Pivotal Housing Association Financial Statements Year Ended 31 March 2021 Regulator of Social Housing registration number- 4747 Company regislratlon number 08211760 Charity registrati￿ number.. 1121914 Pivotal Houslng Associatlon Contents Year Ended 31 March 2021 Page Registered Social Housing Provrder Information Board Report (including Strategic Report) Independent Auditor's Report Statement of Comprehensive Income Balance Sheèt 2-28 29-32 33 Statement of Changes in Equity l Reserves Statement of Cash Flows 35 36 Notes to the Financial Statements 3747 Plvotal Houslng Assoclation Registered Social Housing Provider Information Year Ended 31 March 2021 R&gulator of Social Housing regtstrallon number 4747 Charlty registration number 1121914 embers of the board P Levaggi D Slreek {Chair} NSLee J E Hughes N Courts IAppoinled 181051201 D Lockerman {Apk)ointed 181051201 A Hussain Shah IAppoint8d 03108r201 Chlef Executive Officer J Kingsbury Registered office Everdene House Deansleigh Road Bournemouth Dorset BH7 7DU Auditor PKF Francis Clark Chartered Accountsnls & Slalulory Audito Towngate House 2-8 Paikstone Road Poole BH15 2PW Solicitor Fr8llens SO1￿ll0T8 The Saxon Centre 11 Bargates Christchurch BH23 1PZ Bankers National Westminster Bank PLC The Squar8 5 Okl Christchurch Road Bournemouth BH1 1DU Plvotal Housing Assoclation Board Report Ilncluding Strateglc Report) Year Ended 31 March 2021 The Trusteès and Strategic Leader8hip Team are pleased lo present the Annual Report and Financial Statements for the year ending 31 March 2021 for Pivotal Housing Association fpHA'}. Members of the board The members of the board who have served during the year were as follow8-. P Lèvaggi D Streek (Chaiil NSLee J E Hughes N Courts IAppoinled 181051201 D Lockerman (Appointed 181051201 A Hussain Sh?h (Appointed 031081201 Prlncipal Actlvlties PHA is a company limited by guarantee, a Registered Providèr of Social Housing and a charty registered with the Charity Commission which was established in April 2007. PHA is proud lo provide quality housing with specialist support and compassionate care to over 450 single VLFlnerable people with a variety of needs. We work closely with local authorities and hèalth serV￿e cotrwnissioners across a number of locations, including Dorsel, Cornwall and GIOU￿Ster, lo identify sui18ble homes for the vulnerable people we exisl lo serve. All current accommodation managed by PHA is operated on a lease~based fi'nancing model with the associated support and care delivered by third party partners. The Trustees have complied with duties Contained in Section 4 of the Charilies Act 20[￿ to have due regard lo guidance in respect of public benefit published by the Charity Cc*nmission and ar@ satisfied that all Ihe objectives and activilres outlined belc)w are undertaken for public bonefil. Dellvering our Strateg1¢ Pla In April 2019, the PHA Board signed up lo a 2-year Pivotal Group Strategy for the period 2019-21 Doing hllore Good for More People. alongside ils decision lo formally b8come a member of the wider Pivotal Group of companies 81 a future point in lime. This was augmented by the PHA Board adopting a 5-year Business Plan - Providing mre serv￿￿$ for more peop18- in May 2020. This sets out an ambition for PHA to be as follows by 2025.. 1. A stronger business with increased capacity for grO1￿h of new homo5 and services. 2. Slrenglhening our geographic area of operation and customer base in line with the group strategy. 3. Realising positive results from the investments we have made in our existing home8 and communities. 4. Providing PToducls and services that are shaped by cuslDmers, influenced by market conditions and demonstrably deliveiing value for morkey. 5. A smarter, slicker, simpler business, combining the strength of a group stru¢lure with the fl&xibility for group enlilies to make independent decisions. Our key stralegK aims can be summarised as follows.. We will dellver excellent serwc8S We will grow our business We will maximlse our impact Pivotal Hou3ing Assoclation Board Report {Includlng Strateglc Report) Year Ended 31 March 2021 The way in which wel will achieve each of these strategic aims is as follows.. Deliverexcellent $8ryices Improve the quality of customers, homes by having an agreed Pivotal Standard shaped by customers and seNi¢e providers. Improv8 our asset management and repairs serviGe based on ou¥ full stock condilK)n Su￿ey. Be more pro-active in tackling anti-social behaviour and wider tenancy enforcement Pul in place robust serV￿e Level Agreemonls with partner agencies to reduce void risk Fulure-proof our HMO housing portfolio Embrace new technology to improve customer experience Wort co-operatively and collaboratively with our partners, funders and regulators. Grow ourbusiness Create Capacity through improving effici8ncy and by maximising long-lerm funding, establishing a sus18in8bl8 mixed portfolio of leasehold properties by 2025 containing both short and long tèrm leases lo ensure a balan¢e between certainly and flexibility. Manage risk by reporting on a strong set ol KPIS and havÈng an up lo date risk framework and monthly updated risk regislar, Deliver a growth programmo which meets the stratègic objectives of the charity, developing 500 new homes by 2025. Actively seeking out new sour¢es of fttnding through Charftabla grants and pursuing ¥propriale forms of strategic allrances, wi(h at least 2 health authority partn8rs and 5 national care and support provider partn8rships by 2025. Adopt a proactive approach lo existing business, taking strategi¢ ?oliDn to tender for 8XiSting and new busir¢ess, review and renew conlracls and lo implement exit strategies and remodelling where required to achi8V8 and maintain linancial strength. Maximise ourimpacl Use thè strength of the wider Pivotal Homes Group lo provid8 financially sound services Have a strong enough presence to make a rèal difference to people's lives, helping them to becom8 more financially or physically independent in order that we can sustain their tenancies. Help our customers to cope with welfawe reform by 8UPPOrting them off benèfits and into work. Work collaborativety across the Pivotal Homes Group, with other housing associations and OL5r partners to revilalise communities and neighbourhoods. Construct effectlV8 partn8rships with h8alth and care commissioning bodies, to ensure we improve the health and wellbeing in our communities. Pivotal Housing Association Board Report (Including Strategic Report) Year Ended 31 March 2021 Our key prlorities to March 2025 Continue lo develop the governance structure for PHA wllhin the Pivotal group slruclure. Reduce void levels lo under 50k average across all services with an actlon plan for long term voids and a robust housing management servic8 to generate new ref8rrals to void properties. Reduce the risk of new business by providing servlces which are supported by public sector funding, have a robust Service Level Agreen￿nI in place to mitigate void risk, provide a fill up p8ri0d indemnity, have a lease which providos a revi&w clause where public funding is reduced and have an exit sliategy in plac8. Develop and Implement a robust organisational response lo weKare reform, changing govemmenl pri0ri118s and changing regulatory requirem8nts lo minimise loss of rental incomo while 8UPPOrting our customers. Damonslrale a Value Money approach lo deliver further efficieneies. continue lo reduce our costs of delivery, and generate a nèt surplus of £800k by 2025. Produce a 20 year 8lod( condition plan linked lo the full stock condition survey carried out in 2019. Complete the appraisal of the preferred operating model for th8 repairs setvice moving lo a more proactive and less reactive approach. Future Prospects In May 2020, the Board agreed a new 5 yèar Business Plan, which demonstrates strong financial perfomianc8 in the years to come achieved through continued growth and increased economies of scale. This position will lead to increased levels of cash reserves within the organisalion to enhance financial resilience. PHA has limit8d debt of £45Ok held with Pivotal Hom88 Group Limited which it will begin to repay from Year 3 of the current Business Plan. It will also Source a range of seNices from the wider Pivotal Group. including arrangement of property leases lo achieve growth of approximately 500 additional units of accommodation over the life of the Business Plan. This model th8refore requires no recourse lo addition81 finance lo support growth aspirations. Key focus, achi8vements and operational performance for 2020121 The key focus for PHA during 2020121 can be summaris@d as follows., Review and re-design of underpèrforming servtC8s that were experiencing unaccèptable void levels and difficulties wi(h support providers. Consolidalh)n of systems, polrcies and goveinaftce arrangements to pwjvide ? sound basis for future service improvements and business growth. Pivotsl Houslng Association Board Report (Including Strategic Report) Year Ended 31 March 2021 Details of activities undertaken include.. New housing managem8nl and accounts systems {Open Housing and Open Accounts) have been purchased and largèly implemented during the course of th@ year. These new systems w711 be operational from 2021 ancl will assist PHA to create woikflows,, aulomale processes and reporting., and improv& Complian￿ monitorEng. Re-c3tegorisalion of PHA propertles following a review of housing stock. 