CARITAS ANCHOR HOUSE bomelessness TRUSTEES ANNUAL REPORT AND FINANCIALSTATEMENTS FOR THE YEAR ENDED 31 MARCH 2021 Company Reglstration Number: 08075329 (England and Wales) RegSstered Charlty Number. 1147794 RSH ReBlstratlon 4841 CARITAS ANCHOR HOUSE CONTENTS Pale Trusteeg Annual Repryt 1-13 Independent Audltorfs Report 14-16 Statement of Flnanclal Artivltl•s 17 Balantt Sheet Statement of Cash Hows Note5 to Financlal Ststements 20-32 CARITAS ANCHOR HOUSE CARITAS- ANCHOR HOUSE TRUSTEES. ANNUAL REPORT FOR THE YEAR ENDED 31 MARCH 2021 The Trustees present their report and financial 5tstements for the year ended 31 March 2021. The report. whl¢h Constitutes a trustees. report for the purpose5 of charity legislation and a director< report for the purposes of company legislation. ha5 been prepared in accordan￿ with Part Vlll of the Charities Act 2011. The financlal statements have been prepa￿d in accordan￿ with the a¢counting policie5 set out In note l and comply with the charitablè cornpany's Memorandum and Articles of As$0¢iation, applicable laws. the Companies Act 2(X)6 and the requirements of the Statement of Recommended Practtce"Accounting and ReportinE by Charities" SORP 2015 IFRS 1021 ISe¢ond bulletin effective January 20191 and the requirements of the Statement of Recommended Practice ISORPI Accounting by Reglstered S¢xial Housing Pmider5. Reference and Admlntstrntl¥e Inforn￿tIOn Constltutlon The charitsble company 15 8overned by its Memorandum and Artide5 of Association. The members of the Board of Trustees are the companvs directors ond trustees of the Charity. The Trustees who held office during the year under review and up to the date of this report are as follows Trustees Mr Simon Hall Mr Charles Abel Smith Ms Emma Butterworth Mr Patrick Davis Mrs Emer Delaney Mrs Caesar Gordon Mr Andrew Haines Father Dominic Howarth Sr. Teresa Ann Hughes CRSS Mrs Cate Kirkbride Mr Graeme McLean Mr Robert Townsend Mrs Sarah Wright Father james Mackay Matthew Williams Desmond Patrick Connor5 Chair Resigned 30 May 2021 Resigned 2 July 2020 Resigned I September 2020 Resigned 31 March 2021 Resigned 22 October 2020 Appointed 13 October 2020, Resigned 9 Marth 2021 Appointed 20 September 2020 Appointed 16Juty 2021 We have supported the operation of thefollowing Sub-commrttees.. l. Finance, Audit, Governance, and Risk SuKommittee 2. People & Culture Sub-committee 3. Execijtive Sub-committee 4. Premises Management Sublommrttee 5. Frontline Services Quality Assurance and Impart SutF 6. Values su1￿cOMmittee Committee Prln¢lpal Address Caritas Anchor House 81 Barking Road Canning Town London E16 4HB Audltor.. Haysmacintyre LLP. 10 Queen Street Place, London, EC4R IAG Solltitors.. Bates Wells. 10 Queen Street Place, London, EC4R 18E 8ankers: Barclays. UK Banking. I Churd)ill Place. London E14 5HP and NatWesL 1-11 The Broadway. London. E15 4DX Cknrty rtgislwed in Englond ond Wol95 1147794 Compjny limi*d by gvorontee 080f539 CARITAS ANCHOR HOUSE CARITAS- ANCHOR HOUSE TRUSTEES, ANNUAL REPORT {contlnu¢d) FOR THE YEAR ENDED 31 P4lARCH Z021 Ab¢xrt Us Carits5 Anchor House ICAHI is a homelessnes5 charity. and for over 50 years has provided a safe place and support lor people to rebuild their Irve5. We are based in the London BorouBh of Newham which has the highest levels of homelessness per capita in the country. A5 a result. there is more demand for our services than ever before. Durin8 the last year we have reflected on our purpose and our values and alonBside our team. our residents and manv other stakeholders to our work. We have created a new mission statement and a core set of values which will guide our work going forward. Our mission is to bulld hope, enable lasting chan8e and end homelessness for people in East London. Ow values guide our interactions and decision-makin8 proo5ses at all levels within the organisatiort. They are.. Compas51on- we care about people. value th￿r views and eXper1er￿e5 and putthem at the heart of all we do. Inclwlon- we celebrate diversity. promote indusTwty and respect, and challenge inequality. Growth- we support people to breakthrou8h barriers and fvlfil their hopes and potential. Collaboratlon- we're stronger and can have è bigger impact when we work in partnership5 and build 311Sances. Our service combines the provisiort of a Safe placeto live for¥ulnerable aduks experiencing homele55ness, wlth in-house delivery fo¢usin8 on physical and mental heakh. Complex health issues, education. employment, financial literacy and tenanry 5U5tainment. Each person who walks through our doors re¢eNes a hjll assessment of their needs and a bespoke programme of in-house and external services created to best preparè that individual for Independent living. We have 140 bed-spaces making Caritas Anchor House the largest provider of homelessness ServI￿S in Newham, and one of the largest hostel Services in the country. These bed-spaces are shared between ￿40 setvices- our core h05tel and our Asse55ment Hub. The Asse￿Ment Hub grew from 20 to 39 bed spaces over the course of a year and included prO￿$10n for those in the community with no re¢ourse to publicfunds and who are often unable to access homelessness servlces. We are proud to art as a beacon of hope. In the year endin8 31st March 2021. we accommodated and supported 278 people, and helped 137 to move on p05ftivety from our services. 95 left homelessness behind for good and moved into their own homes, and 42 moved into short-term accommodation such a5 Other support Servi￿$. Richard was one such person. who has since moved into his own home. He said, -I'd been o cob driverft*r20 yeors ond hod o comfortuble life, but when I lost my portner to concer, my worfd collupsedandlended up on the streets. When lfirst urrived at Coritos Anchor House. Ididn't think IcoLtld rebuild my life. But being somewhere safe t7ndknowing l Glwoys hodsomeone there to tolk to keptme g￿ng. I'dbeen woiting nftne monthsfor ¢ounselling, but I hod o cour)sellor within three weeks of my keyworkerfinding out My keyworker reg(J1¢7rty keeps in touch to how l om and if i need ony help. slowly butsurety. Istarted to reconstruct mylife. My outlook hus chonged completely ond it hos soved my life without o shadow of a doubt. iftel Ilke there ￿ hope,. o chonce thot I con rebuild rnyposit￿n in society." Structure, Goveman¢e & Management CAH is a registered charity and company limited by 8uarantee as well as a Registered Provider of S¢xial Housing. We are regulated by a number of bodies. including the Charity commi￿10n. Companies House, the Fundraising Regulator and the Regulator of Social Housing. awty in En9lond ond Woh5 1147794 Cornp)ny limit￿ by 0807539 CARITAS ANCHOR HOUSE CARtrAS- ANCHOR HOUSE TRUSTEES, ANNUAL REPORT l¢ontlnued) FOR THE YEAR ENOED 31 PW¢CH 2021 During the year the Tru5tee5 have considered the recent updates to the charity code of governance and the National Housing FederatFon's code of governance. and have undertaken to employ a consultant to review the charitws compliance with these codes. A Consultant has been appointed and started thi5 work in lune 2021. Our Trustees meet on a quarterly basis to review the performance of the organisation and plan for the future. The professional back8rounds of the Trustees include ffinancial manaEement. business plannin& charity management, social enterprise, human resources and diversity, law, risk management. social care and community involvement. marketing and investment banking. The day to day running of the Charity is delegated to the Chief Executive and Strategic Management Team I'smfi. Our SMT is led by our Chief Executive. Amanda Dubarry. who joined us in March 2018 and has an extensive background in the homelessness settor. She was joined by both John Lowery, Director of Frontline Services. and Siva Selliah, Finance Director. in 2018, both of whom come to us with many years. experience in the houslnB and care sertors. Irh June 2020 a fourth member of the Senior team, Craig Hardaker. joined as our Director of People, bringing with him a strong background in the charity sector. Key management remuneration is set by the Trustees by reference to the degree of seniority and responsibility of the post. by benchmarkirtg against similar roles in charities of similar size and complexity and in the light of performance appraisal. TnBteè re¢ruitmenL Inductlon and trainln8 The sUPPOrt of our Trustee5 Is vttally important in ensuring we deliver the best Possible service to those in need. and in rai5Ing awareness and support for the essential and life changing work that CAH provides. Between autumn 2020 and summer 2021, three new trusteesjoined our Board which enabled us to broaden our Board ski115et and meet identified skills gaps. All newtrustees are provided wlth a trustee induction pack and Induction process, and are encouraged and supported to attend specialist trainin8 relating to the roles and responsibilrties of a charity trustee. including safeguarding. ObJe¢tlves &Artl¥ltles Carr(as Anchor House's objects contained in its Memorandum and Articles of As$0¢iatiort are "to further the general charitable work5 of the Roman Catholic Church by providing servios and facilities for the relief of poverty and sufferin& the advancement of education. the promotion of social justice and othercharitable acts which promote the development of all individuals and communrties in need for the public benefft of people of all faiths and none.