The Trustees (who are also Directors for the purposes of the Companies Act) present their Annual Report together with the audited financial statements and auditors’ report of Thedwastre Education Trust (the Trust) for the period ended 31 August 2020. The Trustees confirm that the Annual Report and Financial Statements of the Trust comply with the current statutory requirements, the requirements of the Trust’s governing documents and the Academies Accounts Direction 2019 to 2020. The Annual Report serves the purposes of both a Trustees’ report and a Directors’ report including a strategic report under company law.
Thedwastre Education Trust operates four smaller than average Primary Academies in Suffolk and has a pupil capacity of 770 and had roll of 663 in the school census of October 2019.
Thedwastre Education Trust includes the following Academies:
Great Barton C of E Primary Academ y
T hurston C of E Primary Academy
Rattlesden C of E Primary Academy
Woolpit Primary Academy
The Trust was incorporated on 1 December 2015, it is a company limited by guarantee and an exempt charity. All four schools transferred to an Academy Trust Structure on 1 January 2016.
The Trust’s Memorandum and Articles of Association are the primary governing documents. The Trustees of Thedwastre Education Trust are also the directors of the charitable company for the purposes of company law.
The principal objects of the Trust are 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 Academies which shall offer a broad and balanced curriculum.
The operation of The Trust’s Academies and employment of staff are the responsibility of the Trustees. The Trust retains control of Academy budgets and finances, and monitors these through its Finance Committee. Each Academy has appointed Local Governing Bodies (LGBs) who have delegated authority to administer their Academy within agreed budgets.
Within this Report the term Trustee refers to a member of the Board of Directors and the term Governor to a member of a Local Governing Body. Details of the Trustees who served during the year are included in the Reference and Administrative Details section.
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.
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 trustees 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 trustees and officers indemnity element from the overall cost of the RPA scheme.
The management of the Trust is the responsibility of the Trustees who are co-opted under the terms of the Articles of Association. The St Edmundsbury and Ipswich Academies Umbrella Trust is entitled to appoint two Trustees and each Academy Local Governing Body is entitled to nominate one Trustee who is appointed by the Members.
Directors’ skills and areas of expertise are reviewed regularly; before new directors are appointed to the Board, their skills and areas of expertise are carefully considered to ensure that the Board has the required skill set overall to fulfil its duties.
Trustees are appointed for a fixed term of four years (renewable). The Chief Executive Officer (CEO) is an ex officio member of the Board of Directors and is a Director for as long as they remain in post. Other Trustees are appointed by the Members of the Trust and up to two Directors may be appointed by the Directors with the consent of the St Edmundsbury and Ipswich Academies Umbrella Trust. The Articles of Association make provision for 10 Trustees plus the CEO.
The training and induction of new Trustees will depend on their existing experience. Newly appointed Trustees are contacted in writing by the chair to welcome them and to affirm expectations. All new Trustees will be offered a tour of the academies to meet staff and pupils. All Trustees are introduced to the policies, procedures, minutes, accounts, budgets, plans and other documents that they will need to undertake their role. As there is expected to be low turnover of Trustees, induction will be carried out informally and will be tailored specifically to the individual.
The governance of the Trust is defined in the Memorandum and Articles of Association together with the Funding Agreement with the Department for Education.
The Trust was set up with a management structure to support the delivery of high-quality education. The structure consists of two levels: The Board of Directors is responsible for the strategic direction of the Trust and the Leadership Group that is responsible for the day-to-day running of the academies. In addition, each academy has a Local Governing Body (LGB) that acts as a committee of the Board of Directors and has delegated authority determined according to the Scheme of Delegation.
T he Directors (who are Trustees) are responsible for setting strategic policy, adopting an annual plan and budget, monitoring the use of budgets and making major decisions about the direction of the Trust, capital expenditure, trust-wide contracts and senior staff appointments.
The Governors of each Local Governing Body are responsible for implementing Trust policy, ensuring the appropriateness of annual budgets and capital expenditure projects for their Academy and monitoring performance against that budget within authorised limits.
The Leadership Group consists of the Headteacher of each Academy and the Chief Executive. This Group are responsible for leading the Trust on a day-to-day basis, organising the teaching staff, facilities and pupils. The Leadership Group control the operation of the Trust at an executive level under the direction of the Chief Executive, implementing the policies laid down by the Directors and reporting back to them. The Leadership Group ensures that the work of individual academies and LGBs aligns with the strategic aims of the Trust as a whole .
The Headteacher of each Academy, with the support of senior staff, is responsible for implementing policies and reporting to the LGB, and for the day-to-day operation of the Academy, in particular organising staff, resources and pupils. They are responsible for the authorisation of spending within agreed budgets and for the appointment of staff following vetting and safer recruitment processes.
The Chief Executive Officer acts as the Chair of the Leadership Group and the Accounting Officer and has ultimate accountability for the performance of the academies.
Key management personnel include Trustees and those staff to whom the Trustees have delegated significant authority and responsibility in the day-to-day running of the Trust.
