnight • To refurbish Technology toilets • To continue to hold an Easter School • To continue one to one tuition in English and Maths • To continue with monitoring performance of all students • 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 arrive • To review the work undertaken through the Disadvantaged Student Grant • 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 implement the print contract and obtain value for money • To implement expansion of PAN in years 7 and 12 to increase income
The list above is closely linked to the school budget to ensure that the school can deliver on its priorities. It is closely monitored by the board of trustees at the termly meeting through a series of full reports by the staff involved in the specified areas.
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GOVERNORS' REPORT (continued) FOR THE YEAR ENDED 31 AUGUST 2016 c. ACTIVITIES FOR ACHIEVING OBJECTIVES
We are delighted with the excellent exam results achieved by our students. In 2016 at GCSE 79% of students reached the threshold in both English and Maths. Our Progress 8 score was very strong at + 0.56. 32% of students achieved 5 A*/A grades.
Our results at A2 this year were excellent; 96% of students achieved 3 + A levels at A* - E, with 100% of students gaining 2+ A levels at A* - E. 56% of all A level grades (including General Studies) were A*/A/B grades. We had an impressive average point score of 971 and an average entry score of 222. These results are both well above the national average and placed us as one of the top performing Suffolk state schools.
To ensure that standards are continually assessed, the Academy operates a programme of lesson observations, which are undertaken by Faculty Heads and the Senior Leadership Team.
One focus continues 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 tuition 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 ‘Cabaret’ and the Lower School Production was ‘High School Musical’. 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. The students participate 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 Burgers and Bingo evening, quiz night and craft fayre. They have donated £8,530 to the school this year to help towards a new long jump, purchase of equipment for Duke of Edinburgh Award and the Go Karting Championships.
Staff training at Farlingaye served the needs of the school staff as well as providing wider development opportunities for teachers from across Suffolk and beyond through its Teaching School work.
Within school the staff development programme 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 organised with a keynote external speaker who provided an excellent day’s training for the teaching staff as well as the teachers from several local primaries.
Our work as a teaching school, as well as the Leading Edge work we engage, means we have a strong focus on improving teaching and learning and a commitment to supporting this across the county. This year, in partnership with Kesgrave High School we have hosted two NQT conferences as well as a micro-conference aimed at raising achievement at KS4 for schools across the county. We continue to make effective teaching and learning developments though are teaching school alliance.
We have also run an incredibly successful Maths subject knowledge training course throughout the year, offering expertise training to those teachers delivering maths as non-specialists. We have been one of only a hundred schools leading this flagship government initiative and have been delighted with the uptake and feedback.
The refurbishment programme of toilets has continued this year, the student toilets in Technology have been updated with the introduction of unisex toilets for transgender students.
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GOVERNORS' REPORT (continued) FOR THE YEAR ENDED 31 AUGUST 2016
The Academy has raised the following amounts of money for charity:
Sponsored Walk £30,150 Readathon £2,199 Super Rock £1,400 6th form Charity £2,728 Committee Farlingaye Foundation £8,530 Other collections £1,196 d. PUBLIC BENEFIT
The Trustees have complied with their duty to have due regard to exercising their powers to ensure that the Academy trust is for the advancement of education, which includes citizenship and sporting activities for the inhabitants of Woodbridge and the surrounding area.
Achievements and performance a. KEY FINANCIAL PERFORMANCE INDICATORS
• The school was graded 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 • The school is full and the 6th form has increased by 25 students • Attendance in years 7-11: students on roll = 1447– attendance = 95.1% • The main financial performance indicator is the level of reserves at the balance sheet date. Spending is closely monitored to ensure that our reserves policy is adhered to • Staffing costs as a percentage of GAG for this year were 88.7% b. REVIEW OF ACTIVITIES
Details of the activities undertaken in the year can be found in the section Activities for Achieving Objectives above. c. INVESTMENT POLICY AND PERFORMANCE
The Governors are committed to ensuring that all funds under their control are managed in such a way as to maximise returns whilst minimising risk. Any cash not required for operating expenses is placed on deposit at the most favourable rate available from Lloyd Bank plc. Day to day management of the surplus funds in delegated to the Headteacher and Bursar within the guidelines of the investment policy.
Financial review a. 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. Further details regarding the adoption of the going concern basis can be found in the Accounting Policies.
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GOVERNORS' REPORT (continued) FOR THE YEAR ENDED 31 AUGUST 2016 b. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Academy Trust has a Risk Register and a Risk Management Plan. The register and plan are formally reviewed annually.
Farlingaye High School is full and in some year groups over-subscribed, the risks to revenue funding from a falling role are small. However the reduction in post 16 funding levels, the uncertainty regarding the introduction of the National Funding Formula means that the school is unable to make firm financial plans beyond the next two 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 Trust had no significant liabilities arising from creditors where there would be significant effect on liquidity.
The Governors recognise that the defined benefit scheme deficit (Local Government Pension Scheme) represents a significant potential liability. However, the Academy Trust is able to meet known annual contributions commitments for the foreseeable future so the risk is minimised. c. PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and uncertainties facing the Academy are as follows:
Financial- the Academy 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 now delayed until 2018 will provide the school with a more stable financial environment, The government have promised not to cut funding for education by more than 1.5% but the outside influences of national living wage agreements and pension increases together with a 1% rise in salaries have to be funded from existing formula funding.
The Academy is still oversubscribed due to the exam results and the excellent reputation it has, a small expansion of admission numbers is underway. The transition to Dr Sievewright becoming Head from September 2016 has been ongoing since the start of the year with meetings held with all stakeholders.
Safeguarding and child protection- the trustees 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.
Staffing- the success of the Academy is reliant on the quality of its staff, there is a programme of professional development in place, and subject specialist are used in most areas of teaching. The development of middle leaders continues and secondment to the senior leadership team.
Fraud and mismanagement of funds- the Academy has appointed an Internal Auditor 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.
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GOVERNORS' REPORT (continued) FOR THE YEAR ENDED 31 AUGUST 2016 d. RESERVES POLICY
The Governors review the reserve levels of the Academy Trust 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 an 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 Trust 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 (unrestricted) reserves at 31 August 2016 were £951,715 (2015 - £867,427), which is enough to cover the minimum requirement.
Restricted fixed asset funds stood at £9,839,852 as at 31 August 2016 (2015 - £10,239,148). This could only be realised on disposal of tangible fixed assets.
Restricted funds (excluding the Local Government Pension Scheme deficit) stood at £278,019 at 31 August 2016 (2015 - £259,298). Details of the restricted funds can be found in note 18.
The deficit on the Local Government Pension Scheme at 31 August 2016 was £2,469,000 (2015 - £1,328,000 deficit). The Governors are seeking to build up free reserves in order to contribute to any pension deficit that may arise.
