## **REPORT AND FINANCIAL STATEMENTS**
YEAR ENDED MARCH 2023
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## TABLE OF CONTENTS
1-3
4
REPORT OF THE TRUSTEES/DIRECTORS INCLUDING STRATEGIC REPORT STRUCTURE, GOVERNANCE AND MANAGEMENT
5-6
OBJECTIVES AND ACTIVITIES
7-9 ACHIEVEMENTS AND PERFORMANCE STRATEGIC REPORT INCLUDING FINANCIAL REVIEW 10-15 16-19 INDEPENDENT AUDITOR’S REPORT 20 STATEMENT OF FINANCIAL ACTIVITIES 21 BALANCE SHEET 22 CASHFLOW STATEMENT 23-49 NOTES TO FINANCIAL STATEMENTS
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## **REPORT OF THE TRUSTEES/DIRECTORS**
The trustees/directors of Positive Steps Oldham (referred to as Positive Steps [PS] (the trading name), for the remainder of this report) present their thirtieth Annual Report together with the financial statements. The directors or members of the board of the charitable company (the charity) are its trustees for the purpose of charity law. Throughout this report they are collectively referred to as the ‘trustees’.
## **Charity number:**
**1017247**
## **Company number:**
## **2563094**
## **Chief Executive:**
Stephanie Bolshaw (retired on 1st April 2023)
Paul Axon (with effect from 1st April 2023)
## **Registered Office:**
Medtia Place, 80 Union Street, Oldham, Lancashire, OL1 1DJ
## **Auditors:**
Third Sector Accountancy Limited, Holyoake House, Hanover Street, Manchester, Greater Manchester, M60 0AS
## **Bankers:**
Barclays Bank plc. 25 High Street, Oldham, Lancashire, OL1 3AZ
## **Solicitors:**
After Athena, Greenbank Court, Challenge Way, Greenbank Business Park, Blackburn, BB1 5QB
## **Key Management Personnel:**
Paul Axon Chief Executive Donna Marshall Director of Education & Guidance Services Rina Dabhi Director of Families & Communities Cliff Shields Director of Corporate Services & Company Secretary
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TRUSTEES REPRESENTING
Ms Julie Anne
Edmondson (Chair to
Independent Resigned 31st March 2023
31st March 2023)
Mrs Joanne Marie Independent
Forsdike (Chair as from
1st April 2023)
Cllr Diane Tracey
Oldham Council Resigned 4th May 2023
Williamson
Cllr Graham Resigned 4th May 2023
Oldham Council
Shuttleworth
Resigned 4th May 2023
Cllr Rosalynne Katya
Oldham Council
Birch
Independent
Mr Vinesh Mistry Appointed 30th August 2022
Independent
Ms Mezreet Rasul Appointed 30th August 2022
Mrs Nicola Jane Independent
Robinson
Ms Hannah Jane
Independent
Roberts
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TRUSTEES REPRESENTING
Cllr Shaid Oldham Appointed 4th
Mushtaq Council July 2023
Appointed 4th
Cllr Mohon Oldham July 2023
Ali Council Resigned 12th
September 2023
Cllr Patricia Appointed 4th
Oldham Council
Byrne July 2023
Cllr Umar Oldham Appointed 4th
Nasheen Council July 2023
Oldham Resigned 27th November
Cllr Abdul Malik
Council 2022
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## **STRUCTURE, GOVERNANCE AND MANAGEMENT**
## **Governing Document**
Positive Steps Oldham is a company limited by guarantee governed by its Memorandum and Articles of Association which were redrafted and adopted by special resolution on 27th September 2016 having previously been amended August 2005 and November 2006. It is registered as a charity with the Charity Commission. Members are drawn from Oldham's public sector, private business sector, education and training sector, and voluntary sector communities, each of whom agree to contribute £1 in the event of the charity winding up.
## **Appointment of trustees**
The Memorandum and Articles of Association state that the Board of Trustees should total up to twelve members: four elected members of Oldham Council: and eight from statutory partners – (e.g. education, health, crime and disorder) and/or “community” representatives from private business, training, the voluntary sector and/or who are independent with an interest in furthering the objects of the Charity.
## **Trustees induction and training**
A formal induction process for trustees is in place and informal seminars, held as part of Board meetings covering key activities, delivered by service managers supplement this. Guidance Notes are issued to all trustees informing them of their rights and responsibilities.
## **Organisation**
The board delegates day-to-day operations of the company to the Chief Executive. Who is assisted by Directors and a number of senior managers with responsibility for operational delivery. It should be noted that these post holders are not Board members.
## **Related parties**
Close working relationships exist between the Charity and local authorities and a range of other local public, private and third sector organisations, which have proved invaluable to the charity in establishing improved links within the community and identifying relevant policy developments and prospective funding.
## **Subsidiaries**
During the 2022-23 financial year, PS had a subsidiary company:
PSO Trading Limited was incorporated on 2nd June 2005 and commenced trading on 31 October 2005. The company is a wholly-owned subsidiary of the charity and was formed to provide a range of trading activities from the offices of the charity. These include ICT services and projects; work experience; cycle repair/resale and DBS services for smaller voluntary sector organisations. Any surplus or profit from these trading activities is transferred to PS under a gift-aid arrangement. As of 1st April 2023, PSO Trading Limited ceased trading and became dormant. The trustees deemed the level of activity and the nature of the work did not warrant a separate subsidiary.
## **Remuneration of key management personnel**
The goal of our pay policy is to offer fair pay to attract and keep appropriately qualified staff to lead, manage, support and deliver the charity’s aims. Trustees are ultimately responsible for setting remuneration levels for the key management personnel. Pay for other staff is determined by a Job Evaluation Scheme with a cost-of living award agreed by the Trustees annually. Positive Steps is a Real Living Wage accredited body and this will override the Job Evaluation grades, where applicable.
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## **OBJECTIVES AND ACTIVITIES**
As an independent sector organisation, PS is unique in England in the way it provides a range of integrated and targeted support services for young people. The trustees are mindful of the Charity Commission Guidance on public benefit. Its charitable objects are:
- To advance the education and training of young people in order to prepare them for working and adult life.
- ·The relief of unemployment for the public benefit in such ways as may be thought fit, including assistance to find employment.
- The provision of recreational facilities for young people in the interests of social welfare.
- The promotion of public safety.
- The prevention of crime and the rehabilitation of young offenders.
- Advancing in life and helping young people by developing their skills, capacities and capabilities to enable them to
- participate in society as independent, mature and responsible individuals.
- The relief of sickness and the preservation of health among people residing permanently or temporarily in such locations
- as the company is commissioned to deliver services.
- The provision of support and activities which develop their skills, capacities and capabilities to enable them to participate in society as independent, mature and responsible individuals.
- To assist in the treatment and care of persons suffering mental or physical illness arising from substance abuse or in need of rehabilitation as a result of such illness.
During the year, the biggest contract continues to be with Oldham MBC who contract with us to deliver a range of integrated and targeted services for young people, adults and families mainly in the Borough of Oldham. We have continued to deliver Career Guidance services in both Rochdale and Tameside. Our work has been supported by a range of other local, regional and national funding, resulting in the following delivery model:
## **Young People Services**
The work of this directorate focuses on Careers Guidance and Support
Oldham, Rochdale and Tameside local authorities commission information, advice and guidance (IAG) with young people who are at risk of becoming NEET and those in target groups, such as those in the care of the local authority, those involved with the criminal justice system, those with special educational needs or disabilities and teenage parents. Allied to that, we have contracts with over 50 schools and colleges to provide IAG for non-targeted students.
## **Youth Justice and Prevention**
This work focuses on clients with the most complex needs including young people who are missing from home and at risk of child sexual exploitation and young people at risk of or involved in offending behaviour. The services are delivered in partnership with other statutory and voluntary sector organisations in Oldham. Positive Steps is actively involved in both strategic work and in the operational delivery of services for these clients. The services are provided in a holistic way with support offered to whole families in order to assess and support around systemic issues that may be influencing problematic behaviours. Positive Steps is unique as a third sector organisation delivering the statutory Youth Justice Service in Oldham.
## **Families Health and Wellbeing**
The largest element of this Directorate is Early Intervention and Prevention (EIP). EIP is an Oldham-wide strategy to support individuals and families of all ages to stay in control of their lives by effectively managing issues that may be affecting them and preventing escalation to crisis services
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## **OBJECTIVES AND ACTIVITIES**
The Positive Steps service consists of staff and many more volunteers who support families in their own homes and within District Hubs. Assessment and support can be offered for issues such as emotional wellbeing, financial difficulties, housing, relationship difficulties and behaviour management. The service works closely in partnership with Oldham Council alongside other voluntary sector partners to deliver a holistic offer.
The Directorate delivers the Young Carers Service for Oldham which provides support for young people who have a caring responsibility at home – identifying and engaging these vulnerable young people and their families to help them to develop social confidence increasing opportunities for them to engage fully with peers and their community.
## **Corporate Services**
The Directorate has a key role within the business, to provide corporate support and to develop the trading company, PSO Trading Ltd.
## Organisational Support:
This service contains a blend of appropriately skilled and experienced staff that provide Business Intelligence; ICT; Information Governance; Finance; Human Resources; and Quality advice, support and guidance.
## Service Delivery Support:
This service provides the day-to-day support for operational service delivery. This includes Administrative Support; Communications & Marketing; Facilities; “Front of house”.
In addition, a volunteers support service is delivered. Volunteers are integral to Positive Steps as a whole and we have successfully developed roles for volunteers; recruited and trained volunteers to work in all areas of the business. We strive to offer high quality and meaningful volunteering opportunities and offer an excellent training package and a range of opportunities including paid work.