Except for the Chief Executive Officer, Trustees receive no remuneration from the Trust.
The Trust applies the guidance of the School Teachers Pay and Conditions Document to all leadership roles. The remuneration for Headteachers is recommended by the Headteacher’s Performance Management Committee of the Local Governing Body of the Academy for which they are responsible based on their achievement of the objectives set for them during the year. Each Headteacher’s Performance Management Committee is advised by an external adviser appointed by the Trust in conjunction with the Chief Executive Officer. The salary point (Headteacher Pay and Conditions) for the responsibilities of the Chief Executive Officer is determined by the Trust Board based on the overall number of pupils in the Trust.
Pay and remuneration of key management personnel is decided by a variety of contributory factors, such as the Academy group size, ISR, the pay scales for each role and the level of experience of each staff member. In addition, pay levels may be affected by nationally agreed pay awards, the ability to recruit and retain in post, all of which are in accordance with the Trust’s appointment and pay policies.
All amendments to key management’s pay and remuneration is advised by the HR Committee and approved by the Board of Directors.
Trade union facility time
The trust has no trade union officials that require trade union facility time.
Owing to the nature of the Trust's operations and the composition of the Board of Directors being drawn from local public and private sector organisations, it is inevitable that from time to time transactions will take place with organisations in which members of the Board of Directors may have an interest. All transactions involving such organisations are conducted at arm's length and in accordance with the Trust’s financial regulations and normal procedures. Any transaction where the Trustee may have a pecuniary interest is only undertaken in accordance with the ‘at cost’ principle described in the Academies Financial Handbook.
The Trust cooperated with the following organisations during the academic year in pursuit of its charitable activities:
Thurston Partnership School Company. Individual academies are Members of the Thurston Partnership School Company (company number 08318298), a dormant company.
LARK Teaching Schools Alliance. Our academies are strategic partners of the LARK Teaching Schools Alliance, a teaching schools alliance that offers continuous professional development, teacher training, school-to-school support and access to range of other professional support services.
The St Edmundsbury and Ipswich Academies Umbrella Trust/ Diocese. Three of our schools are associated with the Diocese who provide support for church schools in fulfilling their Christian ethos, religious education and spiritual and moral teaching and learning. The Umbrella Trust also acts as a Member of the Trust.
The Trust does not have a formal sponsor.
The principal object and aim of Thedwastre Education Trust is the operation of a number of Academies to provide free education and care for pupils of different abilities within its local community between the ages of 4 and 11.
The Trust aims to provide the best possible education for all the children in its care by providing a structure of school-to-school support and challenge. We wish to develop our children as rounded individuals who leave the schools well prepared for the next stage of their education – a broad and balanced education is an essential part of this aim.
We have continued our work to establish Thedwastre Education Trust on a firm basis, developing sustainable structures and processes that allow the Trust to harness the talents of all the staff within the academies to work towards achieving our aims.
During 201 8 - 19 the Board and the Leadership Group met several times to further refine the Trust’s strategy. The renewed strategy is set out below:
Vison
We are a community of schools striving for excellence for our pupils, staff and communities, providing a broad and balanced education which enables all to reach their full potential.
Our Values
We value every child, parent, volunteer and employee; we aim to ensure all are respected and children show respect to one another, learning to work collaboratively with their peers for mutual benefit. We have high aspirations for all pupils, staff and the communities we serve.
Our core values are:
Excellence
Inclusive
Community
Collaborative
Our Priorities
Over the next 3 years we will focus on the following objectives:
1. Excellence in Education
We aim to ensure all our schools are judged as good or outstanding over the next three years with outcomes and progress consistently above national average
Our schools will have a strong sense of identify whilst working collaboratively as part of the Trust and beyond
We will prepare children for life through a creative, broad and balanced curriculum, utilising sharing best practice to benefit all
2. Growth
We aim to welcome at least three new schools to join the Trust as Academy converters
We will become a DfE Sponsor and develop capacity to take on schools in significant need
Our central service functions will enable us to grow through greater economies of scale, efficient and cost effective systems
3. Enablers:
Effective Governance, including risk management
We will regularly review governance at all levels to ensure it is robust, appropriate and fit for purpose, modelling recognised best practice
Finance and Administration
We will work to achieve an annual surplus across the Trust to enable us to reinvest in our schools and take informed risks
We will develop an effective central services team to support our schools so that they can focus on providing an exceptional education for our pupils
Estates and Facilities
Our facilities, including technology, will support our ambitious curriculum plans and support school improvement
Our schools willingly share resources where this adds value to the curriculum
Our school premises will be well maintained with support from the central services team
4. Effective and timely communications
We will ensure our communications are effective with regular updates to all our stakeholders at both a School and Trust level
5. People
Our staff will recommend working for TET as evidenced by our Net Promoter Score collected annually through our staff survey
We will develop an annual Trust wide CPD programme that supports all our staff to achieve their potential, complimenting in-school CPD
Our leaders will support colleagues across the Trust and willingly share best practice for the benefit of all
Our strategy will be reviewed and updated annually and supported by an annual plan to ensure we keep on track. During the 2019-20 year, the Board approved an annual plan with specific objectives for the year. Good progress was made during the year against this plan and the strategic report below summarises some of the key highlights.