~ We provide supported accommodation to 140 pe¢)ple experiencing homelessness in the London Borough of Newham at any one time, and support them to move on from homelessness and go on to lead fulfilling INe5. We do this by.. Providing a safe place- to make sure that people experien¢in8 homelessness have somewhere safe to stay as they begln to ￿bUIld their lives Offering support- to encourage and enable people to build a betterfuture forthemselves. through the provision of personallsed support, educational and life skills opportunities Building resilience- to build networks of suppory and empower people to navi8ate services with confidence and be a proartive member of thelr community Outside of and beyond lrfe at Carita5 Anchor House. Our frontline teams work direttly wrih residents during their time at Carita5 Anchor House. Each resident, in both our core and assessment hub services. is assigned a keyworker who will guide them through their stay, and support5 them to access a holistic seThice offering relating to health and wellbein& education and employability, financial management and securing and sustainin8 new tenancies. Residents can participate in trainin& workshops and activities includin8 Chorty rtyis*r*J in E￿j￿)nd ond Wbl•s I Id7794 Cwyjny Iwnihd by gwronteo 0607539 CARITA.% ANCHOR HOUSE CARITAS- ANCHOR HOUSE TRU5TEES' ANNUAL REPORT Icontlnued) FOR THE YEAR ENDED 31 MARCH 2021 cooking dasses. money management trainin& mindfulness sessions. Counselling, CV workshops and events. Our work is the primary response to homelessness in the borough. and the goal for eath resident is to move on from our service w￿h the skills to navigate their next chapters with confidence. Publ1¢ benefft The Trusteès Confirm that they have complied with the duty in Sertion 17 of the Chartties Act 2011 to have due regard to the Charity Commission's gefteral guidance on publrc benefit"Charr(ies and Public 8enefiV' in the exercise of their powers and responsibllities as detailed in the Artides of Association and under charity law. Value for Monev The Charity is always consuous of the need to promde value for money to our users and stakeholders. As a re8lStered provider of social housin8 Wlth the Regulator of Social Housing I'ASH'I, we are committed to delivering value for money and continuing to meet the RSH'S Value for Money Standard. Our rental and housing related support levels are set in consultation with London Borough of Newham. to ensure that they. as the principal commi55ioners of our servicès, feel that they are receiving such value. We regularly review our perfomiance and the way we work to CDntlftLte developing the impact of services and using resources in the most effettwe and efficiènt way. Value for Money metrlcs In response to the Regulator of Social HousingTechnicaS note of June 2019, the Chartty reports Value for Money metrics. There a￿ seven metrics covered by thi5 technical note. CAH is a unique chartty operating in the homelessness sector, and as such, we could not find a comparable charity to publish comparaiives as required in the technical note. Metrk l- ReSn¥estment% Thls metric looks at the Investment in properties lexisting stock as well as new 5upplyl a5 a percentage of the value of total properties held. The charity has not provided any new supply in the year. The percentage reflects investment in the Barn project. to increase our accommodation capaaty by IS. which Ès currently a work in progress and due to open in the nèxt financial year. The Chari￿s metric for reinve5tmentfor the year was 0.29%12019120.. 0.63%> Metr1¢ 2- New supply dellvered % No new supply has been delivered by the tharity in the year for s¢xial housing or non-sotial hou5inB. Metr1¢ 3- Gearlng % The Charity's property. Anthor House, is owned freehold. The charityhas two longterm loans, onewith Natwest, seCu￿d against this property. and thè other with Homeless ￿nk. The balance outstanding at 31 Mar 2020 of £2.262K12019120- £2,192KI rep￿SentS 2.99%12019120:13.12%1 of Housing depreciated value owned by the Char4ty. Metrlc 4- Earnlng$ Before Interes¢ T¥ Depreclat5on. Amortlsaoon. Major Repalys Included IEBITDA MRI) Interest Cover % The ¢harity paid interest of £61K12019120.- £72KI in the year in relation to the loan finance referred in metric 3. Interest is therefore covere19 From mid-march 2020. like all organisations in the UL our work was affected by the crisis ¢aused by the fiovel Coronavirus. Our focus was on keeping our people Iresidents. staff, volunteer5 and visitors) safe In a public heaFth emergency. Wetook a number of far reachin6 actions which included mowng non-frontline staff to home workin& closing some of our communal spa¢es and shutting our doors to visitors and partners. We paused new move-ins and -outs of the building wlth some exceptions to meet specific ￿sIdent needs. and this meant that WÈ tontinued to accommodate a higher than usual number of people who had been sleeping rough with complex needs. who had been due to move out gf our5ervi¢e at the end of March. ChoTty wi￿red in Erybnd ond WJl•s 11477P4 11rni￿4 ￿9￿)rOnt18 0807539 CARITAS ANCHOR HOUSE CARITAS- ANCHOR HOUSE TRusfEES' ANNUAL REPORT {¢ortinued} FOR THE YEAR ENDED 31 MARCH 2021 Alongside these measures we distributed food for all 140 of our residents Iwho u5u3lly self-caterl. increased our cleaning prowsion significantly, increased our volunteer effort, and as the pandemic continued. we increased our ni8ht time staffing cover io prevent issues of antl-s¢xi31 behaviour that had arisen after some weeks of lockdown. We also lobbied successfully to ensu￿ earfy accesstothe vaccinefor both oUr￿$1￿ents and ourstaff. this meant considerable pressure on our management team but we are delighted to report that we have had no COVID positive ¢a5e5 arnon8St our resident group to date ènd that we have maintained a sah and supportive environment throughout the pandemic period. The cost of COVID-related safety measures in the year amounted to around £547K. Our fvndraising team have worked hard to cover these costs through additional income from supporters. and have had success here. We are proLKI of the way in which we have managed to continue our operations and to adapt our support services to continue to provide vital servlces to people experiencing homelessness, and pleased that wè are managingthe crisis ￿11 in financial tern)s so far. The political imperatives of the g(svernment thange. Recent examples include: a bold cross-govemment plan of action to sign[fican￿¥ reduce the number of people sleeping rough the Covid-19 Everyone In stheme which has seen thousands of people sleepTn8 rough housed in hotels since the end of March 2020 and the new Rou8h Slèeping Taskforce. working to find safe. lon8.tem homes for people who had prevlously been sleepin8 rou8h, beyond the Covid-19 lockdown. These Inltiatives impart on us and the way we delNer our service, creating opportunities for u5 alongside a lack of predictability of fundingsour¢es, and often shorttemi, non-recvrrentfundin8 Streams with the corresponding difflculties for staff and rècriLitment, which challenge our abiltty to provide consistent levels and range of seNices. We very much support the view expressed in the recent Kerslake Report. which we provided a submission to, which points to the need to maintain funding levels to drive down levels of homelessness. t*Jring the year we have been actrve in supporting sector campaign5 calling for: the continuation of 'Everyone In. funding for placements of rough sleepers during the Covid pandemic I'Everyone In for Goo¢J'l early access to the Cowd 19 vacone for both 5tsff working in the l)omelessness sector and those experlencin8 rough sleeping and homele55ness the end of the condition of No Recourse to Public Funds INRPFI the govemment to Support Don't Deport those with an undear immigration statu5 who are expèriencing homelessness Rlsk Management TheTrustees have examined the finanaal and operational risks which the tharityfaces and confirm thatsystems, controls and revSew pro¢edures have been established to mitigate exposure to these risks. The Charity has a Iwe Risk Register, and each of the ChariVs Sub-committees reviews relevant risks on a quarterly basis. The fvll Risk Register is updated following &Jb-Committee meetings and reviewed quarterly at full Board meètings. The printipal risks, togrther with the appropriate mitt8ation strategies. have been identified as: lal Inability to 5er¥lce debt finance and on-801￿ cash flow. Our loan financing Is funded through housin8 benefit and rents at CAH which significantly mitl8ate5 this risk. In additioft. we have stretching fundraising targets and high performance in this area which is reassuring and further reduces the likelihood of us experiencing cash flow problems. C￿"ty rryi*er8d in ond Wolès 1147794 G)mp*y INntsd by9uoronkn 0807539 CARITA.S ANCHOR HOUSE CARITAS- ANCHOR HOUSE TRUSTEES. ANNUAL REPORT Icontlnued FOR THE YEAR ENDED 31 ￿RCH 20ZI Ibl Fallure to secure appropriat• fundini from Trusts. Statutoryi Corporate. Communlty or Indlvldual donors. IndLEdln8 Impact of Covid-19 on fundraising income lor core artivitie5. We have a stron8 track record of raising good sums of money through fundraisin8 and have retained the key post holders with the experience of achlevin8 this. During the yearwe appointedtr40 additional fvndraisin8 team members, an Individual Giving and Legacy Specialist and a Community and Events Officer, to enable the charity to secure support from a wider range of sources. We monitor budget performarKe closely and will make decisions to restrict expenditure to match income if required. Icl Reductlon In referral I Increase In volds levels. We have had high levels of referrals up until April 2021, but are experiencing increased voids since this time. We a￿ working c105ely with our referral partners. primarily Newham's Homele55ne55 Prevention and Adwce team. to address this matter. Idl Non Compllan(e wlth re8ulatSons. Our Management Team have responsibility for ènsuring that we are compliant with the range of regulatory reQu4￿Ments which relate to ourwork and our Premise5 Sub Commltteè and Board receive quarterly updates on key compliance items. As a 8rowng organisation, we are lookin8 to appoint a Compliance Specialist during autumn 2021 to further our compliance work and mitwdate thos key risk. lel Increase In rent arrears le￿1> We have focussed on ￿U¢Ing ￿nt arrears leve15 since the appolntment of a Rent & Housing Management Specialist in 2020. and we are very pleased that a significant reduttion has been achieved. This reduttion has been maintsined despite the pressures of Covid and a number of our ￿sIdents losing their employment as a resu￿. 