The trustees present their annual report together with the accounts and auditor's report of the charitable company for the year 1 September 2018 to 31 August 2019. The annual report serves the purposes of both a trustees' report, and a directors' report under company law.
The accounts have been prepared in accordance with the accounting policies set out in note 1 to the accounts and comply with the academy's Articles of Association, the Companies Act 2006 and the Statement of Recommended Practice, "Accounting and Reporting by Charities", issued in 2015, and the Education & Skills Funding Agency's "Academies Accounts Direction 2018 to 2019 " issued in April 2019.
The trust operates an academy for pupils aged 11 to 18 serving a catchment area of South Devon. It has a pupil roll of 1,070 in the School census in October 2019 (2018: 1,030).
The academy trust is a company limited by guarantee and an
All the governors act as trustees for the charitable activities of the academy and are also directors of the charitable company for the purposes of company law. The charitable company is known as Churston Ferrers Grammar School and is also referred to using the acronym of CFGS.
The trustees of Churston Ferrers Grammar School are also the directors of the charitable company for the purposes of company law. Details of the trustees who served during the year, and to the date these accounts are approved, are included in the Reference and Administrative Details on page 1.
The liability of the members of the Academy Trust is limited.
Each member of the charitable company undertakes to contribute to the assessors 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 members.
If the Academy Trust is wound up or dissolved and after all its debts and liabilities (including any under section 483 of the Education Act 1996) have been satisfied there remains any property it shall not be paid to distributed among the members of the Academy Trust, but shall be given or transferred to some other charity or charities having objects similar to the Objects which prohibits the distribution of income and property to an extent at least as great as is imposed on the Academy Trust by Article 6 above, chosen by the members of the Academy Trust at or before the time of dissolution and if that cannot be done to some other charitable object.
The Academy through its Articles has indemnified its Governors to the fullest extent permissible by law. Trustees benefit from indemnity insurance purchased at the academy’s expense to cover the liability of the trustees which by virtue of any rule of law would otherwise attach to them in respect of any negligence, default or breach of trust or breach of duty of which they may be guilty in relation to the academy trust. The cost of this insurance in the year was included in the total insurance cost and could not be separately identified.
The academy trust has adopted a skills based approach to governance and as such the directors have been approached for the skills and experience that they can bring to the board. The trust is proactive in recruiting and has approached local businesses, higher education providers and consultants to recruit.
The training and induction provided for each new trustee will depend on their existing experience and where necessary induction will provide training on charity, educational, legal and financial matters. There is an Induction Booklet which is provided and includes details of policies and procedures to ensure that trustees are provided with suitable support, information and training opportunities to fulfil their role. Copies of minutes, accounts, budgets and other documentation needed to undertake their role as a trustee are made available.
All trustees give their time freely and no trustee or governor received remuneration with the exception of the staff governors. This is referred to in the Trustees’ remuneration and expenses note of this report.
The academy has a Pay Policy and Performance Management Policy which are reviewed annually. Procedures for the remuneration of staff are outlined in these policies.
Churston Ferrers Grammar school is a member of the South West Academic Trust (SWAT). This is a formalised collaboration between seven schools and Exeter University which aims to bring together partners who share a common interest in the development of educational provision and opportunity for able students in a way which will also promote the aspiration and standards achieved by all students in partner school and other schools in the community. Participation in this Trust will allow the Academy Trust to build on existing relationships, formalise joint working that already takes place with partners, and join with those partners in having a stronger, more unified voice.
Mission
We offer a co-educational, academic education that opens doors for students from all backgrounds. We maximise academic success through a creative and supportive culture that welcomes and includes everyone in the School. |
Vision
We want our students to achieve more and be happier at Churston than at any other school and to leave us with a passion for learning and a strong sense of social justice.
Ethos
We believe that happy, challenged and well-supported students perform better and are more caring towards each other. Student welfare is a priority and we are proud of our students’ considerate and inclusive outlook.
Churston Ferrers Grammar School has a three-year development plan. This is based on feedback from students, parents, staff and trustees. It also reflects the strengths and weaknesses of student outcomes in 2018 and 2019.
The five key areas identified for development are:
tailoring learning to the needs of students
reducing in-school variation
maximising the benefits of collaboration
improving the lunchtime experience for students
maintaining a budget surplus up to 2020.
The governors have complied with their duty to have due regards to the guidance on public benefit published by the Charity Commission in exercising their powers or duties. Churston Ferrers Grammar School fully complies with statutory guidance and governors consider how planned activities will contribute to the aims and objectives they have set. Community based projects are undertaken throughout the year by staff and students which further enhances public benefit.