The Trustees believe that by working towards the objects and aims of the Trust as detailed above, they have complied with their duty to have due regard to the guidance on public benefit published by the Charity Commission.
The Covid-19 pandemic led to the closure of schools for a significant period of time between March and July 2020. Our schools all responded well and maintained provision for vulnerable pupils and children of key workers, often going over and above what was expected off them to support families, bring pupils back to school as soon as possible. The Board maintained close supervision of all schools, the risks associated with the pandemic and the welfare of pupils and staff. During the school closure period the Board met more regularly than normal and ensured direct communication with Headteachers and Chairs of Governors throughout the whole period.
The Board would like to thank all staff, but especially the senior leaders who worked so hard during extremely challenging times.
Excellence in Education
During 2019-20 we appointed a new Headteacher to lead Woolpit Primary Academy. Since taking up the post in January 2020, significant progress has been made in all aspects of school improvement. The school has developed a new vision and values, significantly improved general behavior and attitudes to learning, substantially re-written the curriculum and made good progress on improving the quality of teaching, learning and outcomes for pupils. The school is in a far better place than it has been for many years. The Board maintains regular oversight over the school and is pleased with the substantial progress made so far. Whilst there is still much work to do, we are confident that pupil progress will show improvement over the coming year.
The Board appointed colleagues from the LARK Teaching Schools Alliance to act as its school improvement advisers. Half termly visits were undertaken by experienced external school leaders (where this was permissible up until school closures in March) to support our schools in further developing their school improvement activities. Additional focused support was given to Woolpit Primary Academy which further accelerated school improvement. Two Directors were assigned to work more closely with Woolpit, including attending local governing body meetings where possible.
The Trust continued to strengthen opportunities for collaborative working between our schools, extending the subject leadership arrangements and facilitating cross school working. Of particular note has been the work led by the Headteacher at Rattlesden Primary Academy to develop a programme for developing the teaching of science across our four schools and two other local schools. Whilst this work was paused during the lockdown, it will be back on track in 2020-21. In addition, our four schools have continued to work together on writing moderation, supported by the Headteacher at Great Barton.
Due to the pandemic all statutory tests were cancelled during the year. There is therefore no publishable data to demonstrate the outcomes and progress of children at each key stage. However, indications from the Autumn term indicate that all schools would have continued to show good progress with most children expected to achieve the age-related expectations. Progress measures have been improving on the whole over the previous three years at Rattlesden, Great Barton and Thurston and it was anticipated that this would have continued due to the strong systems in place in each school. The expected outcomes at Woolpit would have demonstrated a significant improvement on the 2019 data. Whilst this would not have yet been quite in line with national, it would’ve been very close.
Growth
Over the last two years the Board has made some significant improvements in the provision of its central services. During the year the production of financial reports continued to be strengthened and was brought in house for the first time. The quality of financial reporting continued to improve, meaning that the Trust would now be able to support additional schools in future. The appointment of the Trust Business Manager also added to the central services offered including additional support for HR administration, procurement activities, and IT infrastructure amongst many other things.
The Trust submitted its first free school application during the year. Whilst the application was not successful on this occasion, the Trust learnt many beneficial lessons for any future applications. The Board approved the extension of the CEO contract by a further day a week for the next year to focus on growing the Trust.
Effective Governance
The Board undertook a review of its governance arrangements during the year and extended invitations to attend Board meetings to Chairs of each Local Governing Body. This significantly improved communication between the Board and LGBs. The Board also adapted to use video conferencing to ensure that meetings could continue even though schools were closed. The Board found that this has been very effective and has decided to continue this for the next year for some committees and Board meetings. The Board also decided to trial merging the Premises, Health and Safety Committee with the Finance and Audit Committee as many of the agenda items work well together.
Finance and Administration
Whilst the Trust has reported an in-year deficit this is due to a number of very late invoices from two suppliers. Without these late invoices, the Trust would be reporting a revenue surplus across the Trust, despite some very challenging times. The Board has maintained a close oversight of the financial position of each academy and the Trust as a whole and has further developed its long-term forecasting taking into account expected pupil numbers. This allows the Board to plan better for the future and predict schools where there are likely to be financial challenges ahead. A Schools Resource Management Review was due to take place during the year but unfortunately this had to be postponed due to the pandemic. This will be rescheduled for the next financial year and we hope this will provide us with further opportunities to make savings so that more resources can be directed toward teaching and learning.
During the year a tender for HR Services was completed and the Trust will move to a new provider during 2020-21.