11 Use of o¥ertlme amongst employees In manual worf( roles. We ore committed to staff wellbein8 and as such want to ensure that any overtime worked by our team members does not become regular or excessive. This yearwe have increased our 518n off processes and scrutinyaroLtnd overtime to demonstrate our intentions here. Flnanclal re¥lew f¢x ihe year During the year the Charrty feceived income of £4.437K12020.. £3,541KI and incurred expenditure of £3,659K12020: £3,377KI. resulting in a surplu5 of £778K12020.. surplus of £164KI. of which £15X relates to restricted funds and £763K relates to unrestricted fvnds. The increase in income of £896K125.3%1 from prewous yearfs income was largely due to an additlonal income of £488K from donations and grants received towards Covid-related Safety measures. an additional Income of E261K from extended cold weather projert and increase in numberof complex bedspaces. There was also an In¢￿aSe in rental income of £188K as a result of new rents set and agreed with the local authority forthe year. The cold weather project was due to come to an end in March 2020. but was extended tojuly 2020 due to thmd. The actual increase in expenditure from the previous yearwa5 £447K after adjusting forthe one-off expenditure of £165K Incurred on the refurbishment of restdents. lounge in the prewous year. This increase in expenditure of £447K113.91%1 was largely attributable to COVIO-related measures and additional expenditure incurred on the extended Cold weather projert and additional complex needs beds. During the year we spent around £547K on Covid-related measures. and around £239K on the extended cold weather project and additional complex needs beds. Flnanclal revlewforfuture pertods Our budget and forecast for 2021-22 reftects impacts of Covid and void 1055e5 due to some planned maintenance work on Rèsidents, rooms. The void losses will be funded from free reserves and designated reserves as prevlously planned. The expenditure on planned maintenance work will be fvnded from resetves designated for this purpose. We will also be delivering new Assessment Hub and Support Services at other sttes. which come into operation between August 2021 and September 2021.The total annuali5ed revenue expected from these Services is around £7C¥)K. Trustees are pleased to report that at the datè of approval of this report the Charity has perfomied well. CknTty ryistred in Engb)nd ond Woles 1147794 Cryny Iwnited by gLKJr¢nkn 0807539 CARITA.£ ANCHO HOUSE ARITAS- ANCHOR HOUSE TRUSTEES, ANNUAL REPORT {contknued) FOR THE YEAR ENDED 31 MARCH 2021 Reserves At 31 March 2021, unrestricted reseThes Stood at £10.464K12020= £9,701KI, of which £8,383K is represènted by the net book value of fixed assets. Of the balance of £2,080K. £702K has been de518nated for a cytlical programme of major repair5, £146K forthe replacement of residents. fumtture and equipment both in their rooms and in the communal areas, £350K for access control and £50K to cover grant ce55ations, and the remainin8 £832K is held in general reserves. The Trustees have the authority to make these designated hjnds available for other purposes if required. The Trustees have reviewed the reserves of the Charity taking into consideration future activities, uncertainties. and risks and have concluded that the appropriate level of reserves required is in the range of to £1.2M. We wlll continue our efforts to build these reserves over the next few years from £832K12020.' £244KI to the requir￿ level through prudent financial management. As part of this exercise. Trustee5 have also reviewed the management accounts for the rjrst quarter of the year 2021-22 and the forecast for the year in liBht of the void1055es and planned maintenance work, and are confident that the Charity will continue to be able to build towards the required level of rese*we5. The Trustees have also acknowledged that the Charity is lar8ely reliant on reseThes for future growth and expansion and have agreed that the Charity should be able to use part of the reserves for this purpose if needed provided that this does not impact the existing operation5 and that strategies are in place to replenish them. The Board of Trustees has designated a Post Grant Continuity ￿erve of £50K12020.' £50KI to provlde interim cover where a funding source has ceased le.8. for a staff positionl. until replacement funding can be found. The 8oard of Trustee5 has designated a Major Repairs fund of £702K12020.. £454KI to ensure that the Charity has sufficient funds to maintain its building asset Whe￿ our residents live. in good condition induding planned maintenance and replacement of various components atthe end of their useful economic life. The Board of Trustees has designated a Furnitu￿ and Equipment fund of £146K12020- £67KII to ensure that the Charlty has sufficient funds to replace furniture and equipment both in fesidents, rooms and in the communal areas. The Board of Trusteès has designated an Access Control fund of £350K12020.. nil) to ensure that the Charity has sufflcient funds to replace the old access control system. The Fixed Assets Fund of £8,383K12020= £8.886KI is intended to represènt the net book value of unrestricted tangible fixed assets. less the outstandin8 loan finance raised to lacilitate the acquisition and development of capital improvèments. Plan5 for Future Years During the year wè developed our new five-year Strategic Plan for the pèriod April 2021 to March 2026. Thls plan sets out an ambitious roadmap around flvè key goals. By March 2026. we wll- l. provide additional specialist supported housin8 2. offer an expanded range of complemèntary 5eryice5 3. be a sustainable or8anisation 4. be a great place to work S. be a trusted voice in the community and sector We were delighted that we were able to respond to local pressures around homelessness in what was an unprecedented yearfor us all. We Increas￿ the number ol beds available in ourAssessment Hubfor people sleeping rough wlth complex needs from 20 to 39 in late 2019, having secured additional funding via Newham Council and the Oty of London for the cold weather period. With lockdown measures in place until laTr JUW 2020, we extended the stay of these residents to keep them safe. and took on a further group of residents accommodated using funding secured by Newham Council for people with no re¢our5e to public fundin8 INRPFI under the government'5 Everyone In initiativp. Thi5 increased role 10 ChoriTr regis*￿ in Ergk)rd ond Wol05 1147794 Cornwny limi*d by gwrankn 0807539 CARITAS ANCHOR HOUSE CAR￿AS- ANCHOR HOUSE TRUSTEES, ANNUAL REPORT {contlnued) FOR THE YEAR ENDED 31 MARCH 2021 working with those experiencing rough sleeping led to us partnerir4 with a group of providers In blddin8 to deliver Newham Covncil's new Inte8rated Rough Sleeper Support seThi￿, which we are delighted we will be helping to deliver from September 2021. In aifvance of this. we have a150 begun dellverin8 a new A$5essment Hub se￿1￿. off-site from August 2021. We a￿ now close to startln8 building work on an additional 15 units of accommodation which will house people who had been sleeping fough, which will be known a5 Hope Street la name picked by our re5identsl. The project will allow us to provlde contemporary, individualise(J and safe accommodation, al￿ increase the capacity of our buildin8 to 155 residents at any one time. Looking ahead, we are beginning to look at how we can increase our move-on offer to residents In both our ￿MpleX needs service and our core semce. and we are considering a number of potentsal options here. We continue to work with our partners to increase our impatt for our residents and to grow our offer to those experiencing homelessness and disadvantage in our communty. We embrace change and welcome others to join u5 in 501ving sorne of sociews most ¢hallen8ing soclal issues. We look forward to stren8thÈning existing partnerships and developing new collaborations to support our residents and the Community to achieve their potential. Chority ra9i4wad in Er4bnd ond Wol•> 1147794 Comp)ny by gwronkn 0807539 CARITAS ANCHOR HOUSE cAR￿A5- ANCHOR HOUSE TRUSTEES, ANNUAL REPORT (continued) FOR THE YEAR ENDED 31 MARCH 2021 Staternent of Trustees, Responslbllltles The Trustees Iwho are also dirertors of Caritas- Anchor House for the pur[￿se$ of company lawl are responslble for preparing the Trustees. Annual Report and the financial statements in accordance with applicable law and United KSngdom Accounting Stsndards Iunited Kingdom Generally Accepted Accounting Practice). Company law requires the Trustees to prepare financial Statements for each financial year whi¢h 8ive a true and fair view of the state of affairs of the charitable company and of the incomin8 resources and application of resources, including the Income and expenditure, of the charitable company for that year. In preparing these financial statements, the Trustees are required to.. select suitable accounting policies and then apply them consistently.. observe the methods and principle5 in the Charities and Social Housing SORP- make judgments and accounting estimates that are reasonable and prudent,. state whether applicable UK Accounting Stsndards have been followed. subje¢t to any material departure5 dlsclosed and eyplained in the financial statements,. and prèpare the tinanaal statements on the 80in8 Concern basis unless it is inappropriate to presume that the charitable company will continue in business. The Trilstees are responsible for keeping proper accounting records that disclose with Tea50nable accuracy at any time the financial position of the charitable company and enablè thèm to ensure that the financial statements comply with the Companies Act 2(K)6. They are also responsible for safeguarding the assets of the charitable company and hen¢e for taking reasonable steps for the prevention and detertion of fraud and other