The Academy Trust will also seek to build up free reserves in order to develop its 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 High School. e. PRINCIPAL FUNDING
Most of the Academy’s income is obtained from the 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 end 31st August 2016 and the associated expenditure are shown as Restricted Funds in the Statement of Financial Activities.
The Academy also receives grants for fixed assets from the DfE and are shown in the Statement of Financial Activities as restricted income in the Fixed Asset Fund. 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.
The Internal Audit Service was purchased from Schools’ Choice, who have visited the academy during the financial year with the focus for audit requested by the trustees. 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 Trustees, Headteacher, Bursar and budget holders as well as the delegated authority for spending.
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GOVERNORS' REPORT (continued) FOR THE YEAR ENDED 31 AUGUST 2016 f. INVESTMENTS 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.
Plans for future periods a. FUTURE DEVELOPMENTS
Plans for future periods are as follows:
• 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 focusing on developing maths teachers with a grant of £ 60,000 following a successful programme with 22 participants. • Continue to upgrade ICT equipment as far as finances allow • Continue its own home tutoring; • Develop new A level and GCSE courses and then monitor outcomes • Focus on approach for ‘ Assessment without levels’ • Continue to identify ways to reduce expenditure. • Prepare a bid for the Condition Improvement Fund to replace old roofing. • Tender the catering contract to ensure the best deal for students
FUNDS HELD AS CUSTODIAN
The Academy Trust and its Governors do not act as Custodian Trustee of any other Charity.
EMPLOYEE INVOLVEMENT AND EMPLOYMENT OF THE DISABLED
Employees have been consulted on issues of concern to them by means of regular consultative committee and staff meetings and have been kept informed on specific matters directly by management. The Academy Trust carries out exit interviews for all staff leaving the organisation and has adopted a procedure of upward feedback for senior management and the Governors and Members.
The Academy Trust has implemented a number of detailed policies in relation to all aspects of personnel matters including: Equal opportunities policy Volunteers' policy Health & safety policy
In accordance with the Academy Trust's Equal opportunities policy, the Academy Trust has long established fair employment practices in the recruitment, selection, retention and training of disabled staff.
Full details of these policies are available from the Academy Trust's offices.
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GOVERNORS' REPORT (continued) FOR THE YEAR ENDED 31 AUGUST 2016
DISCLOSURE OF INFORMATION TO AUDITORS
Each of the persons who are Governors and Members at the time when this Governors' report is approved has confirmed that: so far as that Governor is aware, there is no relevant audit information of which the charitable company's auditors are unaware, and that Governor has taken all the steps that ought to have been taken as a Governor in order to be aware of any relevant audit information and to establish that the charitable company's auditors are aware of that information.
AUDITORS
The auditors, Larking Gowen, have indicated their willingness to continue in office. The Designated Governors will propose a motion re-appointing the auditors at a meeting of the Governors.
This report, incorporating a strategic report, was approved by order of the Governing Body as the company directors, on 7 December 2016 and signed on its behalf by:
Tim Fosker Chair of Trustees
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GOVERNANCE STATEMENT
SCOPE OF RESPONSIBILITY
As governors, 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 material misstatement or loss. The Governing Body 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 Governing Body any material weaknesses or breakdowns in internal control.
GOVERNANCE
The information on governance included here supplements that described in the Governors' report and in the Statement of Governors' responsibilities. The Governing Body has formally met 4 times during the year. Attendance during the year at meetings of the Governing Body was as follows:
Governor Meetings attended Out of a possible T Fosker (Chair) 3 4 S Hargadon 4 4 L Franks 4 4 E Bond 3 4 N Howe 3 4 A Dalby 3 4 W Norris 3 4 A Thomas (until November 2015) 1 4 D Williams 4 4 B Jarvis 4 4 J Cowles 3 4 N Edge 3 4 B Rogers 4 4 M Stevens 3 4 J Newall 2 4 C Sharman (from November 2015) 2 3 K Thomas (from November 2015) 3 3
The membership has changed with Katharina Thomas and Carl Sharman joining and Adam Thomas resigning in November 2015.
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 and to ensure sound management of the Academy Trust's finance and resources, including proper planning, monitoring and probity.
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GOVERNANCE STATEMENT (continued)
Attendance at meetings in the year was as follows:
Governor Meetings attended Out of a possible E Bond (until November 2015) 1 3 A Dalby 4 5 N Edge 4 5 T Fosker (Chair of Governors) 5 5 L Franks (Chair) 5 5 B Jarvis 5 5 C Sharman (from November 2015) 2 3 M Stevens 5 5 S Hargadon (resigned 31 August 2016) 5 5
GOVERNANCE REVIEWS
The Governing Body has undertaken a self-review in this financial year to establish the strengths and expertise in areas and highlight any areas of weakness that need to be considered.
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 Academy Trust’s use of its resources has provided good value for money during each academic year, and reports to the Governing Body where value for money can be improved, including the use of benchmarking data where appropriate. The Accounting Officer for the Academy Trust has delivered improved value for money during the year by:
THE PURPOSE OF THE SYSTEM OF INTERNAL CONTROL
The system of internal control is designed to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an ongoing process designed to identify and prioritise the risks to the achievement of 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 1 September 2015 to 31 August 2016 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 ongoing process for identifying, evaluating and managing the Academy Trust's significant risks, that has been in place for the year 1 September 2015 to 31 August 2016 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:
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GOVERNANCE STATEMENT (continued)
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 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 purchase an Internal Audit service from School's Choice (previously the Local Authority) which will be carried out annually. The internal auditor's role includes giving advice on financial systems. On an annual basis the internal auditor produces reports for the Governing Body on the operation of the systems of control and on the discharge of the Governing Body's financial responsibilities.
The internal auditor has delivered the schedule of work 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 internal auditor; the work of the external auditors; the financial management and governance self-assessment process; the work of the executive managers within the Academy Trust who have responsibility for the development and maintenance of the internal control framework. The Accounting Officer has been advised of the implications of the result of their review of the system of internal control by the 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 7 December 2016 and signed on their behalf, by:
Mr T Fosker Dr A Sievewright Chair of Trustees Accounting Officer
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STATEMENT ON REGULARITY, PROPRIETY AND COMPLIANCE
As Accounting Officer of Farlingaye High School I have considered my responsibility to notify the Academy Trust board of trustees and the Education Funding Agency of material irregularity, impropriety 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 for Education. As part of my consideration I have had due regard to the requirements of the Academies Financial Handbook 2015.
I confirm that I and the Academy Trust board of trustees 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 2015.
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.