Estates and Facilities
During the year the Trust invested in a class set of Chromebooks for each school, increasing the availability of IT equipment to support teaching and learning. This benefitted our schools during school closure as many classes were able to utilise Google Classroom to continue pupil’s learning albeit remotely. Further investment was made in the installation of additional smart screens in each school again improving the learning environment.
During 2018-19 the Trust was awarded significant Condition Improvement Funding (CIF) to replace the roof at Rattlesden school. The majority of this project was completed within the year with the final parts completed in the following year. The Trust was also successful in bidding for CIF funding for the replacement of doors and windows at Great Barton and Woolpit and the replacement of heating and water services at Great Barton. These CIF projects will be completed during the 2020-21 year and will make a significant improvement in facilities at each school.
Major steps were taken towards the expansion and relocation of Thurston CE Primary Academy. Planning approval was given for the development and work started on site in August 2020. Work is due to be completed in the summer of 2021 with the target date of September 2021 for the full relocation of the school to its new premises. Over the coming years the school will double in size to 420 pupils and has room for further expansion should this be needed to accommodate local children.
The Board has developed a capital investment plan to identify and plan capital investment over the coming years.
Effective and timely communications
The Trust issued its first newsletter in the Autumn term of 2019 and updated the Trust website to ensure information is more easily available. The Chair of the Board has ensured that all key stakeholders are kept informed throughout the year and Board members have been allocated schools to work more closely with, including regular visits and attendance at LGB meetings.
People
The Trust undertook two shared CPD sessions for all schools and further enhanced collaborative working across Trust schools through subject leader meetings and additional support for Woolpit Primary Academy from the other Trust schools. Staff wellbeing is high on our list of priorities and we have ensured all staff have access to confidential support helplines should they need it.
Overall, 2019-20 was a good year for the Trust and much progress was made against our priorities despite the significant disruption caused by the pandemic. The Board would like to express its gratitude to all staff, governors and volunteers who helped make our schools stronger. The collaboration across the schools within the Trust during very challenging times proved that we are definitely stronger together .
Ofsted outcomes
Great Barton – 1 – January 2009
Thurston – 2 – November 2018
Rattlesden – 2 – October 2018
Woolpit – 3 – November 2018
There were no SATS tests in 2019-20 so we are unable to report this data on this occasion.
Financial Key Performance Indicators
The financial KPIs for the period were as follows;
Staff costs as a % of income 78% (2019 - 73%)
GAG income as % of total income 76% (2019 - 77%)
Closing cash balances as % of total income 15% (2019 - 15%)
Current assets vs current liabilities 3.67 : 1 (2019 - 2.85 : 1)
After making appropriate enquiries, the board of trustees 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 trustees continues to adopt the going concern basis in preparing the accounts. Further details regarding the adoption of the going concern basis can be found in the statement of accounting policies.
The principal source of funding for the Trust is the General Annual Grant (GAG) and other grants that it receives from the Education Funding and Skills Agency (EFSA). For the year ended 31 August 2020 the Trust received £3, 135,198 (2019 - £2,936,137) of GAG and other funding. A high percentage of this income is spent on staff salaries and support costs to deliver the Trust’s primary objective of the provision of education. During the year the Trust spent £3,653,726 (2019 - £3,410,139) on expenditure and transferred £42,612 (2019 - £13,041) to support capital projects on the various academy sites. The Trust brought forward from 2018/19 £53,349 restricted funds and £296,517 unrestricted funding. The carry forward for 2019/20 is £80,144 restricted funding and £363,758 unrestricted funding.
Due to the accounting rules for the Local Government Pension Scheme under FRS102, the Trust is recognising a significant pension fund deficit of £1, 1 28,000 (2019 - £886,000). This does not mean that an immediate liability for this amount crystallises and such a deficit generally results in a cash flow effect in the form of increased employer contributions over a number of years.
At the end of 2019/20, all academies within the Trust had positive balances. Overall balanced budgets for 2020-21 were achieved due to very careful management of costs. We are aware that we must seek further reductions in costs to avoid in-year deficits for future years. The Board reviews financial management information at each meeting to ensure that plans to reduce expenditure are being implemented to bring cost in line with income over a 3 year period.
Funding has been used to support key development priorities in each academy, the additional costs associated with providing support for pupils with SEND, and staff training in key areas.
The Trust held fund balances as at 31 August 2020 of £1,939,142 (2019 - £2,138,924) comprising of the pension deficit of £1,128,000 (2019 - £886,000) restricted fixed asset fund of £2,623,240 (2019 - £2,675,058) and unrestricted reserves of £363,758 (2019 - £296,517).
The Trustees are aware of the requirement to balance current and future needs and always aim to set a balanced budget with annual income balancing annual expenditure. The Trustees monitor estimated year-end carry forward figures via the receipt of management accounts. The budget plan identifies how any carry forward will be allocated in the plan for the following academic year, including the identification of any funds earmarked for a specific project or purpose. The Trust maintains a medium-term financial forecast which shows how end of year reported reserves will be utilised for each academy. The Trust reviews the forecasts and actual results closely to ensure that the Trust continues for the foreseeable future and can react to unforeseen budget changes.