## PSO Trading Ltd:
PSO Trading Ltd is a wholly-owned subsidiary of Positive Steps and any trading surpluses are covenanted into the Positive Steps charitable trust.
We support schools through traded services that organise work experience placements, sector visits, mock interviews and employer encounters. Our Positive Futures programme provides opportunities for young people who are not ready for work to gain valuable vocational experience in a range of activities – bicycle maintenance, DIY, environmental maintenance, hair salon and upcycling.
We operate an in-house bicycle project – Positive Cycles – based on donated bicycles the project involves young people and adults developing skills around bicycle maintenance and renovation. The renovated bicycles are then gifted to clients or sold at our low cost retail outlet.
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ACHIEVEMENTS AND PERFORMANCE
IOGETHEk
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## **ACHIEVEMENTS AND PERFORMANCE**
Positive Steps has a long history of hitting and exceeding targets and the past year has proved no exception. During the April 2022 to March 2023 period, we delivered a comprehensive, integrated range of services which helped young people, adults and families reach their full potential. Our approach throughout has been to understand and break down the barriers individuals face in reaching their goals.
## **EARLY INTERVENTION AND PREVENTION**
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1452
5467
Families referred to the service
Individuals referred to the service
3438
127
Under 18's referred to the service Adult only referrals
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## **2 YEAR OLD**
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604
Families received FREE childcare
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## **YOUTH JUSTICE SERVICE**
The rate of re **-** offending in Oldham of 25.9% was better than the figures for Greater Manchester (33.4%), the North West (26.4%), England (33.8%) and our YJS family comparators (31.6%)
Our custody rate per 1,000 of the age 10 **-** 17 population of 0.15 is lower than all our comparators
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## **ACHIEVEMENTS AND PERFORMANCE**
## **CAREER GUIDANCE & SUPPORT SERVICES**
These are the Participation rates achieved :
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95.6%
OLDHAM
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95.6%
ROCHDALE
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95.1%
TAMESIDE
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## **YOUNG CARERS**
665 Registered with the service
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78.7%
progressed into learning
after year 11
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## **MISSING FROM HOME**
86.25% of the 1607 reported cases were interviewed within 72 hours
## **VOLUNTEERING**
4,491 hours of support to the people accessing our service areas
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## **FINANCIAL REVIEW**
The Positive Steps Oldham Charity accounts for 2022-23 show overall income increasing from £5,630,079 in 2021-22 to £6,211,972, this year an increase of 10.34%.
The accounts show, an operating deficit of £224,131. However, the FRS102 Pension Scheme adjustment of £7,566,000, results in a reported surplus of £7,341,869 for the year.
The figures presented in the GM Pension Fund’s actuarial report are prepared only for the purposes of FRS102 and have no validity in other circumstances **. “In particular, they are not relevant for calculations undertaken for funding purposes"** . The methodology of the Accounting Standard, in conjunction with the Fund’s investment strategy, means that the surplus or deficit identified in the report can vary significantly over short periods of time.” It is important to realise that the actual cost of the pension fund (i.e. how much money it will ultimately have to pay out to its members in the form of benefits) is unknown. This cost will not be known with certainty until the last benefit is paid to the last pensioner. The purpose of this valuation is to estimate what this cost will be, so that the Fund can then develop a funding strategy to meet it.
The pension asset and liability has featured in financial reports and statements since 2005, and has, following reassessment by the Greater Manchester Pension Scheme’s independent actuary, improved from a deficit of £6,930,000 at 31st March 2022 to a balanced position at 31st March 2023. The FRS102 (FRS 17) calculations have continue to oscillate year on year with the following surpluses and deficits noted since the FRS102 (FRS 17) requirements were introduced in 2004-2005
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2005 2023
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Further disclosures relating to the pension fund are given in note 27 to the accounts.
On reviewing the Balance Sheet, the net assets, excluding pension liability, have increased from £2,177,971 to 2,589,840.
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## **STRATEGIC REPORT INCLUDING FINANCIAL REVIEW**
## **INVESTMENT POWERS AND POLICY**
Under the Memorandum and Articles of Association, the Company has the power to invest in any way the trustees wish.
The trustees, having regard to the liquidity requirements of operating the business of the Company and the Reserves Policy, have, where possible, kept available cash funds in an interest bearing deposit account and seek to achieve a rate of interest which matches or exceeds inflation measured by the retail price index.
## **RESERVES POLICY**
In May 2022, the trustees approved the following Reserves Policy:
Reserves should be regarded as realisable “cash assets” namely: funds in the bank; and the difference between moneys owed to creditors and moneys owed by debtors.
Fixed assets would not be included.
A Building and Capital Asset Reserve intended to provide a ready source of funds for repair or acquisition of buildings, leaseholds, furniture, fixtures, and equipment necessary for the effective operation of the organisation and programs.
An Opportunity Reserve intended as a source of internal funds for organisational capacity
building such as staff development, research and development, or investment in infrastructure that will build longterm capacity.
AN Operating Reserve intended to provide an internal source of funds for situations such as a sudden increase in expenses, one-time unbudgeted expenses, unanticipated loss in funding, or uninsured losses. The Operating Reserve is not intended to replace a permanent loss of funds or eliminate an ongoing budget gap.
A Pensions Liability Reserve intended to allow for future potential pension liabilities as a result of retirement on ill health grounds.
The set aside values for these reserves as at 31st March 2023 were:
|Building and Capital Asset Reserve
Opportunity Reserve
Operating Reserve|£250,000
£500,000
£250,000|
|---|---|
||£1,000,000|
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## **STRATEGIC REPORT INCLUDING FINANCIAL REVIEW**
## **PLANS FOR FUTURE PERIOD**
## **Contracting/Funding activity**
Positive Steps continues to work with Oldham, Rochdale and Tameside local authorities, with contract periods of various lengths and extensions. There are no guarantees that PS will automatically be awarded new contracts as they crystallise, however, we continue to develop the services and enhance the proposition to each authority.
The Rochdale Young People’s Support and Guidance Services has been extended to March 2025 .
The Tameside Careers Guidance and Support Service contract is due to be commissioned in December 2024.
The UK Government Community Renewal Fund Roots of Opportunity programme completed in December 2022 and funding as a sub-contracted partner for a Connect to Your Future project funded by European Social Funding continues until September 2023, some continuation funding through the UK Shared Prosperity Fund is expected through to March 2025.
During 2023/24 we will be looking to expand our range of commissioned services into existing and new geographical areas.
Furthermore, we will continue to bid for specific funding opportunities from the Home Office; Children in Need; Community Safety and other funders.
Our trading arm, Positive Steps Trading, has ceased trading and will be dormant from 1st April 2023.
## **Future Ways of Working**
We have embraced a hybrid model of working, all staff are enabled to work remotely and have been equipped with laptops, mobile phones and peripherals.
Reviews of working practices are ongoing, both to meet the demands of hybrid working and to improve efficiency. Continuing reduction of paper-based processes and the development of more ICT based processes are planned in 2023/24, including the development and launch of a new “digital front door”.
Our “state of the art” Oldham HQ offices have attracted a range of partners to co-locate with us and we continually develop the integrated offer.
## **Environmental Responsibility**
Positive Steps takes its environmental responsibility seriously with schemes for the recycling of waste, unwanted furniture and redundant ICT equipment alongside actions to reduce energy usage and ethical procurement.
In April 2020 we adopted our Environmental Policy that contains 12 objectives that focus our commitment to environmental sustainability.
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## **STRATEGIC REPORT INCLUDING FINANCIAL REVIEW**
## **PRINCIPAL RISKS AND UNCERTAINTIES**
The Trustees and Senior Managers remained mindful of the major risks, both internal and external, facing the organisation and where appropriate, systems or procedures have been established to mitigate those risks.
External risks to funding have led to the development of a strategy to continue to diversify activities and seek to diversify business within the sub-region.
Internal control risks were minimised by the implementation of procedures for authorisation of all financial transactions. Contract negotiation with funding bodies is supported by external legal advice. Detailed procedures and protocols existed which supported grievance and disciplinary processes, which were again underpinned by specialist external legal advice.
In particular robust HR systems and processes have minimised employee relations risk and helped to create a more flexible and generic employee base which has minimised economic dismissals through enabling movement into other posts created as a result of new project demands. Staff turnover during the year, was above industry norms. Similar to all sectors recruiting new staff to vacancies and new roles continues to be a challenge and improved methods of online recruitment have been introduced. The easing of covid-19 restrictions and the uncertainty surrounding the cost of living crisis saw higher than expected turnover levels in 2023. The Strategic Group implemented a whole organisation job evaluation review in June 2023.
The Company continued to operate a ‘safe recruitment’ policy in line with Local Safeguarding Children Board standards. All posts, undertaking regulated activity for the organisation, were subject to an Enhanced DBS disclosure at the point of recruitment and reviewed every three years.
Other procedures ensured compliance with health and safety regulations for staff, volunteers, clients and visitors and full insurance cover was maintained in relation to public and employer liability.
The company recognises Unison as its trade union. Any proposed changes to terms and conditions of employment, including job evaluation or other workplace issues were subject to full consultation.
All procedures relating to finance, human resources, IT and professional practice were kept under constant review in the light of changes in legal requirements and improvements in professional standards.
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## **STRATEGIC REPORT INCLUDING FINANCIAL REVIEW**
## **TRUSTEES RESPONSIBILITIES IN RELATION TO THE FINANCIAL STATEMENTS**
The charity’s trustees are responsible for preparing the annual report and financial statements in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice.
