The governors present their annual report together with the accounts and auditor's report of the charitable company for the year 1 September 2020 to 31 August 2021. The annual report serves the purposes of both a trustees' report, and a directors' report under company law.
Bourne Grammar School (the 'School') was incorporated on 16 November 2011, it is a company limited by guarantee and an exempt charity. The charitable company's memorandum and articles of association, dated 16 November 2011 are the primary governing documents of the School.
The academy trust is a company limited by guarantee and an exempt charity. The charitable company's memorandum and articles of association are the primary governing documents of the academy trust.
The governors act as the trustees for the charitable activities of Bourne Grammar School and are also the directors of the charitable company for the purposes of company law. The charitable company is known as Bourne Grammar School.
Details of the governors who served during the year are included in the Reference and Administrative Details on page 1.
The objective of the School is 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. The direction of the School is shaped by the School Development Plan.
The governing body and its committees will act as a 'critical friend' by offering an external perspective to the Headteacher and the School through:
· Monitoring its work;
· Offering support and advice;
· Providing an external opinion;
· Asking challenging questions and requiring satisfactory answers;
· Offering constructive criticism where appropriate.
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.
In accordance with normal commercial practice the Academy has purchased insurance to protect Governors and officers from claims arising from negligent acts, errors or omissions occurring whilst on Academy business.
Subject to Articles 48-49 and 64, the School shall have the following governors:
- Up to 5 governors, appointed under Article 50.
- 7 parent governors appointed under Articles 53-58. A parent governor shall be elected by parents of registered pupils at the School. A parent governor must be a parent of the pupil at the School at the time when they are elected.
- 3 staff governors, comprising 2 teachers and 1 support staff, subject to Article 50A. The staff governors shall be elected by staff members at the School. A staff governor must be a staff member at the time they are elected. If a staff governor ceases to be a staff member then they shall deem to have resigned and shall cease to be a governor.
- 4 foundation governors, appointed under Article 51
- The Headteacher
- Any additional governors, if appointed under Article 62, 62A or 68A; and
- Any further governors, if appointed under Article 63 or Article 68A.
The term of office for any governor shall be 4 years, save that
- This time limit shall not apply to the Headteacher
- A staff governor shall only hold office for so long as they continue to be employed by the School.
The training and induction provided for new governors depends on their existing experience. Where necessary induction provides training on charity and educational legal and financial matters. All governors are provided with copies of terms of reference, policies, procedures, minutes, accounts, budgets, plans and other documents that they will need to undertake their role as governors.
The Headteacher, as the principal leader and manager for the School, is responsible for the internal organisation, management and control of the School, for advising the governors and for implementing the School Development Plan. The Headteacher is supported by members of the leadership team, each with their own clearly defined role and portfolio.
The Headteacher:
- Has overall executive responsibilities for the School's activities, including all financial activities;
- Formulates aims and objectives of the School for adoption, modification or rejection by the governing body;
- Formulates policies and targets for the governing body to consider;
- Reports to the governing body on progress;
- Puts into practice the policies agreed by the governing body.
The governing body delegates to the following committees, each with their own terms of reference and scheme of delegation:
- Finance, Premises & Audit
- Curriculum & Personnel
- Pastoral & Community
- Disciplinary
The Leadership Team consists of the Headteacher and four Deputy Headteachers. All are paid within ranges, set by the governing body on each appointment, on the national Leadership Pay Spine. The Headteacher is a governor, trustee, member and director of the Academy Trust; his pay range is determined by the group of governors, led by the Chair of Governors, which manages his annual performance management. The range is reviewed from time to time and has been adjusted to reflect the School’s growth in student numbers and the governors have also had regard to the published pay of Headteachers in schools of comparable size in the surrounding area. The ranges of the other members of the leadership team are reviewed by the Headteacher whose recommendations to the governing body are considered by the Finance, Premises & Audit Committee. Any annual increments awarded within the agreed ranges are approved by the Headteacher.
Related parties have been identified by the governors in their annual disclosures of pecuniary interests. Further details are disclosed in note 25.
