## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** **TRUSTEES’ ANNUAL REPORT AND FINANCIAL STATEMENTS** _**For the year ended 31 December 2022**_ # **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(A charity and a company limited by guarantee)** ## **TRUSTEES’ ANNUAL REPORT AND FINANCIAL STATEMENTS** **For the year ended 31 December 2022** Page 1 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** ## **TRUSTEES’ ANNUAL REPORT AND FINANCIAL STATEMENTS** _**For the year ended 31 December 2022**_ ## **CONTENTS** ||Page| |---|---| |Chair's introduction|3| |Report of the Trustees including the Strategic Report|4| |Report of the independent auditor|15| |Statement of financial activities|20| |Balance sheet|21| |Cash flow statement|22| |Notes forming part of the financial statements|23| Page 2 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** ## **(Registered number: 04823842; Charity number: 1141289)** ## **CHAIR’S INTRODUCTION** I am very pleased to introduce the Trustees’ Annual Report and Financial Statements for 2022. It has been another challenging year for students and the higher education sector as we came out of the pandemic into the cost of living crisis and other pressures, and this has been reflected in our work during the year. Despite this context the OIA has fulfilled its role effectively and provided a valuable service. We sustained strong performance against key performance indicators and resolved complaints for more students than ever before. We continued to share learning from complaints with the sector and to engage positively with students, their representative bodies and higher education providers. We have played our part effectively in the wider regulatory framework, using our influence to maintain focus on students’ concerns and responding to emerging and developing issues. None of these achievements would have been possible without the skill and dedication of everyone in our organisation. I would like to thank my colleagues on the Board, our excellent staff and particularly Ben Elger, Chief Executive and Felicity Mitchell, Independent Adjudicator, who, together, have so ably led the organisation through the year. This has been Felicity’s last full year as Independent Adjudicator and I would like to take this opportunity to pay tribute to the exemplary integrity, commitment and skill she has brought to the OIA over the last 19 years. This is also my last Trustees’ Annual Report as Chair of the OIA Board. I am proud of what we have achieved as an organisation during my time as Chair, and confident that the OIA will go from strength to strength with a new Independent Adjudicator from May 2023 and a new Chair from October. Dame Suzi Leather Chair of the Board of Trustees/Directors Page 3 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** ## **REPORT OF THE TRUSTEES INCLUDING THE STRATEGIC REPORT** _**For the year ended 31 December 2022**_ The Trustees, being also Directors of the charitable company, present their annual report together with the financial statements for the year ended 31 December 2022. The report complies with the Charities Act 2011, and the Directors’ report as required by section 415 of the Companies Act 2006. The financial statements comply with the requirements of the Companies Act 2006, the charitable company’s Articles of Association and the Charities Statement of Recommended Practice (SORP FRS 102 effective 1 January 2019). ## **Objectives and activities** The OIA is the designated operator of the student complaints scheme in England and Wales established under the Higher Education Act 2004, and a charity registered in England and Wales. ## **Charitable purpose** The OIA’s charitable purpose is to advance education for public benefit through the independent review of student complaints in England and Wales and by using learning from complaints to help improve policies and practices. ## **Public benefit** The Trustees confirm that they have complied with their duty in the Charities Act 2011 to have due regard to the guidance issued by the Charity Commission on public benefit. The OIA brings benefit to students, higher education providers, the higher education sector and the wider public as an independent Scheme funded by higher education providers (rather than directly by taxpayers) that can be accessed free of charge by virtually all higher education students. ## **Activities** The principal activity is the impartial review of student complaints and sharing learning from complaints to help improve policies and practices. The OIA’s longer-term strategic priorities to fulfil our charitable purpose and work towards our vision that students are always treated fairly are set out in our strategy (see below). Detailed planning of the activities through which we advance our strategic priorities is undertaken each year and set out in an annual Operating Plan. Progress against the annual Plan is then reported in an annual Operating Report. Both documents are published on our website. A summary of key areas is provided under Achievements and performance below. Page 4 of 33 # **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** ## **REPORT OF THE TRUSTEES INCLUDING THE STRATEGIC REPORT** # _**For the year ended 31 December 2022**_ ## **STRATEGIC REPORT** ## **Our Strategy** ## **Our vision** Our vision is that students are always treated fairly. ## **Our priorities** Our priorities are: - to review student complaints independently, fairly and effectively. - to share learning from complaints with higher education providers, student representative bodies, students and others, to help improve policies and practices and the student experience. - to work effectively with others and influence policy and practice in the wider regulatory framework for higher education and in the ombuds sector. - to continually develop our organisation so that we can do our work well. ## **Our values** Our values inform everything we do. We recruit people who share our values and are committed to our vision, and we reflect our values in our work. Our values are: - Integrity and independence - Quality - Openness and accessibility - Service ethos - Engagement - Equality and diversity **----- Start of picture text -----**
Operating Plan Staff objectives
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Page 5 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** **REPORT OF THE TRUSTEES INCLUDING THE STRATEGIC REPORT** _**For the year ended 31 December 2022**_ ## **Achievements and performance** The OIA brings benefit to students through reviewing their complaints and contributing to improving practice in the higher education sector. More widely our work brings benefit to higher education providers, the higher education sector and the public. Our Scheme is independent and can be accessed by virtually all higher education students. As the Scheme is free to students there is no financial restriction on a student bringing a complaint to the OIA. The Scheme is designed so that legal representation is not needed. Students must normally have completed internal complaints or appeals procedures at their higher education provider before they bring their case to the OIA. When we uphold a complaint, we usually make Recommendations for the higher education provider to put things right for the student(s) through practical remedies and/or financial compensation, and we may also make good practice Recommendations. In 2022 we sustained strong overall performance against our key