Company law requires the trustees to prepare financial statements for each financial year which give a true and fair view of the charity’s and group’s incoming resources and applications of resources during the year and of its state of affairs at the end of the year. In preparing these financial statements, the Trustees are required to:
select suitable accounting policies and then apply them consistently;
observe the methods and principles in the Charities SORP, make judgements and estimates that are reasonable and prudent;
The trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enables them to ensure that the financial statements comply with the Companies Act 2006. The trustees are also responsible for safeguarding the assets of the charity and group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
## **STATEMENT AS TO DISCLOSURE TO OUR AUDITORS**
In so far as the Trustees are aware at the time of approving this report:
There is no relevant audit information, being information needed by the auditor in connection with preparing their report, of which the auditor is unaware, and
The trustees, having made enquiries of fellow directors and the auditor that they ought to have individually taken, have each taken all steps that he/she is obliged to take as a director in order to make themselves aware of any relevant audit information and to establish that the charity’s auditor is aware of that information.
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## **STRATEGIC REPORT INCLUDING FINANCIAL REVIEW**
## **COMPLIANCE WITH ACCOUNTING STANDARDS**
The trustees confirm that the financial statements comply with current statutory requirements, the requirements of the company’s memorandum and articles of association and the requirements of the Charities SORP (FRS 102).
## **AUDITORS**
The auditors, Third Sector Accountancy Ltd, will be proposed for re-appointment in accordance with Section 487 (2) of the Companies Act 2006.
- state whether applicable accounting standards and statements of recommended practice have been followed, subject to any departures disclosed and explained in the financial statements; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business
This report was approved by the board on 28th November 2023 and signed on its behalf by :
Joanne Forsdike
## Trustee/Director
## 01 / 12 / 2023
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**Independent auditor’s report to the members of Positive Steps Oldham**
## **Opinion**
We have audited the financial statements of Positive Steps Oldham (the ‘parent charitable company’) and its subsidiary (‘the group’) for the year ended 31 March 2023 which comprise the Consolidated Statement of Financial Activities, the Balance Sheets, the Consolidated Statement of Cash Flows and notes to the financial statements, 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).
In our opinion, the financial statements:
• give a true and fair view of the state of the group’s and parent charitable company’s affairs as at 31 March 2023 and of the group’s incoming resources and application of resources, including its income and expenditure, for the year then ended;
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;
• have been prepared in accordance with the requirements of the Companies Act 2006.
## **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 financial statements section of our report. We are independent of the group and parent charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements 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.
## **Conclusions relating to going concern**
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group’s or parent charitable company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
## **Other information**
The other information comprises the information included in the trustees’ report, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information.
Our opinion on the financial statements 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.
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**Independent auditor’s report to the members of Positive Steps Oldham**
## **Other information (Continued)**
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements 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 financial statements 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.
## **Opinions on other matters prescribed by the Companies Act 2006**
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the trustees’ report, which includes the directors’ report prepared for the purposes of company law, for the financial year for which the financial statements are prepared is consistent with the financial statements; and
• the directors’ report included within the trustees’ report has been prepared in accordance with applicable legal requirements.
## **Matters on which we are required to report by exception**
In the light of the knowledge and understanding of the group and parent charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors’ report included within the trustees’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 require ~~s~~ us to report to you if, in our opinion:
• adequate and proper accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
• the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of trustees’ remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit; or
• the trustees were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies’ exemptions in preparing the trustees’ report and from the requirement to prepare a strategic report.
## **Responsibilities of trustees**
As explained more fully in the trustees’ responsibilities statement set out on page 18, the trustees (who are also directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the trustees are responsible for assessing the group’s and parent charitable company’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 group or the charitable company or to cease operations, or have no realistic alternative but to do so.
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**Independent auditor’s report to the members of Positive Steps Oldham**
## **Auditor’s responsibilities for the audit of the financial statements**
Our objectives are to obtain reasonable assurance about whether the financial statements 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 financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
## **Capability of the audit in detecting irregularities, including fraud**
Based on our understanding of the group and environment in which it operates, we identified the principal risks of non-compliance with laws and regulations related to pension legislation, tax legislation, employment legislation, health and safety legislation, and other legislation specific to the industry in which the group operates, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, the reporting requirements under the Charities SORP and FRS102, and the Charities Act 2011.
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to:
- Posting manual journal entries to manipulate financial performance, including the treatment of deferred income being inconsistent with FRS102 SORP income recognition; and
- Management bias through judgements and assumptions in significant accounting estimates and significant one-off or unusual transactions.
Our audit procedures were designed to respond to those identified risks, including non-compliance with laws and regulations (irregularities) and fraud that are material to the financial statements. Our audit procedures included but were not limited to:
Compliance with laws and regulations:
- Discussions with management including consideration of known or suspected instances of non-compliance with relevant laws and regulations;
- Communicating identified laws and regulations throughout our engagement team and remaining alert to any indications of non-compliance throughout our audit;
- Review minutes of meetings for issues relating to non-compliance;
- Reviewing both the design and implementation of key policies, including safeguarding.
- Review of correspondence with the regulators and with legal advisors;
Material Fraud in the financial statements:
- Making enquiries of management and those charged with governance on whether they had any knowledge of any actual, suspected or alleged fraud;
- Gaining an understanding of the internal controls established to mitigate risks related to fraud;
- Discussing amongst the engagement team the risks of fraud;
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**Independent auditor’s report to the members of Positive Steps Oldham**
## **Capability of the audit in detecting irregularities, including fraud (Continued)**
- Addressing the risks of fraud through management override of controls by performing journal entry testing; and
- Challenging assumptions and judgments made by management, including reviewing management’s recognition of income in line with FRS102 SORP, use of depreciation policies and the defined benefit pension liability and associated disclosures;
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
## **Use of the audit 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.
Patrick Morrello ACA (Senior Statutory Auditor)
For and on behalf of Third Sector Accountancy Limited, Statutory Auditor Holyoake House Hanover Street Manchester M60 0AS
> Date 01 / 12 / 2023
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## Positive Steps Oldham
Consolidated Statement of Financial Activities (including Income and Expenditure account) for the year ended 31 March 2023
**----- Start of picture text -----**
Unrestricted Restricted Total funds Unrestricted Restricted Total funds
funds funds 2023 funds funds 2022
Note £ £ £ £ £ £
Income from:
Donations and legacies 3 180,841 - 180,841 173,842 - 173,842
Charitable activities 4 5,286,155 354,637 5,640,792 4,793,220 401,755 5,194,975
Other trading activities 5 270,047 - 270,047 204,418 - 204,418
Investments 6 120,292 - 120,292 56,844 - 56,844
Total income 5,857,335 354,637 6,211,972 5,228,324 401,755 5,630,079
Expenditure on:
Raising funds 7 323,070 - 323,070 367,219 - 367,219
Charitable activities 8 5,706,955 406,078 6,113,033 5,630,134 440,533 6,070,667
Other expenditure 10 - - - (2,763) - (2,763)
Total expenditure 6,030,025 406,078 6,436,103 5,994,590 440,533 6,435,123
Net income/(expenditure) 11 (172,690) (51,441) (224,131) (766,266) (38,778) (805,044)
Remeasurement gain/(loss) on defined benefit
pension plan 27 7,566,000 - 7,566,000 7,188,000 - 7,188,000
Net movement in funds 7,393,310 (51,441) 7,341,869 6,421,734 (38,778) 6,382,956
Reconciliation of funds
Total funds brought forward (4,816,143) 64,114 (4,752,029) (11,237,877) 102,892 (11,134,985)
Total funds carried forward 2,577,167 12,673 2,589,840 (4,816,143) 64,114 (4,752,029)
**----- End of picture text -----**
The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.
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## Positive Steps Oldham Company number 2563094
## Balance Sheets as at 31 March 2023
**----- Start of picture text -----**
The Group The Charity
Note 2023 2022 2023 2022
£ £ £ £
Fixed assets
Tangible assets 16 757,227 775,810 757,227 775,385
Investments 17 - - 1 1
Total fixed assets 757,227 775,810 757,228 775,386
Current assets
Stock - - - -
Debtors 20 1,108,183 755,500 1,108,183 1,046,823
Cash at bank and in hand 1,526,773 1,446,842 1,526,772 1,169,221
Total current assets 2,634,956 2,202,342 2,634,955 2,216,044
Liabilities
Creditors: amounts falling
due in less than one year 21 (802,343) (800,181) (802,343) (770,740)
Net current assets 1,832,613 1,402,161 1,832,612 1,445,304
Total assets less current liabilities 2,589,840 2,177,971 2,589,840 2,220,690
Net assets excluding pension
liability 2,589,840 2,177,971 2,589,840 2,220,690
Defined benefit pension scheme
asset/ (liability) 27 - (6,930,000) - (6,930,000)
Net assets/ (liabilities) 2,589,840 (4,752,029) 2,589,840 (4,709,310)
Funds of the charity:
Restricted income funds 22 12,673 64,114 12,673 64,114
Unrestricted income funds:
General 23 2,577,167 2,113,857 2,577,167 2,156,576
Pension reserve 23 - (6,930,000) - (6,930,000)
Total charity funds/ (deficit) 2,589,840 (4,752,029) 2,589,840 (4,709,310)
**----- End of picture text -----**
These accounts are prepared in accordance with the special provisions of part 15 of the Companies Act 2006 relating to small companies and constitute the annual accounts required by the Companies Act 2006 and are for circulation to members of the company.
The notes on pages 22 to 48 form part of these accounts.