The objective of the School in relation to all students on roll (Year 7 through to Sixth Form) is summed up by the School’s purpose statement:
The School is about the best atmosphere, the best support, the best results. By the time our students leave the School they will be well qualified, well rounded and well prepared.
The Headteacher and leadership team lead on the development and implementation of the School development plan to ensure delivery of the School’s purpose within the constraint of the allocated funding.
The expansion programme commenced in September 2012 and is now essentially complete, with 8 forms in each of the years 7-11, and greater Sixth Form numbers as a result of follow-through from successive expanded Year 11 years and a greater inflow of students from Year 11 cohorts from other schools.
Although the Sixth Form may grow a little more, it is expected that the School is now in its final expanded form. In this state, student numbers will be as follows:
Year 7 – 11 5 X 240 = 1,200
Sixth Form Around 500
Expected steady-state total student numbers: 1,675 – 1,725
The governors confirm that they have referred to the guidance contained in the Charity Commission's general guidance on public benefit when reviewing the charitable company's objectives and aims and in planning future activities for the year. The governors consider that the School's aims are demonstrably to the public benefit.
2021 GCSE Results
9: 23.6%
9-7: 68.7%
Grade 4+ in EBacc: 81%
Grade 5+ in English & Maths: 95%
Att 8 score: 74
EBacc APS: 7.6
Progress 8: Not Yet Available
2021 A Level Results
A*: 22.4%
A*-A: 51.9%
A*-C: 93.7
Av A Level grade: B
The Sixth Form has been growing in numbers but is now likely to have reached a plateau of around 500. There are 26 A-Level subjects on offer. No further subjects are planned.
The School continues to invest in the estate. Work over the recent Summer break and planned for the future will redeploy and refurbish older parts of the estate to best meet the needs of a fully expanded school.
Sport plays a significant role within the life of the School. An artificial pitch facility opened in Summer 2020.
After making appropriate enquiries, the board of governors has a reasonable expectation that the academy trust has adequate resources to continue in operational existence for the foreseeable future. For this reason the board of governors continues to adopt the going concern basis in preparing the accounts.
The School held fund balances at 31 August 2021 of £12,658,966 (2020 - £12,523,686) comprising (£1,839,575) (2020 - (£1,773,138)) of restricted funds and £76,912 (2020 - £48,525) of unrestricted general funds. Of the restricted funds, £14,421,629 (2020 - £14,248,299) is represented by tangible fixed assets.
The pension reserve which is considered part of restricted funds was (£2,538,000) (2020 - (£2,133,000)).
Covid Impact on Finance
Covid funding from central government ensured that school finances were not adversely affected. Intervention to allow all students access to effective remote learning was successfully planned and delivered using the additional resources received for this purpose. Those who needed support in terms of devices, software or internet connectivity were given this support within the allocated budget. Due to our funding structure, the furlough of staff was not an option. This allowed teaching staff to focus on the delivery of online lessons: every lesson on timetable was delivered remotely including practical subjects such as PE and Drama.
The Governors consider that unrestricted funds together with the balance on general annual grant and devolved formula capital grant comprise available funds.
The governors expect to spend the money received on the pupils in the school at the current time and retain an ongoing reserve of 3 – 8% of annual grant funding as set out in the reserves policy.
We calculate available funds to be £756,758 and the governors will carry out a review on how these will be used and is detailed in plans for future periods.
The Academy is confident that it will meet the required pension contributions from its projected income without significantly impacting on its planned level of charitable activity. It continues to calculate its ‘free’ or general unrestricted reserves without setting aside designated reserves to cover the pension liability.
Under the Memorandum and Articles of Association, the School has the power to invest funds not immediately required for its own purposes, in any way the governors see fit. The organisation has a positive cash balance to cover eventualities and unforeseen expenses. The banking facilities are reviewed on a regular basis.
The governors are responsible for identifying risks faced by the charitable company, establishing procedures to mitigate these risks, and ensuring that employees are aware of these procedures and of the implications of failing to implement them. They are satisfied that these procedures are consistent with the guidelines issued by the Charity Commission.
A Risk Register is in place and relevant risks are reviewed and updated at every committee meeting under the direction of the Chair of the committee.