395 units now calegorised as non-50cial housing, with 65 units conlinuit)g lo be categori58d as social housing. An ongoing review of governance arrangements for PHA., resulting in agre8m8nt lo join the Pivotal group structur6 w¢lh anticipated ¢omplelton later in 2021. Started work on a 20 year stock condition plan linked to the Stock condilhjll survey cornpleled in 2019. Plan lo be completed in 2021. New 3 year Customer Engagem8nl strategy developad aimed at increasing the customers voice in designing and delivering Pivotal sgrvices. A new set of KPI'S have been developed and agreed lo ensure that all key areas are closely monitored, and that perf0mlan￿ can be contirnually improved. Business dovelopmant Existing partnerships have been strengthened during the year. and several n8W Partnerships have ￿en established, including a new partnership with the Northam Care Trust with whom our first sch8me was successfully completed and opened in June 2021. Slgnificanl b8nèfils ar8 derived frcxn the wider Pivotal Group of companies in tarms of sourcing of properties and finance, and the proleclKJn of PHA against development risk wheréby PHA only entèrs new leases where schemes are acquired and partnerships and Glient groups in place. Partnetships for the delivery of Care and support are now in Pla￿ with the following organisalion8.' Clear Pathway Care Pivotal Support SAFFA Nelson Trust Rethink K2 Care NHS Icornwalll Brandon Trust Young Person's Team, Cornwall CC Northam Care Trust Live West Details of new schemes launched during the year.. Two schemes for customers Suffering with poor mental health wero opened in partnership with Rethink., a 13 bed and a 7 bed scheme. Three schemes for customers with a learning disability were launched in partnership with the Brandon Trust., a 10 bed. an 8 bed and a 6 bed. Plvotal Houslng A550clation Board Report Ilncluding Strategic Reportl Year Ended 31 March 2021 Additional pipeline schemes for later in 2021122 include Ihe following.. Location Comwall Partner Servlce rou Estimatgd o Qct-21 enin Brandon Trust Learning disability Sl Anne's Grove Cornwall Penmare Brandon Trust Learning disability Sep-21 Gloucester Bristol Road Gloucester Elmore Lane Brandon Trust Leaming disability Sep21 Brandon Trust Learning disability Sep-21 Devon Brunswick House Northam Care Trust Leamin disabilit Nov-21 Devon Park Villa North8m Care Tru81 Learnin disabil. D8c-21 Performance review A summary of our key operational performance achievements in 2020121 is as folli)WS'. Average void levels improved throughout the year from 12.17°/o to 11.40h al financial year end. Void loss remained high in the eaily part of the financial year. and was Imp￿ted throughout Ihe year by the Coronavirus pandemic. However, perfomiance improved throughout the year and a new arrangem8nl has b88n put in placé with Gloucester L4 which has Signif￿antty reduced void loss in the Gloucester area. Average re-let days wewe 13.1 at the end of Quart8r 4120201211. 100°h compliance levels were maintained across all health and safely p8rformance areas.. gas safety, legionella testing., electrical safety., asbestos,. fire risk assessments.. ffre alarm testing- and emergency IwJhting. Tumover for the Housing Association increased by £750.000 to £7.88 million, ￿presentIng an 11% increas8 year-on-year. Net surplus of £27,866 has been recorded in 2020121, an increase of £204,148 against the nel deficit reeorded in 2019120 and 0.35Vh net surplus margin versus 2.47°kn nel defecil in prior year. Net margins have been impacted this year dile lo the impact of the Coronavirus pandemic on both void loss and the wider Pivotal development programme,. however revenue has grown 10.5V￿ yearwon-year and with the focus on cost control through the year nel margins have improved. The Housing ASS￿latIon has grown by 44 properties during 2020121 resulting in a porlfolio of 457 pr(werties. Over the coming year and beyond, Pivotal will continue lo grow its availability of properties for rental through reinveslmenl of surpluses. A key focus ftsr 2020121 has been on maintaining financial liquidity and Improving operational perfomiaftce through increased occtspancy and improved rent collection. 11 has been idenlrfied Ihal improvements to performance reporting is required and a new performance dashboard containing a broader range ol key performance indicators has beer) developed and launched within 2021. Dgllverlng Value for Money PHA'8 approach lo delivering Value for Money ￿fM) is based on maximising the dellvery of its new 5 year Business Plan - Providing more servres for more people adopted in May 2020. This builds upon the wider 2 Year Group Strategy 2019-21 of Doing More Good for More People. P4VOtal Houslng Association Board Report Ilncludlng Stratsgic Report) Year Ended 31 March 2021 We seek to optlmise the balance between the three'E's'_ Economy, Efficiency and Effectiveness.. Economy- is the price paid for what goes into providing a service. Efflclency- is a measure of productivity or how much ts gained from what is pul in. Effectiveness- is a measure of the impact achieved and can be both qualilalive and quantitativ8. This requires PHA to assess the impact of all its Gosts. lo best meet ils slak8holder'8 needs. This means spending efficient￿ lo keep costs low, whilst maintaining high produclivily and maximising outcomes. Value for Money strategic approaeh PHA has establishad a Vfm Strategy 8nd reviews this annually lo ensure that Ic Continues to meel the organisalion's vision and business plan-, Ignanl's needs and expectations,. takes account of the Dperaling environment, risk management and regulatory requirements. A register of Vfm inilialives is updated quarterly and presented and discussed al Senior Leadership Team and Board meetings, with highlights included in the management accounts. PHA'S approach lo Vfm, promotes transparency in terms of: Reviewing performance against Vfm targets and any metrics sel out by the regulator, and how that performance c(*npares to peers Establishing measurable plans lo address any areas of und8rperforman¢e. including clearly stating any areas wher6 improvements would not be appropriate and the rationale for this. Ihe following slralegic objectives have been established by PHA.. Promotion- Embedding of Vfm principles within the culture of th8 organisation. People - Encouraging economic awareness amongst staff and Vfm principks within all business operations. Procurement - Cr8alion, mainl8nanc8 and promot￿n of economic. efficient and effective purchasing principles and continuous review of contracts and services. Minimising waste - frc¥n our business operations and revtew of Vfm in each department. lrnprovemenls - in the stock conditions through seeking wnprovement opportunities. Green- Provision of energy saving, wal&r conservation and waste minimisation advice to our employees and customers. Plvotal Houslng Associatlon Board Report Ilncludlng Strategic Reporti Year Ended 31 March 2021 Vfm Goals and Oblectlves Area GoalslOblective$ Value for Money will be embedded in the culture of organisalion and is a key objective in the Business Plan Culture Benchmarking PHA will benchmark performance with other organisations to analyse areas of the business and learn fmm higher performing I lower cost organisalions Budgets Budgets will be inform8d by known costs and experience, including detailed stock condition informalton, We wll adopt a zero-based budgeting approach. Management Accounts Man8gemanl accounts will be provided to enable the Senior Leadership Team to effectively manage their budgets and achieve value for mon8y. Financi81 staterr￿nIS will demonslrale control and assist in enabling efficiejncies to be maximised and Vfm achieved. Financial Slalemenls Procurement We will maintain an effective methodology for procuring goods and seNices that enables PHA lo achiev@ Vfm aims and objectives. This will be achieved through value 8ngineering. Customer engagomenl W8 will look to involve resif18nls in our lenders and will ask our key business partners to evidence how they have helped us deliver Vfm as part of our contract with them. Reporting We will record Vfm savings within our KPIS and maintain a VW Register. Performance results will be reported to lh& Senior Le￿ership Team and Board quarterty IhTough management a￿OUntS and self-assessm8nt reports. The Board will consider delivery of the VIM Strategy annually as part of the sign4)ff process for the Financial Stalemenls, including perfoTmanc8 against the RSH'S Vfm metiics, and these will be published annually as required as part of our Financial Stalemenls. Benchmarking PHA is a member of the Small@r Housing Providers Benchmarking {SPBMI network, facililaled by Acuity in partnership with Hous8Mark. SPBM has 140 m8mbefS owninglmanaging 75,000 homes across eight English regions, wilh an average stock of 353. The sector s¢orecard aims to provide an agreed set of mèthcs for housing associations to compare their rfomiance and check they afft providing value fr>r money. 