28th November 2023
Approved by the trustees on
Joanne Forsdike (Trustee)
Hannah Roberts (Trustee)
and signed on their behalf by: Robert Edden (Secretary)
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Positive Steps Oldham
## Consolidated Statement of Cash Flows for the year ending 31 March 2023
**----- Start of picture text -----**
Note 2023 2022
£ £
Cash provided by/(used in) operating
activities 26 134,495 (459,577)
Cash flows from investing activities:
Dividends, interest, and rents from investments 120,292 56,844
Purchase of tangible fixed assets (174,856) (6,424)
Cash provided by/(used in) investing activities (54,564) 50,420
Increase/(decrease) in cash and cash
equivalents in the year 79,931 (409,157)
Cash and cash equivalents at the beginning of the year 1,446,842 1,855,999
Total cash equivalents at the end of the year 1,526,773 1,446,842
**----- End of picture text -----**
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Positive Steps Oldham
## Notes to the accounts for the year ended 31 March 2023
## 1 Accounting policies
The principal accounting policies adopted, judgments and key sources of estimation uncertainty in the preparation of the financial statements are as follows:
## a Basis of preparation
The financial statements have been prepared in accordance with 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) issued in October 2019 - (Charities SORP (FRS 102), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.
Positive Steps Oldham meets the definition of a public benefit entity under FRS102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy note.
## b Group financial statements
These financial statements consolidate the results of the charitable company and its wholly-owned subsidiary PSO Trading Limited on a line by line basis. A separate Statement of Financial Activities and Income and Expenditure account are not presented for the charity itself following exemtions afforded by section 408 of the Companies Act 2006.
## c Preparation of the accounts on a going concern basis
The trustees consider that there are no material uncertainties about the charitable company's ability to continue as a going concern.
## d Key judgments and estimates
## Defined benefit pension scheme
The present value of Positive Steps Oldham' defined benefit pension scheme liabilities is calculated every three years by an appointed actuary. For the purpose of reporting the actuarial present value of promised retirement benefits, this liability value is updated annually in intervening years by the Actuary. The methodology used is in line with accepted guidelines and in accordance with FRS102. Assumptions underpinning the valuations are agreed with the Actuary. This estimate is subject to significant variances based on change to the underlying assumptions. See note 27 for summary of assumptions used and sensitivity analysis performed.
It is difficult to assess the accuracy of the rolled-forward obligations shown in the accounts without conducting a full valuation using updated individual membership data. Such a valuation is generally not practical in the time available to meet the Employer's reporting requirements. The estimated rolledforward obligations as at the accounting date will therefore not reflect differences in demographic experience from that assumed (e.g. member longevity), the impact of differences between aggregate changes in salaries or changes for specific individuals (e.g. individual members transfers in/out of an Employer).
In addition, whilst the obligations calculated under FRS102 include an allowance for some premature retirements on grounds of ill-health, there is no allowance for early retirements on grounds of redundancy or efficiency.
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Positive Steps Oldham
## Notes to the accounts for the year ended 31 March 2023 (continued)
## 1 Accounting policies (continued)
Defined benefit pension scheme (continued)
There are risks and uncertainties associated with whatever assumptions are adopted. FRS102 requires the assumptions to be determined on a best estimate basis. However the assumptions are in effect projections of future investment returns and demographic experience many years into the future and there is inevitably a great deal of uncertainty in what constitutes best estimate for such projections.
It should also be noted that the actuary’s estimation will likely be less accurate in the second and third years following the last triennial valuation, as greater estimation uncertainty is involved. See note 27 for full disclosure of the pension scheme estimates, including uncertainties.
There are no other key judgments or estimates relevant to the financial statements.
## e Income
Income is recognised when the charity has entitlement to the funds, any performance conditions attached to the item(s) of income have been met, it is probable that the income will be received and the amount can be measured reliably.
Income from government and other grants, whether ‘capital’ grants or ‘revenue’ grants, is recognised when the charity has entitlement to the funds, any performance conditions attached to the grants have been met, it is probable that the income will be received and the amount can be measured reliably and is not deferred.
Income received in advance of a provision of a specified service is deferred until the criteria for income recognition are met.
## f Donated services and facilities
Donated professional services and donated facilities are recognised as income when the charity has control over the item, any conditions associated with the donated item have been met, the receipt of economic benefit from the use by the charity of the item is probable and that economic benefit can be measured reliably. In accordance with the Charities SORP (FRS 102), general volunteer is not recognised; refer to the trustees’ annual report for more information about their contribution.
On receipt, donated professional services and donated facilities are recognised on the basis of the value of the gift to the charity which is the amount the charity would have been willing to pay to obtain services or facilities of equivalent economic benefit on the open market; a corresponding amount is then recognised in expenditure in the period of receipt.
## g Interest receivable
Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charity; this is normally upon notification of the interest paid or payable by the Bank.
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Positive Steps Oldham
Notes to the accounts for the year ended 31 March 2023 (continued)
- 1 Accounting policies (continued)
- h Fund accounting
Unrestricted funds are available to spend on activities that further any of the purposes of charity.
Designated funds are unrestricted funds of the charity which the trustees have decided at their discretion to set aside to use for a specific purpose.
Restricted funds are donations which the donor has specified are to be solely used for particular areas of the charity’s work or for specific projects being undertaken by the charity.
## i Expenditure and irrecoverable VAT
Expenditure is recognised once there is a legal or constructive obligation to make a payment to a third party, it is probable that settlement will be required and the amount of the obligation can be measured reliably. Expenditure is classified under the following activity headings:
- Costs of raising funds comprise the costs of commercial trading in the subsidiary company and associated support costs.
- Expenditure on charitable activities includes the costs undertaken to further the purposes of the charity and their associated support costs.
Irrecoverable VAT is charged as a cost against the activity for which the expenditure was incurred.
## j Allocation of support costs
Support costs are those functions that assist the work of the charity but do not directly undertake charitable activities. Support costs include back office costs, finance, personnel, payroll and governance costs which support the charity's programmes and activities. These costs have been allocated between cost of raising funds and expenditure on charitable activities. The bases on which support costs have been allocated are set out in note 9.
## k Operating leases
Operating leases are leases in which the title to the assets, and the risks and rewards of ownership, remain with the lessor. Rental charges are charged on a straight line basis over the term of the lease.
## l Tangible fixed assets
Individual fixed assets are capitalised at cost and are depreciated over their estimated useful economic lives on a straight line basis as follows:
|Leasehold improvements|The remaining term of the lease|
|---|---|
|Office fixtures and equipment|3 to 10 years|
|Mechanical systems|8 to 15 years|
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Positive Steps Oldham
## Notes to the accounts for the year ended 31 March 2023 (continued)
- 1 Accounting policies (continued)
## m Debtors
Trade and other debtors are recognised at the settlement amount due after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.
## n Cash at bank and in hand
Cash at bank and cash in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.
## o Creditors and provisions
Creditors and provisions are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due.
## p Financial instruments
The charity only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value with the exception of bank loans which are subsequently measured at amortised cost using the effective interest method.
## q Pensions
## Defined contribution scheme
Employees of the charity are entitled to join a defined contribution ‘money purchase’ scheme. The charity’s contribution is restricted to the contributions disclosed in note 12. There were no outstanding contributions at the year end. The costs of the defined contribution scheme are included within support and governance costs and allocated to the funds of the charity using the methodology set out in note 9.
## Defined benefit scheme
Qualifying employees of Positive Steps participate in the Greater Manchester Pension Fund (‘the Fund’) administered by Tameside Metropolitan Borough Council, under the regulations governing the Local Government Pension Scheme (LGPS). The scheme is a defined benefit scheme. Full disclosure of the accounting policies used is given in note 27.
## 2 Legal status of the charity
The charity is a company limited by guarantee registered in England and Wales and has no share capital. In the event of the charity being wound up, the liability in respect of the guarantee is limited to £1 per member of the charity. The registered office address is disclosed on page 1.