The Academy is compliant with the recognised standards of fundraising set out in the Code of Fundraising Practice. Bourne Grammar School does not use professional fundraisers and there have been no complaints received by the Academy about fund raising activities carried out by the Academy in the year.
Future plans for the school include:
- Refurbishment of the existing estate to provide a standard of accommodation (size, ambient environment etc.) of similar high specification to the new Science Block.
- Development of a new Pastoral Hub
- Redesign of Reception
- Longer term consideration of a new Sixth Form Centre
- Investment in a wellbeing programme for staff and students
- Fresh look at LT and support staff structures
- Further development of ICT provision.
The School and its governors do not act as the custodian trustees of any charity.
In so far as the governors are aware:
- there is no relevant audit information of which the charitable company's auditor is unaware; and
- the governors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.
A resolution proposing that Azets Audit Services be reappointed as auditor of the charitable company will be put to the members.
The governors' report, incorporating a strategic report, was approved by order of the board of governors, as the company directors, on
As governors, we acknowledge we have overall responsibility for ensuring that Bourne Grammar 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.
As governors, we have reviewed and taken account of the guidance in DfE's Governance Handbook and competency framework for governance.
The board of governors 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 Bourne Grammar School and the Secretary of State for Education. They are also responsible for reporting to the board of governors any material weaknesses or breakdowns in internal control.
The information on governance included here supplements that described in the Governors' Report and in the Statement of Governors' Responsibilities. The board of governors has formally met 4 times during the year. Attendance during the year at meetings of the board of governors was as follows:
In line with the requirements of the Academies Trust Handbook the board meets in full four times per year with an additional nine committee meetings held on top. Effective governance is assured via the work of the Pastoral and Community Committee, the Finance, Premises and Audit Committee and the Curriculum and Personnel Committee. The Finance, Premises and Audit Committee has monthly access to management accounts, reviews spending annually and scrutinises budget plans prior to approval each year by the board.
Throughout the period of the COVID-19 pandemic during which the School was closed, an Emergency Executive Committee was mandated to operate. Meetings of the EEC took place when scheduled Committee/FGB meetings would have taken place. Full attendance at each meeting of the EEC was experienced throughout the period for which it operated. Notwithstanding the record of full attendance at the EEC meetings, the practice of supplanting normal attendance at meetings with the smaller number of Governors attending meetings of the EEC has resulted in the attendance numbers noted above being lower than would be expected had the meetings run in the conventional manner. All meetings both during and outwith the period during which the EEC operated were in every case quorate.
The Finance, Premises and Audit committee is a sub-committee of the main board of governors. Its purpose is to advise the Board of Governors in accordance with the terms of reference approved by the full governing body.
Attendance at meetings in the year was as follows:
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 board of governors where value for money can be improved, including the use of benchmarking data where available. The accounting officer for the academy trust has delivered improved value for money during the year by ensuring multiple quotes are obtained where practicable and appropriate.
Staffing:
Recruiting the highest quality staff, teaching and non-teaching, remains a key priority of the School and considerable time and financial resource is spent on this activity. The policy of recruiting additional staff in English and Maths provides protection in the event of it being difficult to recruit at certain times of the year and also enables smaller set sizes with emphasis on all students reaching their potential through support for ‘weaker’ students. Carefully controlled resource is spent on CPD for staff with the objective of enhancing teaching and learning across the curriculum.
The non-teaching staff model is streamlined and efficient and best-placed to meet the current needs of the School.
Financial Governance:
Financial governance of the School is overseen by the Finance, Premises & Audit committee in accordance with the School’s finance policy. The Finance, Premises & Audit Committee meets regularly to oversee and review spending against income, preparation of annual budget, 3-year financial projections, recommendations of the Responsible Officer, compliance with guidelines published by the ESFA in the Academies Financial Handbook, health & safety and matters pertaining to the upkeep and expansion of the School estate. Governor approval must be sought for non-routine items over £2,000.