The cash balance of the Trust has been very healthy all year, ending the year with a balance of £526,844 (2019 - £495,859).
During this period, the Trust has held all its funds in an interest-bearing accounts and made no investments.
The Trust maintains a Risk Register identifying the major risks, to which each academy is exposed, and identifying actions and procedures to mitigate those risks. This register is approved and monitored by the Board with a formal review undertaken three times a year as a minimum. The internal control systems and the exposure to identified risks are monitored on behalf of the Trustees at each Finance Committee meeting. The principal risks facing the Trust are outlined below; those facing the Academies at an operational level are addressed by its systems and by internal financial and other controls.
The Trustees report that the Trust’s financial and internal controls conform to guidelines issued by the EFSA, and that improvements to the wider framework of systems dealing with business risk and risk management strategy continue to be made and formally documented.
It is recognised that systems can only provide reasonable but not absolute assurance that major risks have been adequately managed.
As a group of academy schools, the level of financial risk is low. Cash flows can be reliably forecast, monitored and reported. Staff costs make up the majority of expenditure and are relatively stable with contingencies in place to cover such items as sickness and maternity absence.
The Trustees assess the other principal risks and uncertainties facing the Trust as follows:
each Academy within the Trust has considerable reliance on continued Government funding through the EFSA and there is no assurance that Government policy or practice will remain the same or that public funding will continue at the same levels or on the same terms;
failures in governance and/or management - the risk in this area arises from potential failure to effectively manage the Trust’s finances, internal controls, compliance with regulations and legislation, statutory returns, etc. The Trustees continue to review and ensure that appropriate measures are in place to mitigate these risks;
reputational - the continuing success of the individual Academies is dependent on continuing to attract pupils in sufficient numbers by maintaining the highest educational standards. To mitigate this risk Trustees ensure that pupil progress and outcomes are closely monitored and reviewed by LGBs and the Standards Committee in particular;
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 & safety and discipline;
staffing - the success of the Academies is reliant on the quality of its staff and the Trustees monitor and review policies and procedures and recruitment to ensure continued development and training of staff as well as ensuring there is clear succession planning;
fraud and mismanagement of funds - The Trust appointed an external company to carry out independent and external checks on financial systems and records as required by the Academies Financial Handbook. All finance staff receive training to keep up to date with financial practice requirements and develop their skills in this area;
financial instruments – the Trust only deals with bank balances, cash and trade creditors, with limited trade (and other) debtors. The risk in this area is considered to be low; and
defined benefit pension liability – as the Government has agreed to meet the defined benefit pension liability of any Academy ceasing to exist the main risk to the Trust is an annual cash flow funding of part of the deficit. Trustees take these payments into account when setting the annual budget plan.
The Trust and each academy have continued to strengthen the risk management process throughout the year by improving the process and ensuring staff awareness.
The Trust is compliant with the recognised standards of fundraising set out in the Code of Fundraising Practice. Thedwastre Education Trust does not use professional fundraisers and there have been no complaints received by the Trust about fund raising activities carried out by the Trust in the year .
The Board’s plans for the next year include the following:
Ensure School Improvement is the focus of all senior leaders within the Trust
Continue to support Woolpit Primary Academy to ensure it is able to be rated as Good at its next Ofsted Inspection
Implement the Trust’s strategy focusing on school improvement, pupil outcomes and growth of the Trust
Strengthen the Board by adding at least one Director with substantial educational expertise
Identify further cost savings and efficiency improvements to allow maximum resources to be targeted at continual school improvement
Continue to be outward looking in our work, developing links with outside organisations to support teaching and learning
Support all staff effectively to encourage high staff retention and where possible extend opportunities for professional development within the MAT
Maintain and develop effective systems of support for pupils with SEND, mental health and behavioural support needs so that every child thrives and achieves their full potential
Complete all CIF funded projects within the year and in budget
Further invest in school’s IT infrastructure to support teaching and learning
Ensure that we continue to provide mechanisms for effective sharing of good practice at every level throughout the Trust
Oversee the successful relocation and expansion of Thurston CE Primary Academy
On 7 September 2020 Group Audit Services Limited trading as Baldwins Audit Services changed its name to Azets Audit Services Limited. The name they practice under is Azets Audit Services and accordingly they have signed their report in their new name.
A resolution proposing that Azets Audit Services be reappointed as auditor of the charitable company will be put to the members.
The trustees' report, incorporating a strategic report, was approved by order of the board of trustees, as the company directors, on
As trustees we acknowledge we have overall responsibility for ensuring that Thedwastre Education Trust 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 trustees, we have reviewed and taken account of the guidance in DfE's g overnance h andbook and competency framework for governance.