Churston Ferrers Grammar School was rated outstanding in its most recent Ofsted inspection. Examination outcomes at GCSE and A Level are very high. All academic performance indicators support the view that student achievement is very high.
At A Level, 59% (2018: 72%) of students achieved an A* - B grade. The vast majority of students achieved their university places including Oxbridge.
At GCSE, 52% of entries gained grades 7 – 9 (2018: 58%) across all subjects. The Attainment 8 score was 68.02 (2018: 69.1). The Progress 8 score was +0.38 (2018: +0.5), which was well above average – the highest Government rating.
The personal development of students is also excellent. There are a full range of enrichment opportunities available to students and up-take is high. Finally the school's relationship with the wider community is very strong. There are established links with local schools and businesses and the school has strong links with schools in several continents.
Churston Ferrers Grammar School is part of the South West Academic Trust (SWAT) which is a collection of high-performing schools in the South West. Benefits of this alliance include staff development, sharing good practice and opportunities for pupils to take part in joint-school educational programmes. The school is a member of the South West Training Alliance which offers similar benefits.
The Academy employs a range of KPIs to monitor and assess its performance and its achievements.
Key non-financial measures include the following:
|
2019 |
2018 |
2017 |
2016 |
2015 |
Pupils on roll |
1,070 |
1,030 |
1,011 |
996 |
981 |
Number sitting 11+ at Churston |
321 |
304 |
324 |
271 |
312 |
External applications to Year 12 |
92 |
94 |
125 |
127 |
181 |
GCSE 5 Grade 5 and above (2014-2017: A*-C) incl Eng and Maths |
93.79 |
96 |
99 |
100 |
98 |
Attainment 8 |
68.02 |
69.1 |
65.7 |
67.4 |
65.6 |
Progress 8 |
0.38 |
0.5 |
0.28 |
0.15 |
0.27 |
A Level A*-E |
99 |
99 |
99 |
99 |
100 |
Average Points per Entry |
38.5 |
238 |
229 |
234 |
235 |
Value added |
-0.14 |
0.19 |
-0.22 |
-0.03 |
-0.04 |
Student Absence (%) |
4.5 |
4.4 |
4.4 |
4.3 |
4.5 |
Ofsted Category |
1 |
1 |
1 |
1 |
1 |
Key financial KPI's include the following:
|
2019 |
2018 |
2017 |
2016 |
2015 |
Salary costs to ESFA revenue income (%) |
85 |
87 |
88 |
87.9 |
83.8 |
Salary costs to total income (%) |
75.22 |
76.42 |
75.54 |
77.57 |
74.21 |
Salary costs to total expenditure (%) |
69.81 |
69.89 |
72.07 |
73.77 |
72.1 |
Pupil: teacher ratio |
14.66:1 |
14.96:1 |
14.83:1 |
14.2:1 |
13.45:1 |
Pupil: support ratio |
18.45:1 |
19.11:1 |
18.68:1 |
18.14:1 |
18.88:1 |
Staff absence |
417 |
332 |
- |
- |
- |
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 financial results of Churston Ferrers Grammar School are detailed in the following pages. It is considered that the finances are sound and well-established. The principal financial management policies adopted are laid down by the Academies Financial handbook published by the Education and Skills Funding Agency (ESFA).
The academy is funded principally by the DfE via the ESFA through the General Annual Grant (GAG) the use of which is restricted to particular purposes. The grants received from the DfE during the year ended 31 August 2019 and the associated expenditure are shown as restricted funds in the Statement of Financial Activities.
During the year ended 31 August 2019, the academy received total income of £5,505,017 and incurred total expenditure of £5,931,972. The excess of expenditure over income for the year was £426,955, however this included depreciation of £292,719, pension costs of £197,000 and payments for tangible fixed assets of £53,162. This results in a surplus for the year of £9,602 which is represented by the movement in the restricted and unrestricted income funds as detailed in the Reserves policy below.
At 31 August 2019, the net book value of fixed assets was £11,379,733 and movements in tangible fixed assets are shown in note 13 to the financial statements. Capital expenditure in the year was £53,162.
Restricted funds include a Pension reserve deficit of £2,409,000 as detailed in note 20 which may result in the academy having to make additional contributions in future years.
Key financial policies adopted or reviewed during the year include the Finance Policy which details the framework for financial management, including the financial responsibilities of the Trustees, Headteacher, Director of Finance and Resources, Finance staff and Other staff.