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## Positive Steps Oldham
## Notes to the accounts for the year ended 31 March 2023 (continued)
**----- Start of picture text -----**
3 Income from donations and legacies
Unrestricted Restricted Total 2023 Unrestricted Restricted Total 2022
£ £ £ £ £ £
Refurbishment contribution from landlord 144,684 - 144,684 144,684 - 144,684
Donations 8,907 - 8,907 1,908 - 1,908
- -
In kind donation: Property Lease 27,250 27,250 27,250 27,250
- -
180,841 180,841 173,842 173,842
4 Income from charitable activities
Unrestricted Restricted Total 2023 Unrestricted Restricted Total 2022
£ £ £ £ £ £
Young Peoples Services 3,993,940 292,951 4,286,891 3,470,268 385,593 3,855,861
Families Health and Wellbeing 1,292,215 61,686 1,353,901 1,322,952 16,162 1,339,114
5,286,155 354,637 5,640,792 4,793,220 401,755 5,194,975
5 Income from other trading activities
Unrestricted Restricted Total 2023 Unrestricted Restricted Total 2022
£ £ £ £ £ £
- -
Work experience 177,383 177,383 144,983 144,983
- -
Projects 75,701 75,701 54,188 54,188
Other income (Placements and sundry
sales) 16,963 16,963 5,247 - 5,247
- -
270,047 270,047 204,418 204,418
**----- End of picture text -----**
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## Positive Steps Oldham
## Notes to the accounts for the year ended 31 March 2023 (continued)
**----- Start of picture text -----**
6 Investment income
Unrestricted Restricted Total 2023 Unrestricted Restricted Total 2022
£ £ £ £ £ £
Income from bank deposits 13,473 - 13,473 258 - 258
Rent receivable 99,696 - 99,696 37,110 - 37,110
Room hire 7,123 - 7,123 19,476 - 19,476
- -
120,292 120,292 56,844 56,844
7 Cost of raising funds
Unrestricted Restricted 2023 Unrestricted Restricted 2022
£ £ £ £ £ £
- -
Activity costs - PSO Trading Limited 123,670 123,670 147,029 147,029
- -
Staff costs - PSO Trading Limited 173,935 173,935 179,218 179,218
Pension scheme adjustments
Current service costs less employer
contribution 17,617 - 17,617 28,596 - 28,596
Net interest on the defined benefit
pension liability 7,848 - 7,848 12,376 - 12,376
- -
323,070 323,070 367,219 367,219
**----- End of picture text -----**
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## Positive Steps Oldham
## Notes to the accounts for the year ended 31 March 2023 (continued)
8 Analysis of expenditure on charitable activities
|taff costs
raining and employee costs
roject costs
ravel, subsistence and transport
ent and property costs
tationery and administration
elephone and data communications
omputer maintenance and software
epreciation
rofessional services
ension scheme adjustments:
overnance costs (see note 9)
upport costs (see note 9)
Current service costs less employer
contribution
Net interest on the defined benefit
pension liability|Young
Peoples
Services
£
2,708,931
8,812
199,929
21,175
1,140
650
572
-
113,012
2,457
273,975
122,044
1,134,966
11,837
4,599,500|Family,
Health, and
wellbeing
£
852,996
2,668
127,914
3,121
-
-
-
-
35,637
4,686
86,395
38,485
357,898
3,733
1,513,533|Total 2023
£
3,561,927
11,480
327,843
24,296
1,140
650
572
-
148,649
7,143
360,370
160,529
1,492,864
15,570
6,113,033|_Young_
_Peoples_
_Services_
_£_
_2,475,596_
_3,990_
_347,162_
_14,533_
_170_
_1,149_
_-_
_-_
_118,829_
_2,981_
_395,001_
_170,961_
_1,012,536_
_10,154_
_4,553,062_|_Family,_
_Health, and_
_wellbeing_
_£_
_828,036_
_510_
_111,510_
_1,763_
_-_
_-_
_-_
_-_
_39,746_
_4,667_
_132,120_
_57,183_
_338,673_
_3,396_
_1,517,604_|_Total 2022_
_£_
_3,303,632_
_4,500_
_458,672_
_16,296_
_170_
_1,149_
_-_
_-_
_158,575_
_7,648_
_527,121_
_228,145_
_1,351,209_
_13,550_
_6,070,667_|
|---|---|---|---|---|---|---|
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## Positive Steps Oldham
## Notes to the accounts for the year ended 31 March 2023 (continued)
9 Analysis of governance and support costs
|taff costs
ension scheme adjustments
raining and employee costs
ravel, Subsistence and Transport Costs
roject costs
elephone and data communication
omputer maintenance and software
tationery and administration
ent and property costs
epreciation
rofessional services
oss on Disposal
ad debt write off
udit and accountancy
l
l
o
ca
t
ed
a
s
f
o
l
l
o
w
s
:
Cost of raising funds
Young Peoples Services
Family, Health, and Wellbeing|Support
£
612,264
89,637
36,988
6,656
6,904
38,324
246,887
23,489
342,932
25,580
37,745
18,785
6,674
-
1,492,865
-
1,134,966
357,898
1,492,864|Governance
£
-
-
-
-
_-_
-
-
-
-
-
-
-
15,569
15,569
-
11,837
3,733
15,570|_Total 2023_
£
612,264
89,637
36,988
6,656
6,904
38,324
246,887
23,489
342,932
25,580
37,745
18,785
6,674
15,569
1,508,434
-
1,146,803
361,631
1,508,434|_Support_
_£_
_528,230_
_120,762_
_17,547_
_-_
_2,173_
_36,847_
_226,894_
_19,471_
_332,405_
_25,302_
_41,577_
_-_
_-_
_-_
_1,351,208_
_-_
_1,012,536_
_338,673_
_1,351,209_|_Governance_
_£_
_-_
_-_
_-_
_-_
_-_
_-_
_-_
_-_
_-_
_-_
_-_
_-_
_13,550_
_13,550_
_-_
_10,154_
_3,396_
_13,550_|_Total 2022_
_£_
_528,230_
_120,762_
_17,547_
_-_
_2,173_
_36,847_
_226,894_
_19,471_
_332,405_
_25,302_
_41,577_
_-_
_-_
_13,550_
_1,364,758_
_-_
_1,022,690_
_342,069_
_1,364,759_|
|---|---|---|---|---|---|---|
Support costs have been apportioned using numbers of people per area of activity, or on a basis which is considered consistent with the use of the resources.
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Positive Steps Oldham Notes to the accounts for the year ended 31 March 2023 (continued)
## 10 Other expenditure
**----- Start of picture text -----**
2023 2022
£ £
Early Help Restructuring
Redundancy costs - -
Pension strain costs - -
- -
Corporate Restructuring
Redundancy costs - -
Pension strain costs - (2,763)
-
(2,763)
Total Restructuring Costs - (2,763)
**----- End of picture text -----**
## _Current Year_
No expenditure relating to restructuring in the current year
## _Prior Year_
Current year expenditure relates to the difference between the expected pension strain costs accrual as at 31st March 2021 and the actual cost incurred during the current financial year.
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Positive Steps Oldham Notes to the accounts for the year ended 31 March 2023 (continued)
**----- Start of picture text -----**
11 Net income/(expenditure) for the year 2023 2022
£ £
This is stated after charging/(crediting):
Depreciation 174,654 184,574
Loss on disposal of fixed assets 18,785 -
Defined benefit pension costs:
Current year service costs 852,000 1,053,000
Past service cost - 131,000
Net interest 196,000 277,000
-
Restructuring costs (as note 10 above) (2,763)
Movement in holiday pay accrual (35,950) (43,183)
Operating lease rentals: Land and buildings 120,000 120,000
Auditor's remuneration - audit fees 10,500 9,000
Auditor's remuneration - accountancy fees 5,069 3,400
12 Staff costs
Staff costs during the year were as follows:
2023 2022
£ £
Wages and salaries 3,589,589 3,283,489
Social security costs 338,736 290,116
Pension costs 455,751 483,421
Movement in holiday pay accrual (35,950) (43,183)
-
Redundancy costs (2,763)
4,348,126 4,011,080
The average number of employees and secondees during the year was as follows:
Charitable activities 123 125
Raising funds 5 5
128 130
The number of employees whose emoluments (gross salary plus employer pension contribution) amounted to
over £60,000 in the year were as follows:
£60,001 - £70,000 2 1
£70,001 - £80,000 1 1
£80,001 - £90,000 - -
£90,001 - £100,000 1 1
**----- End of picture text -----**
The number of employees whose emoluments (gross salary plus employer pension contribution) amounted to over £60,000 in the year were as follows:
The key management personnel of the charity comprise the trustees and the Senior Management Team. The total employee benefits of the key management personnel of the charity were £351,526 (2022: £310,488).
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Positive Steps Oldham Notes to the accounts for the year ended 31 March 2023 (continued)
## 13 Trustee remuneration and expenses, and related party transactions
Neither the trustees nor any persons connected with them received any remuneration or reimbursed expenses during the year (2022: Nil).
In line with the definition of a related party per FRS102, any entity that is a post-employment benefit plan for the benefit of employees of the reporting entity is a related party and hence is to be disclosed. Under this basis, Greater Manchester Pension Fund are a related party. For more details of associated transactions please see note 27.
A £200 (2022: Nil) unrestricted donation was received from a trustee during the year, there were no further donations received from related parties in the year.
Stephanie Bolshaw, the CEO (up to 31 March 2023), is a trustee of Mahdlo (Oldham Youth Zone), charity number 1134427. During the year, the group supplied services and equipment to Mahdlo for £17,793 (2021: £20,074). A balance of £Nil (2022:£8,802) was owed as at year end from Mahdlo to the group.
Four trustees are also Oldham Metropolitan Borough Councillors. During the year, the charity was paid £2,811,150 (2021: 2,769,370 ) by the council for services. The charity also paid £18,815 (2022: £22,394) for charges made by the council.
The charity is the sole member of its subsidiary company PSO Trading Limited. The charity is a director of PSO Trading Limited, as are two members of the charity's senior management team. During the year the charity had the following transactions with the subsidiary:
||2023|_2022_|
|---|---|---|
||£|_£_|
|Payroll costs re-charged to the subsidiary|174,146|_180,160_|
|Other costs recharged to the subsidiary|47,770|_46,718_|
|Write off of costs owed by the subsidiary|(56,503)|_-_|
|Charges by subsidiary to parent charity|-|_(85,967)_|
As at 31 March 2023 the subsidiary owed the parent charity £nil (2022: £371,371).
Apart from the above, no trustee or other person related to the charity had any personal interest in any contract or transaction entered into by the charity, including guarantees, during the year (2022: nil).
## 14 Government grants
The government grants recognised in the accounts were as follows:
|hildren in Need
rly Intervention Services
rnaround
ung Carers- HAF
oots of Opportunities|2023
£
37,021
45,000
58,733
9,157
189,218
339,129|_2022_
_£_
_16,162_
_45,000_
_-_
_1,128_
385,593
447,883|
|---|---|---|
There were no unfulfilled conditions and contingencies attaching to the grants.