performance indicators. We exceeded our timescale targets at most stages of our case-handling process, and exceeded our target for the proportion of complaints we settled. We did not quite meet our target for the proportion of complaints closed within six months of receipt, but we closed over 2,800 complaints (our highest ever number), and in addition we completed our review of a complaint from a large group of students at a single provider. The number of complaints we received rose for the sixth consecutive year. We have continued to develop our casework processes and to further embed kindness in our work to support students in using our service. We have maintained a strong focus on equality, diversity and inclusion. We have developed our IT infrastructure to achieve greater integration of our systems and further support efficient casework. Our achievements despite the continuing challenging context are testament to the hard work, commitment and resilience of our staff and our ongoing focus on efficiency as part of providing a high-quality service. We continued to share learning from complaints to promote good practice in the sector. Alongside our online good practice and outreach work, we restarted in-person visits to providers and student representative bodies that we had paused during the pandemic. We maintained a high level of outreach and engagement with students and student bodies and with providers across the full range of our membership. We continued to contribute expertise from our unique role, as both an independent ombuds service and part of the higher education regulatory framework. We worked with other organisations to influence policy and practice to the benefit of students and the sector and engaged extensively with policy developments including at government level. Page 6 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** ## **REPORT OF THE TRUSTEES INCLUDING THE STRATEGIC REPORT** _**For the year ended 31 December 2022**_ We continued to engage with the tertiary sector in Wales, recognising its distinct context. We worked with the Welsh government and others as the Tertiary Education and Research (Wales) Bill progressed through the Senedd and was enacted, and as we began preparations for our expanded remit in Wales. Our financial position remains sound. We have managed our finances effectively, enabling us to resource our organisational priorities appropriately. The unit cost of cases increased this year but remains below £2,000 even without taking into account the complaint from the large group of students. We continue to cultivate a positive working culture, with appropriate attention paid to health and safety and to supporting staff wellbeing, and to promoting diversity and inclusion. Our Operating Report for 2022 reports progress against our Operating Plan 2022. It sets out what we have done during the year to advance each of our strategic priorities and includes both ongoing areas of work and new initiatives. ## **Financial review** ## **Principal funding sources** The OIA is funded by compulsory subscriptions payable by higher education providers. It does not undertake any additional fundraising activities. ## **Results for the year and financial position** The results for the year show total income of £6,621,295 (2021: £6,151,764) and a surplus on general reserves of £81,309 (2021: £377,682). Income rose in 2022, with the rise in complaints to the OIA contributing to increased income from the case-related element of subscriptions _._ Expenditure also increased but this includes the non-capital element of our IT infrastructure development project. The element that met the criteria for capitalisation led to the creation of an intangible asset as described in note 9 that will be amortised over its useful economic life from 2023. Along with the tangible fixed assets this intangible asset is not included when calculating the “free” reserves. Expenditure of £60,000 has been committed for the IT infrastructure development project in 2023. The surplus and the anticipated continued rise in cases have been and will continue to be factored into the budgeting process for 2023 and beyond with a view to balancing income and expenditure over a reasonable period of time anticipating a need for both increased capacity and continuing focus on efficiency. Page 7 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** ## **REPORT OF THE TRUSTEES INCLUDING THE STRATEGIC REPORT** _**For the year ended 31 December 2022**_ As explained in note 13 of the notes forming part of the Financial Statements, the pensions reserve deficit increased by £29,169 in line with a review of the assumptions about future staffing and the discount rate together with a minor amendment to the recovery plan. The cash impact of increases in employer pension contributions are factored into the budget setting process, whilst the reserves policy is set on the pre pension reserve levels. ## **Investment policy and performance** Funds surplus to short-term working capital requirements are placed in short-term deposits with appropriate UK financial institutions. The rate of interest received is regularly reviewed. ## **Principal risks and uncertainties** The Trustees have a risk management strategy which includes: - An established Risk and Audit Committee which oversees the organisational approach to risk and the Risk Register - Regular review of policies and developments relating to risk, including potential new risks, culminating in a designated meeting of the Risk and Audit Committee to fully review changes to the Register and a report on key developments to the Board - Designated responsibility for managing and monitoring key risks on the Register - An approach based on mitigating both the likelihood of risks occurring and the impact should they occur. Risks associated with ensuring continuing efficiency and quality in decision making and maintaining the confidence of stakeholders remain strongly identified on the Risk Register. In 2022 we proactively and largely successfully managed risks around the continuing increase in the number of complaints coming to us. We also continued to focus on working with other organisations with a role in the higher education regulatory landscape. Income has remained reliable despite the financial challenges in the higher education sector. ## **Reserves policy** The reserves policy is overseen by the Finance Committee and reviewed periodically. It is informed by Charity Commission guidance, in particular that there should be an integrated approach to reserves that takes account of key risks. Income-related risks are relatively low as our statutory basis and members’ strong record of paying on time means that income is fairly predictable. Financial planning allows for proactive management of risks within planned operating expenditure. The reserves policy recognises a number of key risks that could potentially impact reserves requirements: a sudden increase in cases; a significant business interruption event; an unexpected increase in financial commitments such as pensions; and exceptional judicial review costs. Page 8 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** **REPORT OF THE TRUSTEES INCLUDING THE STRATEGIC REPORT** _**For the year ended 31 December 2022**_ The reserves requirement (excluding the pensions reserve in line with Charity Commission guidance) remains at three months’ operating expenditure, currently about £1,750,000. The current reserves excluding the pensions