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Diocese of Leeds Leeds Board (“The Board”) LB20 09 02 These minutes do not include any wording the Board has agreed be kept confidential in the online publication. Diocese of Leeds Leeds Board (“the Board”) Minutes of the Board meeting held 9 July 2020, via Zoom conferencing. Present: The Rt Revd Nick Baines (Chair), Mr Matthew Ambler, The Ven Paul Ayers, Canon Mr Simon Baldwin, Mrs Marilyn Banister, Ms Kay Brown, The Revd Canon Sam Corley, The Ven Dr Anne Dawtry, The Very Revd John Dobson, Canon Mrs Jane Evans, The Revd Canon Kathryn Fitzsimons, The Rt Revd Dr Jonathan Gibbs, The Ven Jonathan Gough, The Rt Revd Dr Helen-Ann Hartley, The Rt Revd Dr Toby Howarth, The Ven Andy Jolley, Mr Andrew Maude, Canon Ann Nicholl, The Rt Revd Tony Robinson, The Rt Revd Paul Slater, Mrs Jane Wardman, Mr Irving Warnett and The Revd Nigel Wright. In Attendance: Ms Alison Bogle (AB), Mrs Charlotte Lilley (CL), Mr Peter Foskett (PF), The Revd Canon Andrew Norman (AN), Mr Geoff Park (GP), Mr Chris Tate (CT) and Mr Jonathan Wood (JW). Minutes taker: Mrs Heather Burge (HB) Papers: All papers circulated for Leeds Board meetings are taken as read. Item Minute Action Number 1 Opening Prayers. The meeting opened with prayers led by Bishop Helen-Ann Hartley. 2 Welcome and Apologies. The Chair asked for formal confirmation from the Trustees that they were content to meet via Zoom conferencing. The Chair proposed: 1 LB20 09 02 “That this Board, for the purposes of Article 9.3 of the Memorandum and Articles of Association of the Leeds Diocesan Board of Finance and for all business and matters conducted during the holding of this meeting approves meeting by means of Zoom conferencing as a suitable means through which all participants may communicate with all the other participants”. Agreed unanimously. Welcomed: Simon Dennis (SD), Chair of the Leeds Diocesan Board of Finance Audit Committee Kathryn Belton (KB), Senior Manager, Saffery Champness LLP, auditors of the Leeds Diocesan Board of Finance. Jemima Parker (JP), Environment Officer, joined at Item 14. Apologies received from The Ven Peter Townley. 3 Declarations of conflicts interest. Members were reminded to declare any conflicts of interest concerning any items on the Agenda. No conflict of interest was disclosed. 4 Leeds Diocesan Board of Finance Annual Reports and Financial Statements 2019 Circulated papers: LB20 07 022019 Annual Report and Accounts, LB20 07 02 01 Draft Letter of Representation to the Auditors, LB20 07 02 02 Draft Audit Findings report and Audit overview, LB20 07 02 03 Annual Report and Accounts covering note. Presenters: GP, SD and KB. GP gave a summary of the covering note and shared a PowerPoint, highlighting some key items. There was a net unrestricted funds surplus of £4,297k before investment gains or £685k if the pension valuation movements were excluded. This surplus included the final payment of restructuring funding of £641k. There had been some progress on the parish share receipts with receipts of £13,454k, which represented a collection rate of 86.6%. There had been a reduction in statutory fees receipts but an increase in income from housing, Parcevall Hall and schools. Investment income had also increased. Expenditure had generally reduced with the exception of the contribution to the national church and parish ministry (stipends and pension costs). Overall funds were just short of £200m split between endowment, restricted and unrestricted. There had been a revaluation of the Church of England Clergy 2 LB20 09 02 pension scheme in 2018. This was reflected in the 2019 Accounts as a significant reduction in the Leeds DBF’s liability by £3,417k. Two issues had delayed the signing of the 2019 Accounts: 1. There had been a property reclassification following a reconciliation of the Finance team’s and Property team’s records with the Mission and Pastoral team’s records, which had proved to be more up to date. A check for property classification had been made for every benefice. Twenty-seven properties had been reclassified. The result was a net historical property reclassification of £4.45m from Benefice and Glebe to Leeds DBF. This reclassification had been audit tested after the May 2020 Leeds Board meeting. A note has been included in the Letter of Representation [LB20 07 02 01] that there are a small number of cases where documentation remained unclear or unavailable but there was confidence that the allocation reflected within the financial statements is reflective of the underlying intention around the use of these properties. A process was being developed to ensure property classifications are reflected in all internal diocesan records and that as part of the ongoing property registration project a full reconciliation to Land Registry records will be undertaken. 