33
Doc ID: e0bf4532ad041b8d6a185c184c906039fee1f922
Positive Steps Oldham Notes to the accounts for the year ended 31 March 2023 (continued)
## 15 Corporation tax
The charity is exempt from tax on income and gains falling within Chapter 3 of Part 11 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992 to the extent that these are applied to its charitable objects. No tax charges have arisen in the charity. The charity's trading subsidiary PSO Trading Limited gift aids available profits to the parent charity. Its charge to corporation tax in the year was:
**----- Start of picture text -----**
2023 2022
£ £
UK corporation tax at 19% (2022: 19%) - -
Fixed assets: tangible assetsixed assets: tangible assetsxed assets: tangible assetsed assets: tangible assetsd assets: tangible assets assets: tangible assetsssets: tangible assetssets: tangible assetsets: tangible assetsts: tangible assetss: tangible assets: tangible assets tangible assetsangible assetsngible assetsgible assetsible assetsble assetsle assetse assets assetsssetssetsetstss
The group Office
Leasehold
equipment & Total
improvements
furniture
£ £ £
Cost
At 1 April 2022 832,702 508,950 1,341,652
Additions 42,581 132,275 174,856
Disposals (70,488) (3,866) (74,354)
At 31 March 2023 804,795 637,359 1,442,154
Depreciation
At 1 April 2022 272,158 293,684 565,842
Charge for the year 85,854 88,800 174,654
Disposals (51,736) (3,833) (55,569)
At 31 March 2023 306,276 378,651 684,927
Net book value
At 31 March 2023 498,519 258,708 757,227
At 31 March 2022 560,544 215,266 775,810
**----- End of picture text -----**
## 16 Fixed assets: tangible assetsixed assets: tangible assetsxed assets: tangible assetsed assets: tangible assetsd assets: tangible assets assets: tangible assetsssets: tangible assetssets: tangible assetsets: tangible assetsts: tangible assetss: tangible assets: tangible assets tangible assetsangible assetsngible assetsgible assetsible assetsble assetsle assetse assets assetsssetssetsetstss
34
Doc ID: e0bf4532ad041b8d6a185c184c906039fee1f922
Positive Steps Oldham Notes to the accounts for the year ended 31 March 2023 (continued)
## 16 Fixed assets: tangible assets (continued)
**----- Start of picture text -----**
The charity Office
Leasehold
equipment & Total
improvements
furniture
£ £ £
Cost
At 1 April 2022 832,702 505,698 1,338,400
Additions 42,581 132,275 174,856
Disposals (70,486) (617) (71,103)
At 31 March 2023 804,797 637,356 1,442,153
Depreciation
At 1 April 2022 272,156 290,859 563,015
Charge for the year 85,854 88,375 174,229
Disposals (52,103) (215) (52,318)
At 31 March 2023 305,907 379,019 684,926
Net book value
At 31 March 2023 498,890 258,337 757,227
At 31 March 2022 560,546 214,839 775,385
**----- End of picture text -----**
## 17 Investments
**----- Start of picture text -----**
||||||
|---|---|---|---|---|
|The group|The charity|
|2023|2022|2023|2022|
|£|£|£|£|
|Investment in group undertakings|-|-|1|1|
**----- End of picture text -----**
The charity owns one share in PSO Trading Limited which represents 100% of the issued share capital of that company.
## 18 Subsidiary undertaking
The Charitable company owns the whole of the issued ordinary share capital of PSO Trading Limited, a company registered in England. The subsidiary is used for non-primary purpose trading activities. Available profits are gift aided to the charitable company. A summary of the results of the subsidiary is shown below:
35
Doc ID: e0bf4532ad041b8d6a185c184c906039fee1f922
Positive Steps Oldham Notes to the accounts for the year ended 31 March 2023 (continued)
## 18 Subsidiary undertaking (continued)
**----- Start of picture text -----**
||||
|---|---|---|
|Profit and loss account|2023|2022|
|£|£|
|Turnover|257,718|289,124|
|Administration costs|(297,604)|(326,247)|
|Other operating income|82,603|27,250|
|Net (loss)/profit|£42,717|(£9,873)|
|Balance sheet|2023|2022|
|£|£|
|Fixed assets|-|424|
|Current assets|1|357,672|
|-|
|Creditors due in less than one year|(400,812)|
|£1|(£42,716)|
|Called up share capital|1|1|
|Profit and loss account|-|(42,717)|
|£1|(£42,716)|
**----- End of picture text -----**
The activities of the trading subsidiary PSO Trading Limited were transferred to the parent charity as at 01/04/2023 and the trading subsidiary has been dormant since 01/04/2023.
## 19 Parent charity
The parent charity's gross income and the results for the year are disclosed as follow:
**----- Start of picture text -----**
||||
|---|---|---|
|2023|2022|
|£|£|
|Gross income|6,148,919|5,640,994|
|Net surplus/(deficit)|(260,173)|(795,171)|
|Actuarial (losses)/gains on defined benefit pension scheme|6,990,000|7,188,000|
|Net movement in funds|6,729,827|6,392,829|
**----- End of picture text -----**
36
Doc ID: e0bf4532ad041b8d6a185c184c906039fee1f922
Positive Steps Oldham Notes to the accounts for the year ended 31 March 2023 (continued)
## 20 Debtors
**----- Start of picture text -----**
The group The charity
2023 2022 2023 2022
£ £ £ £
Trade debtors 884,699 584,435 884,699 517,556
Amounts owed by subsidiary
undertaking - - - 371,372
Prepayments 26,604 105,348 26,604 105,348
Accrued income 196,880 65,717 196,880 52,547
1,108,183 755,500 1,108,183 1,046,823
Creditors: amounts falling due within one yearreditors: amounts falling due within one yeareditors: amounts falling due within one yearditors: amounts falling due within one yearitors: amounts falling due within one yeartors: amounts falling due within one yearors: amounts falling due within one yearrs: amounts falling due within one years: amounts falling due within one year: amounts falling due within one year amounts falling due within one yearmounts falling due within one yearounts falling due within one yearunts falling due within one yearnts falling due within one yearts falling due within one years falling due within one year falling due within one yearalling due within one yearlling due within one yearling due within one yearing due within one yearng due within one yearg due within one year due within one yearue within one yeare within one year within one yearithin one yearthin one yearhin one yearin one yearn one year one yearne yeare year yeareararr
The group The charity
2023 2022 2023 2022
£ £ £ £
Trade creditors 173,701 162,106 173,701 162,076
Accruals 82,019 245,405 82,019 230,815
Deferred income 236,146 292,329 236,146 280,953
Taxation and social security costs 310,477 100,341 310,477 96,896
802,343 800,181 802,343 770,740
**----- End of picture text -----**
21 Creditors: amounts falling due within one yearreditors: amounts falling due within one yeareditors: amounts falling due within one yearditors: amounts falling due within one yearitors: amounts falling due within one yeartors: amounts falling due within one yearors: amounts falling due within one yearrs: amounts falling due within one years: amounts falling due within one year: amounts falling due within one year amounts falling due within one yearmounts falling due within one yearounts falling due within one yearunts falling due within one yearnts falling due within one yearts falling due within one years falling due within one year falling due within one yearalling due within one yearlling due within one yearling due within one yearing due within one yearng due within one yearg due within one year due within one yearue within one yeare within one year within one yearithin one yearthin one yearhin one yearin one yearn one year one yearne yeare year yeareararr
Deferred income is service contract income where amounts have been received or billed in advance of the performance of the services.
Included within accruals is a balance of £54k (2022: £90k) in respect of a holiday pay accrual.
37
Doc ID: e0bf4532ad041b8d6a185c184c906039fee1f922
Positive Steps Oldham Notes to the accounts for the year ended 31 March 2023 (continued)
## 22 Analysis of movements in restricted funds
Current reporting period
|Balance at 1
April 2022
£
3,312
60,802
-
-
-
tal
64,114
rnaround
rly Intervention
rvices Grant
Household
pport grant
mmunity Renewal
nd: Roots of
portunity
ildren in Need 21-|Income
£
37,021
189,218
58,733
45,000
24,665
354,637|Expenditure
£
(29,262)
(250,020)
(57,131)
(45,000)
(24,665)
(406,078)|Transfers
£
-
-
-
-
-
-|Balance at 31
March 2023
£
11,071
-
1,602
-
-
12,673|
|---|---|---|---|---|
38
Doc ID: e0bf4532ad041b8d6a185c184c906039fee1f922
Positive Steps Oldham Notes to the accounts for the year ended 31 March 2023 (continued)
## 22 Analysis of movements in restricted funds
## _Previous reporting period_
|_Balance at 1_
_April 2021_
_Income_
_Expenditure_
_Transfers_
_£_
_£_
_£_
_£_
85,967
-
(85,967)
-
16,925
(16,925)
-
16,162
(12,850)
-
385,593
(324,791)
-
_tal_
_102,892_
_401,755_
_(440,533)_
_-_
D
e
s
c
r
i
p
t
i
o
n
,
n
a
t
u
r
e
a
n
d
p
u
r
p
os
e
s
o
f
t
h
e
f
u
n
d
Health and wellbeing project for young carers
Turnaround Programme (voluntary youth early intervention programme)
Early Intervention and Prevention grant programme
Oldham Cost-of-Living Household Support Fund 2022
_ildren in Need 19-_
_ildren in Need 21-_
_mmunity_
_newal Fund:_
_ots of_
_portunity_
mmunity Renewal
nd: Roots of
portunity
me
o
f
s
t
r
i
c
t
e
d
f
u
n
d
_rclays Covid_
Programme with a graduated approach to enable young people to
contribute to the local environment and seek employment in the green
economy.