11 includes performance and compafisons on the RSH'S Vfm performance metrics. The service pn)vides additional intelligènce for PHA lo idenlrfy where improvem8nl8 can be made relalwe to our peers. o (h Ii'i lilfl !"}, IP ? ZO(Drtn 3 S3 1 1111 Ii'i .* ¢3ID Z5 30)J8 c i rL Q) ID (Th Er CiiJo£L£L&_ Pivotal Houslng Associatlon Board Report {In¢ludlng Strategic Report) Year Ended 31 Maych 2021 Prlncipal risks and uncertalnties PHA has developed and adopted a risk management and assurance framework.11 sets out the airangemenls for identifying and managing risk in accordan￿ with the Board's risk app&lile. Risks that tnay prevent us achieving our objectives are considered and review8d quarterfy by the Strategic Leadership Team, the Audit & Risk Committee and the Board. PHA has adopted the thr@e lines of defence risk management model, which is des￿Jned so that assuranGe may be derived through the strength and sOu￿e of controls and the level of reliance placed on these. All our risks are assessed in lemis of their impact and probability, as well as inherent, current and largel risk. In addition, reports taken to our Board and Committees are required lo contain an evaluation of the risks involved wlh any recommendations made. Amendments lo risks, including th& identification of new risks are proposed as part of decision making, which are then approved by the Board or Audit & Risk Committee. The lop 18Tr risks lo successful achievement of the PHA'S 0￿.ectIveS are.. Strat¢glc rlsk . Flnaneial Plan fallures Risk descnption Risk controls Incorrect assumplions in the financial plan Financial plan developed and agreed. Liabiliti&s in plan include stock condition dats and asset management resource r4uirement8 Plan developed with knOw￿dge of sector and markets, and realistic growth plans Pr￿￿tIeS for action Addilionsl stress testing and scenario planning will be undertaken on the new 5 year Financial Plan during 2021122. Strategic rlsk . Cashflow Risk d8scry?tion Insufficient cash flow Risk controls hAonlhly cashflow forecasting for Association Register of assets and liabilit￿S Regular reporting lo SLT and Board No on-lending in plac Loan facility with Parent in plac81£450kl Pl￿ritIeS for8ct￿n Additional stress testing and scenario planning will b& undertaken on the new 5 year Financial Plan during 2021122. Continued growth will be puisued to increase cash ￿serveS and improve financial resilien￿. Service ralionalisalion will b8 impl&menled lo improve value for money and reduce cory)rate overheads. Strategic rlsk . Budget fallures Risk descriplron Failure in budgetary control leading lo Servi￿ failure and business objectives not being achieve Risk controls - Recent inv8stmenl in new financ8 recording and reporting systems Sense ¢he¢k of financial reports by SLT and Board Data integrity Checking to ensure quality of dal8 inpltl Regular financial feporting and monitoring lo SLT and Boards Pnonlies foraction Embedding of new finance systems (Open Accounts}. 12 Plvotal Housing As80¢iatlon Board Report (Including Strategic Report) Year Ended 31 March 2021 Principal risks and uneertalntles Icontlnued) Strateglc rlsk ". Business Growth Risk descrwtion Failure lo deliver growth of new homes in line wfth Business Plan assumptions1100 per annuml Risk controls Comprehensive Financial planning undertaken regularly Annual budget prepaied and approv8d Dedicated Business Development Team in place to èstablish and manage partnerships and idenlfy and match demand with accommodalM)n provision Scheme appraisals providing viability (ln Ilne with agreed parameters for new Business) Established Service Level Agrèements for use with Partners Due diligence for any new Partners and regular monitoring of existing Partners Monthly monitoring of Financial performance and operational KPIS by SLT Quarterly monitoring of Financial perfomiance and operational KPIS to Board Exe¢utNe review of Business plan and Financial projections Board approval of Business plan and Financial projections Internal audit of new Business Development projects (to implemenll Priorilics foraction A nwi 5 Year Business Strategy has been agreed. Existing relationships will be managed lo ensure a supply of properties to match identified Service u8er need5. Strateglc rlsk .' Income Risk d&9cnption Income collection less than expected l Arrears greater than expected Risk Gontrols Financial monitoring {cash flow) against budget and business plan. - Arrears monitoring in housing managemenl system, with escalation affangements Liaison with local authorities to ensure regular diabgue and timely receipt of payments Priorili&s foraclion R￿￿13[ dialogue will be maintained wtth local authorities lo ensure sound understanding the accommodation and support supplied lo the vulnerable groups serviced. 13 Plvotal Houslng Assoclatlon Board Report Ilncluding Strateglc Report) Year Ended 31 March 2021 Princlpal rlsks and uncertainties Icontlnuedl strategic risk - Board Leadership Risk desGnptio Failure Df board lo give capable leadership, control and strategi direction andlor inappropriate governan￿ arrang$ments and structures Risk controls Standing Orders and Financial Regulations Board sU￿Ssion plans S¢heduPe of delegated authorities - Code of Governance adopted - Code of Conduct - Service Agreements for Trustees I[￿UctIon training and development for Trustees Govemance Action Plans Skills review and established Skills Matrix Board appointments based on preferred balance of skills and competencies Piiorilies for8¢t￿l Complelton of Governance Action Plan lo achreve full compliance with the GO￿rnance and Financial Viability Standard and adopted Code of Governance. Completion r)f action plan allached to Voluntary Undertaking with RSH. Strategic rlsk - Rlsk and assurance fallures Risk d8scTipbon Risk controls Failure to demonstrate an effectwe risk managemenuinlernal control Risk strategy in place system Risk management framework in place Risk culture embedded in all formal meetings and board paper8 Risk register in place, regularly revwmed and updated Inlemal audit seNices lintemal only,. external service to be prcLuredl Priorifres foraclion Rollout of externally sourced Internal Audit service. Further embedding of new risk and assurance framework. Strategic rlsk .. Covld-19 Pandemlc Risk dgscriptK)n NegalDie impact of spread of coronavirus (COVID-191 on delivery of Business Plan and viability Risk conlrDIs Revised opgrating procedures in line with natlonal and regulatory guidanc8 has b8en implemented. PPE sourced in ample quantities for front line staff. Full Covid risk assessment undertaken and published. Prit)rifies foraGlion Vigilance will be applied across all services areas and regular environmental scanning to ensure responsiveness lo additional waves of the viru5. Maintaining 80cial distancing arrangements across all ar8as of business activity. R8sponding to Changing Govt. advice. 