2022-03-31-accounts

Army Form N1514 (Rev 111091 Servicè Non Public Funds Final Accounts, Managing Trustee's Report, Internal Audit 8oard Report and Independ8nt Examiner's Report {SORP 2005 ¢ompliantl Regimental Accountant Scheme Unit Address HQ HEREFORD GARRISON. STIRLING LINES, HEREFORD. HR4 7DD In respect of the PALUD-R-INN Fundlcharit Charity CommissionlRegulator registered number 130125 For the period from 01 APR 21 31 MAR 22 Managing Trustee(s) during the period: From From 01 APR 2021 06 OCT 2021 to to 06 OCT 2021 31 MAR 2022 Name Name Fund Managerlsl durlng the perlod: From From Fforn 01 APR 2021 08 NOV 2021 22 NOV 2021 to to to 08 NOV 2021 22 NOV 2021 31 MAR 2022 Name Name Narno Internal Auditorls) durlng the period: Froffl From 01 APR 2021 12 JUL 2021 to to 12 JUL 2021 31 MAR 2022 Name Name Associate Auditorls) during the period: Regimental Accountant(sl during the period: From From 01 APR 2021 10 JAN 2022 10 JAN 2022 31 MAR 2022 Name Name lo

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INDEPENDENT EXAMINATION OF XXXX SERVICE NON-PUBLIC FUNDS FOR THE YEAR ENDING 31 MARCH 2022

Prepared by

MANAGEMENT ACCOUNTANCY SERVICES (ARMY)

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ArmyHQ/Res/MAS(A)/Projects/1-008-IE dated 21 Jun 22

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INDEPENDENT EXAMINATION OF XXXX SERVICE NON-PUBLIC FUNDS FOR THE YEAR ENDING 31 MAR 22

DOCUMENT INFORMATION

Independent Examination of XXXX Service Non-Public Funds for Report Name: the year ending 31 Mar 22 Document Title: Final Report Version No: 1.0 Financial Model Version: N/A Reference: ArmyHQ/Res/MAS(A)/Projects/1-008-Independent Examinations MAS(A) Army Headquarters Ramillies Building Produced By: First Floor, Zone 6, IDL 403 Marlborough Lines, Monxton Road ANDOVER, Hampshire SP11 8HJ Telephone: Skype: [phone] Email: [e-mail] CO - Managing Trustee Distribution Action: RAO - Internal Auditor Distribution Copy: MAS(A) SharePoint Project Area

DOCUMENT AUTHORISATION

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Document Authoriser: Lt Col AM McTaggart SO1 Head MAS(A)
Date Authorised: 21 Jun 22
Document Author: SSgt P Rai Management Accountant
Report Quality Review Lt Col AM McTaggart SO1 Head MAS(A)
Panel: Maj PN Carcone SO2 Programme Manager
WO1 (SSM) M O‘Mara WO1 Technical
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COST MODEL AND MDAL VERIFICATION

Cost Analysis Model and N/A MDAL Verified By: Date Verified: Cost Analysis Model and N/A MDAL Author:

Controlling Statement

THIS DOCUMENT IS THE PROPERTY OF HER MAJESTY’S BRITANNIC GOVERNMENT. It is issued solely for the information of those who need to know its contents in the course of their official duties.

Outside Government service, this document is issued on a personal basis: each recipient is personally responsible for its safe custody and for ensuring that its contents are disclosed only to authorised persons.

Anyone finding this document should hand it in to a British forces unit or to a police station for its safe return to the MINISTRY OF DEFENCE, D DEF SY, ZONE D, LEVEL 6, MAIN BUILDING, WHITEHALL, LONDON SW1A 2HB, with details of where and when found.

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THE UNAUTHORISED RETENTION OR DESTRUCTION OF THIS DOCUMENT MAY BE AN OFFENCE UNDER THE OFFICIAL SECRETS ACT 1911-89. INDEPENDENT EXAMINATION OF MAB2 SERVICE NON-PUBLIC FUNDS FOR THE YEAR ENDING 31 MAR 22

TABLE OF CONTENTS

SUBJECT	PAGE(S)	PARAGRAPH(S)
Introduction	1	1
Background	1	2 – 5
Aim	1	6
Approach	1 - 2	7 – 9
Findings	2	10 – 13
Recommendations	3	14
Conclusion	3	15

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INDEPENDENT EXAMINATION OF XXXX SERVICE NON-PUBLIC FUNDS FOR THE YEAR ENDING 31 MAR 22

Introduction

1. This report has been prepared by Management Accountancy Services (Army) (MAS(A)) on behalf of the Managing Trustee of XXXX Service Non-Public Fund (SNPFs). The Managing Trustee of XXXX SNPFs remains the sponsor and is the authority to whom any queries should be addressed.

Background

1. The XXXX SNPFs comprise the PRI fund, Palud-R-Inn Club, Sergeants’ Mess Fund, Sultan’s Fund and the Clocktower Fund, which are all separate charities.