rnaround
rly Intervention
rvices Grant
Household
pport grant
ildren in Need 21-|_Balance at 1_
_April 2022_
_£_
-
-
3,312
60,802
_64,114_|
|---|---|
39
Doc ID: e0bf4532ad041b8d6a185c184c906039fee1f922
Positive Steps Oldham Notes to the accounts for the year ended 31 March 2023 (continued)
## 23 Analysis of movement in group unrestricted funds
## Current period
**----- Start of picture text -----**
Balance at 1 As at 31
April 2022 Income Expenditure Transfers March 2023
£ £ £ £ £
General fund 2,113,857 5,857,335 (6,030,025) 636,000 2,577,167
Pension reserve (6,930,000) - 6,930,000 -
(4,816,143) 5,857,335 (6,030,025) 7,566,000 2,577,167
Balance at 1 As at 1 April
April 2021 Income Expenditure Transfers 2022
£ £ £ £ £
General fund 1,963,123 5,228,323 (5,994,589) 917,000 2,113,857
Pension reserve (13,201,000) - - 6,271,000 (6,930,000)
(11,237,877) 5,228,323 (5,994,589) 7,188,000 (4,816,143)
**----- End of picture text -----**
Name of Description, nature and purposes of the fund General fund The free reserves after allowing for all designated funds Pension reserve Reserves allocated to the defined benefit pension fund asset/liability
- 24 Analysis of group net assets between funds
Current reporting period
|ngible fixed assets
t current assets/(liabilities)
ovision for pension liability
tal
_e_
_v_
_io_
_u_
_s_
_r_
_e_
_p_
_o_
_r_
_t_
_i_
_n_
_g_
_p_
_e_
_r_
_i_
_o_
_d_
_ngible fixed assets_
_t current assets/(liabilities)_
_ovision for pension liability_
_tal_|General
fund
£
757,227
1,819,940
-
2,577,167
_General_
_fund_
_£_
_775,810_
_1,338,047_
_-_
_2,113,857_|Designated
funds
£
-
-
-
-
_Designated_
_funds_
_£_
_-_
_-_
_(6,930,000)_
_(6,930,000)_|Restricted
funds
£
-
12,673
-
12,673
_Restricted_
_funds_
_£_
_-_
_64,114_
_-_
_64,114_|Total
£
757,227
1,832,613
-
2,589,840
_Total_
_£_
_775,810_
_1,402,161_
_(6,930,000)_
_(4,752,029)_|
|---|---|---|---|---|
40
Doc ID: e0bf4532ad041b8d6a185c184c906039fee1f922
## Positive Steps Oldham Notes to the accounts for the year ended 31 March 2023 (continued)
## 25 Operating lease commitments
The group's total future minimum lease payments under non-cancellable operating leases is as follows for each of the following periods:
**----- Start of picture text -----**
The group The charity
2023 2022 2023 2022
£ £ £ £
Land and buildings:
Less than one year 120,000 120,000 120,000 120,000
One to five years 480,000 480,000 480,000 480,000
Over five years 187,068 307,068 187,068 307,068
787,068 907,068 787,068 907,068
**----- End of picture text -----**
The figures for future minimum lease payments are stated net of the refurbishment contribution agreed with the landlord. In the accounts, the refurbishment contribution is included income. The annual rent before refurbishment contribution is £264,700. The lease expires on 22 October 2029.
26 Reconciliation of net movement in funds to net cash flow from operating activities
|me
/
(
e
xp
e
n
d
i
t
u
r
e
)
f
o
r
t
h
e
y
e
a
r
e
n
t
s
f
o
r
:
eciation charge and disposals
ends, interest and rents from investments
ease/(increase) in stock
ease/(increase) in debtors
ase/(decrease) in creditors
ion scheme adjustments
id
d
b
d
i
i
i
i
i
|2023
£
(224,131)
193,439
(120,292)
-
(352,683)
2,162
636,000
134495|_2022_
_£_
_(805,044)_
_184,574_
_(56,844)_
_3,906_
_(414,023)_
_(289,147)_
_916,999_
_459579_|
|---|---|---|
41
Doc ID: e0bf4532ad041b8d6a185c184c906039fee1f922
Positive Steps Oldham Notes to the accounts for the year ended 31 March 2023 (continued)
## 27 Retirement benefit scheme
## Defined benefit scheme
Qualifying employees of Positive Steps participate in the Greater Manchester Pension Fund (‘the Fund’) administered by Tameside Metropolitan Borough Council, under the regulations governing the Local Government Pension Scheme (LGPS). The scheme is a defined benefit scheme. The fund was valued using the projected unit method. The purpose of the valuation was to determine the financial position of the fund and to recommend the contribution rate to be paid by TfGM and the other participating employers.
The market value of the Fund's assets at 31 March 2022 amounted to £29.324 million. The funding level of the Fund as measured using the actuarial method of valuation was 104% as at 31 March 2022.
## Basis for estimating assets and liabilities
Liabilities have been assessed on an actuarial basis using the projected unit credit method, an estimate of the pensions that will be payable in future years dependent on assumptions about mortality rates, salary levels, rates of inflation and discount rates. The Local Government Pension Scheme liability has been estimated by Hymans Robertson LLP, an independent firm of actuaries. Positive Steps Oldham's share of pension fund assets is rolled forward, by the actuary, from the latest formal valuation date (31 March 2022). The roll forward amount is then adjusted for investment returns, the effective contributions paid into and estimated benefits paid from the fund by Positive Steps and its employees. As such this estimate may differ significantly from the actual assets held by the Pension Fund at 31 March 2023. The significant assumptions used by the actuary have been as below.
|_K_
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_p_
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_e_
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_s_
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_s_|_K_
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_p_
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_s_|_K_
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_y_
_a_
_s_
_s_
_u_
_m_
_p_
_t_
_i_
_o_
_n_
_s_|_K_
_e_
_y_
_a_
_s_
_s_
_u_
_m_
_p_
_t_
_i_
_o_
_n_
_s_|_K_
_e_
_y_
_a_
_s_
_s_
_u_
_m_
_p_
_t_
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_n_
_s_|_K_
_e_
_y_
_a_
_s_
_s_
_u_
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_s_|_K_
_e_
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_u_
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_s_|_K_
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_s_
_u_
_m_
_p_
_t_
_i_
_o_
_n_
_s_||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|||||||||||||||||||||||||||||||||2023|_2022_|
|||||||||||||||||||||||||||||||||%pa|_%pa_|
|Discount rate||||||||||||||||||||||||||||||||4.75|_2.75_|
|Expected rate of||||||||increase|||||||of||pensions||||in||payment|||||||||2.95|_3.15_|
|Expected rate of||||||||salary increases||||||||||||||||||||||||3.75|_3.90_|
|_M_
_o_
_r_
_t_
_a_
_l_
_i_
_t_
_y_
_a_
_s_
_s_
_u_
_m_
_p_
_t_
_i_
_o_
_n_
_s_||||||||||||||||||||||||||||||||||
|||||||||||||||||||||||||||||||||2023|_2022_|
|||||||||||||||||||||||||||||||||years|_years_|
|_As_
_s_
_u_
_m_
_e_
_d_
_l_
_i_
_f_
_e_
||||||_e_
_x_
_p_
_e_
_c_
_t_
_a_
_t_
_i_
_o_
_n_
_s_
||||||||||_o_
_n_
||_r_
_e_
_t_
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_e_
_m_
_e_
_n_
_t_
||||||_a_
_t_
||_a_
_g_
_e_
_d_
||||_6_
_5_
_:_||||
||||||Retiring today:|||||||||||||||||||||||||||||
||||||- Males|||||||||||||||||||||||||||20.5|_20.3_|
||||||- Females|||||||||||||||||||||||||||23.5|_23.2_|
||||||Retiring in 20|||years||||||||||||||||||||||||||
||||||- Males|||||||||||||||||||||||||||21.5|21.6|
||||||- Females|||||||||||||||||||||||||||25|25.1|
42
Doc ID: e0bf4532ad041b8d6a185c184c906039fee1f922
Positive Steps Oldham Notes to the accounts for the year ended 31 March 2023 (continued)
## 27 Retirement benefit scheme (continued)
## _Commutation_
An allowance is included for future retirements to elect to take 55% of the maximum additional tax-free cash up to HMRC limits for pre-April 2008 service and 60% of the maximum tax-free cash for post-April 2008 service.
## _Sensitivity analysis_
The estimation of the defined benefit obligations is sensitive to the actuarial assumptions set out in the table above. The sensitivity analyses below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period and assumes for each change that the assumption analysed changes while all the other assumptions remain constant. The assumptions in longevity, for example, assume that life expectancy increases or decreases for men and women. In practice, this is unlikely to occur, and changes in some of the assumptions may be interrelated. The estimations in the sensitivity analysis have followed the accounting policies for the scheme, i.e. on an actuarial basis using the projected unit credit method. The methods and types of assumptions used in preparing the sensitivity analysis below did not change from those used in the previous period.
||2
0
2
2
/
2
0
2
3|2
0
2
2
/
2
0
2
3|2
0
2
2
/
2
0
2
3|2
0
2
2
/
2
0
2
3|2
0
2
2
/
2
0
2
3|2
0
2
2
/
2
0
2
3|2
0
2
2
/
2
0
2
3|2
0
2
2
/
2
0
2
3|2
0
2
2
/
2
0
2
3||
|---|---|---|---|---|---|---|---|---|---|---|
||Approximate % increase to|||||||||Approximate monetary|
|Changes in assumptions|Defined Benefit Obligation|||||||||amount (£000)|
|0.1% decrease in Real Discount Rate|2%|||||||||600|
|1 year increase in member life|4%|||||||||1,117|
|expectancy|||||||||||
|0.1% increase in Salary Increase|0%|||||||||56|
|Rate|||||||||||
|0.1% Increase in the Pension
Increase Rate (CPI)|2%|||||||||553|
The principal demographic assumption is the longevity assumption (i.e. member life expectancy). For sensitivity purposes, we estimate that a one year increase in life expectancy would approximately increase the Employer’s Defined Benefit Obligation by around 3-5% (2022: 3-5%). In practice the actual cost of a one year increase in life expectancy will depend on the structure of the revised assumption (i.e. if improvements to survival rates predominantly apply at younger or older ages).