Dr A Sievewright Accounting Officer
Date: 7 December 2016
Page 16 FARLINGAYE HIGH SCHOOL (A company limited by guarantee)
STATEMENT OF GOVERNORS' RESPONSIBILITIES FOR THE YEAR ENDED 31 AUGUST 2016
The Governors (who act as governors of Farlingaye High School and are also the directors of the charitable company for the purposes of company law) are responsible for preparing the Governors' report and the financial statements in accordance with the Annual Accounts Direction 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 Governors to prepare financial statements for each financial year. Under company law the Governors 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 Governors are required to: select suitable accounting policies and then apply them consistently; observe the methods and principles of the Charities SORP 2015 and the Academies' Accounts Direction 2015 to 2016; make judgments and accounting estimates that are reasonable and prudent; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in business.
The Governors 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 Governors 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 Governors 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 Governing Body on 7 December 2016 and signed on its behalf by:
Mr T Fosker Chair of Trustees
Page 17 FARLINGAYE HIGH SCHOOL (A company limited by guarantee)
INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS TO THE MEMBERS OF FARLINGAYE HIGH SCHOOL
We have audited the financial statements of Farlingaye High School for the year ended 31 August 2016 which comprise the Statement of financial activities incorporating income and expenditure account, the Balance sheet, the Statement of cash flows and the related notes. The financial reporting framework that has been applied in their preparation is applicable law, United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Academies Accounts Direction 2015 to 2016 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 Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and its members, as a body, for our audit work, for this report, or for the opinion we have formed.
RESPECTIVE RESPONSIBILITIES OF GOVERNORS AND AUDITORS
As explained more fully in the Statement of Governors' responsibilities, the Governors (who are also the directors of the Academy Trust for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.
SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Academy Trust's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Governors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Governors' report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
OPINION ON FINANCIAL STATEMENTS
In our opinion the financial statements: give a true and fair view of the state of the charitable company's affairs as at 31 August 2016 and of its incoming resources and application of resources, including its income and expenditure, for the year then ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and have been prepared in accordance with the requirements of the Companies Act 2006, the Charities SORP 2015 and the Academies Accounts Direction 2015 to 2016 issued by the Education Funding Agency.
Page 18 FARLINGAYE HIGH SCHOOL (A company limited by guarantee)
INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS TO THE MEMBERS OF FARLINGAYE HIGH SCHOOL
OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion the information given in the Governors' report, incorporating the 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:
adequate accounting records have not been kept, 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 Governors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Giles Kerkham (Senior Statutory Auditor) For and on behalf of:
Larking Gowen Chartered Accountants Statutory Auditors
1 Claydon Business Park Great Blakenham Ipswich Suffolk IP6 0NL Date:
Page 19 FARLINGAYE HIGH SCHOOL (A company limited by guarantee)
INDEPENDENT REPORTING AUDITORS' ASSURANCE REPORT ON REGULARITY TO FARLINGAYE HIGH SCHOOL AND THE EDUCATION FUNDING AGENCY
In accordance with the terms of our engagement letter dated 22 April 2016 and further to the requirements of the Education Funding Agency (EFA) as included in the Academies Accounts Direction 2015 to 2016, we have carried out an engagement to obtain limited assurance about whether the expenditure disbursed and income received by Farlingaye High School during the year 1 September 2015 to 31 August 2016 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. Our work has been undertaken so that we might state to 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 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 AUDITORS
The accounting officer is responsible, under the requirements of Farlingaye High School's funding agreement with the Secretary of State for Education dated 21 March 2011, and the Academies Financial Handbook extant from 1 September 2015, 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 2015 to 2016. We report to you whether anything has come to our attention in carrying out our work which suggests that in all material respects, expenditure disbursed and income received during the year 1 September 2015 to 31 August 2016 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 2015 to 2016 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.
Page 20 INDEPENDENT REPORTING AUDITORS' ASSURANCE REPORT ON REGULARITY TO FARLINGAYE HIGH SCHOOL AND THE EDUCATION FUNDING AGENCY (continued)
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 year 1 September 2015 to 31 August 2016 have not been applied to purposes intended by Parliament and the financial transactions do not conform to the authorities which govern them.
Larking Gowen Chartered Accountants Statutory Auditors
1 Claydon Business Park Great Blakenham Ipswich Suffolk IP6 0NL
Date:
Page 21 FARLINGAYE HIGH SCHOOL (A company limited by guarantee)
STATEMENT OF FINANCIAL ACTIVITIES INCORPORATING INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31 AUGUST 2016
Restricted Unrestricted Restricted fixed asset Total Total funds funds funds funds funds 2016 2016 2016 2016 2015 Note £ £ £ £ £ INCOME FROM: Donations and capital grants 2 45,476 - 38,021 83,497 102,244 Charitable activities 3 574,631 8,868,281 - 9,442,912 9,364,064 Other trading activities 4 14,048 - - 14,048 14,569 Investments 5 13,560 - - 13,560 9,173
TOTAL INCOME 647,715 8,868,281 38,021 9,554,017 9,490,050
EXPENDITURE ON: Charitable activities 563,427 8,914,706 459,171 9,937,304 9,697,805
TOTAL EXPENDITURE 8 563,427 8,914,706 459,171 9,937,304 9,697,805
NET INCOME / (EXPENDITURE) BEFORE TRANSFERS 84,288 (46,425) (421,150) (383,287) (207,755) Transfers between Funds 18 - (21,854) 21,854 - - NET INCOME / (EXPENDITURE) BEFORE OTHER RECOGNISED GAINS AND LOSSES 84,288 (68,279) (399,296) (383,287) (207,755) Actuarial (losses)/gains on defined benefit pension schemes 23 - (1,054,000) - (1,054,000) 23,000
NET MOVEMENT IN FUNDS 84,288 (1,122,279) (399,296) (1,437,287) (184,755)
RECONCILIATION OF FUNDS: Total funds brought forward 867,427 (1,068,702) 10,239,148 10,037,873 10,222,628
TOTAL FUNDS CARRIED 951,715 (2,190,981) 9,839,852 8,600,586 10,037,873 FORWARD
The notes on pages 26 to 48 form part of these financial statements.