irregulartties. So far as each of the Trustees is avrdre atthe time the rewt is apw(wed: the￿ 15 no relevant audit information of whith the tharitable company's aLtditors are unaware.. and the Trustees have taken all steps that they ought to have taken to make themselvès aware of any relevant audit information and to establish that the auditors are aware of that infomiation. Statement of Board of T￿￿te¢S ¢>n Ittternal finandal controls The Board of Trustees acknowledge its ovèrall rèsponsibiltyfor establishing and maintsiningthe wholè system of internal controls and reviewing its effectivene￿. The system of internal control is designed to manage. rather than eliminate, the risk of failure to achieve business objectbves. and to provide reasonable assurance against material misstatements or Ioss. The process for identi￿.n& evaluating and managing the significant risks by the Charity is on8oifvd and has been in place throughout the year up to the date of approval of the report and financial statements. The key elements of the control and sources of assurance include: Clearly defined management responsibilities and procedures for the identification, evaluation, and control of significant rlsks. Risk re815ter and risk management rep(Yts Performance reports External audit reports Detailed financial budgets, management accounts and forecasts Policie5 and procedures for all area5- Safeguardin& Heatth & Safety. Human Resource. Finance & IT. These police5 and procedure a￿ reviewed bythe Sub-committees and the Board on a regular basis. Estsblished authorisation and appraisal prO￿dureS for nèw initiative5 and commitments Regular reporting to the appropriate Sulpcommittees and Board on key I￿sInesS objertives, targets and outcome5. There were no attempted or attual frauds during the year that requlred reporting to the Re8ulator of Social HoLtsin& the Charity Commission or other re8ulatory bodies. 12 CknTty En9hnd ond Wol8$ 1147794 limit￿ by guaraTh*tr 0807539 CARITA5 ANCHOR HOUSE CARITAS- ANCHOR HOUSE TRU5TEES' ANNUAL REPORT (Continued) FOR THE YEAR ENDED 31 ￿RCH 2021 The key areas ¢over control, infomiatSon ￿Porting 5VStems, monitoring and risk mana8emenL Control The Board of Trustees retains ￿pOnSIbIlity for defined range of areas ¢overin8 Strategio operatlonal, and financial elements. The Board of Trustees has put in place an organisational structure which clearly defines lines of wponsibility nd dele8ation of authority. Infomiatlon reportln8 Svstem Financial reporting systems indude regular rewev*S of overall fftnancial busine55 plans. preparation of detailed annul budgets and the production of detailed monthfy management accounts. These are prepared by thè Senior Management Team and are considered and approved by the Sub-committee and the Board. The Senior Management Team and the Board of Trustees also review performance re8ularty to assess progress towards the achievement of key business objettive, tsr8ets and outcomes. Monltorlng A process of regular management monitorin8 on control Issues provides assurance to Senior Mat)agement Team and Board of Trustees. This includes a rigorous process of ensuring that correttive artions are taken in relation to any significant control is5ue5. Risk Management The charlty has a comprehensive risk management Strategy which identifies risks faclnÉ the Charity. risk management responsibilities, and action reqUI￿d to mitigate these risks. and monitorin8 arrangements. The Trustee5' Annual Report whith incorporates the strategic ￿pOrt was approved and signed on behalf of the Board on 7 September 2021 Simon Hall- Chair & Trustee 13 CIKTrrity rryi¥or•4 in E￿10nd and Woh$ 1147794 C¢)mFX)ny limitd by 0807539 CARITA% ANCHOR HOUSE INDEPENDENf AUDifows REPORTTO THE MEMBERS OF CARITAS-ANCHOR HOUSE OplnSon We have audited the financial ststements of Caritas-Anchor House for the year ended 31 March 2021 which comprise Statement of Financial Actlvities. Balance sheet. Statement of Cash Flows and notes tothe financial 5tatement5. includin8 a 5ummaryof signfflcant attounting policies. Theffinancial reportin8 frameworkthat has been applied in their preparation is applicable law and United Kingdom Ac¢ountin8 Standards. including Financial Reporting Standard 102 The Financial Reporting Stondord opplicoble the UK ond Republic of irelond (United Kingdom Generally Accepted Accountin8 Practi￿1. In our oplnion, the financial stateme1￿-. give a true and fair view of thestate of the charitsble companrfs affairsas at 31 March 2021 and of the charitable company's net movement in funds, including the income and expenditure, for the yearthen ended,. have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice,. and have been prepa￿d in accordance with the requirements of the Companies Act 2C￿6, the Housing and Regeneration Act 2C(J8 and the kcounting Direction for Private Re8i5tered Providers of Social Hou51ng from January 2019. Basls for opSnlon We Conducted our audit in a¢cordance with Intemational Standards on Auditing IUKI IISA5 IUKII and applicable law. Our responsibilities under those standards are fvrther described in the Auditorfs responsibilities for the audit of the financial statements se¢tion of our report. We are independent of the Charity in accordance with the ethical requirements that are rèlevant to our audit of tF]e financial statements in the UK, including the FRCS Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit eviden￿ we have obtained is sufficient and appropriate to provide a basis for our opsnion. ConclusSons relatlngto 8oln8 concern In auditing the finanaal statements. we have concluded that the trustees, use of the goin8 Concern basi5 of accounting in the preparation of the financial statements is appropriate. Based on the work we have perfomed, we have not identified any material urKertainties relatin8 to events or conditions that, individually or collectively, may cast significant doubt on the charitable ￿MPanY'S ability to continue as a goin8 concern for a period of at least twelve months from when the financial ststements are authoriseil for issue. Our responslbilities and the responsibilities of the trustees with respert to 80in8 concem are described in thè relevant sections of this report. Other Inforniatlon The Trustees are responsible for the other information. The other inform•tion Comprises the information included in the Trustees, Annual Report. Our opinson on the financial statements does not cover the other information and, except to the extent otherwise explicitty stated in our report, we do not express any forni of assuran¢e ¢on¢lusion thereon. In Connection with our audit of the financial statements. our responsibility is to read the other Infomiation and. In dolng so, consider whether the other information 15 materially inconsistent with the finanaal statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we Ident￿ such material incortsistencies or apparent material misststements, we are required to detemiine whetherthere is a material misstatement in the financial statements or a material misstatement of the other information. If. based on the work we have performed, we conclude that there is a material misstatemerrt of this other information. we are required to report that fact. We have nothing to report in this regard. Oplnlons on other matters prexrlbed by the Compartles Art 2006 In our opinion. based on the work undertaken in the course of the audit: the information given in the Trustees. Annual Report Iwhich includes the strate8ic ret)ort and the dirertors, report prepared for the purposes of company lawl for the financial year for which the financial statements are prepared 15 consistent with the finanoal ststements: and 14 Chority register•J in Ev4bnd ond Wolès l 147794 Cornpjny limi￿ by 9uaran*e 0807539 CARITAS ANCHOR HOUSE INDEPENOEKfAUDITOR'S REPORTTO THE MEMBERS OF CARifAS- ANCHOR HOUSE (continued) the strategic report and the directors. report included within the Trustees, Annual Report have been prepared in accordance wrth ap￿1£able legal requirements. Matters on whkh * are requlred to Yeport by eMcept•on In the light of the knowled8e and understanding of the tharitable company and its environment obtained in the course of the audit. we have not identified material misstatements in the Trustees. Annual Report Iwhlch incorporates the strategic report and the directors. reportl. We have nothing to report in respect of the following matters in relation to which the Companies Act 2C(J6 requlre5 US to report to you rf, in our opinion.. dequate accounting records have not been kept by the charitable company,. or the charitable company financial 5tstements a￿ not in agreement wfch the accounting records and returns,. or certain disclosures of trustees. remuneration specified by law a￿ not made,. or we have not received all the information and explanations we require for our audit. Responslbllltles of trustees forthe Ilnandal StateTh￿Trts As explained more fijlly in thè tru5tees' responsibilities statement set out on page 11. the Trustees Iwho are also the directors of the charitable companyforthe purpose5 of company lawl are responsible forthe preparation of the financlal statemenis and for bein8 satisfied that they give a true and fair view. and for such internal control as the trustees determine is necessary to enable the p￿parati¢)n of financial Ststemel￿ that are free from material misstatement, whether due to fraud or error. In preparing the financial statements. the Trustees are responsible for asse55in8 the charitable compan￿5 abllity to continue as a going concern, disclosin& as applicable. matters related togoing concem and u5ingthe going concern basis of accounting unless the Trustees etther intend to liquidate the charitable Company or to cease operations, or have no realistic alternative but to do $0. Auditoes responslblllt5es lorthe audlt of the ftnanclal ststemet Our oblettives are to obtain ￿a$Onable assurance about whether the financial Statements as a whole are free from material misstatement. whether