reserve stand at £2,303,371 (2021: £2,222,062). The “free reserves” (ie those excluding the pension reserve, the carrying value of the fixed assets and the intangible asset) stand at £1,839,228 (2021: £2,081,166). ## **Pensions** As shown in note 13 of the notes forming part of the Financial Statements, there continues to be a very substantial deficit in the pensions reserve based on the 2020 valuation. Although this does not constitute a current financial risk given the nature of the USS pension scheme and the way the overall deficit is managed, we recognise that there is a significant degree of uncertainty over the medium-to long-term cost of membership of the pension scheme, both in cash terms and accounting non-cash terms. Given the uncertainty of current and future economic conditions, even following changes to the scheme over a number of years there remains a level of risk of larger deficits and increasing contribution rates in the future. We continue to carefully monitor the situation mindful of the need to be able to meet any increased contribution costs out of operational cash flows. ## **Plan for future periods** Our strategic priorities as set out above remain unchanged for 2023. Our Operating Plan for 2022 sets out what we plan to do this year to advance each of these priorities and what we intend to have achieved by the end of the year. It includes both ongoing areas of work and new initiatives within the strategic priorities. The very challenging circumstances that students and the higher education sector are continuing to face will be a key context for our work in 2023. The Plan anticipates this and the further developments that we expect across all aspects of our work, including as we continue to prepare for our expanded remit in further education in Wales. We continue to respond to the sustained year on year increases in our case receipts and prepare for possible further rises, as well as to progress our good practice and outreach work and contribute to the wider regulatory framework for higher education towards our vision that students are always treated fairly. ## **Structure, governance and management** The OIA is a charitable company limited by guarantee. It was established under a Memorandum of Association and is governed under its Articles of Association. Page 9 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** **REPORT OF THE TRUSTEES INCLUDING THE STRATEGIC REPORT** _**For the year ended 31 December 2022**_ ## **The Board** The Board comprises up to 21 members (including Alternate Trustees), all of whom are non-executive. There are six Trustees nominated by representative bodies in higher education in England and Wales (the Association of Heads of University Administration, the Committee of University Chairs, GuildHE, National Union of Students, Universities UK and Universities Wales). Some of these representative bodies have identified Alternate Trustees, who may stand in for the Nominated Trustees. The majority of voting Board members and the Chair are Independent Trustees appointed through an open recruitment process. The Board is responsible for the strategic direction of the OIA, its funding and development and the oversight of its performance. It meets at least four times each year. It has established three standing committees, Finance, Risk and Audit, and Nominations and Remuneration. All standing committees are formally constituted with terms of reference, and include at least four Trustees. In 2022 the Board completed a review of the OIA’s governance arrangements. Under the new arrangements (which we anticipate introducing from 31 March 2023), all new Directors will be appointed through an open recruitment process within a framework that sets out the skills, experience and perspectives required to achieve a balanced, independent and effective Board. The Board delegates aspects of some of its functions and decision-making to its Committees and to the executive. It has a delegations framework which identifies areas of responsibility and the key Committees and roles involved. Responsibilities are set out in more detail in documents such as Committee terms of reference and senior executive job descriptions. New Trustees are provided with a Handbook giving guidance on their role and expectations of them as Trustees, and are signposted to Charity Commission guidance for Trustees. Induction covers the role and responsibilities of Trustees, strategic considerations, complaints handling processes and other key aspects of OIA work. There are ongoing opportunities for development, for example through one-to-one conversations with the Chair/Deputy Chair, invited speakers and opportunities to attend Committee meetings as an observer. ## **Key management remuneration** The pay of the Senior Leadership Team is set and reviewed by the Nominations and Remuneration Committee of the Board of Directors. Review mechanisms take account of performance and market conditions. Benchmarking exercises are undertaken regularly, Page 10 of 33 # **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** **REPORT OF THE TRUSTEES INCLUDING THE STRATEGIC REPORT** _**For the year ended 31 December 2022**_ sometimes with external support and have previously included analysis from the higher education, ombuds and charity sectors. ## **Reference and administrative details** The Office of the Independent Adjudicator for Higher Education is a charitable company limited by guarantee, incorporated (England & Wales) on 7 July 2003 and registered as a charity on 11 April 2011. **COMPANY NUMBER:** 04823842 (England and Wales) **CHARITY NUMBER:** 1141289 **REGISTERED OFFICE** Second Floor, Abbey Wharf **AND ADDRESS:** 57-75 Kings Road Reading RG1 3AB ## **TRUSTEES / DIRECTORS:** The Trustees of the charity and Directors of the charitable company, who served throughout 2022 unless otherwise stated, were as follows: **Independent Trustees/Directors** Dame S C Leather (Chair) A L Mack (Deputy Chair) A Adebisi A F Chandler Dr W V Finlay M S Kirke J N Rees S J Williams ## **Nominated and Alternate Trustees/Directors** _Nominated by the Association of Heads of University Administration_ D Hall Nominated Director _Nominated by the Committee of University Chairs_ Vacant Nominated Director _Nominated by GuildHE_ J H Renyard Nominated Director _Nominated by the National Union of Students_ H Gyebi-Ababio (to 30 June 2022) Nominated Director C Field (from 1 July 2022) Nominated Director (Alternate Director from 1 January 2023) Page 11 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** **REPORT OF THE TRUSTEES INCLUDING THE STRATEGIC REPORT** _**For the year ended 31 December 2022**_ O J Tarn (from 1 January 2023) N Dhumma (to 31 December 2022) _Nominated by Universities UK_ Professor A D Fitt Professor P J Layzell (to 31 July 2022) _Nominated by Universities Wales_ W D Callaway Dr K Mundy Nominated Director Alternate Director Nominated Director Alternate Director Nominated Director Alternate Director Trustees/Directors are appointed by the Board of Trustees. They are normally appointed for a term of three years and serve up to two terms. The Board may decide to extend a Trustee’s period of service up to a maximum of nine consecutive years. **SENIOR LEADERSHIP TEAM:** B P Elger - Chief Executive F Mitchell - Independent Adjudicator ## **COMPANY SECRETARY:** S L Liddell ## **PROFESSIONAL ADVISERS** **BANKERS: AUDITORS:** HSBC Crowe U.K. LLP 26 Broad Street Statutory Auditors Reading RG1 2BU Aquis House, 49-51 