Churston Ferrers Grammar School will build and maintain a revenue reserve fund to provide flexibility and certainty in forward planning. The reserve levels will be reviewed termly.
The governors will ensure that within the Reserves Policy the school will carry forward no less than 3% and no more than 12% of the current year’s GAG income. Should the projected year end reserves fall below the minimum level this will trigger associated discussions and the formulation of an adequate financial rescue plan.
It is the policy of Churston Ferrers Grammar School to hold reserves to support future education purposed in line with the Development Plan and to help bridge any anticipated budget gap over the medium term. To provide sufficient working capital, to cover timing issues between spending and receipt of grants and to provide a buffer for unexpected emergencies a cash balance of £350,000 should also be maintained. |
At 31 August 2019 the total funds comprised:
Unrestricted funds 261,153
Restricted funds: Other 33,908
Pension reserve (2,409,000)
Fixed asset funds 11,379,733
£ 9,265,794
Total reserves of the academy amount to £9,265,794, although £8,970,733 of this is invested in fixed assets or represents non GAG restricted funds. The remaining £295,061 (representing £261,153 unrestricted funds and £33,908 restricted funds) is the balance that the trustees monitor in accordance with the reserves policy.
The defined benefit pension scheme reserve has a negative balance. The effect of the deficit position of the pension scheme is that the academy is paying higher employers’ pension contributions over a period of years. The higher employers’ pension contributions will be met from the academy’s budgeted annual income.
Due to the nature and timings of funding receipts, the academy may hold cash balances surplus to its short term requirements and as such, the trust has in place an investment policy which allows for the potential investment of surplus cash balances but operated within the guidelines as approved by the trustees in the Finance Policy.
Churston Ferrers Grammar School maintains and operates an effective system of internal control to safeguard all the resources delegated, granted or otherwise entrusted to the school and ensure they are used cost effectively. The system of internal control has been developed and coordinated to provide as much assurance as is reasonably possible (not absolute assurance) that assets are safeguarded, transactions are properly authorised and recorded and that material errors or irregularities are either prevented or can be detected promptly. By the segregation of duties within the finance department the risk of financial errors or inappropriate conduct is minimised.
The financial regulation of the school is subject to internal audit review and by annual audit by Darnells Chartered Accountants, as well as a programme of internal scrutiny which is described more fully in the accompanying Governance Statement.
A Risk Register, detailing all areas of risk to the trust, is in place and reviewed at board meetings with mitigating actions agreed as and when required.
The trust’s most significant financial risk is future funding from the Government through the ESFA. In the last year 93.6% of the incoming resources were Government funded and whilst this level is expected to continue, 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.
Increased employment and premises costs are all contributing to cost pressures which in turn indicate the importance of maintaining robust levels of reserves.
Fundraising
The academy trust does not use any external fundraisers. All fundraising undertaken during the year was monitored by the Trustees.
The trust works in partnership with the school parents' association to raise funds to wholly benefit the education of the students. The association is accountable to the parent community reporting on the funds that they have raised. The school encourages students to fundraise for charities of their choice. The house captains will nominate a charity for which they will undertake fundraising.
The key plans for the current development planning period 2016 to 2020 include the following:
Embedding new examination courses and new assessment practices
Student progress outcomes to exceed +0.3 at GCSE and 0 at A2 level
Reducing in-school variation. No subject worse than -0.5 and the gender gap less than 0.5
Maximising the benefits of collaboration
Developing the school site so that all facilities are at least good
Maintaining a balanced budget during a period of funding cuts
The key strategies to achieve the above include the following:
Developing teaching and learning communities focused on reducing in-school variation
Using a greater range of software and targeting interventions to improve outcomes
Embed new technologies to support learning
Strengthen monitoring in the 6 th Form
Accessing a range of grants for site development
Churston Ferrers Grammar School and its Governors do not act as the custodian trustees of any other charity.
Each of the directors has confirmed that there is no information of which they are aware which is relevant to the audit, but of which the auditor is unaware. They have further confirmed that they have taken appropriate steps to identify such relevant information and to establish that the auditors are aware of such information.
A resolution proposing that Darnells Chartered Accountants 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 Churston Ferrers 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.
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 Churston Ferrers Grammar School and the Secretary of State for Education. They are also responsible for reporting to the board of trustees any material weaknesses or breakdowns in internal control.
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 four times during the year. Attendance during the year at meetings of the board of trustees was as follows:
During the 2016/17 year, a review of the constitution of the Governing Body was conducted to include in particular the associated skills set of the Governors. Following on from this, there has been a restructuring within the Governing Body resulting in reduced Governor numbers allowing for increased focus and specialisation in terms of the development of the Academy.