The School continually evaluates expenditure in all areas in order to demonstrate best value for money and to reduce expenditure where possible; an example being the change of printer contract and the reduction from two leased minibuses to one. The Support Staff structure has been reviewed and refined over recent years to deliver increased efficiency at a reduced cost.
Risk and control:
Bourne Grammar School has historically received the lowest level of per pupil secondary school funding in Lincolnshire. Despite this level of funding the School offers exceptional teaching and learning and offers outstanding value for money. This has been made possible by the long-term expansion strategy that the School and Governors put in place in 2012 along with prudent financial management.
Now that the School has completed it’s expansion it is expected that it will generate a moderate annual operating surplus, some of which is likely to be used to improve the condition of the state.
A Risk Register is in place and relevant risks are reviewed and updated at every committee meeting under the direction of the Chair of the committee.
The system of internal control is designed to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives. It can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an on-going process designed to identify and prioritise the risks to the 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 Bourne Grammar School for the period 1 September 2020 to 31 August 2021 and up to the date of approval of the annual report and accounts.
The board of governors 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 board of governors 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 period 1 September 2020 to 31 August 2021 and up to the date of approval of the annual report and accounts. This process is regularly reviewed by the board of governors and at each committee.
The academy trust's system of internal financial control is based on a framework of regular management information and administrative procedures including the segregation of duties and a system of delegation and accountability. In particular, it includes:
comprehensive budgeting and monitoring systems with an annual budget and periodic financial reports which are reviewed and agreed by the board of governors;
regular reviews by the Finance, Premises and Audit committee of reports which indicate financial performance against the forecasts and of major purchase plans, capital works and expenditure programmes;
setting targets to measure financial and other performance;
clearly defined purchasing (asset purchase or capital investment) guidelines;
identification and management of risks.
The board of governors has decided:
to buy in an internal audit service from Streets LLP.
The Internal Auditor's role includes giving advice on financial and other matters and performing a range of checks on the academy trust's financial and other systems. In particular, the checks carried out in the current period included:
Governance/Financial Management
Income
Expenditure
Payroll
Regularity
Three times per year, the Internal Auditor reports to the Finance Team and the Headteacher, who then report to the board of governors through the Finance, Premises and Audit committee on the operation of the systems of control and on the discharge of the financial responsibilities of the board of governors. The accompanying Internal Auditor report includes an outline of the areas reviewed, key findings, recommendations and conclusions to help the committee consider actions and assess year on year progress.
The Internal Auditor has delivered one visit during the past year as opposed to the planned three. This is less than the expected schedule of work due to the restrictions surrounding COVID-19 and the working restrictions imposed (lockdowns and working from home for part of the year). The review has confirmed that overall the systems within the Academy are working effectively. They identified one area where improvements are required and recommendations have been made to improve current arrangements. The recommendation is categorised as low risk and for this reason the Internal Audit opinion has been assessed as Substantial i.e. A high level of assurance where the control framework is robust and working largely as expected.
The one area raised for improvement was that some purchases were made without purchase order forms and the recommendation was to raise purchase orders to accompany invoices as part of best practice and as per the School’s Finance manual. It is not always possible to raise an order for every purchase, every invoice/payment made is authorised by the budget holder.
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 auditor;
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 Finance, Premises and Audit committee and a plan to address weaknesses and ensure continuous improvement of the system is in place.
Approved by order of the board of governors on 01 December 2021 and signed on its behalf by:
As accounting officer of Bourne Grammar School, I have considered my responsibility to notify the academy trust board of governors and the Education and Skills Funding Agency (ESFA) of material irregularity, impropriety and non-compliance with terms and conditions of all funding received by the academy trust, 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 2020.
I confirm that I and the academy trust's board of governors 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 2020.
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 governors and ESFA.
The governors (who act as trustees for Bourne Grammar School and are also the directors of Bourne Grammar School for the purposes of company law) are responsible for preparing the governors' report and the accounts in accordance with the Academies Accounts Direction 2020 to 2021 published by the Education and Skills Funding Agency, United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) and applicable law and regulations.