Blagrave Street Reading RG1 1PL **SOLICITORS: ACCOUNTANTS:** Field Seymour Parkes BDO LLP 1 London Street R+, 2 Blagrave Street Reading RG1 4QW Reading RG1 1AZ ## **Charity Governance Code** The OIA is committed to the seven principles identified in the Code and follows or is working towards recommended practice in almost all areas. ## _1. Organisational purpose_ The OIA has a strong organisational purpose. It is clearly expressed in our strategic documents, and is kept under review as part of ongoing strategic planning to make sure that it remains relevant in the evolving higher education sector landscape. The public benefit is clearly defined as set out above. Page 12 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** ## **REPORT OF THE TRUSTEES INCLUDING THE STRATEGIC REPORT** _**For the year ended 31 December 2022**_ ## _2. Leadership_ The Board works with the Senior Leadership Team to set a clear strategic direction for the organisation and to ensure that the OIA’s values are reflected in our work. ## _3. Integrity_ Integrity is one of the OIA’s core values. Trustees are expected to follow the Seven Principles of Public Life drawn up by the Committee on Standards in Public Life and to preserve the independence of the OIA Scheme. The OIA’s values underpin all of our work and inform how we develop what we do. ## _4. Decision making, risk and control_ The Board maintains strong oversight of the organisation, delegated where appropriate to Committees with defined terms of reference or to the executive. Key policies and procedures and organisational performance are regularly reviewed. The Board has developed a sophisticated approach to risk management as outlined above, and appropriate audit arrangements are in place. ## _5. Board effectiveness_ Recruitment to the Board ensures an appropriate balance of skills and knowledge, taking into account the OIA’s evolving membership. Trustees receive a full induction. The Board and its Committees meet regularly to receive information and reports and to have full and frank discussions of important issues. The Board reviews its own effectiveness annually. The Board has recently undertaken a review of the OIA’s governance arrangements as outlined above. ## _6. Equality, diversity and inclusion_ The Board values diversity in all its forms. It is committed to reaching out to underrepresented groups when recruiting Trustees, and to removing barriers to participation. Diversity on the Board is monitored. The Board has a strong focus on promoting equality, diversity and inclusion within the organisation and through the OIA’s work, led by a Diversity Steering Group comprising Trustees with expertise in this area and relevant senior managers. ## _7. Openness and accountability_ Openness and building trust to maintain the confidence of stakeholders is a key part of how the OIA operates. Information about our work is available on our website and published in an Annual Report and other publications. A Register of Directors’ Interests and summary minutes of Board meetings are also published on the website. We continue to engage with developments to the Charity Governance Code and recommended practice. The Board reviews annually the effectiveness of the OIA’s Page 13 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** **REPORT OF THE TRUSTEES INCLUDING THE STRATEGIC REPORT** _**For the year ended 31 December 2022**_ governance practice in relation to the Code and other relevant developments, with external input as appropriate. The Code has also informed the recent review of our governance arrangements. ## **Trustees' responsibilities** Company law requires the Trustees to prepare financial statements for each financial year that give a true and fair view of the charitable company’s state of affairs and of its incoming resources and application of resources, including income and expenditure, for the financial year. In preparing those financial statements, the Trustees are required to: - Select suitable accounting policies and apply them consistently - Make judgements and estimates that are reasonable and prudent - State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements - Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue to operate. The Trustees are responsible for maintaining proper accounting records which disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. The Trustees are also responsible for safeguarding the assets of the charitable company, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Trustees confirm that so far as they are aware, there is no relevant audit information of which the charitable company's auditors are unaware. They have taken all the steps that they ought to have taken as Trustees in order to make themselves aware of any relevant audit information and to establish that the charitable company's auditors are aware of that information. ## **Auditors** A resolution to formally re-appoint Crowe U.K. LLP as the OIA’s auditor will be proposed at the Annual General Meeting. The Report of the Trustees (incorporating the Strategic Report) was approved by the Board of Trustees on .......................................... and signed on their behalf by: 31 March 2023 …………………………………………… S Leather - Trustee Page 14 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** **REPORT OF THE INDEPENDENT AUDITOR TO THE TRUSTEES** _**For the year ended 31 December 2022**_ ## **Independent Auditor’s Report to the Members of The Office of the Independent Adjudicator for Higher Education** ## **Opinion** We have audited the financial statements of The Office of the Independent Adjudicator for Higher Education for the year ended 31 December 2022 which comprise the statement of financial activities, the balance sheet, the cash flow statement and notes to the financial statements, including 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 charitable company’s affairs as at 31 December 2022 and of its 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; and - 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 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 trustees’ 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 Page 15 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** **REPORT OF THE INDEPENDENT AUDITOR TO THE TRUSTEES** _**For the year ended 31 December 2022**_ on the 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 trustees with respect to going concern are described in the relevant sections of this report. ## **Other information** The trustees are responsible for the other information contained within the annual report. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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. 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 this gives rise to a material misstatement in the financial statements themselves. 