14 Plvotal Houslng Assoclatlon Board Report (Including Strateglc Report) Year Ended 31 March 2021 Principal risks and uncertainties Icontinuedl Strategic risk - Volds Risk description Lack of demand for speclalised supported housing frL)m suitablè tenants l Lelling dIff￿U111eS Risk controls New properties nol handed over until demand confirmed Contingency for void fi114JP Established systems to identify suitable r8placemenl tenants when move-on I t8n8ncy failure possible - Void standards Testing of rent levels ahead of handover and lelling Exil strategies for any unsuitable schemes lincluding where reduc&d dem8nd} lor onward sale and replacement Priollligs ftiraction Continued efforts lo address and redl￿ historical voids. Strateglc risk .' Regulation failure$ Risk descriptR)n Negative regulator assessments I regulatory action or inlejvenlion Risk controts Governance reviéws (Attairl Self-assessment of complianc8 Governance Action Plans Priorities foraction Implamentalton of Governan￿ Action Plan, including conclusion of entering into Group structure Regulatlon and Corporate Governance In March 2021, the Regulalorof Social Housing {RSHI issued a Regulatory Notice against PHA. In this Not￿e. it found that PHA was.. Non-compliance wth the Govemanc8 Firvarrial Viabilty Standard rdating to both govemance and fin￿Cial viability weaknesses. Th8 RSH foLJtYl that PHA had been unabte'lo demonstralethat il has managed its affairs with an appri¥riate degree of skill, independence, diligents, eff￿1￿ene8S, pruL*nce and foresighl.11 ha8 fai lo derrtonstrate that its busir*ss planniro, ri8k managem8nl 8nd #ilernal wnlrols framework have been effectThie li idenlfying and markaging risk lo the delThiery of Is thjectives,. N￿-Co￿p1i3n￿ with the Rent standard, and in particular, tha PHAwas'unable to provjde adequate assuraroethatthe actomm(Klation rt provKies meets the government's definition olTemporary Sccial Housing ITSHI or S￿￿k￿lSed Supported Housing ISSHI and therefore that it (s exempt from the Rent Standard,. As a rasult, PHA has offered to enter lilo a Vduntary Undèrtaking with the RSH and has an Action Plan agreed and in place Ihatwill enabb the Organ￿ation to move lo ? po5itK)n of¢0mplian￿ IhroughouL2021-22. Many clthese rEGessary actions had ￿readY been ￿lent￿Ed and formed part of PHA's'Strenglhening Governan work proJrar(Mn&. Tha Board of PHA therefore ful￿ undwstands how these weaknesses m*rialised histcwlly and has a plan of action in pl￿8 lo a(klress the weaknesses in the forthcom1r￿ financial ye￿. Compliance with RSH Governance and Financial Viabilty Standard A gap anatysis against the Governance and Financial Viability Standard was und8rtaken by Altair and considered by the Board in October 2019. Actions identified lo address gaps identified have infomied its Governance Action Plan. A further review of wmpliance was undertaken in June 2020. 15 Pivotal Housing Assoclation Board Report (Includlng Strateglc Report) Year Ended 31 March 2021 Items of non-compliance with the Standard that ramain outstanding ar8.. As the Housing Association work towards implemenlalion of the NHF Cpde 2020, In total, theie are 15 areas of non-compliancewilh tho new NHF C(￿e 0fGov￿nan¢e {20201 identified. There ar8 summarised as follows.. 2020 Code Reference AclÉons Due date (indicative only) Sept 21 PrInG1p￿ 1 Develop a Resident En9ag6ftEnl Slraegy that incorporates the princw*es contained in the revised 2020 Code and the Together with Tenants Charter 1.6{21 1.6{31 2.6111 3.414) 3.91fj 1.214> 1.6{11 Publicgtion ofAnnual Report Tenants inclLKling a summary of resident focus commitments have been (klivered. Sept 21 R￿JeWS Equaty & Div8r8ty Slraegy in IvJht of priorit￿$ and wnrrutments contained in thè 2020 Cod8. Dec 21 1.3{11 1.3121 1.4121 Equdty and Dwwsty Annual Rewrt prepaTed and publish￿. Mar 22 Board lo remew its own p@rforma￿e effectiveness. Sept 21 1.5131 Publ￿allon of Board Register of Interests on the PHAwebsile in interests transpar8rw. Sept 21 2.1121 Board to consider and approve fora) carbon neutrality: bl envircfftmental suslain8bilty,' cl S￿la1 sustainakn'lity M*22 2.5111 staff survey exercise to be undertaken and resuts received and considerpd by the Board. Mar 22 2.612) Appointment of Internal Audit SerVr￿ provKJer Sept 21 4.4 {11 10 3.7131 Board to consKler changeto presumptDn (16 years mw¥mum term Iwlh opt￿n lo extend to 9 years foilowing rewewl Sept 21 11 3.714) 3.911Xcl Review and ￿date of the Standing Orders, Induding explrcit arrangements on exclusions lo members who have ￿ ItrE Board not being permitted lo re-j¢in the Board for 3 years. Sept 21 12 3.8 (1) posilKM re: Company Secretary ￿)d intemal appDintm8nts Dec 21 13 3.8ffl PoI￿Y and procedure selling OLrt how Trustee thspules and grievances can be raised and res nded lo developed and reed. Trustee appraisas lo be rolled out and indwidual learning and development plans established as an outy)ul from the exercL8e. Sept 21 14 3.9 (41 3.10 S8pl 21 15 4.314} Business Conlinuty Plan to be d8V81opgd I reviewed and implemented Dec21 16 Plvotsl Houslng Assoclatlon Board Report (Including Strateglc Reporti Year Ended 31 March 2021 Items of non-compliance with the Standard that remain oulslarKling are.. Item Actions Commentary Approval of the Charity Commission is required for proposed changes before agreed framework can be implemented. Customer engagement strategy presented lo Board bul Still being finalis8d. Conslilutional amendments are being implemented ID formalise PHA bec¢)ming part of the Pivotal Group. Enhan￿mentS lo be implemented to how the voice of tenants can influence strategic d8cision-making. Due dale- Seplember 2021. An Annual Report for Tenants is to be devehjped and published. Actions are required lo achieve full compliance with PHA'S adopted Code of Governance. PHA has adopted the NHF Cod& of GoverTrance 2015. See separate section for a¢tions lo be impS8mented. Stress testing of the financial plan and scenarto planning needs lo be developed. An Assets & Liabilities Register is 10 be developed. A new 5 year Business Plan was agreed by the Board in May 2020, and this require5 additional stressing. All property as8els are hokl by PHA on a leasehold basis. Compliance with Code of Governance The Regulalorof Social Housin9's IRSH} Governance and Fin8ncwl Viability Standard requires all Registered Providers (RPs} lo adopt a Code ol G0veman￿. RPS musl comply with their Code of Governance or explain how and why fc does not Comply with the C¢xle. PHA has adopted the NHF Code of Governan¢e12020} I'lhe Code'l in February 2021. It has undertaken a fLEII assessment of ils compliance against this new Code and will be worf(ing towaids achieving full ccxnplianGe during the course of the next financial year. An exiensive Govemance Action Plan has been compiled in response to the Altair audit, and good progress has been made during the year in the delivery of this plan. Some aspects of the Action Plan are conling8nl on PHA formally joining the Pivotal Group. subject to regulatory approval by the Charty Commission. 17 Pivotal Houslng Assoclation Board Report Ilncluding Strateglc Reporti Year Ended 31 March 2021 PHA had previously adopted the NHF Code ol Governance120151 wh￿h w8S the appIl￿ble Code adopted for much of the 2020121 financial year. Items ol non.compliance wth that Code that remained oulslanding and are thergfore also being carried foNard are as follows.. Cade Rel. C3, C5 and C6 Actions Amendments to Articles to formalise PHA'S membership of the Pivotal Group and adoptlon of Ringfencing Agreement and SLA governing group relationships to be entered into pendlng regulatory approvals for PHA to join the Group. Tlmescales/Commentary Antlcipated to be in place by September 2021. Arrangements in place pendin8 approval. Fl Internal audStors are to be appointed. September 2021 A new risk and assurance framework has been adopted. PartH Enhancements to be implemented to how the volce of tenènts can influence strate8lC declslon-making. September 2021 Customer engagement strategy presented to Board but still being finalised. Compliance with all relevant law In accordance wtlh Part 1.1 lal of the RSH's Governance and Financial Viability Standard, il is necessary for all RPS to adhora with 'all relevant law,. The Board is able to confirm that ther8 are no known instances of PHA being in breach of any English law. This includes monitoring of compliance against a range of health and safety related matters in whiGh full Complian￿ is in place. Staiemenls TeFaling lo compliance with all r8levanl law is qualified by the folbwing point., There are ftjrther improvemenis to be made lo PHA'S internal control and assurance framework which was adopted in May 2020. This includes the appointment of externally 80ureed inlemal auditors lo enhance th8 current in-house audit and compliance aclivilies. 18 Pivotal Housing Association Board Report (Including Strateglc Report) Year Ended 31 March 2021 Board Statement of Public Benelh PHA'S charilabb objects restri¢l ils adI￿tIeS lo.. The relief of poverty and unemployment and the promollon of good tteallh among those peop18 in the interim stage beh￿een full government support and their relL¢rn to independence in the community. with particular reference lo the ￿OnOMicallY and socially disadvantaged members of the society such as mental health patiènts, @x-offend8rs, other vulnerable groups and young people in the United Kingdom, by the provision of accommodation, S￿la1 housing, qualified supporting care $erviGes and advice. To providing social housing and any other purposes connected with or incidental lo thé provision and managament of housing, social housing and accommodal¢on. Total customers supported by the HA are in the region of 750. with 295 move on's. PHA'S aims and activities primarily b8nefil people in the folkiwing ways.. Provision of housing of a specialised nalure lo meet the high support and care needs of tenants, provided without support of public capf(al grants, that enable them to live, or adjust to living. independently within the communty. Related home repair, improv8m8nt and tenancy management services. Intensive housing management support services that promote tenancy sustainment and co-ordination of support services that promot8 independent living, including o sleepover cover o preparation of budget plans o access lo support aids arKI funds to help them manage their money o assislanca and education with provision of medical o shopping, cooking I food prepaTalion o workshops for cooking, budgeting and nLrtrition ts bedding, towels anol laUr￿ry facilities o assistance with computers and internet access The Board has ¢on¢luded that our ?