Company law requires the governors to prepare accounts for each financial year. Under company law, the governors must not approve the accounts 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 accounts, the governors are required to:
select suitable accounting policies and then apply them consistently;
observe the methods and principles in the Charities SORP 2019 and the Academies Accounts Direction 2020 to 2021;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the accounts; and
prepare the accounts on the going concern basis unless it is inappropriate to presume that the charitable company will continue in business.
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 that grants received from ESFA/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 accounts may differ from legislation in other jurisdictions.
Approved by order of the members of the board of governors on
Opinion
In our opinion the accounts:
give a true and fair view of the state of the charitable company's affairs as at 31 August 2021 and of its incoming resources and application of resources, including its income and expenditure, f or the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;
have been prepared in accordance with the requirements of the Companies Act 2006 ; and
have been prepared in accordance with the Charities SORP 2019 and the Academies Accounts Direction 2020 to 2021.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 'Auditor's responsibilities for the audit of the accounts' section of our report. We are independent of the academy trust in accordance with the ethical requirements that are relevant to our audit of the accounts in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the governors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the academy trust’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the governors with respect to going concern are described in the relevant sections of this report.
Other information
The governors are responsible for the other information , which comprises the information included in the a nnual report other than the accounts and our auditor’s report thereon. Our opinion on the accounts does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the accounts, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the accounts or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the accounts or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
the information given in the governors' r eport including the incorporated strategic report for the financial year for which the accounts are prepared is consistent with the accounts; and
the governors' r eport including the incorporated strategic report ha s been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the academy trust and its environment obtained in the course of the audit, we have not identified material misstatements in the governors' r eport , including the incorporated strategic report .
We have nothing to report in respect of the following matters in relation to which 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 accounts are not in agreement with the accounting records and returns; or
certain disclosures of governors' remuneration specified by law are not made; or
As explained more fully in the s tatement of governors' r esponsibilities, the governors are responsible for the preparation of the accounts and for being satisfied that they give a true and fair view, and for such internal control as the governors determine is necessary to enable the preparation of accounts that are free from material misstatement, whether due to fraud or error.
In preparing the accounts , the governors are responsible for assessing the academy trust’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the governors either intend to liquidate the charitable company, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these accounts.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below .
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of senior leadership, Governors/Trustees and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations including compliance with the Academies Accounts Directio n 2020 to 2021 issued by the Education and Skills Funding Agency;
Performing audit work over the recognition of grant income and the allocation of expenditure to funds;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
A further description of our responsibilities for the audit of the accounts is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 . Our audit work has been undertaken so that we might state to the charitable company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company 's members as a body, for our audit work, for this report, or for the opinions we have formed.
In accordance with the terms of our engagement letter dated 1 September 2021 and further to the requirements of the Education and Skills Funding Agency (ESFA) as included in the Academies Accounts Direction 2020 to 2021, we have carried out an engagement to obtain limited assurance about whether the expenditure disbursed and income received by Bourne Grammar School during the period 1 September 2020 to 31 August 2021 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 Bourne Grammar School and ESFA in accordance with the terms of our engagement letter. Our work has been undertaken so that we might state to the Bourne Grammar School and ESFA 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 Bourne Grammar School and ESFA, for our work, for this report, or for the conclusion we have formed.
The accounting officer is responsible, under the requirements of Bourne Grammar School’s funding agreement with the Secretary of State for Education dated 1 January 2012 and the Academies Financial Handbook, extant from 1 September 2020, 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 2020 to 2021. We report to you whether anything has come to our attention in carrying out our work which suggests that in all material respects, expenditure disbursed and income received during the period 1 September 2020 to 31 August 2021 have not been applied to purposes intended by Parliament or that the financial transactions do not conform to the authorities which govern them.
We conducted our engagement in accordance with the Framework and Guide for External Auditors and Reporting Accountant of Academy Trusts issued by ESFA. 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.
The work undertaken to draw to our conclusion includes:
a review of the activities of the academy, by reference to sources of income and other information available to us;
sample testing of expenditure, including payroll;
a review of minutes of Governors’ meetings.
In the course of our work, nothing has come to our attention which suggests that in all material respects the expenditure disbursed and income received during the period 1 September 2020 to 31 August 2021 has not been applied to purposes intended by Parliament and the financial transactions do not conform to the authorities which govern them.