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 our audit - the information given in the trustees’ report, which includes the directors’ report and the strategic 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 strategic report and the directors’ report included within the trustees’ report have been prepared in accordance with applicable legal requirements. ## **Matters on which we are required to report by exception** In light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report included within the trustees’ report. Page 16 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** ## **REPORT OF THE INDEPENDENT AUDITOR TO THE TRUSTEES** _**For the year ended 31 December 2022**_ We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept; or - 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 ## **Responsibilities of trustees** As explained more fully in the trustees’ responsibilities statement set out on page 14, the trustees (who are also the 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 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 charitable company or to cease operations, or have no realistic alternative but to do so. ## **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 identified and assessed the risks of material misstatement of the financial statements from irregularities, whether due to fraud or error, and discussed these between our audit team. We then designed and performed audit procedures responsive to those risks, Page 17 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** ## **REPORT OF THE INDEPENDENT AUDITOR TO THE TRUSTEES** _**For the year ended 31 December 2022**_ including obtaining audit evidence sufficient and appropriate to provide a basis for our opinion. We obtained an understanding of the legal and regulatory frameworks within which the charitable company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Companies Act 2006 and Charities Act 2011, together with the Charities SORP (FRS 102) 2019. We assessed the required compliance with these laws and regulations as part of our audit procedures on the related financial statement items. In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which might be fundamental to the charitable company’s ability to operate or to avoid a material penalty. We also considered the opportunities and incentives that may exist within the charitable company for fraud. The laws and regulations we considered in this context were Charity Commission regulations, General Data Protection Regulation (GDPR) and safeguarding regulations. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the trustees and other management and inspection of regulatory and legal correspondence, if any. We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be within the override of controls by management. Our audit procedures to respond to this risk included enquiries of management about their own identification and assessment of the risks of irregularities, sample testing on the posting of journals, reviewing accounting estimates for biases and reading minutes of meetings of those charged with governance. Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations. Page 18 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** ## **REPORT OF THE INDEPENDENT AUDITOR TO THE TRUSTEES** _**For the year ended 31 December 2022**_ 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 our report** This report is made solely to the charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed. Janette Joyce Senior Statutory Auditor For and on behalf of ## **Crowe U.K. LLP** Statutory Auditor Aquis House 49-51 Blagrave Street Reading RG1 1PL ## **Date: 11 April 2023** Page 19 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** ## **STATEMENT OF FINANCIAL ACTIVITIES (incorporating an Income & Expenditure Account)** _**For the year ended 31 December 2022**_ |**Notes**
**Income**
**_Income from investments_**
3
**_Income from charitable activities_**
Subscriptions
**_Other income_**
**Total income**
**Expenditure**
**Charitable activities**
4
**Total resources expended**
**Net income/(expenditure)**
**Net movement in funds for the year**
Total funds at 1 January 2022
**Total funds at 31 December 2022** 16, 17|**General**
**Pension**
**Reserve**
**Reserve**
**£**
**£**
14,324
-
6,606,971
-
-
-
6,621,295
-
6,539,986
29,169
6,539,986
29,169
81,309
(29,169)
81,309
(29,169)
2,222,062
(4,757,797)
2,303,371
(4,786,966)
**Unrestricted Funds**|**Total**
**2022**
**£**
14,324
6,606,971
-
6,621,295
6,569,155
6,569,155
52,140
52,140
(2,535,735)
(2,483,595)|**General**
**Pension**
**Reserve**
**Reserve**
**£**
**£**
1,460
-
6,142,557
-
7,747
-
6,151,764
-
5,774,082
3,005,886
5,774,082
3,005,886
377,682
(3,005,886)
377,682
(3,005,886)
1,844,380
(1,751,911)
2,222,062
(4,757,797)
**Unrestricted Funds**|**Total**
**2021**
**£**
1,460
6,142,557
7,747| |---|---|---|---|---| |||||6,151,764| |||||8,779,968| |||||8,779,968| |||||(2,628,204)| |||||(2,628,204)
92,469| |||||(2,535,735)| The amounts derive from continuing activities. All gains and losses recognised in the year are included in the statement of financial activities. The notes on pages 23 to 33 form part of these financial statements. Page 20 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** ## **BALANCE SHEET AT 31 DECEMBER 2022** ||||**2022**||**2021**| |---|---|---|---|---|---| ||**Notes**|**£**|**£**|**£**|**£**| |**FIXED ASSETS**|||||| |Tangible assets|8||132,898||140,896| |Intangible assets|9||331,245||-| ||||464,143||140,896| |**CURRENT ASSETS**|||||| |Debtors|10|253,646||232,052|| |Cash at bank and in hand||4,225,737||6,357,960|| |||4,479,383||6,590,012|| |**LIABILITIES:**|||||| |**Amounts falling due within one year**|11|(2,555,125)||(4,363,219)|| |**NET CURRENT ASSETS**|||1,924,258||2,226,793| |**TOTAL ASSETS LESS CURRENT LIABILITIES**|||2,388,401||2,367,689| |**LIABILITIES:**|||||| |**Amounts falling due after one year**|12||(85,030)||(145,627)| |**NET ASSETS EXCLUDING PENSION PROVISION**|||2,303,371||2,222,062| |**Pension provision**|13||(4,786,966)||(4,757,797)| |**TOTAL NET LIABILITIES**|||(2,483,595)||(2,535,735)| |**FUNDS**|||||| |**Unrestricted Funds**|||||| |General reserve|16||2,303,371||2,222,062| |Pension reserve|16||(4,786,966)||(4,757,797)| ||||(2,483,595)||(2,535,735)| 31 March 2023 The financial statements were approved and authorised for issue by the Board of Trustees on ............................ and are signed on their behalf by:- …………………………………………. **S Leather - Trustee** The notes on pages 23 to 33 form part of these financial statements. Page 21 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** ## **(Registered number: 04823842; Charity number: 1141289)** ## **CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2022** |**Notes**
Underlying cash provided by operating activities
(Decrease)/increase in subscriptions received in advance
**Cash (used in)/provided by operating activities**
20
**Cash flows from investing activities**
Interest income
Purchase of tangible fixed assets
Purchase of intangible fixed assets
**Cash used in investing activities**
(Decrease)/Increase in cash and cash equivalents in the year
Cash and cash equivalents at the beginning of the year
**Total cash and cash equivalents at the end of the year**|**2022**
**£**
43,108
(1,820,547)
(1,777,439)
14,324
(37,863)
(331,245)
(354,784)
(2,132,223)
6,357,960
4,225,737|**2021**
**£**
398,285
116,628| |---|---|---| |||514,913| |||1,460
(9,119)| |||(7,659)| |||507,254