The Finance Committee is a sub-committee of the main governing body. From 1 September 2017, the Finance Committee, together with the Personnel Committee, have met together as the Resources Committee, the purpose of the Resources Committee being to review the finances of the Academy and review the internal controls in place. This committee also acts as an audit committee its purpose is to address issues arising from audits both internal and external and provide a point of contact should any audit query arise.
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 trust's use of its resources has provided good value for money during each academic year, and reports to the board of trustees where value for money can be improved, including the use of benchmarking data where appropriate . The accounting officer for the academy trust has delivered improved value for money during the year by p erforming a review of expenditure incurred during the year and where funds could be better spent considering not only the educational outcomes but also those factors for the wellbeing of the students ensuring that the school atmosphere is conducive to effective and enjoyable learning .
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 Churston Ferrers Grammar School for the period 1 September 2018 to 31 August 2019 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 2018 to 31 August 2019 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 periodic financial reports which are reviewed and agreed by the board of trustees;
Regular reviews by the finance and general purposes committee of reports which indicate financial performance against the forecasts and of major purchase plans, capital works and expenditure programmes;
Setting targets to measure financial and other performance;
Clearly defined purchasing (asset purchase or capital investment) guidelines;
Delegation of authority and segregation of duties;
Identification and management of risks.
The board of trustees has considered the need for specific internal audit function and has decided to appoint Devon Audit Partnership to carry out a programme of internal checks.
The Internal Auditor's role includes giving advice on financial matters and performing a range of checks on the academy trust's financial systems. In particular the checks carried out in the current period include:
- testing of the wages systems;
- testing of the purchase systems;
- testing of asset purchases and control systems;
- review of systems of governance;
- review of tendering and contracts;
- testing of income systems; and
- review of investments.
On a semi-annual basis, the internal auditor reports to the board of trustees, through the Resources Committee, on the operation of the systems of control and on the discharge of the board of trustees' financial responsibilities.
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 financial management and governance self-assessment process;
the work of the executive managers within the academy trust who have responsibility for the development and maintenance of the internal control framework.
The accounting officer has been advised of the implications of the result of their review of the system of internal control by the finance and general purposes 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 03 December 2019 and signed on its behalf by:
As accounting officer of Churston Ferrers Grammar School I have considered my responsibility to notify the academy trust board of trustees and the Education & 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 2018.
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 2018.
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 Churston Ferrers Grammar School for the purposes of company law) are responsible for preparing the trustees' report and the accounts in accordance with the Academies Accounts Direction 2018 to 2019 published by the Education & 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 2015 and the Academies Accounts Direction 2018 to 2019;
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 03 December 2019 and signed on its behalf by:
We have audited the accounts of Churston Ferrers Grammar School for the year ended 31 August 2019 which comprise the statement of financial activities, the balance sheet, the statement of cash flows and the notes to the accounts, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ' The Financial Reporting Standard applicable in the UK and Republic of Ireland ' (United Kingdom Generally Accepted Accounting Practice), the Charities SORP 2015 and the Academies Accounts Direction 2018 to 2019 issued by the Education & Skills Funding Agency.
In our opinion the accounts:
give a true and fair view of the state of the charitable company's affairs as at 31 August 2019 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 2015 and the Academies Accounts Direction 2018 to 2019.
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 have 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 13 December 2017 and further to the requirements of the Education & Skills Funding Agency (ESFA) as included in the Academies Accounts Direction 2018 to 2019, we have carried out an engagement to obtain limited assurance about whether the expenditure disbursed and income received by Churston Ferrers Grammar School during the period 1 September 2018 to 31 August 2019 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 Churston Ferrers 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 Churston Ferrers 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 Churston Ferrers 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 Churston Ferrers Grammar School’s funding agreement with the Secretary of State for Education dated 1 January 2011 and the Academies Financial Handbook, extant from 1 September 2018, 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 2018 to 2019. 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 2018 to 31 August 2019 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 2018 to 2019 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:
Inspection and review of grant documents and expenditure to ensure they are used for the correct purpose;
Review and enquiry of Trustee meetings and those of the Resources Committee;
Reperformance and review of significant accounting estimates used;
Evaluation of the system of internal controls for authorisation and approval.
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 2018 to 31 August 2019 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 21 to 41 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
Churston Ferrers Grammar School meets the definition of a public benefit entity under FRS 102.
The trustees 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 trustees make 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.