The accounts on pages 20 to 44 were approved by the governors and authorised for issue on
A summary of the principal accounting policies adopted (which have been applied consistently, except where noted), judgements and key sources of estimation uncertainty, is set out below.
The accounts 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 2020 to 2021 issued by ESFA, the Charities Act 2011 and the Companies Act 2006.
The accounts are prepared in sterling , which is the functional currency of the academy trust . Monetary a mounts in these financial statements are rounded to the nearest £.
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 charitable company to continue as a going concern. The governors have made this assessment in respect of a period of at least one year from the date of authorisation for issue of the accounts 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 accounts.
The trustees have taken consideration of the effects of COVID-19 in making their assessment.
All incoming resources are recognised when the academy trust has entitlement to the funds, the receipt is probable and the amount can be measured reliably.
Grants are included in the statement of financial activities on a receivable basis. The balance of income received for specific purposes but not expended during the period is shown in the relevant funds on the balance sheet. Where income is received in advance of meeting any performance-related conditions there is not unconditional entitlement to the income and its recognition is deferred and included in creditors as deferred income until the performance-related conditions are met. Where entitlement occurs before income is received, the income is accrued.
General Annual Grant is recognised in full in the statement of financial activities in the period 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 in full when there is an unconditional entitlement to the grant. Unspent amounts of capital grants are reflected in the balance sheet in the restricted fixed asset fund. Capital grants are recognised when there is entitlement and are not deferred over the life of the asset on which they are expended.
Donations are recognised on a receivable basis (where there are no performance-related conditions) where the receipt is probable and the amount can be reliably measured.
Other income, including the hire of facilities, is recognised in the period it is receivable and to the extent the academy trust has provided the goods or services.
Goods donated for resale are included at fair value, being the expected proceeds from sale less the expected costs of sale. If it is practical to assess the fair value at receipt, it is recognised in stock and ‘Income from other trading activities’. Upon sale, the value of the stock is charged against ‘Income from other trading activities’ and the proceeds are recognised as ‘Income from other trading activities’. Where it is impractical to fair value the items due to the volume of low value items they are not recognised in the accounts until they are sold. This income is recognised within ‘Income from other trading activities’.
Donated fixed assets are measured at fair value unless it is impractical to measure this reliably, in which case the cost of the item to the donor is used. The gain is recognised as income from donations and a corresponding amount is included in the appropriate fixed asset category and depreciated over the useful economic life in accordance with the academy trust‘s accounting policies.
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 are allocated on the portion of the asset’s use.
All resources expended are inclusive of irrecoverable VAT.
This includes all expenditure incurred by the academy trust to raise funds for its charitable purposes and includes costs of all fundraising activities events and non-charitable trading.
These 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.
These include the costs attributable to the academy trust's compliance with constitutional and statutory requirements, including audit, strategic management, governors' meetings and reimbursed expenses.
Assets costing £1,000 or more are capitalised as tangible fixed assets and are carried at cost, net of depreciation and any provision for impairment.
Where tangible fixed assets have been acquired with the aid of specific grants, either from the government or from the private sector, they are included in the balance sheet at cost and depreciated over their expected useful economic life. The related grants are credited to a restricted fixed asset fund in the statement of financial activities and carried forward in the balance sheet. Depreciation on such assets is charged to the restricted fixed asset fund in the statement of financial activities so as to reduce the fund over the useful economic life of the related asset on a basis consistent with the academy trust's depreciation policy. Where tangible fixed assets have been acquired with unrestricted funds, depreciation on such assets is charged to the unrestricted fund.
Depreciation is provided on all tangible fixed assets other than freehold land, at rates calculated to write off the cost of each asset on a straight-line basis over its expected useful life, as follows:
Property introduced into the academy from the previous local authority school was transferred in at depreciated replaceable cost as per the valuation at 31 August 2012 by a professional valuer commissioned by the ESFA.
Other assets transferred to the academy on conversion have not been valued in these accounts.
The land and buildings are leased under a 125 year lease.