5,850,706| |||6,357,960| Page 22 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** **NOTES FORMING PART OF THE FINANCIAL STATEMENTS** _**For the year ended 31 December 2022**_ ## **1 STATEMENT OF ACCOUNTING POLICIES** ## **Basis of preparation** The Office of the Independent Adjudicator for higher education is a registered charity, number 1141289, and a charitable company limited by guarantee, number 04823842, incorporated in England and Wales. The address of its registered office is Abbey Wharf 57-75, Kings Road, Reading, England, RG1 3AB. The financial statements of the charitable company have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS102) (effective 1 January 2019) - Charities SORP (FRS 102), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006. The financial statements are prepared in pound sterling (£) and the figures are rounded to the nearest £. The charitable company meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy note(s). ## **Going Concern Basis** The company made a surplus on the general reserve of £81,309 (2021: £377,682) in the year and has net current assets of £1,924,258 (2021: £2,226,793). Cash at bank, excluding subscriptions received in advance, was £2,230,634 (2021: £2,542,311). However there was an increase in the pension reserve of £29,169 (2021: £3,005,886) resulting in net income of £52,140 (2021: net expenditure of £2,628,204) and net liabilities of £2,483,595 (2021: £2,535,735). The charitable company continually evaluates its operating environment including this year the impact of the cost of living crisis on the organisation itself and its staff, its Scheme members and wider stakeholders. An assessment of the current financial position, cash flow and future income has been made to demonstrate the ongoing viability of the organisation and its ability to carry out its work in this context. The charitable company remains confident that financial resources are sufficient to ensure the ability to continue as a going concern for the foreseeable future, being at least twelve months from the date of approval of these financial statements and therefore have prepared the financial statements on a going concern basis. ## **Fund accounting** General funds are unrestricted funds that are available for use at the discretion of the Trustees in furtherance of the general objectives of the charitable company and have not been designated for other purposes. ## **Income** All income is included in the statement of financial activities when the charitable company is legally entitled to the income and the amount can be quantified with reasonable accuracy. ## **Subscriptions** Subscription income is receivable from higher education providers in England and Wales. ## **Expenditure** Expenditure is accounted for on an accruals basis. The irrecoverable element of VAT is included with the item of expense to which it relates. Support costs include office functions including finance, human resources and general management. Governance costs include costs such as Board and committee meetings, and the costs of preparing statutory accounts and satisfying public accountability. The calculations of support and governance costs include, where practical, an estimated split of employees' time but no allocation of general overheads such as premises costs. Page 23 of 33 # **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** **NOTES FORMING PART OF THE FINANCIAL STATEMENTS (CONTINUED)** _**For the year ended 31 December 2022**_ ## **Tangible fixed assets and depreciation** Depreciation is provided on all tangible assets in order to write off their cost less residual value over their estimated useful lives at the following annual rates:- Leasehold improvements Straight line over the term of the lease Furniture, fixtures and equipment 25% straight line Computer equipment 25% straight line Infrastructure costs Straight line over the term of the lease Individual assets under £1,000 are not capitalised. ## **Intangible fixed assets and amortisation** Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. All intangible assets are considered to have a finite useful life. If a reliable estimate of useful life cannot be made, the useful life shall not exceed ten years. The estimated useful life is as follows: Software 25% staight line ## **Financial instruments** Basic financial instruments include debtors and creditors and the pension liability. Debtors and creditors are initially recognised at transaction value and subsequently measured at amortised cost. The pension liability is measured at fair value. Note 14 provides more information on financial instruments where future cash flows are anticipated, with financial assets referring to debtor balances excluding prepayments and deferred expenditure, and financial liabilities referring to all creditor balances excluding deferred income and other taxes and social security. ## **Pension schemes** The charitable company participates in the Universities Superannuation Scheme (the scheme). The scheme was a defined benefit only pension scheme until 31 March 2016 which was contracted out of the State Second Pension (S2P). The assets of the scheme are held in a separate trustee-administered fund. Because of the mutual nature of the scheme, the scheme’s assets are not hypothecated to individual institutions and a schemewide contribution rate is set. The charitable company is therefore exposed to actuarial risks associated with other institutions’ employees and is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis and therefore, as required by Section 28 of FRS 102 “Employee benefits”, accounts for the scheme as if it were a defined contribution scheme. As a result, the amount charged to the income and expenditure account represents the contributions payable to the scheme in respect of the accounting period. Since the charitable company has entered into an agreement (the recovery plan that determines how each employer within the scheme will fund the overall deficit), the charitable company recognises a liability for the contributions payable that arise from the agreement to the extent that they relate to the deficit and the resulting expense in the income and expenditure account. ## **Operating leases - as the lessee** Rentals paid under operating leases are charged to the Statement of Financial Activities on a straight line basis over the lease term. Page 24 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** **NOTES FORMING PART OF THE FINANCIAL STATEMENTS (CONTINUED)** _**For the year ended 31 December 2022**_ ## **2 JUDGMENTS IN APPLYING ACCOUNTING POLICIES AND KEY SOURCES OF ESTIMATION UNCERTAINTY** In the application of the charity's accounting policies, which are described in note 1, Trustees are required to make judgments, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects the current and future periods. The calculation of the pension reserve provision has relied on the actuary's overall view of the funding of the scheme and the OIA's assumptions on future salary costs and the most appropriate discount rate to be applied. Variations in these estimates could lead to a significant change in the provision. The allocation of IT infrastructure development project expenditure involves a significant level of estimation of the split of expenditure that meets the qualification criteria for creating an intangible asset under FRS102 and the Charity SORP. |**3**
**BANK AND OTHER INTEREST**
Bank interest receivable
**4**
**TOTAL RESOURCES EXPENDED**
**General Reserves**
**Charitable activities**
Direct charitable activities
Support costs
Governance costs
**Pension Reserve movement**
**5**
**EXPENDITURE**
**Direct charitable activities include:**
Operating lease charges
Depreciation
Trustee / Director costs
Pension costs
**Governance costs include:**
Auditors' remuneration (net of VAT)|**2022**
**£**
14,324
**Total**
**2022**
**£**
5,816,005
606,259
117,722
6,539,986
29,169
6,569,155
**2022**
**£**
222,308
45,861
45,240
778,074
14,750|**2021**
**£**
1,460| |---|---|---| |||**Total**
**2021**
**£**
5,174,859
498,369
100,854| |||5,774,082
3,005,886| |||8,779,968| |||**2021**
**£**
221,972
49,850
38,100