Page 22 FARLINGAYE HIGH SCHOOL
(A company limited by guarantee) REGISTERED NUMBER: 07667407
BALANCE SHEET AS AT 31 AUGUST 2016
2016 2015 Note £ £ £ £ FIXED ASSETS Tangible assets 14 10,003,983 10,318,915 CURRENT ASSETS Debtors 15 143,272 125,629 Cash at bank and in hand 1,445,462 1,416,693
1,588,734 1,542,322 CREDITORS: amounts falling due within one year 16 (497,771) (442,801)
NET CURRENT ASSETS 1,090,963 1,099,521
TOTAL ASSETS LESS CURRENT LIABILITIES 11,094,946 11,418,436 CREDITORS: amounts falling due after more than one year 17 (25,360) (52,563)
NET ASSETS EXCLUDING PENSION SCHEME LIABILITIES 11,069,586 11,365,873 Defined benefit pension scheme liability 23 (2,469,000) (1,328,000)
NET ASSETS INCLUDING PENSION SCHEME LIABILITIES 8,600,586 10,037,873
Page 23 FARLINGAYE HIGH SCHOOL (A company limited by guarantee)
BALANCE SHEET (continued) AS AT 31 AUGUST 2016
2016 2015 Note £ £ £ £ FUNDS OF THE ACADEMY Restricted income funds: Restricted income funds 18 278,019 259,298 Restricted fixed asset funds 18 9,839,852 10,239,148
Restricted income funds excluding pension liability 10,117,871 10,498,446 Pension reserve (2,469,000) (1,328,000)
Total restricted income funds 7,648,871 9,170,446 Unrestricted income funds 18 951,715 867,427
TOTAL FUNDS 8,600,586 10,037,873
The financial statements were approved by the Governors, and authorised for issue, on 7 December 2016 and are signed on their behalf, by:
Mr T Fosker Chair of Trustees
The notes on pages 26 to 48 form part of these financial statements.
Page 24 FARLINGAYE HIGH SCHOOL (A company limited by guarantee)
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 AUGUST 2016
2016 2015 Note £ £ Cash flows from operating activities Net cash provided by operating activities 20 155,755 168,033
Cash flows from investing activities: Purchase of tangible fixed assets (93,034) (421,377)
Net cash used in investing activities (93,034) (421,377)
Cash flows from financing activities: Repayments of borrowings (33,952) (27,204)
Net cash used in financing activities (33,952) (27,204)
Change in cash and cash equivalents in the year 28,769 (280,548) Cash and cash equivalents brought forward 1,416,693 1,697,241
Cash and cash equivalents carried forward 1,445,462 1,416,693
Page 25 FARLINGAYE HIGH SCHOOL (A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2016
1. ACCOUNTING POLICIES
A summary of the principal accounting policies adopted (which have been applied consistently, except where noted), judgments and key sources of estimation uncertainty, is set out below.
1.1 Basis of preparation of financial statements
The financial stateme of the academy trust, which is a public benefit entity under FRS 102, have been prepared under the historical cost convention in accordance with the Financial Reporting Standard Applicable in the UK and Republic of Ireland (FRS 102), the Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (Charities SORP (FRS 102)), the Academies Accounts Direction 2015 to 2016 issued by EFA, the Charities Act 2011 and the Companies Act 2006.
Farlingaye High School constitutes a public benefit entity as defined by FRS 102.
First time adoption of FRS 102
There have been no transition adjustments impacting on net assets or funds.
Reclassifications of assets to previous UK GAAP for the comparative figures are included in note 29.
1.2 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 fixed asset funds are resources which are to be applied to specific capital purposes imposed by the Department for Education where the asset acquired or created is held for a specific purpose.
Restricted general funds comprise all other restricted funds received with restrictions imposed by the funder and include grants from the Department for Education.
Page 26 FARLINGAYE HIGH SCHOOL (A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2016
1. ACCOUNTING POLICIES (continued)
1.3 Income
All income is recognised once the Academy Trust has entitlement to the income, it is probable that the income will be received and the amount of income receivable can be measured reliably.
Grants are included in the Statement of financial activities incorporating income and expenditure account 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. Where income is received in advance of entitlement of receipt, its recognition is deferred and included in creditors as deferred income. Where entitlement occurs before income is received, the income is accrued.
General Annual Grant is recognised in full in the Statement of financial activities incorporating income and expenditure account in the year for which it is receivable and any abatement in respect of the period is deducted from income and recognised as a liability. Capital grants are recognised when there is entitlement and are not deferred over the life of the asset on which they are expended. Unspent amounts of capital grant are reflected in the balance in the restricted fixed asset fund.
Sponsorship income provided to the Academy Trust which amounts to a donation is recognised in the Statement of financial activities incorporating income and expenditure account in the period in which it is receivable, where there is certainty of receipt and it is measurable.
Donations are recognised on a receivable basis where there is certainty of receipt and the amount can be reliably measured.
Other income, including the hire of facilities, is recognised in the period in which it is receivable and to the extent the goods have been provided or on completion of the service.
1.4 Expenditure
Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges allocated on the portion of the asset’s use.
Charitable activities and Governance costs are costs incurred on the academy trust’s educational operations, including support costs and costs relating to the governance of the academy trust apportioned to charitable activities.
All resources expended are inclusive of irrecoverable VAT.
Page 27 FARLINGAYE HIGH SCHOOL (A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2016
1. ACCOUNTING POLICIES (continued)
1.5 Going concern The Governors assess whether the use of going concern is appropriate, i.e. whether there are any material uncertainties related to events or conditions that may cast significant doubt on the ability of the Academy Trust to continue as a going concern. The Governors make this assessment in respect of a period of at least one year from the date of authorisation for issue of the financial statements and have concluded that the academy trust has adequate resources to continue in operational existence for the foreseeable future and there are no material uncertainties about the academy trust’s ability to continue as a going concern, thus they continue to adopt the going concern basis of accounting in preparing the financial statements..
1.6 Tangible fixed assets and depreciation
All assets costing more than £1,000 are capitalised.
Where tangible fixed assets have been acquired with the aid of specific grants, either from the government or from the private sector, they are included in the Balance sheet at cost and depreciated over their expected useful economic life. Where there are specific conditions attached to the funding requiring the continued use of the asset, the related grants are credited to a restricted fixed asset fund in the Statement of financial activities incorporating income and expenditure account and carried forward in the Balance sheet. Depreciation on the relevant assets is charged directly to the restricted fixed asset fund in the Statement of financial activities incorporating income and expenditure account. Where tangible fixed assets have been acquired with unrestricted funds, depreciation on such assets is charged to the unrestricted fund.
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 incorporating income and expenditure account.
Land held under leashold is depreciated over the term of the lease.
Tangible fixed assets are carried at cost, net of depreciation and any provision for impairment. Depreciation is provided at rates calculated to write off the cost of fixed assets, less their estimated residual value, over their expected useful lives on the following bases:
Leasehold buildings - 15-50 years straight line Plant and machinery - 5-17 years straight line Furniture and equipment - 10 years straight line Computer equipment - 3 years straight line
1.7 Investments Fixed asset investments are a form of financial instrument and are initially recognised at their transaction cost and subsequently measured at fair value at the Balance sheet date, unless fair value cannot be measured reliably in which case it is measured at cost less impairment. Investment gains and losses, whether realised or unrealised, are combined and shown in the heading ‘Gains/(losses) on investments’ in the Statement of financial activities incorporating income and expenditure account.