The board of trustees has delegated the day-to-day responsibility to the Headteacher, as accounting officer, for ensuring financial controls conform with the requirements of both propriety and good financial management and in accordance with the requirements and responsibilities assigned to it in the funding agreement between Thedwastre Education Trust and the Secretary of State for Education. The accounting officer is also responsible for reporting to the board of trustees any material weaknesses or breakdowns in internal control.
The information on governance included here supplements that described in the Trustees' Report and in the Statement of Trustees' Responsibilities. The board of trustees has formally met ten times (including the Annual General Meeting) during the year in addition to several other informal meetings. The number of meetings increased substantially during the year due to the Covid-19 pandemic and the potential impact on schools. Attendance during the year at meetings of the board of trustees was as follows:
Anita Guernari joined as Trustee through Academy Ambassadors during the year and has already had a positive impact.
Governance reviews
The Trust has conducted its Annual Governance Review and has brought in external support in order to assist with the Financial Governance to ensure Regulatory requirements are met. In addition, an internal structure review took place to consider how best to structure communication and terms of reference between the Local Governing Bodies, the Trust Committees and the Board. This resulted in increasing frequency of Board meetings, open invitations to Chairs of Local Governing Bodies to attend Board meetings as observers, the use of video conferencing and the merging of the Premises, Health and Safety and Finance and Audit Committees from the 2020-21 year.
Finance and Audit Committee
The Finance and Audit Committee is a sub-committee of the Board of Directors and consists of Directors appointed by the Board alongside one representative from each LGB. Its purpose is to address financial matters and monitor the Trust’s internal control framework and compliance with regulations also acting as the Audit Committee. In addition to fulfilling its routine responsibility the committee has also set the financial policies for the Trust and ensured compliance with the Academies Finance Handbook and other financial arrangements that academy trusts are required to adhere to, the Committee was also responsible for the appointment of the Trust’s auditors.
Due to the Covid-19 pandemic a number of Finance and Audit Committee meetings were cancelled. However, financial information was still sent to Directors on a monthly basis for review and discussed at the additional Board meetings as necessary. Attendance at meetings in the year was as follows:
Attendance at meetings in the year was as follows:
As Accounting Officer, the Chief Executive Officer 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 maximising the educational and wider societal outcomes achieved in return for the taxpayer resources received.
Throughout each academic year the Accounting Officer considers whether the Trust’s use of its resources is providing good value for money and reports this to the Board of Directors, highlighting any opportunities where value for money can be improved.
The Accounting Officer for the academy trust has delivered improved value for money during the year by:
Reviewing its business function to ensure the effective operation of all finance and business functions
Advised the Board of Directors to consider a top slice arrangement to provide increased central support and value for money to academies within the Trust
Organised some staff training and CPD activities centrally
Undertook a tender for the Trust’s Absence Insurance providing improved value for money and a better range of services offered
Undertook a tender for the Trust’s HR and Payroll provider providing improved quality of service and a better range of services for schools in the Trust
Pooled the capital finds available to the Academies to invest strategically over two years in the IT provision available within each Academy
Ensured that when photocopy contracts are up for renewal these are changed to the best value services
Developed a further programme of tenders for the coming year to ensure all Academies within the Trust benefit from collective purchasing and economies of scale.
The Board of Directors have been robust in their challenge of spending and budget allocation to ensure that the trust was able to set a balanced budget for 2020-21.
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 Thedwastre Education Trust for the period 1 September 2019 to 31 August 2020 and up to the date of approval of the annual report and accounts.
The board of trustees 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 trustees 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 2019 to 31 August 2020 and up to the date of approval of the annual report and accounts. This process is regularly reviewed by the board of trustees.
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 monthly financial reports which are reviewed and agreed by the board of trustees;
regular reviews by the finance committee of reports which indicate financial performance against the forecasts and of major purchase plans, capital works and expenditure programmes;
m onitoring key financial performance indicators;
clearly defined purchasing procedures;
delegation of authority and segregation of duties;
identification and management of risks.
The board of trustees has considered the need for a specific internal audit function and appointed an external company to perform this role. Their role includes giving advice on financial matters and performing a range of checks on each Academy's financial systems as directed by the Board. In particular the checks carried out in the period included a review of purchasing, income collection and payroll procedures. Some areas requiring improvement were noted and an action plan to address these has been prepared.
The Purpose of the System of Internal Controls
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 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. This system of internal control has been in place in Thedwastre Education Trust from 1 st September 201 9 to 31 August 20 20 , and up to the date of approval of the annual report and financial statements.
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 external company reviewing the fiscal management and governance arrangements;
the work of the internal audit reviewer;
the work of the external auditor;
the financial management and governance self-assessment process;
the work of the senior Trust staff and budget holders 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 committee and a plan to address weaknesses and ensure continuous improvement of the system is in place.
Approved by order of the board of trustees on 26 November 2020 and signed on its behalf by:
As accounting officer of Thedwastre Education Trust, I have considered my responsibility to notify the academy trust board of trustees 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 2019.
I confirm that I and the academy trust's 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 2019.
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 ESFA.