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.
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 of services it must provide.
Rentals payable under operating leases are charged against income on a straight line basis over the period of the lease.
The land and buildings from which the academy operate are leased from the Local Authority at £nil rent.
A commercial value lease of the lease has not been included in these accounts as expenditure or donated income.
The academy trust only holds basic financial instruments as defined in FRS 102. The financial assets and financial liabilities of the academy trust and their measurement basis are as follows.
Trade and other debtors are basic financial instruments and are debt instruments measured at amortised cost. Prepayments are not financial instruments.
Cash at bank is classified as a basic financial instrument and is measured at face value.
Trade creditors, accruals and other creditors are financial instruments, and are measured at amortised cost. Taxation and social security are not included in the financial instruments disclosure definition.
Deferred income is not deemed to be a financial liability, as the cash settlement has already taken place and there is an obligation to deliver services rather than cash or another financial instrument.
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.
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 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 based on quadrennial valuations using a prospective unit credit method. The TPS is an unfunded multi-employer scheme with no underlying assets to assign between employers. Consequently, the TPS is treated as a defined contribution scheme for accounting purposes and the contributions are recognised in the period to which they relate.
The LGPS is a funded multi-employer 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 net income or expenditure 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 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.
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 funders 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/donor and include grants from the Education and Skills Funding Agency/Department for Education.
Designated funds are where the governors have ring fenced unrestricted income for specific purposes.
Accounting e stimates 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.
The academy 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 or income for pensions include the discount rate. Any changes in these assumptions, which are disclosed in note 20, 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 2019 has been used by the actuary in valuing the pensions liability at 31 August 2021. 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.
The academy received £95,680 of funding for catch-up premium and costs incurred in respect of this funding totalled £82,392, with the remaining £13,288 to be spent in 2021/22.
The academy received a further £45,750 for mass testing and £36,428 for emergency support. This income has been fully spent and the costs are included in notes 7 and 9 below.
The key management personnel of the academy trust comprise the governors and the senior management team as listed on page 1 . The total amount of employee benefits (including employer pension contributions) received by key management personnel for their services to the academy trust was £ 577,978 received by 7 people (2020 - £519,492 received by 6 people).
The Headteacher and other staff governors only receive remuneration in respect of services they provide undertaking the roles of Headteacher and staff, and not in respect of their services as governors. Other governors did not receive any payments, other than expenses, from the academy trust in respect of their role as governors. During the year governors expenses amounted to £nil (2020 - £nil).
The value of governors' remuneration was as follows:
Mr J Maddox (Headteacher and trustee) (retired 31 December 2020)
Remuneration £45,000 - £50,000 (2020 - £125,000 - £130,000)
Employer’s pension contributions £10,000 - £15,000 (2020 - £25,000 - £30,000)
Mr A Anderson (Headteacher and trustee) (appointed 1 January 2021)
Remuneration £65,000 - £70,000
Employer’s pension contributions £10,000 - £15,000
Mr C Delport (staff governor and trustee)
Remuneration £45,000 - £50,000 (2020 - £45,000 - £50,000)
Employer’s pension contributions £10,000 - £15,000 (2020 - £10,000 - £15,000)
Mr J Barker (staff governor and trustee)
Remuneration £40,000 - £45,000 (2020 - £40,000 - £45,000)
Employer’s pension contributions £5,000 - £10,000 (2020 - £5,000 - £10,000)
Mr L Edwards (staff governor and trustee)
Remuneration £40,000 - £45,000 (2020 - £40,000 - £45,000)
Employer’s pension contributions £10,000 - £15,000 (2020 - £5,000 - £10,000)
Other related party transactions involving the governors are set out within the related parties note.
The academy trust has opted into the Department for Education’s Risk Protection Arrangement (RPA), an alternative to insurance where UK government funds cover losses that arise. This scheme protects governors and officers from claims arising from negligent acts, errors or omissions occurring whilst on academy trust business, and provides cover up to £10,000,000. It is not possible to quantify the governors and officers indemnity element from the overall cost of the RPA scheme.
Deferred income includes money received for school trips taking place during the next academic year and peripatetic music fees received in advance.