due to fraud or error. and to 155ue an auditorfs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guaranteethat an audit conducted in accordance with ISAS IUKI will always detett a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the ag8re8ate, they could reasonably be experted to influence the economic decislons of users taken on the basis of thesè financial Statements. Irregularities, including fraud. are iNstan¢es of non-compliance vrith law5 and reBulations. We design procedure5 in line with our responsibilities. outlined above. to detect material mt55tatements in respett of irregularities, including fraud. The extent to which our procedure5 are capable of dete¢tin8 irregularities. includlng fraud is detailed below: Based on our understanding of the charitable company and the environment in which it operates, we identrfied that the principal risks of non-compliance with laws and regulations related to social housing, safeguarding, fundrai5in& employment and health and safety regulations and charity law. and we considered the eytent to which non-compliance might have a material effect on the ffinancTral Statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial ststements suth as include the Statement of Recommended Practice for regtstered Social Housing Providers 2C￿8, Companies Act and the Charities Act 2011. and Considered other factors such a5 income tax. payroll ta¥ and sales tsx. We evaluated management's in¢entwe5 and opportL5nities for fraudulent manipulation of the financial statements (including the rssk of override of controls). Audit procedures performed by the engagement team included.. 15 Chority re9ithd in Erebnd gnd W¢l•> 1147794 Comwy 1imrf￿ by gU¢Tonkne 0807539 CARITAS ANCHOR HOUSE INDEPENDENT AUDtroKs REPORT TO ThE MEMBERS OF CARtrAS-ANCHOR HOUSE Icontlnued) Insperting correspondence wlth regulators and tax authoriYes- Discussions with management including consi(Jeration of known or suspected instancès of nonnal needs including food and dothing, and their move on programme5. CO￿d-19 Brants This fund ￿presents the amount of Cowd grants and donations rece¢ved during the year to meet Covld related costs. 30 Cknty r•JiS￿r&4 in En9lond ond Wole$ 1147794 Cornwry 11rni￿4 ￿ guoron￿* 0807539 LARIIAS ANCHOR HOUSE CARITAS- ANCHOR HOUSE NOTES TO ThE FINANCIAL STATEMENTS Icontinu•d) FOR THE YEAA ENDED 31 MARCM 2021 18 Analysls of net assets befvRen fulld5 Unreslrlrted Deslgn*ed Restrfrted Fund5 Funds Funds Total 2021 31 Ma¢ Metr1¢ 2- New supply dellvered % No new supply has been delivered by the tharity in the year for s¢xial housing or non-sotial hou5inB. Metr1¢ 3- Gearlng % The Charity's property. Anthor House, is owned freehold. The charityhas two longterm loans, onewith Natwest, seCu￿d against this property. and thè other with Homeless ￿nk. The balance outstanding at 31 Mar 2020 of £2.262K12019120- £2,192KI rep￿SentS 2.99%12019120:13.12%1 of Housing depreciated value owned by the Char4ty. Metrlc 4- Earnlng$ Before Interes¢ T¥ Depreclat5on. Amortlsaoon. Major Repalys Included IEBITDA MRI) Interest Cover % The ¢harity paid interest of £61K12019120.- £72KI in the year in relation to the loan finance referred in metric 3. Interest is therefore covere19 From mid-march 2020. like all organisations in the UL our work was affected by the crisis ¢aused by the fiovel Coronavirus. Our focus was on keeping our people Iresidents. staff, volunteer5 and visitors) safe In a public heaFth emergency. Wetook a number of far reachin6 actions which included mowng non-frontline staff to home workin& closing some of our communal spa¢es and shutting our doors to visitors and partners. We paused new move-ins and -outs of the building wlth some exceptions to meet specific ￿sIdent needs. and this meant that WÈ tontinued to accommodate a higher than usual number of people who had been sleeping rough with complex needs. who had been due to move out gf our5ervi¢e at the end of March. ChoTty wi￿red in Erybnd ond WJl•s 11477P4 11rni￿4 ￿9￿)rOnt18 0807539 CARITAS ANCHOR HOUSE CARITAS- ANCHOR HOUSE TRusfEES' ANNUAL REPORT {¢ortinued} FOR THE YEAR ENDED 31 MARCH 2021 Alongside these measures we distributed food for all 140 of our residents Iwho u5u3lly self-caterl. increased our cleaning prowsion significantly, increased our volunteer effort, and as the pandemic continued. we increased our ni8ht time staffing cover io prevent issues of antl-s¢xi31 behaviour that had arisen after some weeks of lockdown. We also lobbied successfully to ensu￿ earfy accesstothe vaccinefor both oUr￿$1￿ents and ourstaff. this meant considerable pressure on our management team but we are delighted to report that we have had no COVID positive ¢a5e5 arnon8St our resident group to date ènd that we have maintained a sah and supportive environment throughout the pandemic period. The cost of COVID-related safety measures in the year amounted to around £547K. Our fvndraising team have worked hard to cover these costs through additional income from supporters. and have had success here. We are proLKI of the way in which we have managed to continue our operations and to adapt our support services to continue to provide vital servlces to people experiencing homelessness, and pleased that wè are managingthe crisis ￿11 in financial tern)s so far. The political imperatives of the g(svernment thange. Recent examples include: a bold cross-govemment plan of action to sign[fican￿¥ reduce the number of people sleeping rough the Covid-19 Everyone In stheme which has seen thousands of people sleepTn8 rough housed in hotels since the end of March 2020 and the new Rou8h Slèeping Taskforce. working to find safe. lon8.tem homes for people who had prevlously been sleepin8 rou8h, beyond the Covid-19 lockdown. These Inltiatives impart on us and the way we delNer our service, creating opportunities for u5 alongside a lack of predictability of fundingsour¢es, and often shorttemi, non-recvrrentfundin8 Streams with the corresponding difflculties for staff and rècriLitment, which challenge our abiltty to provide consistent levels and range of seNices. We very much support the view expressed in the recent Kerslake Report. which we provided a submission to, which points to the need to maintain funding levels to drive down levels of homelessness. t*Jring the year we have been actrve in supporting sector campaign5 calling for: the continuation of 'Everyone In. funding for placements of rough sleepers during the Covid pandemic I'Everyone In for Goo¢J'l early access to the Cowd 19 vacone for both 5tsff working in the l)omelessness sector and those experlencin8 rough sleeping and homele55ness the end of the condition of No Recourse to Public Funds INRPFI the govemment to Support Don't Deport those with an undear immigration statu5 who are expèriencing homelessness Rlsk Management TheTrustees have examined the finanaal and operational risks which the tharityfaces and confirm thatsystems, controls and revSew pro¢edures have been established to mitigate exposure to these risks. The Charity has a Iwe Risk Register, and each of the ChariVs Sub-committees reviews relevant risks on a quarterly basis. The fvll Risk Register is updated following &Jb-Committee meetings and reviewed quarterly at full Board meètings. The printipal risks, togrther with the appropriate mitt8ation strategies. have been identified as: lal Inability to 5er¥lce debt finance and on-801￿ cash flow. Our loan financing Is funded through housin8 benefit and rents at CAH which significantly mitl8ate5 this risk. In additioft. we have stretching fundraising targets and high performance in this area which is reassuring and further reduces the likelihood of us experiencing cash flow problems. C￿"ty rryi*er8d in ond Wolès 1147794 G)mp*y INntsd by9uoronkn 0807539 CARITA.S ANCHOR HOUSE CARITAS- ANCHOR HOUSE TRUSTEES. ANNUAL REPORT Icontlnued FOR THE YEAR ENDED 31 ￿RCH 20ZI Ibl Fallure to secure appropriat• fundini from Trusts. Statutoryi Corporate. Communlty or Indlvldual donors. IndLEdln8 Impact of Covid-19 on fundraising income lor core artivitie5. We have a stron8 track record of raising good sums of money through fundraisin8 and have retained the key post holders with the experience of achlevin8 this. During the yearwe appointedtr40 additional fvndraisin8 team members, an Individual Giving and Legacy Specialist and a Community and Events Officer, to enable the charity to secure support from a wider range of sources. We monitor budget performarKe closely and will make decisions to restrict expenditure to match income if required. Icl Reductlon In referral I Increase In volds levels. We have had high levels of referrals up until April 2021, but are experiencing increased voids since this time. We a￿ working c105ely with our referral partners. primarily Newham's Homele55ne55 Prevention and Adwce team. to address this matter. Idl Non Compllan(e wlth re8ulatSons. Our Management Team have responsibility for ènsuring that we are compliant with the range of regulatory reQu4￿Ments which relate to ourwork and our Premise5 Sub Commltteè and Board receive quarterly updates on key compliance items. As a 8rowng organisation, we are lookin8 to appoint a Compliance Specialist during autumn 2021 to further our compliance work and mitwdate thos key risk. lel Increase In rent arrears le￿1> We have focussed on ￿U¢Ing ￿nt arrears leve15 since the appolntment of a Rent & Housing Management Specialist in 2020. and we are very pleased that a significant reduttion has been achieved. This reduttion has been maintsined despite the pressures of Covid and a number of our ￿sIdents losing their employment as a resu￿. 