Page 28 FARLINGAYE HIGH SCHOOL (A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2016
1. ACCOUNTING POLICIES (continued)
1.8 Interest receivable
Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the Academy Trust; this is normally upon notification of the interest paid or payable by the Bank.
1.9 Operating leases
Rentals under operating leases are charged to the Statement of financial activities incorporating income and expenditure account on a straight line basis over the lease term.
1.10 Debtors
Trade and other debtors are recognised at the settlement amount after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.
1.11 Cash at Bank and in hand
Cash at bank and in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.
1.12 Liabilities and provisions
Liabilities are recognised when there is an obligation at the Balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably. Liabilities are recognised at the amount that the Academy Trust anticipates it will pay to settle the debt or the amount it has received as advanced payments for the goods or services it must provide. Provisions are measured at the best estimate of the amounts required to settle the obligation. Where the effect of the time value of money is material, the provision is based on the present value of those amounts, discounted at the pre-tax discount rate that reflects the risks specific to the liability. The unwinding of the discount is recognised within interest payable and similar charges.
1.13 Financial instruments
The Academy Trust only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value with the exception of bank loans which are subsequently measured at amortised cost using the effective interest method.
1.14 Taxation
The Academy Trust is considered to pass the tests set out in Paragraph 1 Schedule 6 of the Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the Academy Trust is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes.
Page 29 FARLINGAYE HIGH SCHOOL (A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2016
1. ACCOUNTING POLICIES (continued)
1.15 Pensions
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 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 quadrennial valuations using a prospective unit credit method. As stated in note 23, the TPS is a multi-employer scheme and there is insufficient information available to use defined benefit accounting. The TPS is therefore treated as a defined contribution scheme for accounting purposes and the contributions recognised in the period to which they relate.
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 credit 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 the costs of scheme introductions, benefit changes, settlements and curtailments. They are included as part of staff costs as incurred. Net interest on the net defined benefit liability/asset is also recognised in the Statement of financial activities incorporating income and expenditure account and comprises the interest cost on the defined benefit obligation and interest income on the scheme assets, calculated by multiplying the fair value of the scheme assets at the beginning of the period by the rate used to discount the benefit obligations. The difference between the interest income on the scheme assets and the actual return on the scheme assets is recognised in other recognised gains and losses.
Actuarial gains and losses are recognised immediately in other recognised gains and losses
1.16 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 the 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 30 FARLINGAYE HIGH SCHOOL (A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2016
1. ACCOUNTING POLICIES (continued)
1.17 Critical accounting estimates and areas of judgement
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Critical accounting estimates and assumptions:
The Academy Trust trust makes estimates and assumptions concerning the future. The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
The present value of the Local Government Pension Scheme defined benefit liability depends on a number of factors that are determined on an actuarial basis using a variety of assumptions. The assumptions used in determining the net cost (income) for pensions include the discount rate. Any changes in these assumptions, which are disclosed in note 23, will impact the carrying amount of the pension liability. Furthermore a roll forward approach which projects results from the latest full actuarial valuation performed at 31 March 2014 has been used by the actuary in valuing the pensions liability at 31 August 2016. Any differences between the figures derived from the roll forward approach and a full actuarial valuation would impact on the carrying amount of the pension liability.
2. INCOME FROM DONATIONS AND CAPITAL GRANTS Restricted Unrestricted Restricted fixed asset Total Total funds funds funds funds funds 2016 2016 2016 2016 2015 £ £ £ £ £ Donations 45,476 - - 45,476 65,944 Devolved formula capital grant - - 38,021 38,021 36,300
Total donations and capital grants 45,476 - 38,021 83,497 102,244
In 2015, of the total income from donations and capital grants, £26,109 was to unrestricted funds and £76,135 was to restricted funds
Page 31 FARLINGAYE HIGH SCHOOL (A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2016
3. INCOME FROM CHARITABLE ACTIVITIES Unrestricted Restricted Total Total funds funds funds funds 2016 2016 2016 2015 £ £ £ £ Educational operations 574,631 8,868,281 9,442,912 9,364,064
574,631 8,868,281 9,442,912 9,364,064
In 2015, of the total income from charitable activities, £408,315 was to unrestricted funds and £8,955,749 was to restricted funds.
Page 32 FARLINGAYE HIGH SCHOOL (A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2016
FUNDING FOR ACADEMY'S EDUCATIONAL OPERATIONS Unrestricted Restricted Total Total funds funds funds funds 2016 2016 2016 2015 £ £ £ £ DfE/EFA grants General Annual Grant - 8,359,586 8,359,586 8,456,987 Pupil Premium - 262,040 262,040 263,898 National Leaders of Education - 11,000 11,000 - Rates Relief - 37,842 37,842 59,224 Insurance funding - 19,106 19,106 14,478 Summer School - 5,000 5,000 4,875 Bursary administration fee 1,451 - 1,451 1,551
1,451 8,694,574 8,696,025 8,801,013 Other government grants Looked after children - 28,456 28,456 - Special Educational Needs - 56,083 56,083 66,251 Other income - 89,168 89,168 85,036
- 173,707 173,707 151,287 Other funding Insurance claims 38,727 - 38,727 39,989 Items sold 33,449 - 33,449 32,845 Exam resit fees 22,515 - 22,515 23,426 Music tuition and exams 69,958 - 69,958 65,851 Teaching staff - - - 11,000 School productions and shows 18,789 - 18,789 16,053 Other income 50,149 - 50,149 39,425 Trips and visits 339,593 - 339,593 183,175
573,180 - 573,180 411,764
574,631 8,868,281 9,442,912 9,364,064
In 2015, of the total income from charitable activities, £408,315 was to unrestricted funds and £8,955,749 was to restricted funds.
Page 33 FARLINGAYE HIGH SCHOOL (A company limited by guarantee)
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2016
4. OTHER TRADING ACTIVITIES Unrestricted Restricted Total Total funds funds funds funds 2016 2016 2016 2015 £ £ £ £ Hire of facilities 14,048 - 14,048 14,569
In 2015, of the total income from other trading activities, £14,569 was to unrestricted funds and £ NIL was to restricted funds.
5. INVESTMENT INCOME Unrestricted Restricted Total Total funds funds funds funds 2016 2016 2016 2015 £ £ £ £ Investment income 13,560 - 13,560 9,173
In 2015, all investment income was unrestricted.