Sponsorship income provided to the academy trust which amounts to a donation is recognised in the statement of financial activities in the period in which it is receivable (where there are no performance-related conditions), where the receipt is probable and it can be measured reliably.
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.
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. 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 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.
Stock is valued at the lower of cost and net realisable value. Net realisable value is based on estimated selling price less further costs to completion and disposal. Provision is made for obsolete and slow moving stock.
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 so as to spread the cost of pensions over employees' working lives with the academy trust in such a way that the pension cost is a substantially level percentage of current and future pensionable payroll. The contributions are determined by the Government Actuary on the basis of quadrennial valuations using a prospective unit credit method. 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 operating surplus are the current service costs and the costs of scheme introductions, benefit changes, settlements and curtailments. They are included as part of staff costs as incurred. Net interest on the net defined benefit liability/asset is also recognised in the statement of financial activities 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 Education Funding Agency.
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 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 2016 has been used by the actuary in valuing the pensions liability at 31 August 2019. 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.
Included in staff restructuring costs are non-statutory/non-contractual severance payments totalling £nil (2018: four totalling £44,500).
The key management personnel of the academy trust comprise of the trustees 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 £ 411,479 (2018: £382,115).
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.
Mr R Owers (headteacher):
Remuneration £110,001 - £120,000 (2018: £100,001 - £110,000)
Employer's pension contributions £10,001 - £20,000 (2018: £10,001 - £20,000)
Ms H Godsland and Mrs R Brooks (staff - aggregate figure):
Remuneration £80,001 - £90,000 (2018: £90,001 - £100,000 (three members of staff))
Employer's pension contributions £10,001 - £20,000 (2018: £10,001 - £20,000)
During the year, travel and subsistence payments totalling £nil (2018: £nil) were reimbursed or paid directly to 0 trustees (2018: 0 trustees).
Other related party transactions involving the trustees are set out within the related parties note.
In accordance with normal commercial practice, the academy trust has purchased insurance to protect trustees and officers from claims arising from negligent acts, errors or omissions occurring whilst on academy trust business. The insurance provides cover up to £10 million on any one claim and the cost for the year ended 31 August 2019 was not separately identifiable within the overall premiums payable.
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 Torbay District 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 2016 .
There were no outstanding or prepaid contributions at either the beginning or the end of the financial year.
The Teachers' Pension Scheme (TPS) is a statutory, contributory, defined benefit scheme, governed by the Teachers’ Pension Scheme Regulations 2014. Membership is automatic for full-time teachers in academies and, from 1 January 2007, automatic for teachers in part-time employment following appointment or a change of contract, although they are able to opt out.
The TPS is an unfunded scheme and members contribute on a 'pay as you go' basis - these contributions along with those made by employers are credited to the Exchequer. Retirement and other pension benefits are paid by public funds provided by Parliament.
The Government Actuary, using normal actuarial principles, conducts a formal actuarial review of the TPS in accordance with the Public Service Pensions (Valuations and Employer Cost Cap) Directions 2014 published by HM Treasury. The aim of the review is to specify the level of future contributions. Actuarial scheme valuations are dependent on assumptions about the value of future costs, design of benefits and many other factors. The latest actuarial valuation of the TPS was carried out as at 31 March 2012 and in accordance with the Public Service Pensions (Valuations and Employer Cost Cap) Directions 2014. The valuation report was published by the Department for Education on 9 June 2014.
The key elements of the valuation and subsequent consultation are:
employer contribution rates set at 16.48% 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 £191,500 million, and notional assets (estimated future contributions together with the notional investments held at the valuation date) of £176,600 million giving a notional past service deficit of £14,900 million
an employer cost cap of 10.9% of pensionable pay will be applied to future valuations
the assumed real rate of return is 3.0% in excess of prices and 2% in excess of earnings. The rate of real earnings growth is assumed to be 2.75%. The assumed nominal rate of return is 5.06%
The TPS valuation for 2012 determined an employer rate of 16.4%, which was payable from September 2015. The next valuation of the TPS is currently underway based on April 2016 data, whereupon the employer contribution rate is expected to be reassessed and will be payable from 1 September 2019.
The employer's pension costs paid to the TPS in the period amounted to £398,845 (2018: £389,872).
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 14.7% for employers and 5.5% 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.
No related party transactions took place in the period of account , other than certain trustees' remuneration and expenses already disclosed.
Owing to the nature of the academy trust and the composition of the Board of Trustees being drawn from local public and private sector organisations, transactions may take place with organisations in which the trust has an interest. All transactions involving such organisations are conducted at arm’s length and in accordance with the trust’s financial regulations and normal procurement procedures.
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.