11 Use of o¥ertlme amongst employees In manual worf( roles. We ore committed to staff wellbein8 and as such want to ensure that any overtime worked by our team members does not become regular or excessive. This yearwe have increased our 518n off processes and scrutinyaroLtnd overtime to demonstrate our intentions here. Flnanclal re¥lew f¢x ihe year During the year the Charrty feceived income of £4.437K12020.. £3,541KI and incurred expenditure of £3,659K12020: £3,377KI. resulting in a surplu5 of £778K12020.. surplus of £164KI. of which £15X relates to restricted funds and £763K relates to unrestricted fvnds. The increase in income of £896K125.3%1 from prewous yearfs income was largely due to an additlonal income of £488K from donations and grants received towards Covid-related Safety measures. an additional Income of E261K from extended cold weather projert and increase in numberof complex bedspaces. There was also an In¢￿aSe in rental income of £188K as a result of new rents set and agreed with the local authority forthe year. The cold weather project was due to come to an end in March 2020. but was extended tojuly 2020 due to thmd. The actual increase in expenditure from the previous yearwa5 £447K after adjusting forthe one-off expenditure of £165K Incurred on the refurbishment of restdents. lounge in the prewous year. This increase in expenditure of £447K113.91%1 was largely attributable to COVIO-related measures and additional expenditure incurred on the extended Cold weather projert and additional complex needs beds. During the year we spent around £547K on Covid-related measures. and around £239K on the extended cold weather project and additional complex needs beds. Flnanclal revlewforfuture pertods Our budget and forecast for 2021-22 reftects impacts of Covid and void 1055e5 due to some planned maintenance work on Rèsidents, rooms. The void losses will be funded from free reserves and designated reserves as prevlously planned. The expenditure on planned maintenance work will be fvnded from resetves designated for this purpose. We will also be delivering new Assessment Hub and Support Services at other sttes. which come into operation between August 2021 and September 2021.The total annuali5ed revenue expected from these Services is around £7C¥)K. Trustees are pleased to report that at the datè of approval of this report the Charity has perfomied well. CknTty ryistred in Engb)nd ond Woles 1147794 Cryny Iwnited by gLKJr¢nkn 0807539 CARITA.£ ANCHO HOUSE ARITAS- ANCHOR HOUSE TRUSTEES, ANNUAL REPORT {contknued) FOR THE YEAR ENDED 31 MARCH 2021 Reserves At 31 March 2021, unrestricted reseThes Stood at £10.464K12020= £9,701KI, of which £8,383K is represènted by the net book value of fixed assets. Of the balance of £2,080K. £702K has been de518nated for a cytlical programme of major repair5, £146K forthe replacement of residents. fumtture and equipment both in their rooms and in the communal areas, £350K for access control and £50K to cover grant ce55ations, and the remainin8 £832K is held in general reserves. The Trustees have the authority to make these designated hjnds available for other purposes if required. The Trustees have reviewed the reserves of the Charity taking into consideration future activities, uncertainties. and risks and have concluded that the appropriate level of reserves required is in the range of to £1.2M. We wlll continue our efforts to build these reserves over the next few years from £832K12020.' £244KI to the requir￿ level through prudent financial management. As part of this exercise. Trustee5 have also reviewed the management accounts for the rjrst quarter of the year 2021-22 and the forecast for the year in liBht of the void1055es and planned maintenance work, and are confident that the Charity will continue to be able to build towards the required level of rese*we5. The Trustees have also acknowledged that the Charity is lar8ely reliant on reseThes for future growth and expansion and have agreed that the Charity should be able to use part of the reserves for this purpose if needed provided that this does not impact the existing operation5 and that strategies are in place to replenish them. The Board of Trustees has designated a Post Grant Continuity ￿erve of £50K12020.' £50KI to provlde interim cover where a funding source has ceased le.8. for a staff positionl. until replacement funding can be found. The 8oard of Trustee5 has designated a Major Repairs fund of £702K12020.. £454KI to ensure that the Charity has sufficient funds to maintain its building asset Whe￿ our residents live. in good condition induding planned maintenance and replacement of various components atthe end of their useful economic life. The Board of Trustees has designated a Furnitu￿ and Equipment fund of £146K12020- £67KII to ensure that the Charlty has sufficient funds to replace furniture and equipment both in fesidents, rooms and in the communal areas. The Board of Trusteès has designated an Access Control fund of £350K12020.. nil) to ensure that the Charity has sufflcient funds to replace the old access control system. The Fixed Assets Fund of £8,383K12020= £8.886KI is intended to represènt the net book value of unrestricted tangible fixed assets. less the outstandin8 loan finance raised to lacilitate the acquisition and development of capital improvèments. Plan5 for Future Years During the year wè developed our new five-year Strategic Plan for the pèriod April 2021 to March 2026. Thls plan sets out an ambitious roadmap around flvè key goals. By March 2026. we wll- l. provide additional specialist supported housin8 2. offer an expanded range of complemèntary 5eryice5 3. be a sustainable or8anisation 4. be a great place to work S. be a trusted voice in the community and sector We were delighted that we were able to respond to local pressures around homelessness in what was an unprecedented yearfor us all. We Increas￿ the number ol beds available in ourAssessment Hubfor people sleeping rough wlth complex needs from 20 to 39 in late 2019, having secured additional funding via Newham Council and the Oty of London for the cold weather period. With lockdown measures in place until laTr JUW 2020, we extended the stay of these residents to keep them safe. and took on a further group of residents accommodated using funding secured by Newham Council for people with no re¢our5e to public fundin8 INRPFI under the government'5 Everyone In initiativp. Thi5 increased role 10 ChoriTr regis*￿ in Ergk)rd ond Wol05 1147794 Cornwny limi*d by gwrankn 0807539 CARITAS ANCHOR HOUSE CAR￿AS- ANCHOR HOUSE TRUSTEES, ANNUAL REPORT {contlnued) FOR THE YEAR ENDED 31 MARCH 2021 working with those experiencing rough sleeping led to us partnerir4 with a group of providers In blddin8 to deliver Newham Covncil's new Inte8rated Rough Sleeper Support seThi￿, which we are delighted we will be helping to deliver from September 2021. In aifvance of this. we have a150 begun dellverin8 a new A$5essment Hub se￿1￿. off-site from August 2021. We a￿ now close to startln8 building work on an additional 15 units of accommodation which will house people who had been sleeping fough, which will be known a5 Hope Street la name picked by our re5identsl. The project will allow us to provlde contemporary, individualise(J and safe accommodation, al￿ increase the capacity of our buildin8 to 155 residents at any one time. Looking ahead, we are beginning to look at how we can increase our move-on offer to residents In both our ￿MpleX needs service and our core semce. and we are considering a number of potentsal options here. We continue to work with our partners to increase our impatt for our residents and to grow our offer to those experiencing homelessness and disadvantage in our communty. We embrace change and welcome others to join u5 in 501ving sorne of sociews most ¢hallen8ing soclal issues. We look forward to stren8thÈning existing partnerships and developing new collaborations to support our residents and the Community to achieve their potential. Chority ra9i4wad in Er4bnd ond Wol•> 1147794 Comp)ny by gwronkn 0807539 CARITAS ANCHOR HOUSE cAR￿A5- ANCHOR HOUSE TRUSTEES, ANNUAL REPORT (continued) FOR THE YEAR ENDED 31 MARCH 2021 Staternent of Trustees, Responslbllltles The Trustees Iwho are also dirertors of Caritas- Anchor House for the pur[￿se$ of company lawl are responslble for preparing the Trustees. Annual Report and the financial statements in accordance with applicable law and United KSngdom Accounting Stsndards Iunited Kingdom Generally Accepted Accounting Practice). Company law requires the Trustees to prepare financial Statements for each financial year whi¢h 8ive a true and fair view of the state of affairs of the charitable company and of the incomin8 resources and application of resources, including the Income and expenditure, of the charitable company for that year. In preparing these financial statements, the Trustees are required to.. select suitable accounting policies and then apply them consistently.. observe the methods and principle5 in the Charities and Social Housing SORP- make judgments and accounting estimates that are reasonable and prudent,. state whether applicable UK Accounting Stsndards have been followed. subje¢t to any material departure5 dlsclosed and eyplained in the financial statements,. and prèpare the tinanaal statements on the 80in8 Concern basis unless it is inappropriate to presume that the charitable company will continue in business. The Trilstees are responsible for keeping proper accounting records that disclose with Tea50nable accuracy at any time the financial position of the charitable company and enablè thèm to ensure that the financial statements comply with the Companies Act 2(K)6. They are also responsible for safeguarding the assets of the charitable company and hen¢e for taking reasonable steps for the prevention and detertion of fraud and other irregulartties. So far as each of the Trustees is avrdre atthe time the rewt is apw(wed: the￿ 15 no relevant audit information of whith the tharitable company's aLtditors are unaware.. and the Trustees have taken all steps that they ought to have taken to make themselvès aware of any relevant audit information and to establish that the auditors are aware of that infomiation. Statement of Board of T￿￿te¢S ¢>n Ittternal finandal controls The Board of Trustees acknowledge its ovèrall rèsponsibiltyfor establishing and maintsiningthe wholè system of internal controls and reviewing its effectivene￿. The system of internal control is designed to manage. rather than eliminate, the risk of failure to achieve business objectbves. and to provide reasonable assurance against material misstatements or Ioss. The process for identi￿.n& evaluating and managing the significant risks by the Charity is on8oifvd and has been in place throughout the year up to the date of approval of the report and financial statements. The key elements of the control and sources of assurance include: Clearly defined management responsibilities and procedures for the identification, evaluation, and control of significant rlsks. Risk re815ter and risk management rep(Yts Performance reports External audit reports Detailed financial budgets, management accounts and forecasts Policie5 and procedures for all area5- Safeguardin& Heatth & Safety. Human Resource. Finance & IT. These police5 and procedure a￿ reviewed bythe Sub-committees and the Board on a regular basis. Estsblished authorisation and appraisal prO￿dureS for nèw initiative5 and commitments Regular reporting to the appropriate Sulpcommittees and Board on key I￿sInesS objertives, targets and outcome5. There were no attempted or attual frauds during the year that requlred reporting to the Re8ulator of Social HoLtsin& the Charity Commission or other re8ulatory bodies. 