¢livilies are in the public interest as defined in the Charity Commission's guidance. Otjr aclivitl8S 8r8 r8Strict8d only in lemis of our published policies, and to ensure fair access lo our 8ervices for all those in housing or other need with additional care and support needs and who would otherwise be unable lo live independenlty. The Board is not aware of any private benefits and has robust policies in place lo prevent uninlended benefits to related parties. The incidental benefits of a well-run housing and support Serv￿ are shared by our tenants. Reserveg Policy The board are reviewing the reserves poI￿Y with a policyto be established November 2021. POI￿leS in relation lo urEreslricled reseNes is to sel aside as designated funds amounts for specific future purposes. The balance of free reserves backed by cash was £139,847 al the 31 sl March 2021. PHA is not expected lo achiev8 the vel of ca8h reserves slated in the agreed policy ut)lil 2022123 and therefore over the next 12 months PHA 11 continue to receive support from Charles Terence Eslales Limited and Pivotal Group Holdings Limited. This support will ba superseded by the formal group structure approved by the board, bul18 subject to approval by the ¢hartly commission. 19 Pivotal Housing Associatlon Board Report (Includlng Stralegic Report) Year Ended 31 March 2021 Dlvldends As a company limited by guaTante8 of members land reglslÈred charilyl, the organisalion has no issued share capital and is not permitted lo distribute profits by way of a dividend. Intgrnal controls assurance The Board has overall r8sponsibility for est8bll8hlng and maintaining the whole system of internal control and for reviewing rt8 effectiveness. The syslems of internal control are designed lo manage rather than eliminate, the risk of failure to achieve business objectives and to provide rèasonablè and not absolute assurance against material misslalement or The systems of internal control are designed lo manage rather than eliminate. the risk of failure lo achieve business objectives and lo provide reasonable and not absolute ossurance against malerial misstatement or loss. The process for identifying, evaluating and managing the significant risks faced by the OTganisalion is ongoing. This is reflected in every report considered by the Bosrd, as well as review by the Audit & Risk Committee. A detailed risk registèr is considered by each Audit & Risk Committee and al least annually by th8 Board. The Trustees are satisfied that the major risks to which the organisalion is exposed are underst(Kd, well documented and that appropriate action plans are in place lo miliga18 these risks. Trustees have ensur8d that the following key me¢hani8ms gre in place lo facilitate effective internal controls assuran￿.. Id8nfifying and ev81ueling kgy rlsks The Audtt & Risk Committee for the Pivotal GTOUP oveisee the Risk Management and Assurance Framewoik and work of the external auditors (and inleTnal auditors when in plac81. The Risk Management and Assurance Framework, approved by the Board, sets the organisalion's attitude to risk in the achievement of ils objectives, and underpins risk management, business planning and ￿ntrOl arrangements. These arran￿MentS clearly define management responsibility for the identification, @valuation and control of significant risks. The Senior Leadership Team regularly considers report8 on these risks and the Chi8f Executive is ullimatety fesponsible for WeP¢￿tIng any significant change affecting key risks to the Committee (and the Board). 20 Plvotal Houslng Assoclatlon Board Report (Including Strategic Report) Year Ended 31 Mar¢h 2021 Control environment 8nd interngl controls The process to identify and manage the key risks to which the organisalion 18 exposed are an integral part of the internal control enVir￿Ment. Such processes, r8view8d annually. include= A formal risk assessment and strategic planning process enabl8s the Board lo confirm that there is an on-going process for identifying, evaluating and managing the significant risks faced by Ihe organisalion Quarterfy review by theAud(( & Risk Committee of risk. assuTance and controls at eaGh ofils meetings, with risk registers bein9 reviewed by the Committee and Board. Quarterly review by the Board of key performance indicators lo assure progress towards the achievement of objectives. Adoption of the National Housing Federal￿n Code of Governance which promotes excellence for Federation members in governing their organisalions and being accountable, independent and diverse. The Board has conducted a review of ils perfomance against this Code and can either demonstrate compliance with this or has agreed aGlions that will16ad lo full compliance on completion of the agreed Governance Action Plan. A clearly d8fined structure with appropriate Articles of Association, Standing Orders, Financial Regulations and Delegated Authorities which Trustees and employ88s follow, and which cover issues such as delegated authority, procufemenl, segregation of duties, accounting, treasury management, health and safety, data and asset protection and fraud prevention ané dd8Ction Clearty determined authority, responsibility and accoun18bilily. Effective proc&durgs lo onsur8 that all Trustee I Senior Leadership Team approval ÈS requirèd as approprk*e for all major expenditure ¢(￿MIlments. The setting of standards and compliance wlh health and safely, data prot￿110￿, fraLFd prevention and counter bribery and money laundering arrangements. All Trustees and employees ar8 covered by Directors and Officers Liability Irisurance through the National Housing Federation INHFI to protect them from Claims made against them in their Capacity as represanlalives of the organisation. There is also Similar nil based gap insurance in plac8 to cover Trustees and employees up lo the claim threshold for the NHF policy cover, Financial reporting arrangements include the selling of detailed anrbual budgets and rent plans, and a 5 year Business Plan which includes cash flow forecasts, all approved by the Board and revised during the year if necessary. Additionally, regular reporting is in plac8 for key 8re8s such as VOKI managém8nl, rent collection, major works 2nd stock investment and responsive repairs. Moniloring affangem8nts R8gular reporting to the Senior Leadership Te￿￿, Committees and Board is part of the contrd environment. This has been established lo follow the Ihr8é lines ol defenc8 mod81. The Audit & Risk c￿mIttee receive an annual report on internal conlrois assurance from the Senior L8ad8rship Team. An internal Audit and Quality team is in place and regularly reports on periodi¢ testing and quality checks to validate data and identify areas for continuous improvement. External auditors provide reports on management and control issues identifled during the course of Iheirwork. These loo are subject lo scrutiny by the Audit & Risk Committee on beha5f of the Board. Reports from the Commillees and their minutes are shared with the Board. 