The trustees (who are also the directors of Thedwastre Education Trust for the purposes of company law) are responsible for preparing the trustees' report and the accounts in accordance with the Academies Accounts Direction 2019 to 2020 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 trustees to prepare accounts for each financial year. Under company law, the trustees 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 trustees 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 2019 to 2020;
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 trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company's transactions and disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the accounts comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The trustees are responsible for ensuring that in its conduct and operation the charitable company applies financial and other controls, which conform with the requirements both of propriety and of good financial management. They are also responsible for ensuring that grants received from ESFA/DfE have been applied for the purposes intended.
The trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company's website. Legislation in the United Kingdom governing the preparation and dissemination of accounts may differ from legislation in other jurisdictions.
Approved by order of the members of the board of trustees on 26 November 2020 and signed on its behalf by:
Opinion
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.
the trustees' use of the going concern basis of accounting in the preparation of the accounts is not appropriate; or
the trustees have not disclosed in the accounts any identified material uncertainties that may cast significant doubt about the academy trust’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the accounts are authorised for issue.
Other information
The trustees 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 trustees' r eport including the incorporated strategic report for the financial year for which the accounts are prepared is consistent with the accounts; and
the trustees' 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 trustees' 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 trustees' remuneration specified by law are not made; or
As explained more fully in the s tatement of trustees' r esponsibilities, the trustees 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 trustees 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 trustees 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 trustees 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.
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 16 September 2020 and further to the requirements of the Education and Skills Funding Agency (ESFA) as included in the Academies Accounts Direction 2019 to 2020, we have carried out an engagement to obtain limited assurance about whether the expenditure disbursed and income received by Thedwastre Education Trust during the period 1 September 2019 to 31 August 2020 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 Thedwastre Education Trust and ESFA in accordance with the terms of our engagement letter. Our work has been undertaken so that we might state to the Thedwastre Education Trust 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 Thedwastre Education Trust and ESFA, for our work, for this report, or for the conclusion we have formed.
The accounting officer is responsible, under the requirements of Thedwastre Education Trust’s funding agreement with the Secretary of State for Education dated 23 December 2015 and the Academies Financial Handbook, extant from 1 September 2019, 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 2019 to 2020. 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 2019 to 31 August 2020 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 Academies Accounts Direction 2019 to 2020 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 2019 to 31 August 2020 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 25 to 50 were approved by the trustees 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 2019 to 2020 issued by ESFA, the Charities Act 2011 and the Companies Act 2006.
Thedwastre Education Trust meets the definition of a public benefit entity under FRS 102.
The accounts are prepared in sterling, which is the functional currency of the academy trust. M onetary amounts in these financial statements are rounded to the nearest £.
The trustees assess whether the use of going concern is appropriate, ie 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 including the impact of COVID-19. The trustees 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.
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.
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, trustees' meetings and reimbursed expenses.
Intangible assets costing £ 2,000 or more are capitalised and recognised when future economic benefits are probable and the cost or value of the asset can be measured reliably. Intangible assets are initially recognised at cost and are subsequently measured at cost net of amortisation and any provision for impairment.
Amortisation is provided on intangible fixed assets at rates calculated to write off the cost of each asset on a straight-line basis over its expected useful life, as follows:
Computer software 5 years straight line.
Assets costing £2,000 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. Where there are specific conditions attached to the funding that require the continued use of the asset, 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 the relevant assets is charged directly to the restricted fixed asset fund in the statement of financial activities. 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:
A proportion of the land and buildings occupied by the Academy has been provided by site trustees under mere licence (also referred to as a Church Supplemental Agreement) which contains a two year notice period.
As the Academy Trust occupies the land and such buildings as may be or may come to be erected on it by a mere licence that transfers to the academy no rights or control over the site save that of occupying it at the will of the site trustees under the terms of the relevant site trust, the trustees have concluded that the value of any land and buildings occupied by the academy trust under a Church Supplemental Agreement will not be recognised on the balance sheet of the company.
In certain circumstances a two year Church Supplemental Agreement may give rise to an annual donation equal to the equivalent of rent not charged, an annual rental expense and a prepayment equal to the value of two years notional rent, if the value of rent not charged can be reliably measured. In this case of the aforementioned agreements it is the belief of the academy trust that the value of rent not charged cannot be reliably measured and as a result no amounts relating to the value of rent not charged have been recognised.
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 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 trustees.
Restricted fixed asset funds are resources which are to be applied to specific capital purposes imposed by 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 Department for Education Group.
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.
Tangible fixed assets are recognised at cost or valuation, less accumulated depreciation and any impairment. Depreciation takes place over the estimated useful life, down to the assessed residual value. The carrying amount of the academy's fixed assets is tested as soon as changed conditions show that a need for impairment has arisen.
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 22, 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 2020. 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 trust has been eligible to claim additional funding in year from government support schemes in response to the coronavirus outbreak. The funding received is shown above under “exceptional government funding”.
- The funding received for coronavirus exceptional support covers £2,978 of additional costs. These costs are included in notes 7 and 9 below as appropriate.