2. The funds are run as SNPFs following the principles of Service Funds Regulations (SFRs). The accounts conform to the Statement of Recommended Practice (SORP)[1] .

3. The Palud-R-Inn Club’s gross income has exceeded the threshold of £250,000 but is below the threshold of £1M. The trustee of the fund has requested MAS(A)[2] to conduct an Independent Examination (IE) as per the requirement of the Charities Commission (CC)[ 3] . The accounts are maintained on an accruals basis with oversight and regular checks conducted by the Internal Auditor (IA).

4. The gross income of the PRI fund has exceeded the threshold of £1M. This fund is not eligible for an IE and an external audit is required. The gross income of the Sergeants’ Mess, Sultans and Clocktower Funds are each below £250,000, therefore an IE by MAS(A) is not required.

Aim

1. MAS(A) are to conduct an IE of the Palud-R-Inn Club for the year ending 31 Mar 22 as directed in Part 8 (section 145) of the Charities Act 2011[4] .

Approach

1. It was confirmed that MAS(A) are eligible to independently examine the accounts and conduct an IE as per the financial thresholds stated by the CC.

2. A detailed briefing[5] was received from the Regimental Accountant (RA) on the charities’ constitution, organisation, accounting systems, activities, nature of assets, liabilities, income and expenditure.

3. Examination of the XXXX SNPFs Annual Report for the year ending 31 Mar 22 was conducted under the general directions given by the CC, as detailed in

1 Charities SORP (FRS 102)

2 Independent Examiner must be a member of the listed body if the fund income is over £250K but below £1M.

3 Charity Commission Registration Number: Palud-R-Inn Club - 1130125

4 Charities Act 2011

5 Briefing held at Sterling Lines on 8 Jun 22.

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Annex A[6] . This included a review of accounting records kept by the RA, comparison with previous records and analysis to identify any unusual items. Where necessary, additional explanation was sought from the Managing Trustee and the RA.

Findings

1. CC Thresholds . A review of the annual account of the PRI fund confirmed that the gross income had exceeded the threshold of £1M[7] . This fund is not eligible for an IE and an external audit is required. Examination of the PRI Fund, therefore, is outside the scope of this report.

2. Balances from the annual accounts for the SNPFs as at 31 Mar 22 are at Table 1.

Table 1 – XXXX SNPFs: Balances as at 31 Mar 22

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Serial Fund Gross Gross
Income Assets
(£) (£)
(a) (b) (c) (d)
1 PRI 1,105,805 295,935
2 Palud-R-Inn 418,372 96,264
Club
3 Sergeants’ 234,118 297,853
Mess
4 Sultans 51,609 424,234
5 Clocktower 39,479 35,600
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1. IE Report . The IE established that the requirements of Charities Act 2011, Section 132[8] had been met. The unqualified IE Certification for the Palud-R-Inn Club is at Enclosure 1 to Annex A.

2. Observations . Whilst the IE reports provide statements to confirm the operability of the Palud-R-Inn Club within the stipulated CC Accounting and Governance regulations, the following points are offered as observations to the accounts:

a. Capital property. The recorded values of capital property in the annual report did not match the property register. The write off and carry forward figures were different from the figures in the trial balance report.

b. Payment vouchers. All payment vouchers are required to be signed off by the Fund Manager. However, some payment vouchers were paid without authorisation, some of which were of a material amount.

c. Monthly report. The Fund’s month end report prepared by the IA which summarises the main activities, issues, and observations during the month were not signed off by the Managing Trustee.

’ 6 The Charity Commission s directions on the Independent Examination of Charity Accounts (CC32).

7 An Audit is required if the income or value of assets exceeds £1M and £3.26M respectively.

8 Charities Act 2011, Section 132.

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d. Reducing net worth of the Fund. There was a net loss in this reporting period as a result of excess expenditure over gross income; there were similarly excess expenditure in prior period. Total funds carried forward end of this period decreased by 15.9% compared with the previous year. It was notable that a large donation was made from the trading profit of the fund to the PRI this reporting period.

Recommendations

1. The recommendation following the IE are as follows:

a. Capital property. The figures of capital property in the annual report must reflect the figures in the property register and the trail balance. A review is to be carried out to analyse the discrepancies in the annual report. Property should be depreciated by an equal amount each year in a straight-line method as stipulated in the SFR.

b. Payment vouchers. All payment vouchers are to be authorised by the FM to avoid potential fraud and erroneous payment. All unauthorised payments are to be acknowledged by the FM during the month end check. It is further recommended that the Managing Trustee examines each of the unauthorised payments over £10,000 to ensure propriety.

c. Monthly report. The Managing Trustee must acknowledge and sign off the monthly report. The report will inform all trustees about its current activities, issues and observations, and ensure that the fund is operating in line with its charter and constitution.

d. Reducing net worth of the fund. The proposed value of donations should be reviewed before making payment to ensure that the fund’s net balance is not reducing year on year. On this trajectory, the fund will not be able to sustain its current level of activities indefinitely.