6. DIRECT COSTS Educational Total Total operations 2016 2015 £ £ £ Pension finance costs 51,000 51,000 1,000 Public transport 34,855 34,855 36,945 Educational supplies 125,684 125,684 122,958 Examination fees 218,281 218,281 219,355 Staff development 22,246 22,246 17,302 Educational consulting 20,263 20,263 51,819 Staff expenses 2,887 2,887 4,974 Agency teaching 3,034 3,034 25,264 Music services, productions and concerts 40,122 40,122 - Teaching and educational support staff costs 5,063,374 5,063,374 4,966,804 National insurance 443,762 443,762 389,824 Pension cost 1,081,656 1,081,656 1,003,458 Depreciation 407,966 407,966 388,325
7,515,130 7,515,130 7,228,028
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2016
7. SUPPORT COSTS Educational Total Total operations 2016 2015 £ £ £ Pupil recruitment and support 100,587 100,587 113,555 Staff recruitment and support 72,444 72,444 32,325 Maintenance of premises and equipment 189,145 189,145 267,274 Bank interest and charges 625 625 542 Rents, rates and water 60,336 60,336 45,698 Cleaning 25,456 25,456 28,530 Heating and light 99,614 99,614 74,082 Security and transport 5,192 5,192 5,334 Insurance 114,033 114,033 114,502 Catering 66,269 66,269 48,768 Technology 66,520 66,520 101,522 Supplies, printing and telephone 148,203 148,203 199,715 Finance costs - - 1,000 Items for resale 29,833 29,833 29,260 Professional fees 49,500 49,500 54,549 Donations 17,110 17,110 26,958 Trips and visits 369,977 369,977 153,253 Governance Costs 15,227 15,227 16,422 Wages and salaries 949,778 949,778 1,119,307 National insurance 42,325 42,325 37,181
2,422,174 2,422,174 2,469,777
During the year ended 31 August 2016, the Academy Trust incurred Governance costs of £15,277 (2015 - £16,422).
8. EXPENDITURE Staff costs Premises Other costs Total Total 2016 2016 2016 2016 2015 £ £ £ £ £
Educational operations: Direct costs 6,591,826 - 923,304 7,515,130 7,265,209 Support costs 992,103 510,187 919,884 2,422,174 2,432,596
7,583,929 510,187 1,843,188 9,937,304 9,697,805
In 2015, of the total expenditure, £563,427 (2015 - £414,415) was to unrestricted funds and £9,400,876 (2015 - £9,283,390) was was to restricted funds.
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9. NET INCOMING RESOURCES/(RESOURCES EXPENDED) This is stated after charging:
2016 2015 £ £ Depreciation of tangible fixed assets: - owned by the charity 407,966 388,325 Auditors remuneration - audit 9,150 9,150 Auditors remuneration - other 2,200 -
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10. STAFF COSTS Staff costs were as follows:
2016 2015 £ £ Wages and salaries 6,013,152 6,086,111 Social security costs 486,087 427,005 Operating costs of defined benefit pension schemes 1,081,656 1,003,458
7,580,895 7,516,574 Supply teacher costs 3,034 25,264 7,583,929 7,541,838
The average number of persons (full time equivalent) employed by the Academy Trust during the year was as follows:
2016 2015 No. No. Teachers 112 112 Administration and support 91 100 Management 8 8
211 220
The number of employees whose employee benefits (excluding employer pension costs) exceeded £60,000 was:
2016 2015 No. No. In the band £60,001 - £70,000 2 2 In the band £100,001 - £110,000 1 1
All of the above employees participate in the Teachers' Pension Scheme, which is a defined benefit scheme. During the year ended 31 August 2016 pension contributions for these employees amounted to £39,947 (2015 - £33,370).
The key management personnel of the academy comprises the Staff Governors and Senior Management Team as listed on page 2, being 11 (2015 - 11) staff members. The total amount of employment benefits (including employer pension contibutions) received by key management personnel was £749,762 (2015 - £689,278).
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11. GOVERNORS' REMUNERATION AND EXPENSES
One or more Governors has been paid remuneration or has received other benefits from an employment with the academy trust. The Principal and other staff Governors only receive remuneration in respect of services they provide undertaking the roles of principal and other staff members under their contracts of employment, and not in respect of their role as Governors, The value of Governors' remuneration and other benefits was as follows:
2016 2015 £ £ S Hargadon, Headteacher Remuneration 100,000-105,000 100,000-105,000 Pension contributions paid 15,000-20,000 10,000-15,000 N Edge, Staff Governor Remuneration 45,000-50,000 45,000-50,000 Pension contributions paid 5,000-10,000 5,000-10,000 D Williams Remuneration 35,000-40,000 45,000-50,000 Pension contributions paid 5,000-10,000 5,000-10,000 W Norris Remuneration 20,000-25,000 20,000-25,000 Pension contributions paid 5,000-10,000 5,000-10,000
During the year, no Trustees received any reimbursement of expenses (2015 - £NIL).
12. GOVERNORS' AND OFFICERS' INSURANCE
In accordance with normal commercial practice the academy has purchased insurance to protect trustees and officers from claims arising from negligent acts, errors or omissions occurring whilst on academy business. The insurance provides cover up to £1,000,000 on any one claim. The cost of this cover is included within the general cover provided to the Academy and it is not possible to separate the specific amount paid in respect of Governors' indemnity for the yeasr ended 31 August 2016 and 31 August 2015.
13. OTHER FINANCE INCOME 2016 2015 £ £ Interest income on pension scheme assets 116,000 146,000 Interest on pension scheme liabilities (167,000) (147,000)
(51,000) (1,000)
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14. TANGIBLE FIXED ASSETS Computer Furniture equipment Leasehold Plant and and and property machinery equipment software Total £ £ £ £ £ Cost At 1 September 2015 10,999,593 318,655 292,009 205,051 11,815,308 Additions - 1,499 22,394 69,141 93,034
At 31 August 2016 10,999,593 320,154 314,403 274,192 11,908,342
Depreciation At 1 September 2015 1,199,880 109,463 87,873 99,177 1,496,393 Charge for the year 288,134 33,275 29,971 56,586 407,966
At 31 August 2016 1,488,014 142,738 117,844 155,763 1,904,359
Net book value At 31 August 2016 9,511,579 177,416 196,559 118,429 10,003,983
At 31 August 2015 9,799,713 209,192 204,136 105,874 10,318,915
15. DEBTORS 2016 2015 £ £ Trade debtors 791 11,224 Other debtors 28,419 20,530 Prepayments and accrued income 114,062 93,875
143,272 125,629
16. CREDITORS: Amounts falling due within one year 2016 2015 £ £ Salix Loan (See note 18) 27,204 27,204 Trade creditors 55,319 54,847 Other taxation and social security 143,879 128,041 Other creditors 579 - Accruals and deferred income 270,790 232,709
497,771 442,801
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17. CREDITORS: Amounts falling due after more than one year 2016 2015 £ £ Salix Loan 25,360 52,563
Included within the above are amounts falling due as follows:
2016 2015 £ £ Between one and two years Salix Loan 25,360 52,563
The Salix loan is secured on the assets to which it relates, is repayable in monthly installments, and attracts no interest charge.