The academy trust has provided the following central services to its academies during the year:
financial and support services.
The academy trust charges for these services on the following basis:
5% of GAG income.
The key management personnel of the academy trust comprise the trustees and the senior management team as listed on page 1. The total amount of employee benefits (including employer pension contributions and employer national insurance contributions ) received by key management personnel for their services to the academy trust was £373,796 (2019 - £336,421).
One or more of the trustees has been paid remuneration or has received other benefits from an employment with the academy trust. The Headteacher and other staff trustees only receive remuneration in respect of services they provide undertaking the roles of Headteacher and staff members under their contracts of employment, and not in respect of their services as trustees.
The value of trustees' remuneration and other benefits was as follows:
P Mackay (CEO and trustee)
Remuneration £30,001 - £35,000 (2019 - £30,001 - £35,000)
Employer’s pension contributions £5,001 - £10,000 (2019 - £5,001 - £10,000)
During the year no expenses were reimbursed or paid directly to any of the trustees (2019: None).
Other related party transactions involving the trustees 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 trustees 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 trustees and officers indemnity element from the overall cost of the RPA scheme.
A proportion of the land and buildings occupied by the Academy has been provided by site trustees under mere licence (also referred to as a Church Supplemental Agreement) which contains a two year notice period.
As the Academy Trust occupies the land and such buildings as may be or may come to be erected on it by a mere licence that transfers to the academy no rights or control over the site save that of occupying it at the will of the site trustees under the terms of the relevant site trust, the trustees have concluded that the value of any land and buildings occupied by the academy trust under a Church Supplemental Agreement will not be recognised on the balance sheet of the company.
At the balance sheet date the Academy Trust was holding funds received in advance of the 2020/21 financial year in respect of parental contributions to trips of £nil (2019 - £9,530), universal infant free school meals of £55,503 (2019 - £61,564) and other amounts totalling £174 (2019 - £nil).
The specific purposes for which the funds are to be applied are as follows:
Restricted general funds and other restricted fixed funds
These relate to the Academy's development and operational activities. The restricted grant income in the year all relates to the provision of education for the students attending the academy.
Restricted fixed asset fund
Restricted fixed assets 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.
Pension reserve
The pension provision equates to the deficit on the Local Government Pension Scheme FRS102 valuation.
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.
Restriction on surplus GAG
General Annual Grant must be used for the normal running costs of the academy. Under the funding agreement with the Secretary of State, the academy was not subject to a limit on the amount of GAG that it could carry forward at 31 August.
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 Suffolk County Council. Both are multi-employer defined benefit schemes.
The pension costs are assessed in accordance with the advice of independent qualified actuaries. The latest actuarial valuation of the TPS related to the period ended 31 March 2012, and that of the LGPS related to the period ended 31 March 2019.
Contributions amounting to £nil (2019 - £nil) were payable to the schemes at 31 August 2020.
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 £271,736 (2019 - £196,098).
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 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 26% for employers and 5.5% to 12.5% for employees. The estimated value of employer contributions for the forthcoming year is £148,000.
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:
Included in commitments above is £192,694 for replacement windows and doors at Great Barton Primary Academy and £100,886 for replacement windows and doors at Woolpit Primary Academy. CIF funding from the ESFA has been secured for these amounts and income is to be received in the year ended 31 August 2021.
The Trust has also been successful in securing CIF funding of £244,539 for heating and drinking water supply works at Great Barton Primary Academy. No expenditure has been incurred and contracts are still to be agreed. Funding for this project is to be received in the year ended 31 August 2021.
Owing to the academy trust's operations and the composition of the board of governors being drawn from local public and private sector organisation, transactions may take place with organisation in which the academy trust has an interest. All transactions involving such organisation 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.
A proportion of the land and buildings occupied by the Academy has been provided by site trustees under mere licence (also referred to as a Church Supplemental Agreement) which contains a two year notice period. The licence is held between the Academy Trust and the Boards of Finance and the Board of Education of the Diocese of St Edmundsbury and Ipswich.
Since no notice has been given, the Academy Trust has the right to occupy the premises for at least two years following the balance sheet date.
As the Academy Trust occupies the land and such buildings as may be or may come to be erected on it by a mere licence that transfers to the academy no rights or control over the site save that of occupying it at the will of the site trustees under the terms of the relevant site trust, the trustees have concluded that the value of any land and buildings occupied by the academy trust under a Church Supplemental Agreement will not be recognised on the balance sheet of the company.
In certain circumstances a two year Church Supplemental Agreement may give rise to an annual donation equal to the equivalent of rent not charged, an annual rental expense and a prepayment equal to the value of two years notional rent, if the value of rent not charged can be reliably measured. In this case of the aforementioned agreements it is the belief of the academy trust that the value of rent not charged cannot be reliably measured and as a result no amounts relating to the value of rent not charged have been recognised.
No related party transactions took place in the period of account.
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.