696,516
11,300| ## **6 TAXATION** The company is a registered charity. It has no liability to corporation tax on bank interest received or its charitable activities. The charity is exempt from tax on income and gains falling within section 505 of the Taxes Act 1988 or section 256 of the Taxation of Chargeable Gains Act 1992 to the extent that these are applied to its charitable objects. Page 25 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** ## **(Registered number: 04823842; Charity number: 1141289)** ## **NOTES FORMING PART OF THE FINANCIAL STATEMENTS (CONTINUED)** _**For the year ended 31 December 2022**_ ## **7 STAFF COSTS** |**STAFF COSTS**||| |---|---|---| |Wages and salaries
Social security costs
Pension contributions paid
Movement in the pension provision
The average number of employees during the year was:
The numbers of employees whose emoluments (being all
remuneration, benefits and payments made but excluding employer’s
pension contributions and employer's national insurance
contributions) exceeded £60,000 during the year, were:|**2022**
**£**
3,947,527
402,782
778,074
5,128,383
29,169
5,157,552
**No.**
99|**2021**
**£**
3,612,370
348,780
696,516| |||4,657,666
3,005,886| |||7,663,552| |||**No.**
95| |||| |£60,000 - £70,000
£70,000 - £80,000
£110,000 - £120,000
£120,000 - £130,000
£130,000 - £140,000
£140,000 - £150,000
Pension contributions for above employees
The number of those higher paid employees who accrued benefits
under a defined benefit pension scheme during the year, were:|5
2
-
1
-
1
9
159,655|7
2
1
-
1
-| |---|---|---| |||11| |||177,890| The Senior Leadership Team comprises two posts and are paid equally (one is pro-rated for part time). The total of employee benefits (including employer's pension contributions and employer's national insurance contributions) paid to the senior leadership team in the year totalled £364,750 (2021: £333,529). A grading structure and job evaluation framework are in place to set the appropriate pay grade for each role. As last year, around three quarters of staff are female, and the proportion in senior roles is similar. The median gender pay gap at 31 December 2022 was 5.6% (2021: median pay gap 6.4%) in favour of men. This figure is likely to vary over time due to the small size of the organisation. The Board and relevant Committees monitor this annually. In accordance with the company's Articles of Association and Charity Commission guidance, meeting attendance allowances of £340 per meeting totalling £37,740 (2021: £30,600) were paid to 8 Trustees during the year (S Leather 26, S Williams 10, J Rees 8, A Adebisi 15, M Kirke 19, A Chandler 13, A Mack 12 and WV Finlay 8). In addition the Chair received an annual allowance of £7,500 (2021: £7,500). Expenses of £3,929 (2021: £nil) were reimbursed or paid on their behalf to 11 Trustees (2021: 0) in the year. The majority of these expenses related to accommodation for the Board Away Day. Page 26 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** ## **(Registered number: 04823842; Charity number: 1141289)** ## **NOTES FORMING PART OF THE FINANCIAL STATEMENTS (CONTINUED)** _**For the year ended 31 December 2022**_ ## **8 TANGIBLE ASSETS** ## **Fixtures, infrastructure** |**and computer**
**equipment**
**£**
**Cost**
At 1 January 2022
115,177
Additions
37,863
Disposals
(3,257)
At 31 December 2022
149,783
**Depreciation**
At 1 January 2022
106,128
Charge for the year
7,806
Eliminated on disposal
(3,257)
At 31 December 2022
110,677
**Net Book Value**
At 31 December 2021
9,049
At 31 December 2022
39,106
**INTANGIBLE ASSETS**
**Cost**
At 1 January 2022
Additions
Disposals
At 31 December 2022
**Depreciation**
At 1 January 2022
Charge for the year
Eliminated on disposal
At 31 December 2022
**Net Book Value**
At 31 December 2021
At 31 December 2022|**Leasehold**
**improvements**
**£**
483,882
-
-
483,882
352,035
38,055
-
390,090
131,847
93,792|**Total**
**£**
599,059
37,863
(3,257)| |---|---|---| |||633,665| |||458,163
45,861
(3,257)| |||500,767| |||140,896| |||132,898| |||**Software**
**£**
-
331,245| |||331,245| |||-
-
-| |||-| |||-| |||331,245| **9 INTANGIBLE ASSETS** Page 27 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** ## **NOTES FORMING PART OF THE FINANCIAL STATEMENTS (CONTINUED)** _**For the year ended 31 December 2022**_ ## **10 DEBTORS** |Trade debtors
Other debtors
**11**
**LIABILITIES**
**_Amounts falling due within one year_**
Trade creditors
Social security and other taxes
Other creditors
Subscriptions received in advance|**2022**
**£**
4,062
249,584
253,646
**2022**
**£**
94,979
122,153
342,890
1,995,103
2,555,125|**2021**
**£**
306
231,746| |---|---|---| |||232,052| |||**2021**
**£**
42,707
98,436
406,426
3,815,650| |||4,363,219| Subscriptions received in advance relate to the payment of subscriptions for the calendar year 2023. |**12**|**LIABILITIES**||| |---|---|---|---| ||**_Amounts falling due after one year_**|**2022**|**2021**| |||**£**|**£**| ||Other creditors|85,030|145,627| Page 28 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** ## **(Registered number: 04823842; Charity number: 1141289)** ## **NOTES FORMING PART OF THE FINANCIAL STATEMENTS (CONTINUED)** _**For the year ended 31 December 2022**_ ## **13 PENSION PROVISION** |**£**
**£**
**£**
Provision b/fwd
4,757,797
Employer contributions relating to the
(224,599)
(173,292)
recovery plan
Unwinding of the discount rate
40,630
20,062
Impact of changes in assumptions during
218,538
100,983
the year
Impact of change in recovery plan
(5,400)
3,058,133
Net movement
29,169
Provision c/fwd
4,786,966
**2022**
**2021**|**£**
1,751,911
3,005,886| |---|---| ||4,757,797| The obligation to fund the past deficit on the Universities Superannuation Scheme (USS) has arisen from the contractual obligation of employers within the scheme, including the OIA, to make additional contributions to reduce the overall deficit arising from past performance. An assessment has been made of the expected future OIA employees within the scheme and the salary payments over the period of the contracted obligation in assessing the value of this provision. During 2022 a revised recovery plan was in place based on the March 2020 actuarial valuation which showed a deficit of £14.1bn. The revised plan requires deficit payments of 6.3% of salaries from 1 April 2022 to 31 March 2038. The above recovery plan payments are included within the overall employer contribution rates which have been factored into the OIA budgeting process. ## **14 OPERATING LEASE COMMITMENT** The following total lease payments are committed to be paid under non-cancellable operating leases: |||**2022**|**2021**| |---|---|---|---| |||**£**|**£**| ||Within one year|282,479|282,479| ||Within two to five years inclusive from the balance sheet date|396,382|678,862| |**15**|**FINANCIAL INSTRUMENTS**||| ||Financial instruments included in the accounts comprise:||| |||**2022**|**2021**| |||**£**|**£**| ||Financial liabilities measured at fair value|(4,786,966)|(4,757,797)| Page 29 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** ## **(Registered number: 04823842; Charity number: 1141289)** ## **NOTES FORMING PART OF THE FINANCIAL STATEMENTS (CONTINUED)** _**For the year ended 31 December 2022**_ ## **16 ANALYSIS OF NET ASSETS BETWEEN FUNDS** |**At 31 December 2022**
**Unrestricted Funds**
General Reserves
Pension Reserve
**At 31 December 2021**
**Unrestricted Funds**
General Reserves
Pension Reserve