18. STATEMENT OF FUNDS Brought Transfers Gains/ Carried Forward Income Expenditure in/out (Losses) Forward £ £ £ £ £ £ Unrestricted funds General Funds - all funds 867,427 647,715 (563,427) - - 951,715
Restricted funds Leadership In Education - 11,000 (9,675) - - 1,325 General Annual Grant (GAG) 199,344 8,359,586 (8,442,749) 65,146 - 181,327 Pupil premium - 262,040 (242,741) - - 19,299 Summer School 2,441 5,000 (1,204) - - 6,237 Rates Relief 22,000 37,842 (37,658) - - 22,184 Insurance funding - 19,106 (19,106) - - - Special Educational Needs - 56,083 (56,039) - - 44 Looked after children 23,032 28,456 (24,050) - - 27,438 Other 12,481 89,168 (81,484) - - 20,165 Pension reserve (1,328,000) - - (87,000) (1,054,000) (2,469,000)
(1,068,702) 8,868,281 (8,914,706) (21,854) (1,054,000) (2,190,981)
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18. STATEMENT OF FUNDS (continued)
Restricted fixed asset funds
Transfer from local authority on conversion 9,901,596 - (288,134) - - 9,613,462 Salix loan transferred on conversion (79,767) - - 27,204 - (52,563) Capital expenditure post conversion 417,319 38,021 (171,037) (5,350) - 278,953
10,239,148 38,021 (459,171) 21,854 - 9,839,852 Total restricted funds 9,170,446 8,906,302 (9,373,877) - (1,054,000) 7,648,871
Total of funds 10,037,873 9,554,017 (9,937,304) - (1,054,000) 8,600,586
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 cost 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 2016.
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 tp 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.
Looked after children income has been received from the County Council. Any costs that have been specifically incurred by that 'looked after child' have been set off against this 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 schooling.
Rates Relief represents funding received via the EFA to cover a proportion of the Acadmey Trust's expenditure on rates.
Insurance represents funding received via the EFA to cover a proportion of the Acadmey Trust's expenditure on insurance.
Assets transferred from the local authority on conversion of £9,613,462 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 £288,134 is in respect of depreciation on these transferred assets.
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18. STATEMENT OF FUNDS (continued)
Salix loan transferred on conversion of £52,767 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 £27,000 represents repayments made on this loan in the year.
Capital expenditure post conversion represents fixed assets purchased from that grant funding.
19. ANALYSIS OF NET ASSETS BETWEEN FUNDS Restricted Unrestricted Restricted fixed asset Total Total funds funds funds funds funds 2016 2016 2016 2016 2015 £ £ £ £ £ Tangible fixed assets - - 10,003,983 10,003,983 10,318,915 Current assets 989,736 598,998 - 1,588,734 1,542,322 Creditors due within one year (38,021) (320,979) (138,771) (497,771) (442,801) Creditors due in more than one year - - (25,360) (25,360) (52,563) Provisions for liabilities and charges - (2,469,000) - (2,469,000) (1,328,000)
951,715 (2,190,981) 9,839,852 8,600,586 10,037,873
20. RECONCILIATION OF NET MOVEMENT IN FUNDS TO NET CASH FLOW FROM OPERATING ACTIVITIES 2016 2015 £ £ Net expenditure for the year (as per Statement of financial activities) (383,287) (207,755)
Adjustment for: Depreciation charges 407,966 388,325 (Increase)/decrease in debtors (17,648) 117,702 Increase/(decrease) in creditors 61,724 (180,239) Defined benefit pension scheme cost less contributions payable 36,000 23,000 Defined benefit pension scheme finance cost 51,000 27,000
Net cash provided by operating activities 155,755 168,033
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21. ANALYSIS OF CASH AND CASH EQUIVALENTS 2016 2015 £ £ Cash in hand 1,445,462 1,416,693
Total 1,445,462 1,416,693
22. CAPITAL COMMITMENTS At 31 August 2016 the Academy Trust had capital commitments as follows: 2016 2015 £ £ Contracted for but not provided in these financial statements 56,025 73,365
23. PENSION COMMITMENTS The Academy Trust's employees belong to two principal pension schemes: the Teacher's Pension Scheme for 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 Multi- employer defined benefit pension schemes.
The latest actuarial valuation of the TPS related to the period ended 31 March 2012 and of the LGPS 31 March 2014.
There were no outstanding or prepaid contributions at either the beginning or the end of the financial year.
Teachers' Pension Scheme
Introduction
The Teachers' Pension Scheme (TPS) is a statutory, contributory, defined benefit scheme, governed by the Teachers' Pensions Regulations (2010) and, from 1 April 2014, by the Teachers' Pension Scheme Regulations 2014. Membership is automatic for full-time teachers in academies and, from 1 January 2007, automatic for teachers in part-time employment following appointment or a change of contract, although they are able to opt out.
The TPS is an unfunded scheme and members contribute on a ‘pay as you go’ basis – these contributions along with those made by employers are credited to the Exchequer. Retirement and other pension benefits are paid by public funds provided by Parliament.
Valuation of the Teachers’ Pension Scheme
Not less than every four years the Government Actuary, using normal actuarial principles, conducts a formal actuarial review of the TPS in accordance with the Public Service Pensions (Valuations and Employer Cost Cap) Directions 2014 published by HM Treasury. 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 of the TPS was carried out as at 31 March 2012 and in accordance with the Public Service Pensions (Valuations and Employer Cost Cap) Directions 2014. The valuation report was published by the Department for Education on 9 June 2014. The key elements of the valuation and subsequent consultation are:
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23. PENSION COMMITMENTS (continued)
employer contribution rates set at 16.48% of pensionable pay, including a 0.08% employer administration charge (currently 14.1%) total scheme liabilities (pensions currently in payment and the estimated cost of future benefits) for service to the effective date of £191,500 million, and notional assets (estimated future contributions together with the notional investments held at the valuation date) of £176,600 million giving a notional past service deficit of £14,900 million an employer cost cap of 10.9% of pensionable pay will be applied to future valuations the assumed real rate of return is 3.0% in excess of prices and 2% in excess of earnings. The rate of real earnings growth is assumed to be 2.75%. The assumed nominal rate of return is 5.06%.