The specific purposes for which the funds are to be applied are as follows:
Restricted Fixed Asset funds represent capital funding received from the ESFA and other sources. In accordance with the accounting policies set out in note 1, assets are capitalised where applicable, and depreciation is charged to this fund over the assets' useful economic life. Where costs are not capital in nature they are charged directly to this fund as an expense.
The restricted grant income in the year all relates to the provision of education for the children of the School.
Under the funding agreement with the Secretary of State, the School was not subject to a limit on the amount of GAG that it could carry forward at 31 August 2021.
Parliament has agreed, at the request of the Secretary of State for Education, to a guarantee that, in the event of School closure, outstanding Local Government Pension Scheme liabilities would be met by the Department for Education. The guarantee came into force on 18 July 2013.
The School fund is designated by the governors for the use in a variety of different areas including school trips and peripatetic music.
The academy trust's employees belong to two principal pension schemes: the Teachers' Pension Scheme England and Wales (TPS) for academic and related staff; and the Local Government Pension Scheme (LGPS) for non-teaching staff, which is managed by Lincolnshire County Council. Both are multi-employer defined benefit schemes.
The latest actuarial valuation of the TPS related to the period ended 31 March 2016, and that of the LGPS related to the period ended 31 March 2019.
Contributions amounting to £164,725 were payable to the schemes at 31 August 2021 (2020: £125,329) and are included within creditors.
The Teachers' Pension Scheme (TPS) is a statutory, contributory, defined benefit scheme, governed by the Teachers’ Pension Scheme Regulations 2014. Membership is automatic for teachers in academies. All teachers have the option to opt out of the TPS following enrolment.
The TPS is an unfunded scheme to which both the member and employer makes contributions, as a percentage of salary. These contributions are credited to the Exchequer. Retirement and other pension benefits are paid by public funds provided by Parliament.
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 every 4 years. 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 2016. The valuation report was published by the Department for Education on 5 March 2019.
The key elements of the valuation and subsequent consultation are:
employer contribution rates set at 23.68% of pensionable pay (including a 0.08% employer administration charge)
total scheme liabilities (pensions currently in payment and the estimated cost of future benefits) for service to the effective date of £218,100 million, and notional assets (estimated future contributions together with the notional investments held at the valuation date) of £196,100 million giving a notional past service deficit of £22,000 million
the SCAPE rate, set by HMT, is used to determine the notional investment return. The current SCAPE rate is 2.4% above the rate of CPI. The assumed real rate of return is 2.4% in excess of prices and 2% in excess of earnings. The rate of real earnings growth is assumed to be 2.2%. The assumed nominal rate of return including earnings growth is 4.45%.
The next valuation result is due to be implemented from 1 April 2023.
The employer's pension costs paid to the TPS in the period amounted to £972,971 (2020: £887,975).
A copy of the valuation report and supporting documentation is on the Teachers’ Pensions website.
Under the definitions set out in FRS 102, the TPS is an unfunded multi-employer pension scheme. The academy trust has accounted for its contributions to the scheme as if it were a defined contribution scheme. The academy trust has set out above the information available on the scheme.
The LGPS is a funded defined benefit pension scheme, with the assets held in separate trustee-administered funds. The total contributions are as noted below. The agreed contribution rates for future years are 21.1% for employers and 5.5 to 12.5% 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.
Scheme liabilities would have been affected by changes in assumptions as follows:
Owing to the nature of the academy trust's operations and the composition of the board of governors being drawn from local public and private sector organisations, transactions may take place with organisations in which the academy 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.
Some of the governors have children who are pupils at the academy, consequently there will be transactions between those governors and the academy in respect of their children’s education. These are on the same basis as other pupils at the academy.
The Bourne Education Foundation, in which all of the trustees are governors at the school, has gifted £nil (2020 - £76) to the school for prizes on the student Speech night.
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 or she is a member, or within one year after he or she ceases to be a member, such amount as may be required, not exceeding £10 for the debts and liabilities contracted before he or she ceases to be a member.
No individual has a controlling interest in the charitable company.