12 CknTty En9hnd ond Wol8$ 1147794 limit￿ by guaraTh*tr 0807539 CARITA5 ANCHOR HOUSE CARITAS- ANCHOR HOUSE TRU5TEES' ANNUAL REPORT (Continued) FOR THE YEAR ENDED 31 ￿RCH 2021 The key areas ¢over control, infomiatSon ￿Porting 5VStems, monitoring and risk mana8emenL Control The Board of Trustees retains ￿pOnSIbIlity for defined range of areas ¢overin8 Strategio operatlonal, and financial elements. The Board of Trustees has put in place an organisational structure which clearly defines lines of wponsibility nd dele8ation of authority. Infomiatlon reportln8 Svstem Financial reporting systems indude regular rewev*S of overall fftnancial busine55 plans. preparation of detailed annul budgets and the production of detailed monthfy management accounts. These are prepared by thè Senior Management Team and are considered and approved by the Sub-committee and the Board. The Senior Management Team and the Board of Trustees also review performance re8ularty to assess progress towards the achievement of key business objettive, tsr8ets and outcomes. Monltorlng A process of regular management monitorin8 on control Issues provides assurance to Senior Mat)agement Team and Board of Trustees. This includes a rigorous process of ensuring that correttive artions are taken in relation to any significant control is5ue5. Risk Management The charlty has a comprehensive risk management Strategy which identifies risks faclnÉ the Charity. risk management responsibilities, and action reqUI￿d to mitigate these risks. and monitorin8 arrangements. The Trustee5' Annual Report whith incorporates the strategic ￿pOrt was approved and signed on behalf of the Board on 7 September 2021 Simon Hall- Chair & Trustee 13 CIKTrrity rryi¥or•4 in E￿10nd and Woh$ 1147794 C¢)mFX)ny limitd by 0807539 CARITA% ANCHOR HOUSE INDEPENDENf AUDifows REPORTTO THE MEMBERS OF CARITAS-ANCHOR HOUSE OplnSon We have audited the financial ststements of Caritas-Anchor House for the year ended 31 March 2021 which comprise Statement of Financial Actlvities. Balance sheet. Statement of Cash Flows and notes tothe financial 5tatement5. includin8 a 5ummaryof signfflcant attounting policies. Theffinancial reportin8 frameworkthat has been applied in their preparation is applicable law and United Kingdom Ac¢ountin8 Standards. including Financial Reporting Standard 102 The Financial Reporting Stondord opplicoble the UK ond Republic of irelond (United Kingdom Generally Accepted Accountin8 Practi￿1. In our oplnion, the financial stateme1￿-. give a true and fair view of thestate of the charitsble companrfs affairsas at 31 March 2021 and of the charitable company's net movement in funds, including the income and expenditure, for the yearthen ended,. have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice,. and have been prepa￿d in accordance with the requirements of the Companies Act 2C￿6, the Housing and Regeneration Act 2C(J8 and the kcounting Direction for Private Re8i5tered Providers of Social Hou51ng from January 2019. Basls for opSnlon We Conducted our audit in a¢cordance with Intemational Standards on Auditing IUKI IISA5 IUKII and applicable law. Our responsibilities under those standards are fvrther described in the Auditorfs responsibilities for the audit of the financial statements se¢tion of our report. We are independent of the Charity in accordance with the ethical requirements that are rèlevant to our audit of tF]e financial statements in the UK, including the FRCS Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit eviden￿ we have obtained is sufficient and appropriate to provide a basis for our opsnion. ConclusSons relatlngto 8oln8 concern In auditing the finanaal statements. we have concluded that the trustees, use of the goin8 Concern basi5 of accounting in the preparation of the financial statements is appropriate. Based on the work we have perfomed, we have not identified any material urKertainties relatin8 to events or conditions that, individually or collectively, may cast significant doubt on the charitable ￿MPanY'S ability to continue as a goin8 concern for a period of at least twelve months from when the financial ststements are authoriseil for issue. Our responslbilities and the responsibilities of the trustees with respert to 80in8 concem are described in thè relevant sections of this report. Other Inforniatlon The Trustees are responsible for the other information. The other inform•tion Comprises the information included in the Trustees, Annual Report. Our opinson on the financial statements does not cover the other information and, except to the extent otherwise explicitty stated in our report, we do not express any forni of assuran¢e ¢on¢lusion thereon. In Connection with our audit of the financial statements. our responsibility is to read the other Infomiation and. In dolng so, consider whether the other information 15 materially inconsistent with the finanaal statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we Ident￿ such material incortsistencies or apparent material misststements, we are required to detemiine whetherthere is a material misstatement in the financial statements or a material misstatement of the other information. If. based on the work we have performed, we conclude that there is a material misstatemerrt of this other information. we are required to report that fact. We have nothing to report in this regard. Oplnlons on other matters prexrlbed by the Compartles Art 2006 In our opinion. based on the work undertaken in the course of the audit: the information given in the Trustees. Annual Report Iwhich includes the strate8ic ret)ort and the dirertors, report prepared for the purposes of company lawl for the financial year for which the financial statements are prepared 15 consistent with the finanoal ststements: and 14 Chority register•J in Ev4bnd ond Wolès l 147794 Cornpjny limi￿ by 9uaran*e 0807539 CARITAS ANCHOR HOUSE INDEPENOEKfAUDITOR'S REPORTTO THE MEMBERS OF CARifAS- ANCHOR HOUSE (continued) the strategic report and the directors. report included within the Trustees, Annual Report have been prepared in accordance wrth ap￿1£able legal requirements. Matters on whkh * are requlred to Yeport by eMcept•on In the light of the knowled8e and understanding of the tharitable company and its environment obtained in the course of the audit. we have not identified material misstatements in the Trustees. Annual Report Iwhlch incorporates the strategic report and the directors. reportl. We have nothing to report in respect of the following matters in relation to which the Companies Act 2C(J6 requlre5 US to report to you rf, in our opinion.. dequate accounting records have not been kept by the charitable company,. or the charitable company financial 5tstements a￿ not in agreement wfch the accounting records and returns,. or certain disclosures of trustees. remuneration specified by law a￿ not made,. or we have not received all the information and explanations we require for our audit. Responslbllltles of trustees forthe Ilnandal StateTh￿Trts As explained more fijlly in thè tru5tees' responsibilities statement set out on page 11. the Trustees Iwho are also the directors of the charitable companyforthe purpose5 of company lawl are responsible forthe preparation of the financlal statemenis and for bein8 satisfied that they give a true and fair view. and for such internal control as the trustees determine is necessary to enable the p￿parati¢)n of financial Ststemel￿ that are free from material misstatement, whether due to fraud or error. In preparing the financial statements. the Trustees are responsible for asse55in8 the charitable compan￿5 abllity to continue as a going concern, disclosin& as applicable. matters related togoing concem and u5ingthe going concern basis of accounting unless the Trustees etther intend to liquidate the charitable Company or to cease operations, or have no realistic alternative but to do $0. Auditoes responslblllt5es lorthe audlt of the ftnanclal ststemet Our oblettives are to obtain ￿a$Onable assurance about whether the financial Statements as a whole are free from material misstatement. whether due to fraud or error. and to 155ue an auditorfs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guaranteethat an audit conducted in accordance with ISAS IUKI will always detett a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the ag8re8ate, they could reasonably be experted to influence the economic decislons of users taken on the basis of thesè financial Statements. Irregularities, including fraud. are iNstan¢es of non-compliance vrith law5 and reBulations. We design procedure5 in line with our responsibilities. outlined above. to detect material mt55tatements in respett of irregularities, including fraud. The extent to which our procedure5 are capable of dete¢tin8 irregularities. includlng fraud is detailed below: Based on our understanding of the charitable company and the environment in which it operates, we identrfied that the principal risks of non-compliance with laws and regulations related to social housing, safeguarding, fundrai5in& employment and health and safety regulations and charity law. and we considered the eytent to which non-compliance might have a material effect on the ffinancTral Statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial ststements suth as include the Statement of Recommended Practice for regtstered Social Housing Providers 2C￿8, Companies Act and the Charities Act 2011. and Considered other factors such a5 income tax. payroll ta¥ and sales tsx. We evaluated management's in¢entwe5 and opportL5nities for fraudulent manipulation of the financial statements (including the rssk of override of controls). Audit procedures performed by the engagement team included.. 