During the previous year the employer contribution rate was 14.1%. The TPS valuation for 2012 determined an employer rate of 16.4%, which was payable from September 2015. The next valuation of the TPS will be as at March 2016, whereupon the employer contribution rate is expected to be reassessed and will be payable from 1 April 2019.
The employer’s pension costs paid to TPS in the period amounted to £770,924 (2015 - £755,458).
A copy of the valuation report and supporting documentation is on the Teachers’ Pensions website (www.teacherspensions.co.uk/news/employers/2014/06/publication-of-the-valuation-report.aspx).
Under the definitions set out in FRS 102, the TPS is a multi-employer pension scheme. The trust has accounted for its contributions to the scheme as if it were a defined contribution scheme. The trust has set out above the information available on the scheme.
Local Government Pension Scheme
The LGPS is a funded defined benefit scheme, with assets held in separate trustee-administered funds. The total contribution made for the year ended 31 August 2016 was £341,202 (2015 - £369,000), of which employer's contributions totalled £274,732 (2015 - £299,000) and employees' contributions totalled £66,470 (2015 - £70,000). The agreed contribution rates for future years are 24.8% for employers and a variable% for employees.
Parliament has agreed, at the request of the Secretary of State for Education, to a guarantee that, in the event of academy closure, outstanding Local Government Pension Scheme liabilities would be met by the Department for Education. The guarantee came into force on 18 July 2013. Suffolk Pension Fund
Principal actuarial assumptions:
2016 2015 Discount rate for scheme liabilities 2.10 % 3.80 % Expected return on scheme assets at 31 August 17.50 % 10.50 % Rate of increase in salaries 4.00 % 4.60 % Rate of increase for pensions in payment / inflation 2.10 % 2.70 %
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23. PENSION COMMITMENTS (continued)
The current mortality assumptions include sufficient allowance for future improvements in mortality rates. The assumed life expectations on retirement age 65 are:
2016 2015 Retiring today Males 22.4 22.4 Females 24.4 24.4
Retiring in 20 years Males 24.3 24.3 Females 26.9 26.9
The Academy Trust's share of the assets in the scheme was:
Fair value at Fair value at 31 August 31 August 2016 2015 £ £ Equities 2,579,000 1,953,000 Debt instruments 748,000 612,000 Property 374,000 321,000 Cash 37,000 29,000
Total market value of assets 3,738,000 2,915,000
The actual return on scheme assets was £535,000 (2015 - £104,000).
The amounts recognised in the Statement of financial activities incorporating income and expenditure account are as follows:
2016 2015 £ £ Current service cost (net of employee contributions) (303,000) (348,000) Net interest cost (51,000) (1,000)
Total (354,000) (349,000)
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23. PENSION COMMITMENTS (continued)
Movements in the present value of the defined benefit obligation were as follows:
2016 2015 £ £ Opening defined benefit obligation 4,243,000 3,791,000 Current service cost 303,000 348,000 Interest cost 167,000 147,000 Contributions by employees 63,000 70,000 Actuarial losses/(gains) 1,473,000 (65,000) Benefits paid (42,000) (48,000)
Closing defined benefit obligation 6,207,000 4,243,000
Movements in the fair value of the Academy Trust's share of scheme assets:
2016 2015 £ £ Opening fair value of scheme assets 2,915,000 2,490,000 Return on plan assets (excluding net interest on the net defined pension liability) 116,000 146,000 Actuarial gains and (losses) 419,000 (42,000) Contributions by employer 267,000 299,000 Contributions by employees 63,000 70,000 Benefits paid (42,000) (48,000)
Closing fair value of scheme assets 3,738,000 2,915,000
24. OPERATING LEASE COMMITMENTS At 31 August 2016 the total of the Academy trust’s future minimum lease payments under non-cancellable operating leases was:
2016 2015 £ £ Amounts payable: Within 1 year 17,288 17,656 Between 1 and 5 years 49,078 66,367
Total 66,366 84,023
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25. 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.
26. RELATED PARTY TRANSACTIONS
Owing to the nature of the Academy Trust's operations and the composition of the board of trustees being drawn from local public and private sector organisations, transactions may take place with organisations in which the trust has an interest. All transactions involving such organisations are conducted at arm's length and in accordance with the Academy Trust's financial regulations and normal procurement procedures.
For the year to 31 August 2016, the Academy Trust had donations from Farlingaye Foundation, a connected charity as defined in the Trustees report, amounting to (2015 - £12,033).
27. JOINT VENTURE The Academy Trust is a 50% joint member of Farlingaye Kesgrave Teaching Alliance, a company limited by guarantee and registered in England and Wales (company number 08160407). The other member of the company is Kesgrave High School.
Kesgrave High School and Farlingaye High School were designated as a joint Teaching School in July 2011. As a result, they formed the Farlingaye Kesgrave Teaching Alliance to strive to continually improve the quality of teaching, learning and standards for students locally.
The investment is accounted for at cost less impairment, which is £Nil at 31 August 2016 (2015 - £Nil).
If the investment in Farlingaye Kesgrave Teaching Alliance had been accounted for using the equity method, the impact would have been:
2016 2015 £ £ Impact on surplus 13,838 4,254 Impact on investments 72,191 58,353
The Academy Trust’s share of the results of Farlingaye Kesgrave Teaching Alliance for the year ended 31 August 2016 and the balance sheet as that date are: 2016 2015 £ £ Income derived from educational activities 257,765 291,540 Expenditure derived from educational activities (207,391) (286,638) Assets 77,879 96,592 Liabilities (5,688) (38,239) Reserves 72,191 58,353
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28. 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 £29,029 (2015 - £31,018) and disbursed £26,999 (2015 - £30,278). An amount of £579 (2015 - £13,258) is repayable to EFA at 31 August 2016 and is included in accruals and deferred income. The Academy Trust retained a beneficial interest in individual transactions such that £1,451 (2015 - £1,551) has been recognised in income and expenditure in the statement of financial activities.
29. FIRST TIME ADOPTION OF FRS 102 It is the first year that the Academy Trust has presented its financial statements under SORP 2015 and FRS 102. The last financial statements prepared under previous UK GAAP were for the year ended 31 August 2015 and the date of transition to FRS 102 and SORP 2015 was therefore 1 September 2014. As a consequence of adopting FRS 102 and SORP 2015, a number of accounting policies have changed to comply with those standards.
Comparative figures have been restated to reflect the adjustments made as below.
There has been no transaction adjustments to net funds or the net movements in funds in the comparative figures.
One reclassification has been made as a result of the implementation of FRS102. Amounts previously reported as current asset investments at 31 August 2015 have been reclassified as cash equivalents. the total amount reclassified is £1,305,563 (2015 - £1,050,976).
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