Conclusion

1. The Palud-R-Inn Club is operating within the accounting and governance tolerances as set by the CC.

Annex:

A. The Charity Commission’s directions on the Independent Examination of Charity Accounts (CC32).

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Annex A to ArmyHQ/Res/MAS(A)/Projects/1-

008

Dated 21 Jun 22

THE CHARITY COMMISSION'S DIRECTIONS ON INDEPENDENT EXAMINATION OF CHARITY ACCOUNTS

1. The CC produce an examiners’ guide to IE of Charity Accounts, specifically written for Independent Examiners explaining their role and duties in examining the accounts of a charity. In accordance with Section 3 of the guidance specific directions are summarised below.

a. Accounting thresholds . The annual report for the period 1 Apr 21 – 31 Mar 22 was examined to confirm IE thresholds[1] had not been breached.

b. Conflict of interest . There is no conflict of interest that will prevent carrying out the IE of the Palud-R-Inn and PRI funds.

c. Documentation . Working papers were examined and evidenced.

d. Understanding the charity . The detailed briefs received and free access to charity documentation ensured full understanding of the charity’s constitution, organisation, accounting systems, activities and nature of its assets, liabilities, incoming resources and application of resources to undertake the examination.

e. Accounting records . The charity accounting records have been subject to a simple review and appear complete, well organised and consistent with statutory requirements of accruals principles.

f. Consistent with accounting records . A comparison of the charities accounts with the accounting records provided a reasonable basis to decide that the accounts are consistent.

g. Accruals basis of accounting . The accounting policies adopted are consistent with the SORP and are appropriate to the activities of the charity.

h. Accounting policies estimates and judgements . Estimates or judgements made in preparing the accounts were checked to ensure they were reasonable.

i. Financial circumstances, going concern and outstanding commitments . The charity’s annual report and financial statements provide a reasonable basis to make a judgement on the charity’s ability to meet its liabilities and achieve its long-term objectives.

j. Form and contents of accounts . The accounts are prepared following the principles of SFRs which provides detailed guidance in the

1[1] Gross income not to exceed £1M and value of assets not to exceed £3.26M, otherwise a full audit is required.

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method of completing the final accounts. The final accounts include Statement of Financial Activities (SoFA), balance sheet and accompanying notes to the accounts.

k. Analytical procedures . An analysis of income, expenditure, assets and liabilities between the current and previous year was conducted. Where unexpected fluctuations were identified, detailed briefs were received.

l. Trustees’ annual report . Financial references in the Trustees’ annual report are consistent with the accounts.

m. Examiner’s report. The IE reports can be found at Enclosures 1.

Enclosure:

1. IE Report to The Trustees of the Palud-R-Inn Club fund (1130125), dated 21 Jun 22.

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OFFICIAL - SENSITIVE Enclosure 1 to Annex A ArmyHQ/Res/MAS(A)/Projects/1008 Dated 21 Jun 22

INDEPENDENT EXAMINER’S REPORT TO THE TRUSTEE OF PALUD-R-INN CLUB SERVICE NON-PUBLIC FUND (A NON-COMPANY CHARITY, REGISTERED 1130125)

I report to the charity trustee on my examination of the accounts of the charity for the year ended 31 March 2022.

Responsibilities and basis of report

As the trustee of the charity, you are responsible for the preparation of the accounts in accordance with the requirements of the Charities Act 2011 (‘the 2011 Act’).

I am satisfied that the accounts of the charity are not required to be audited under Section 144 of the 2011 Act and are eligible for Independent Examination (IE). I report in respect of my examination of your charity’s accounts as carried out under section 145 of the 2011 Act. In carrying out my examination, I have followed the directions given by the Charity Commission under section 145(5) (b) of the 2011 Act.

Independent examiner’s statement

As the Charity’s gross income exceeded £250,000 the independent examiner must be a member of a body listed in section 145 of the 2011 Act. I confirm that I am qualified to undertake the examination as a member of the Chartered Institute of Management Accountants, which is one of the listed bodies.

I have completed my examination. I confirm that no matters have come to my attention in connection with the examination giving me cause to believe:

1. Accounting records were not kept in respect of the charity as required by section 130 of the 2011 Act.

2. The accounts do not accord with those records.

3. The accounts have not been prepared in accordance with the methods and principles of the Statement of Recommended Practice for accounting and reporting by charities.

I have no concerns and have come across no other matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the accounts to be reached.

Original Signed

SSgt Pawan Rai BEng (Hons), ACMA, CGMA

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Chartered Institute of Management Accountants Management Accountancy Service (Army) Army Headquarters, Marlborough Lines, Andover, Hampshire, SP11 8HT 21 Jun 22

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