21 Plvotal Houslng Assoclatlon Board Report (Including Strateglc Report) Year Ended 31 March 2021 The Board has received the Audit & Risk Committee's and the Strategic Leadership Team's annual assurance report which includes evidence lo support the review of the effectivenass of the systems of inlernal control. This proc&ss involves the Strategic Leadership Team confirming that throughout the year therè were adequate systems of internal conlrd in place. The Strategic L@adership Team Pfovides their assurance to the Audit & Risk Commillee whose chair provides a report for the Board. This system is supported by eviden￿ lo provide the required level of assurance including details of thé key policies and intemal control systems together with external evidenc8 from external auditors and other key external slak8holders. The Board has reviewed the Audit & Risk Committee's annual report on the effectiveness of the system of internal control and has taken account of any changes ne8d8d to maintain the effectiveness of the risk management and control process. Where sssues have been idenlffied, adion plans are in place arKI will be enacted. The Board cannot delègate responsibility for the system of internal control, bul il can, and has, delegated to the Audit & Risk Committee respon8ibilily for reviewing the effectweness of the sys16m of internal control. Whilst the Board is salisfi8d that the new system provides adequate control over recording and aulhorisalion of Iransaclions, further work is required lo develop ils reporting capabilities in order to meet the needs of the organisation. Some areas where furthar aclKJn has been idenlrfied as n8cessary lo enhance controls and assurance across the organi8alion are as follows-. More robust slres$16sling and scenario planning for the newly developed 5 y8ar Business Plan to better und&rsland what changes would be damaging and what action could be pul in place to mitigate the negalivo wnpact. Externally sourced internal audit services are to be tend8r8d to procure additional seNices and expertise in this area, lo undertake an audit n8eds assessment exercise and develop a three year programme of intemal audit activity that reports lo the Audit & Risk Commitlee on lovers of a8sufdnce that Can be supplied. The sc¢)pe of futur& internal audit will include.. o Revtewing ?nd 4praising the soundness, adequacy and applicalKJn of control8 o A8certaining the extent lo which PHA'S assets are properfy controlled and safeguarded from k)ss o AS￿rtaInIng the extent lo which coftirols ensure complianc8 with policies and Pfocedures, the business plan, laws and r&gulalion$ Ascertaining that accounting and other infoimalion 18 rellable as a basis for the financial stslemenls and other returns o Ascertaining integrity and reliabS1ily of management decIS￿n-MakJng information o Ewalualing economy, efficiency and effectiveness of systems and procedures o Idenlrfying inappropriate controls and recommending improvements in prO￿d￿reS and practices Fraud Assurance A Counter Fraud. Bribery and Corruption Policy and Anli-money Laundering Policy is in place to refluce the risk of fraudulent aclivilie8 and provide clarity of response to suspected instances of fraudulent activity. This includes Whistleblowing aTrangements and will be subject to regular review. A Fraud Register ss maintained and availab18 for inspectwJn of thg Audit & Rlsk Committee. on￿ in place, Ihe aclivilies of the inl8rnal audi(ors will provide an additional layer of controls d&signed lo r8duce the risk of fr8ud occurring. 22 Plvotal Houslng A8so¢latlon Board Report Ilncluding Strateglc Report} Year Ended 31 March 2021 Overall intemal o>ntrols posit￿n $18lement The Board is of the vi8w Ihal inlernal control 8rr8ng8m&nts are generally effective, bul that there are some areas wh&r8 slrenglhening of inlemal controls arè required as detailed. There are also improvements required to further strengthen the goveman¢8 and financial viability of PHA. This s subject to a Voluntary Undertaking and Action Plan with the RSH. The Board PHA is govemed by a voluntary Board of TnJstÈès containing a total of seven non-exe¢utive Trustees. The Trustees who senred during the year and Ltp lo the dale of signing the financial statements are listed on page 1. The supervlsion of how an organisation is run and how il manages the risks lo ils business is generally referred to as'corporale governance,. This includes regulation, corporate structure and the function of the Board. The Board of Trustees meet al least quarterly with officers in attendance lo sel the strategic direction, review and approve Ihe 8usiness Plan and budgets, Ira¢k performance against the Business Plan and budget. approve any new developments, and generally review operations. There are also additional 'stralegy days, sel aside for strategic planning as well as on-going leaming and development. The Board has established a Competency and Skills Framework that sets out what the Board will require in order lo me81 the challenges of delivering our priorities. 11 is not expected that all Trustees will possess all the attributes, bul in order to achieve a balanced Board containing an appropriate range of skills, experiences and qualities, every effort is mad8 lo ensure the Board as a collective achieves an optimum fil. It thereforè follows that all Trustee recruitment follows an open and Iransparenl process, with Trustees s8lecled on the basis ol their skills attd compelencles, and their strategi¢ fit with tho Board's overall preferred balance of skills and compelenGies. The balance of skills contained on the Board is assessed aeross the following calegori8S.' General business skills I experience Governan¢e and r8gulation Finance. funding and audit Corporate services Housing, property and developmerbt Customer servioe¥ Additional specialist skills and knowledge Profa8sional associations The Board has a Trtjslee Induction policy. This is deslgned to ensure all Trustees have knowledge of the organisalion and its principal aclivilEs', and also ensures that they are briefed on their legal obligations under charity and company law. the content of the Articles ol Asswialion, and relevant regulatory obligations and expeclalions. Opportun((ies are also provided for Trustees lo meet with key senior stalf, and lo visit schemes to enhance their knowledge of our properties and the tenants we serve. Additional internal and ext8mal training is also arranged for Trust@8s as approprtate. Delegations The Board of PHA is responsib18 ft)r strategy of th8 organisation as well as overseeing ils performance. Spec¢fi¢ responsibilities have been delegated lo a PHA Audit & Risk Committee. Day-lo-day performance Is delegal8d lo the Strategic Leadership Team. 23 Plvotal Houslng Assoclatlon Board Report Ilncludlng Strateglc Report) Year Ended 31 March 2021 Audit & Risk Committee- responsible for.. Slalulory repDrting. internal (when appointed) and external audit, intemal controls, and assurance Monitoring the Group's rlsk management and control framework, as set out in the Group Risk Management and Assuran￿ Framework. Upon formally joining the Pivotal Group, Committee structures will be reviewed and revised as necessary. Company mombership Ther8 are eurrently Iwo company members, drawn and selected from the wid8r Pivotal group. A decision has been taken for PHA to formally become a Subsidiary of Pivotal Group Holdings Limited. Once completed. it is intended that memb&rship of thè organisation will be co-t8rminus with the Board, plus an additional share issued to Pivotal Gioup Holdings Limited in its capacity as Parent. Customor Involvemgnt Direct engagement with cuslomeys is encouraged wherever possible, taking in lo account the sp6cialisl needs of the client gr(￿p$ seTved. This may often require engagement with family, 8UPPOrt and care worker8. Involvement includes: Information newsletters,. new home surveys,. repai¥s feedback., satisfaction feedback. PHA has idenlrfied that this is an area requiriro further improvemfjnt. A customer engayemenl strategy has been drawn up for thg period 2021-23 and will be fomally agr8ed in August 21. Trustee obligations and responsibilities are set out in the Trustee Role Profile, the Stsnding Orders, and the T8rms of Reference of the PHA Board. This includes statements that the Board is colledively responsible for the direction and control of the organisalion. Each member is required lo cary oul Ih8ir responsibilities in accordance with the constitution, law and regulatory requirements and shares the same legal status and responsibilty for decisions taken. 24 Pivotal Housing Assoclatlon Board Report {Includlng Strategic Report) Year Ended 31 March 2021 Board's re$ponslb115tles Trustee obligations and responsibilities are sel out in the Trustee Role Profile, the Standing Orders, and the Terms of Reference of the PHA Board. This irlcludes statements that the Board is collectively responsible for the direction and control of the organi$4tion. Eaoh member is reqL¢ired lo carry out their responsibilities in accordance wilh the constilulion, law and r8gulalory requirernents and shares the same legal status and responsibility for decisions taken. The Board is responsible for preparing the report and linaneial statements in accordance wlth applicable law and regulations. Company Law and registered social housing legislation require the Board to prepare financial statements for 8ach financial year which give a true and fair view of the State of affairs of the association and of the income and expendrture of the association for that pèriod. In preparing these financial statements, the Board is required lo.. sele& suitable aGcounling policios and then appty them consistthty,. makejudgements and estinates that are reasonable and prudentr, i. state)th&lh8r appltcable accounting stamdards have been followed, subject lo materid dep¥tures d￿Closed expL8ined in the financiil statements,. aftd , prepare th8 financi81 stalemenls on the going concem basis unkn it is fftappropriate to that th& assc¢ialion will continue in business. The Board is responsible for keeping proper accoL¢nling