2. A Going Concern analysis for the company has to be reviewed every year for the Report and Financial Statements to ensure the Trustees are confident that the company will remain viable for the next twelve months. Due to the economic uncertainties produced by the Covid-19 pandemic, this analysis had been brought in to sharp focus this year. The analysis was for the twelve months period to the end of July 2021. GP explained that the main assumption in the analysis is that Parish Share receipts will reduce significantly to 50% of budget. The other assumptions (which had been updated to reflect April and May 2020) were that fee income would remain at 70% of budget, other income would be at 50% of budget and that expenditure would be at 70% of budget. The result of these assumptions would be a depletion of the cash and liquid assets reserves so that there was c. £425k left at 31 July 2021. This was thought to be a conservative analysis as Parish Share receipts had not fallen to 50% of budget to date. Members were also reminded that the Pastoral Fund (currently c £4m) had a wide application and there were properties that could be sold if needed. On this basis, there was confidence that the Leeds DBF would remain a going concern for the next twelve months. SD confirmed the Audit Committee had considered all the points GP had reported to the Board and commended GP and the Finance team and the Saffery Champness LLP audit team for their work in preparing the revised Report and Financial Statements. 3 LB20 09 02 KB spoke to the draft Audit Findings Report (LB20 07 02 02) This was the first year Saffery Champness LLP had audited the Leeds DBF accounts. The Audit Committee had considered the Audit Findings Report at two of its meetings. The Audit Findings Report had been concluded save for any post balance sheet items. Sally Appleton, Audit Partner, would sign the Audit Findings Report when she returned from annual leave w/c 20 July 2020 and the audit team would report anything to the DBF they were not sure of up to that date. KB highlighted some key features of the Audit Findings Report: Section 2 Key audit risks Overall, the auditors were content with the Significant Risks and the Other significant and accounting matters they had audited. The auditors had considered the impact of Covid-19 on the Going Concern basis of preparation of the Accounts and having looked at the assumptions being made, cash and investments they were able to give an unqualified opinion of the management’s assessment of the Leeds DBF as a going concern. In the Summary of Audit findings section, the auditors had noted the transfer between parsonage and Diocesan properties and the transfer between endowment and unrestricted funds. The recommended that the land registry records are also reviewed against the pastoral scheme documentation. KB also mentioned that there was one property where records could not be found for the property. There was nothing of significance to report on with regard to misstatements. Overall, the appropriate checks and balances were in place and key risks identified. There were some housekeeping points with regard to properties and lettings, essentially to ensure all the paperwork links up. There were no questions. The Chair to proposed that: “This Board acknowledges receipt of the Audit Findings report (LB20 07 02 02) and approves the draft letter of representation from the Board to the auditors (LB20 07 02 01) and approves the Leeds Diocesan Board of Finance Draft Annual Reports and Financial Statements for the year ended 31 December 2019 (LB20 07 02).” The proposal was approved. The Chair reported that the Letter of Representation, Annual Report and Financial GP/JW Statements would all be signed using electronic signatures. 4 LB20 09 02 SD and KB were thanked for their work and left the meeting. The Chair requested that an electronic voting function be introduced for the next HB Board Zoom meetings. 5 COVID-19 update Circulated paper: None Presenter: Jonathan Wood JW gave an updated report on the diocesan response to Covid-19. The financial impact of Covid-19 had been outlined in GP’s paper on the 2019 Annual Report and Financial Statements. An initial discussion had begun with the National Church concerning possible support funding for the diocese. Further updates would be reported. An emergence group, chaired by Archdeacon Jonathan Gough, was meeting at least once a week to discuss government and national church guidance and diocesan support for parishes. Guidance from the group has covered opening churches for private prayer, opening for nurseries and good practice with regard to vulnerable people. The group also looks at diocesan publication of guidance with the diocesan Communications team to ensure a balance between regular and pertinent information. A diocesan support email address for Covid-19 has been implemented.
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