**17**
**UNRESTRICTED FUNDS**
**At 31 December 2022**
**General Reserves**
**Pension Reserve**
**UNRESTRICTED FUNDS**
**At 31 December 2021**
**General Reserves**
**Pension Reserve**|**Fixed**
**Assets**
**£**
464,143
-
464,143
**Fixed**
**Assets**
**£**
140,896
-
140,896
**Balance**
**1 January 2022**
**£**
2,222,062
(4,757,797)
(2,535,735)
**Balance**
**1 January 2021**
**£**
1,844,380
(1,751,911)
92,469|**Net Current**
**Assets /**
**(Liabilities)**
**£**
1,924,258
-
1,924,258
**Net Current**
**Assets /**
**(Liabilities)**
**£**
2,226,793
-
2,226,793
**Income**
**£**
6,621,295
-
6,621,295
**Income**
**£**
6,151,764
-
6,151,764|**Long term**
**Liabilities**
**£**
(85,030)
(4,786,966)
(4,871,996)
**Long term**
**Liabilities**
**£**
(145,627)
(4,757,797)
(4,903,424)
**Expenditure**
**£**
(6,539,986)
(29,169)
(6,569,155)
**Expenditure**
**£**
(5,774,082)
(3,005,886)
(8,779,968)|**Total**
**£**
2,303,371
(4,786,966)| |---|---|---|---|---| |||||(2,483,595)| |||||**Total**
**£**
2,222,062
(4,757,797)| |||||(2,535,735)| |||||**Balance**
**31 December 2022**
**£**
2,303,371
(4,786,966)| |||||(2,483,595)| |||||**Balance**
**31 December 2021**
**£**
2,222,062
(4,757,797)| |||||(2,535,735)| Page 30 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** ## **NOTES FORMING PART OF THE FINANCIAL STATEMENTS (CONTINUED)** _**For the year ended 31 December 2022**_ ## **18 RECONCILIATION IN MOVEMENT IN FUNDS** |**RECONCILIATION IN MOVEMENT IN FUNDS**||| |---|---|---| |Retained surplus for the year
Increase in pension reserve
Funds at 1 January 2022
Funds at 31 December 2022|**2022**
**£**
81,309
(29,169)
(2,535,735)
(2,483,595)|**2021**
**£**
377,682
(3,005,886)
92,469| |||(2,535,735)| ## **19 PENSIONS** The OIA participates in the Universities Superannuation Scheme (USS). In 2016 the scheme changed from a defined benefit only scheme to a hybrid pension scheme, providing defined benefits (for all members) as well as defined contribution benefits. The assets of the scheme are held in a separate fund administered by the trustee, Universities Superannuation Scheme Limited. The charitable company is required to contribute a specified percentage of payroll costs to the pension scheme to fund the benefits payable to the charitable company's employees. In 2022 the percentage was 21.4%. The charitable company is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis and therefore accounts for the scheme as if it were a defined contribution scheme. The total cost charged to the profit and loss account is £778,074 (2021: £696,516) as shown in note 7. There was an accrual at the end of the financial year in respect of these contributions of £107,377 (2021: £87,978) included within other creditors. The disclosure below represents the position from the scheme's financial statements. Page 31 of 33 # **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** **NOTES FORMING PART OF THE FINANCIAL STATEMENTS (CONTINUED)** _**For the year ended 31 December 2022**_ ## **19 PENSIONS (CONTINUED)** As at the year end the latest available complete actuarial valuation of the Retirement Income Builder section of the scheme was at 31 March 2020 (the valuation date), which was carried out using the projected unit method. Since the OIA cannot identify its share of the USS Retirement Income Builder Section of the scheme assets and liabilities, the following disclosures reflect those relevant for the section as a whole. The 2020 valuation was the sixth valuation for USS under the scheme-specific funding regime introduced by the Pensions Act 2004, which requires schemes to adopt a statutory funding objective, which is to have sufficient and appropriate assets to cover their technical provisions. |**Actuarial valuation date**|**31 March 2020**|**31 March 2018**| |---|---|---| |Valuation method
Value of scheme assets
Value of technical provisions
Net pension deficit|£80.6bn
£14.1bn
£66.5bn|£63.7bn
£67.3bn
£3.6bn| The key assumptions used in the 2020 valuation are described below: |Valuation method
Value of scheme assets
Value of technical provisions
Net pension deficit
The key assumptions used in the 2020 valuation are|£80.6bn
£14.1bn
£66.5bn
described below:|£63.7bn
£67.3bn
£3.6bn| |---|---|---| |**Financial assumptions**|**31 March 2020**|**31 March 2018**| |Market derived price inflation
Inflation Risk Premium (IRP)
Price inflation (RPI)
RPI / CPI gap
Price inflation (CPI)
Pension increases in payment
Discount rate:|RPI less RPI / CPI gap
CPI assumption + 5bps (for both pre and post
2011 benefits)
Fixed Interest gilt yield
curve plus:
Pre-retirement: With
anticipated benefit
reform 2.75%
Without anticipated
benefit reform
Post retirement: 1.0%
Years 1-10: CPI
+0.14% reducing
linearly to CPI -0.73%
Years 11-20: CPI
+2.52% reducing
linearly to CPI +1.55%
by year 21
Years 21+: CPI +1.55%
In line with the difference between Fixed Interest
& Index-Linked yield curves
0.0% p.a.
0.3% p.a.
Market derived price inflation less IRP
1.1% p.a.
1.0% p.a.|| |||| |**Demographic assumptions**|**31 March 2020**|**31 March 2018**| |Mortality - base table|Post-retirement:
96.5% of SAPS S1NMA
"light" for males and
101.3% of RFV00 for
females
Pre- retirement:
71% of AMC00
(duration 0) for males
and 112% of AFC00
(duration 0) for females
101% of S2PMA "light"
for males and 95% of
S3PFA for females|| Page 32 of 33 ## **THE OFFICE OF THE INDEPENDENT ADJUDICATOR FOR HIGHER EDUCATION** **(Registered number: 04823842; Charity number: 1141289)** ## **NOTES FORMING PART OF THE FINANCIAL STATEMENTS (CONTINUED)** _**For the year ended 31 December 2022**_ ## **19** ## **PENSIONS (CONTINUED)** As disclosed in note 13, a provision of £4,786,966 has been made at 31 December 2022 (2021: £4,757,797) for the present value of the estimated future deficit funding element of the contributions payable under the recovery plan agreement. Budgeted and forecasted headcount increases and that the relevant earnings of these employees will increase in line with the OIA's projected long-term salary rate increases have been included in determining the level of this provision. ## **20 RECONCILIATION OF NET INCOME/(EXPENDITURE) TO NET CASH INFLOWS FROM OPERATIONS** |Net movement in funds
Add back depreciation charge
Add back loss on disposal of fixed assets
Deduct investment income shown in investing activities
(Increase)/decrease in debtors
(Decrease) in creditors
Increase in pension provision
Underlying cash provided by operating activities
(Decrease)/Increase in subscriptions in advance
**Net cash (used) / provided by operating activities**
**At 1 January**
**2022**
**£**
Cash at bank and in hand
6,357,960
**ANALYSIS OF MOVEMENT IN NET DEBT**|**2022**
**£**
52,140
45,861
0
(14,324)
(21,594)
(48,144)
29,169|**2021**
**£**
(2,628,204)
49,850
12,337
(1,460)
47,333
(87,457)
3,005,886| |---|---|---| ||43,108
(1,820,547)|398,285
116,628| ||(1,777,439)|514,913| ||**Cashflow**
**£**
(2,132,223)|**At 31 December**
**2022**
**£**
**4,225,737**| ## **21 ANALYSIS OF MOVEMENT IN NET DEBT** ## **22 RELATED PARTY DISCLOSURES** Payments to Trustees are disclosed in note 7. Some Trustees also hold senior positions at higher education providers. During the year in accordance with the requirements of the Higher Education Act (2004) these providers paid subscriptions to the charitable company. These fees are calculated on an arms length basis and in accordance with a defined formula. The Board of Trustees has no involvement in the administration or adjudication of individual cases. There were no other related party transactions during the current or preceding year. Page 33 of 33