records which disclose with reasonable aeeuracy at any lime thefinancial position of the asso¢lat￿n and lo enable it lo ensure that the financial $lat8m8nls comply with the Housing SORP 2018 IFRS1021, Companies Act 2006. the Housing and Regeneration Act 2008 and the Accounting Dire¢lion for private registered providers of social housing in England 2019. It has g8n@ral responsibility for taking reasonable steps lo safeguard the 88set8 of the Associalion and to FNevenl and detect fraud and other irregu12rilies. The Board is responsible forthe maintenance and integrity of the corporate and financial information in¢lud@d on the assock4lion's w8bsf(e. Legislation in the United Kingdom goveming the preparation and dissemination of financial state￿nIS may drffer from legislation in other jurisdictions. Dlsclosure of infomiation to tho auditors We, the dire¢tors of the ￿MpanY who held office at the dale of approval ofthese Financial Statements as set out above each confirm, so far as w8 are aware, Ih81.' there is no relevant aLKlil Information of whlch ihe AssocialKJn's audSlors are unaware., and we have taken all th8 St8ps that we ought lo have taken as directors in order to mak8 ourselves aware of any relevant audit information and to establish Ihatthe Association's auditors are aware of that infomiation. The Report of the Directors has been prepared in accordance with the prowsions applicable to companies under the Companies Act 20C6. subject to the small companies. exemption regime. Statomgnt of Compllance In preparing this Strategic Report and Board report, the Board has followed the principles set out in Financial Reporting Standard 102 The Financial Reporting Slandard Applicable in the UK and R&pUbl￿ of Ireland IFRS 102}, the Slatamenl ol Recommended PraCt￿e for Social Housing Providers 2018. and wilh the A¢¢ounling DireclKin for privalo regisl8r8d providers of Social housing in England 2019. The financial statements are also prepar8d under the requirements of the Housing and Rageneralicpn AGI 2008 and the Companies Act 2(X)6. 25 Pivotsl Housing Assoclation Board Report (Includlng Strategic Report) Year Ended 31 March 2021 Annual general meetlng The annual general meeting will be held in September 2021. AudStors A resolution to revappoinl PKF Francis Clark will be propixed al the forthcoming Annual General Meeting. Golng Concern PHA'S business activllie8, 11$ current financial position and factor5 likely to affect its fvlure d8velopment are sel out within this Board Report and Annual Accounts. PHA has in plac& debt facilities which provide adequate r88ources to finance committed reinvestment and growlh programmes, along with the organisation's day lo day operations. PHA also has a 5 year business plan which shows that il is able to service this debt faolily and all anticipated expenditur8 requirements. We are commilled lo creating a safe and healthy environment - for our staff, cuslomors and all who come into contact with our s8Nices. Our teams have continued lo provide essential services during the Coronavirus outbreak. We acted quKkly to implement appropriate health and safely measures during the Coronavirus lockdown. Following the Govemment's aasing of lockdown re8trictions, our focus conlinues lo be on the health and Safely of our staff and cli8nls. The table below sets out our assessment of the health and safely risks as a result of Covid-19, the Gontrols we have in place and any further action we plan to lake. 'Thi5 assessment considers the risks within thè ¢onlext of the Govemmenl's easing ol lockdown restrictions. We will review our risk ass085menl as and when the Govemmenl announces further phases of ils Coronavirus responsg and update il accordingly. 26 Pivotal Housing Assoclatlon Board Report (Includlng Strategic Report) Year Ended 31 March 2021 Covid-19 Health and Safety Risk Assessment Risk Exlstlng Controls Further Action Staff returning to wort< siles bèfore il is safe to do so. Staff who can work from home have been facilitated to do so. Only staff performing an essential role that Cannot be done from home will be in the office I service. Clear communication issued lo staff to maintain the slalus quo for tha lime being, Specific risk assessme¢)I for support service5, HMO'S and our Head Office.Pwson specific risk assessments for those who are Vltlnerable and need lo return lo oflice I service l(xalion. Further communication of 8LlPPOrt and access to equipment for those working al home.continued.. Risk of infe¢lion when trav811ing to work and between sites. Only those staff who have lo come into work are Iravelling. Encourage those staff that need to allend th8 work sile lo walk, cycle or drive where possibl8. This continues to be the posltion for the Current phas8. Minimise Iravelling being undertaken wherever possible. Staffing rotas in some ServI￿S have been adjusted lo minimise travel. Social dislancing arrangements in place and communicated. Staff, customers. contadors and visitors do not maintain Social distancing Wamings procedLFre in place for custijners who do not comply wth social distancing. Delwertes and conlraclor8 allend by appointment onty. Risk a88essment in place for support schemes, HMO'S and Head Office, including.. A plan for officgs and kitchens for use with 1m+ rule. * Ensuring signage is up in all locations inslrucling people lo keep al16ast lm distance. arking out floor areas to slop people getting too close to each other where necessary. 27 Plvotal Housing Association Board Report (Includlng Strategic Report) Year Ended 31 March 2021 Covid-19 Health and Safety Risk Asse89ment Risk Exk81ing Controls Further Aclw)n Infection risk is not appropriate managed (where social distancing is not possibl&). Clear instructions are in place on isolation if St￿ have symptoms or a household contact has symptoms. Supply of PPE where il appropriate I where required to be provided rf a new 811e is opening UP. Personal prot8cltve equipment is available in all Work Pla￿S. Wherever possible, windows should be open for ventilation. Plans Communicated for symptomatic customers and how lo isolate and support them in isolation Remew our requirements on face coverings following Governm8nl advice. Consider the options in terms of provision. Information provided lo customers on how lo practice social distancing, report symptoms and isolate. staff to travel between sftes a5 little as possible lo reduce infection risk. Communal spaces dosed where appropriate. No face to face meellngs unl8ss 2m distance Can be maintained. Us8 oiilside Space for meelin98 where possibEe. Home working risk assessment undertaken by all home workers. Wellbeing of staff working at home and in services is not appropriately managed. VideopconfeTencing facilities in place to ensure effective communication. Guidance issued to staff or¢ wellbelng when working remol81y. On Ihis basis, the Board has a reasonable expectation that PHA has adequate rasources lo continue in operationd existence for the for8S8eable future, being a pertod of at least twelve months after the date on which the r&port and fi'nancial slalements are signed. For this rèason, il continues lo adopt the going concem basis in the financial statements. The r8port has been prepared having taken advantage of the small companles exemption in the Companies Act 2006. In approving the Board Rèport, we al80 approve th@ Strategic Report included therein. in our capacity a8 company directors. On behaK of the board D Streek, Chair Dato.. 28 Pivotal Houslng Association Independent Auditor's Report to the Board of Plvotal Housing A$sociation Year Ended 31 March 2021 Oplnion We have audited the linan¢ial stat8m8nls of Pivotal Housing Association Ithe'associolion'l forth& year ended 31 March 2021 which comprise the statement of comprehensive in￿Me. statem&nt of financial posilK)n, stalèmenl of changes in equilyl reserves, st818m8nt of cash flows and notes lo the financk71 slatemenls. including a summary of significant accounting policies. The fina￿la1 Teporting framework that has been applied in their PTeparalion is applicable law and United Killgdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Acc8pled Accounting Practice}. In our opinion the financial slalemenls.. give a tru6 and fair Mew of the slate of the association's affairs as at 31 March 2021, and of ils incoming resources and application of resources, including ils income and expenditure. for the year Ih8n ended., have b88n properly prepared in accordanc8 With Unit￿1 Kingdom Generally Accepted Accounting Practice,. and have been prepared in accordance with the requirements of the Companies Act 2LK6, the Housing and Regeneration Act 2008 and the A¢counliny Direction for private registered providers of s￿181 housing in England 2019. Basls for oplnlon We conducted our audit in accordance with International Standards on Auditing IUKI {ISAs (UK)} and applicab￿ law. OUT responsibililEs underlhose st8ndards are furtherdescribed in IheAudilor's responsibilities for the audit of the financial slalemenls section of our report. We are independent of the association in accordanc8 with the alhical r8quirem6nls that are rekvanl to our audit of the financial statements in the UK. including the FRC'S Ethical Stsndard, and we have fulfilled our other ethical respon8ibililies in 8¢cordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Matgrial uncertainty relating to going concern In auditing the financial slalemenls, we have concluded that a matefial uncertainly exists that may cast slgnificant doubt on the as50cialions ability lo to corttinue as a going concem. We draw your allenlion to notes 110} and 17 in the financial slalemenls which indicate that the association is dependant upon the ¢onlinu8d support of related parties. Our opinkin is not modified in respect of this maller. Our responsibililias anrl the responsibilities of the board with r&sp8Ct lo going concern are described in the relevant sections of this report. Other infomiation The board is responsible for the other information. Th8 Other information ￿mpriseS the information included in the board report. other than the financial slalements and our altditorfs report Ihereon. Our opinion on the fi'nancial slalemenl8 dees not ¢ovèr the other infefmalion and, éxtspt lo the extent olheEwise @xplicilly slated in our report, we do not expfess any form of assurance conclusion Ihereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is malertalty ifieonsislenl with the financial slalemenls or our knowledge obtained in the audit or otherwise appears to be materialty misslaled. If w8 identify such material inconsistencies or apparent material mlsststemènls, we are required to determine whether there is a material misstatement in the financial statements or a material misst8tèm8nl ofthe other infonnation. If. based on the work we have performed, we conclude that there is a material misststement of thi8 other infom)ation. we are rèquired to feport that fact. 29 Plvotal Housing Association Independent Audltor's Report to the Board of Plvotal Houslng Association Year Ended 31 March 2021 Vve have nothing to report in this regard. Oplnlons on othèr matters prescribed by the Companies Act 2006 In our opinion, based on the WQTk undertaken in the course of the audit.. the information given in the board report (incorporating the strategic report) for the linancial year forwhich the financ￿1 statements are prepared is consistent with th8 financial slatemenls,. and the board report {incorporaling the strategic report) has been prepared in a￿OTdanCe wlth applicable legal requirements. Matters on whlch wa are required to r6port by ex¢&ption In the light of our kno￿edge and understanding of the association and ils environment obtained in the CQLtrse of the audit. we have riot id&nlified material misstaloment8 in the board report {iTrcorporaling the strategic reporti. We have nothing lo report in resped of the followlAg mallers in Yelation lo which Ihe Companies Act 2006 requires us to report to you if, in our opinion.. adequate accounting records have not been kept or returns adequate for our audit have not been receiv6d from branches not visited by us., or Ihe financial slalemenls are not in agreement with th8 accounting record$ and returns. C* certain disclosures of direelors, remuneration specified by law are not made,. or we have nol received all th8 infom)alion and explanations we requiro for our audit. or the board was not 8nlttled to prepare the financlal slatem8nts in accordance wilh the small companies regime and lake advantage of the small companies, exemption in preparing the direclots, report and from the requirement to prepara a strategic report. In addition, we have nolhing to report in respect of Iha following matter where the Hou8ing and Regeneration Act 2008 requires us to report lo you rf, in our opinion.. a saltsfactory system of control over transactions has not been maintained, Rgsponslbllltles of tho board As explained more fully in the board's ￿sPonsibl1111eS statement sel out on page 25, the board members (who are also the di￿¢101$ of the assoctalion for the purposes of company law) are responsible for the preparation of thè financial slalemenls and for being satisfied that they give a true and fair view, and for such internal control as the board detemine is nec8s8ary lo enable the preparation of financial statements that are free from material misslatemenl, whether due to fraud or error. In preparing the fillancial slatemenls. the board is responS5b￿ for assessing the asscKialion's ability lo continue as a going Concern, disclosing. as applicable, matters related lo going coneern and using the going concern basis of accounting unless the board either intends lo liquidate the assLKi?tion orto cease operatlons, or has no realistic allemative bul to do so. 30 Plvotal Houslng Assoclatlon Independont Auditor's Roport to the Board of Pivotal Housing Associatlon Year Ended 31 March 2021 Auditor's responsibilities for the audlt of the finanGial $tatements Our object￿Ve$ are lo obtain reasonable assurance aboutwhelher the finan¢ial slalemenls as 2 whole are free from material misslatemenl, whether due to fraud or efror. and lo issue an auditor's raport that includes our opinion. Reasonable assurance is a high level of assuran￿. bul is not a guarantee that an audit conducted in accordance with ISAS (UK} will a￿ayS dete¢l a material misslalemenl when il exists. Misslatemenls can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be 8xpectal to influence the economic decisions of u8er8 lak8n on the basis of Ih8se financial statements. Irregularities, including fraud, are instancès of non-compliancè with laws and regulations. We dgsign procedures in line with our responsibilities. oullin8d above, lo detect material misslalements in respect of irregulariti&s, including fraud. The extent lo which our procedures are Capable of detecting irregularitiès, including fraud is detailed below.. As part of our audit planning we obtained an underslanding of th& legal and regulatory framework that is applicable lo the association. INe gained an understanding of the association and the industry in wh￿h the association operates as part of this assessment to identify the key laws and regulations affecting the association. INe made enquiriès with manag8m8nl and mad8 an appropriate team selection {ensurÉng compolence and capability lo recognise non-compliancel. Key regulations identified were health and safety regulalrons, employment law, regulalvjns regarding the standards of homes and also those law5 and regulations that have ? dire¢t impact on the preparation of the financial slalements, Management enquiries covered any knowledg8 or evid8nc8 of actual or potential fraud, litigation and claims which are followed up w¢th corroborative audrt review work. We also evaluated management incentives and opportunili8s for fraudulent manipulation of the financial statements and found nothing to note. Based on this understanding we designed our audf( procedures to identify non-complianGe with such laws and regulations. Our procedures invobjed the following- EnqLÈiries of management regaiding their knowledge of any non compliance with laws and regulations that could affect th8 financial Slalemenls. As part of these anquiriag we also discussed with management whether there have been any known instances of frauLI. of which there were none. R￿leWed legal and professional costs to identify any possible non complia￿e or legal costs in respect of non compliance. Roviewed filings wlth the Règulator of Social Housing, Charity Commis8ion and Companies House and whether th&re were any serious incident reports made during the year, of which there were none. Diseussed with management if any health and safety inciderbts have been recorded during the year, of which there were none. Review of the GDPR policy and enquiries to managemenl as lo the 0￿UrrenCe of any reportable brea¢he5, of which there were none. Revwed Board minutes and correspond8nce with the Regulator of Social Housing and Charity Commission. Reviewed 8Stimates and judgements made in the a¢¢ounls for any indicalton of bias, of which there were none. Audited the risk of management overridg of controls, including through testing journal entries and other adjuslmenls for appropriateness. and evaluating the busines8 rationale of signif￿an1 transactions outside the normal course of business. 31 Pivotal Housing Assoclatlon Indopendent Auditor's Report to the Board of Plvotal Housing Association Year Ended 31 March 2021 Because of the inherent limitations of an audit, there is a risk that we wlll not delect all irregulartlies, including those leading to a material misslaternenl in the financial slalements or non