43
Doc ID: e0bf4532ad041b8d6a185c184c906039fee1f922
Positive Steps Oldham Notes to the accounts for the year ended 31 March 2023 (continued)
## 27 Retirement benefit scheme (continued)
## _Impact on the accounts_
|Current service cost
Net interest on defined benefit liability
Past service cost
her recognised (gains) or losses:
Actuarial return on scheme assets
Less: calculated interest element
Actuarial changes relating to obligations
Restriction on recognition of scheme asset
Total cost/(income)
e amounts charged or (credited) in the Statement of
nancial Activities are as follows:|2023
£
852,000
198,000
-
1,050,000
923,000
-
923,000
(18,049,000)
9,560,000
(7,566,000)|_2022_
_£_
_1,053,000_
_277,000_
_131,000_
_1,461,000_
_(3,064,000)_
_-_
_(3,064,000)_
_(4,124,000)_
_-_
_(7,188,000)_|
|---|---|---|
The amounts included in the balance sheet arising from the company's obligations in respect of defined benefit plans are as follows:
|Present value of funded retirement benefit obligations
Fair value of plan assets|(27,914,000)
_(44,283,000)_
37,474,000
_37,353,000_|
|---|---|
|Surplus/ (deficit) in scheme|9,560,000
_(6,930,000)_|
|Restriction on recognition of scheme asset|(9,560,000)
_-_|
|Net asset/ (liability) recognised on the balance sheet|-
(6,930,000)|
44
Doc ID: e0bf4532ad041b8d6a185c184c906039fee1f922
Positive Steps Oldham Notes to the accounts for the year ended 31 March 2023 (continued)
27 Retirement benefit scheme (continued)
_Impact on the accounts (continued)_
The present value of the defined benefit obligation as at 31st March 2023 is less than the fair value of plan assets at that date. As such the plan is in a surplus position of £9,560,000 as at 31st March 2023. Per FRS102 section 28.22 an entity shall recognise a plan surplus as a defined benefit plan asset only to the extent that it is able to recover the surplus either through reduced contributions in the future or through refunds from the plan
An entity should recognise a net pension asset in such cases because the entity controls a resource, and that control is a result of past events. This is in the form of contributions paid by the entity and service rendered by the employee. Future economic benefits are available to the entity in the form of a reduction in future contributions or a cash refund, either directly to the entity or indirectly to another plan in deficit. The asset ceiling is the present value of those future benefits.
Accounting standards dictate that when an entity has a surplus in a defined benefit plan, it should measure the net defined benefit of the asset at the lower of:
i. the surplus in the defined benefit plan, and
ii. the asset ceiling
The entity has instructed Hymans Robertson LLP, an independent firm of actuaries to calculate an asset ceiling calculation based on the net present value of future service costs less net present value of future contributions over the future working lifetime as at 31 March 2023.
The below assumptions were used by the actuary as part of the calculation:
i. future Working Lifetime of the Employer calculated as 8.5 as at the most recent triennial funding valuation
ii. discount rate of 4.75% p.a. and salary increase of 3.75% p.a. from the Employer's 31 March 2023 accounting report, giving an annuity of 8.16
iii. the present value of the liability expected to arise from next years' service by scheme members less the present value of future employee contributions is equal to the projected current service cost as calculated by the actuary in the valuation of the scheme.
iii. the employer contributions for the 2023/2024 financial year to be paid by the entity will be £412k.
|Net present value of (employer) future service costs over
the future working lifetime: 8.16 * £377k
Net present value of (employer) future contributions over
the future working lifetime: 8.16 * £412k
Net present value of any economic benefits available in the
form of refunds or reductions in future contributions to the
plan.
e results of the instructed calculations are:|£
3,076,000
(3,362,000
(286,000|
|---|---|
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Positive Steps Oldham Notes to the accounts for the year ended 31 March 2023 (continued)
27 Retirement benefit scheme (continued)
## _Impact on the accounts (continued)_
Per the above calculation, the net present value of future service costs are less than the net present value of future contributions and as such it does not appear that a recoverable asset exists either through a reduction in the entity's future contributions or through being able to obtain refunds from the plan.
Therefore the entity have not deemed it appropriate to recognise any form of asset in respect of the defined benefit pension plan and a £9.56m adjustment has been posted through other recognised gains/losses within the statement of financial activities.
The increase in pension liabilities is included in the SOFA as follows:
|Other recognised gains/ (losses)
Current service cost
Contributions paid by employer
Net interest on defined benefit liability
Past service cost
(Increase)/decrease in liability
_o_
_v_
_e_
_m_
_e_
_n_
_t_
_s_
_i_
_n_
_t_
_h_
_e_
_p_
_r_
_e_
_s_
_e_
_n_
_t_
_v_
_a_
_lu_
_e_
_o_
_f_
_d_
_e_
_f_
_i_
_n_
_e_
_d_
_b_
_e_
_n_
_e_
_f_
_i_
_t_
_o_
_b_
_li_
_g_
_a_
_t_
_i_
Liabilities brought forward
Current service cost
Past service cost
Benefits paid
Contributions from scheme members
Remeasurements:
Changes in financial assumptions
Changes in demographic assumptions
Other experience
Interest cost on defined benefit obligations
Liabilities carried forward|7,566,000
(852,000)
412,000
(196,000)
-
6,930,000
_o_
_n_
_s_
44,283,000
852,000
-
(519,000)
124,000
(17,547,000)
80,000
(582,000)
1,223,000
27,914,000|_7,188,000_
_(1,053,000)_
_544,000_
_(277,000)_
_(131,000)_
6,271,000
_46,618,000_
_1,053,000_
_131,000_
_(490,000)_
_132,000_
_(3,968,000)_
_(263,000)_
_107,000_
_963,000_
_44,283,000_|
|---|---|---|
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Positive Steps Oldham Notes to the accounts for the year ended 31 March 2023 (continued)
## 27 Retirement benefit scheme (continued)
## _Impact on the accounts (continued)_
The defined benefit obligations arising from the plan are funded as follows:
**----- Start of picture text -----**
Wholly unfunded obligations - -
Wholly funded obligations 27,914,000 44,283,000
27,914,000 44,283,000
Movement in the fair value of plan assets
Opening fair value of the scheme assets 37,353,000 33,417,000
Interest income on plan assets 1,027,000 686,000
Contributions by employer 412,000 544,000
Contributions by members 124,000 132,000
Benefits paid (519,000) (490,000)
Other experience (552,000) -
Return on assets excluding amounts included in net
interest (371,000) 3,064,000
37,474,000 37,353,000
**----- End of picture text -----**
The major categories of plan assets as a percentage of total plan assets are as follows:
|Equities|%
%
68
67|
|---|---|
|Bonds|15
15|
|Property|9
8|
|Cash|8
10|
|analysis of the scheme assets at the reporting date was as follows:||
|Equities|£
£
25,482,320
25,026,510|
|Bonds|5,621,100
5,602,950|
|Property|3,372,660
2,988,240|
|Cash|2,997,920
3,735,300|
||37,474,000
_37,353,000_|
The analysis of the scheme assets at the reporting date was as follows:
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Positive Steps Oldham Notes to the accounts for the year ended 31 March 2023 (continued)
27 Retirement benefit scheme (continued)
Review of the 2023 results
## _Assets_
In the year ending 31 March 2023, investment returns have typically been lower than assumed (compared to last year's accounting discount rate assumption). As such, this has resulted in a £371,000 decrease in the fair value of the scheme assets.
As a result of basing the 31 March 2023 accounting figures on the updated triannual funding valuation results calculated as at 31st March 2022, there has been a reduction of £552,000 in the fair value of the scheme assets.
## _Obligations_
The remeasurements in the obligations roll forward are split into three separate parts to differentiate between 'changes in financial assumptions', 'changes in demographic assumptions' and 'other experience'.
Changes in financial assumptions
As at 31st March 2023, the net discount rate (discount rate net of CPI inflation has significantly increased compared to 31st March 2022. This has resulted in an decrease to the liabilities of £17,547,000
Changes in demographic assumptions
Using a more up-to-date longevity assumption as at 31st March 2023 has resulted in an increase of the liability of £80,000
Changes in other experience: Pensions increase order
The loss (increase in obligations) resulting from applying the actual Pensions Increase Order for April 2023 of 10.1% to the benefits, as 10.1% is significantly higher than the pension increase rate assumption built into the obligations at the start of the accounting period. This has resulted in an increase in the funded obligations of £2,447,000
Changes in other experience: 2022 triannual funding valuation
As a result of basing the 31 March 2023 accounting figures on the 2022 funding valuation results, there has been a decrease in the liability of £1,865,000
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Positive Steps Oldham Notes to the accounts for the year ended 31 March 2023 (continued)
27 Retirement benefit scheme (continued)
The objectives of the scheme are to keep employers’ contributions at as constant a rate as possible. TfGM has agreed a strategy with the scheme’s actuary to achieve a funding level of 100%. Funding levels are monitored on an annual basis. As at 31 March 2022 it was determined that Positive Steps were to continue to pay 22.4% contributions per annum for the foreseeable future.
Positive Steps anticipates paying £412,000 in expected employer's contributions to the scheme in 2022/23.
## _Key differences between funding and accounting valuations_
The purpose of the formal funding valuation, which is carried out every three years, is to assess the ongoing financial position of the fund and to determine the cash contribution rates at which the employing bodies participating in the fund should contribute in the future. The aim of the funding valuation is to ensure that the existing assets alongside future expected investment returns and contributions will be sufficient to meet future benefit payments from the fund.
In terms of the above cash contributions that need to be paid into the fund, an employer's accounting valuation position has no effect. Under FRS102, the purpose is to facilitate consistent comparison of pension positions between employers.
Importantly, as the method and assumptions underlying the funding and accounting calculations are different, the accounting calculations can produce significantly different results from the formal funding valuation calculations.
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