15 Chority re9ithd in Erebnd gnd W¢l•> 1147794 Comwy 1imrf￿ by gU¢Tonkne 0807539 CARITAS ANCHOR HOUSE INDEPENDENT AUDtroKs REPORT TO ThE MEMBERS OF CARtrAS-ANCHOR HOUSE Icontlnued) Insperting correspondence wlth regulators and tax authoriYes- Discussions with management including consi(Jeration of known or suspected instancès of nonnal needs including food and dothing, and their move on programme5. CO￿d-19 Brants This fund ￿presents the amount of Cowd grants and donations rece¢ved during the year to meet Covld related costs. 30 Cknty r•JiS￿r&4 in En9lond ond Wole$ 1147794 Cornwry 11rni￿4 ￿ guoron￿* 0807539 LARIIAS ANCHOR HOUSE CARITAS- ANCHOR HOUSE NOTES TO ThE FINANCIAL STATEMENTS Icontinu•d) FOR THE YEAA ENDED 31 MARCM 2021 18 Analysls of net assets befvRen fulld5 Unreslrlrted Deslgn*ed Restrfrted Fund5 Funds Funds Total 2021 31 Ma¢ Manager: Stephen Fisher; sfisher@haysmacintyre.com
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**Caritas -Anchor House – Audit Findings Report** | YEAR ENDED 31 MARCH 2021 ## Table of Contents |1.|Introduction and Executive Summary ............................................................................................................. 1| |---|---| |2.|Audit risks and key judgement areas identified during planning ....................................................................... 2| |3.|Accounting and Audit Matters ........................................................................................................................ 3| |4.|Detailed control points .................................................................................................................................. 5| |5.|Emerging issues ........................................................................................................................................... 7| **Caritas -Anchor House – Audit Findings Report** | YEAR ENDED 31 MARCH 2021 ## **1. Introduction and Executive Summary** This report summarises our key findings in connection with the audit of the financial statements of Caritas – Anchor House (the Charity) for the year ended 31 March 2021. ## **Our audit approach** Our work was planned and performed in order to issue an audit opinion on the financial statements in accordance with International Standards on Auditing (UK) (“ISAs”) and the terms of our letter of engagement. ## **Limitations** Our audit procedures, which have been designed to enable us to express an opinion on the financial statements, have included an examination of the transactions and the controls thereon. Our audit included consideration of internal controls relevant to the preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for expressing an opinion on the effectiveness of internal control or to identify any significant deficiencies in their design or operation. We have included in this report only those matters that have come to our attention as a result of our normal audit procedures and, consequently, our comments should not be regarded as a comprehensive record of all deficiencies that may exist or improvements that could be made. ## **Overall conclusion and opinion** At the time of issuing this report we anticipate issuing an unqualified opinion, without modification on the financial statements. ## **Haysmacintyre LLP September 2021** **Caritas -Anchor House – Audit Findings Report** | YEAR ENDED 31 MARCH 2021 ## **2. Audit risks and key judgement areas identified during planning** We set out below the key areas of focus for our audit identified at the planning stage and the conclusions of our audit work: |||| |---|---|---| |**Audit risk/key judgement area**|**How we addressed this**|**Commentary**| |||| |||| |**Presumed risk in revenue recognition**
We are required to consider and respond to the risks of
improper revenue recognition.|We have undertaken the following procedures to verify the
appropriateness of revenue recognition:
•
Detailed substantive testing of revenue including cut-off
testing.
•
Analytical testing of accommodation income with
reference to occupancy levels and charging rates.|Our audit work on revenue did
not identify any material issues.| |||| |||| |**Presumed risk of management override**
We are required to consider and respond to the risks
arising from management override of controls.|Accounting estimates were reviewed for potential bias.
The business rationale for unusual or significant transactions
outside the normal course of business for the company were
evaluated.
We reviewed the appropriateness of general journal entries
posted throughout the year and at the year-end for the
preparation of the financial statements.|Planned audit work considered
to be satisfactory in this area.| |||| 2 **Caritas -Anchor House – Audit Findings Report** | YEAR ENDED 31 MARCH 2021 ## **3. Accounting and Audit Matters** ## **3.1 Qualitative aspects of accounting practices and financial reporting** ## **i. Gas accrual** The liabilities include £45,678 in respect of unbilled gas charges for July 2017 to March 2020. Our understanding is that the gas has been consumed and metered hence it was possible to quantify the creditor but that the amount has not been registered onto the supplier’s system or billed. The accrual has not been added to as the gas supplier was changed in 2020-21 and the new supplier has been duly paid. The brought forward accrual has been retained as there remains an actual liability and we understand from management that it is still considered probable that this amount will be demanded. ## **ii. Recoverability of St Mark’s Community Centre debtor** At 31 March 2020 there was a historic debtor balance of £54,048 due from St Mark’s for historic management fees and reimbursement of expenses paid by Caritas. We note that a credit note was raised in 2020-21 reducing the balance at 31 March 2021 to £34,048. A full provision has been retained against the remaining balance. ## **iii. Audit fieldwork** The audit fieldwork was performed remotely and this progressed relatively smoothly as the relevant primary documents were available in electronic form. 3 **Caritas -Anchor House – Audit Findings Report** | YEAR ENDED 31 MARCH 2021 ## **3.2 Accounting and audit matters** ## **i. Potential impact of the Covid-19 coronavirus pandemic** The ongoing situation in respect of the Covid-19 pandemic is likely to continue to have a significant impact across most sectors in the coming months and consideration will need to be given to the specific impact on the charity’s financial position, financial resilience and subsequent events disclosures. On the basis of our discussions with management and other audit procedures carried out to date, we do not expect that there will need to be a modification to the going concern statement in the accounting policies note or to the audit report. However, as this is an ever-changing situation so we will need to discuss these matters with management and update our audit evidence closer to the date of approval of the financial statements. ## **ii. Changes to auditing standards** Two new auditing standards have been issued by the Financial Reporting Council and haven taken effect for the audit of the financial statements for the year ending 31 March 2021: ISA540 Auditing Accounting Estimates and ISA570 Going Concern. Both standards include increased requirements, compared with the existing standards, for auditors to challenge the assessments and judgments made by management and Trustees in relation to the charity’s ability to continue as a going concern and in making accounting estimates. This in turn means that we will require additional documentation from management to demonstrate that a formal going concern assessment has been made and explaining the basis on which the Trustees have determined that the charity is able to continue as a going concern, as well as setting out the rationale for material accounting estimates. ## **iii. Materiality** The audit materiality used was £84,000 based on 2% of estimated income. This amount is as set out in our Audit Planning Letter and we did not elect to revise the figure during the audit as 2% of actual income is only a marginally greater figure. ## **iv. Misstatements** During our audit, we did not identify any unadjusted material misstatements other than clearly trivial items. ## **v. Letter of representation** International Standards on Auditing require us to obtain written representations from the trustees when you approve the financial statements. The letter contains only standard matters with no additional items specific to Caritas - Anchor House. 4 **Caritas -Anchor House – Audit Findings Report** | YEAR ENDED 31 MARCH 2021 ## **4. Detailed control points** During the course of our audit we identify detailed control points that we feel need to be brought to the attention of the Trustees and certain recommendations for improvements and/or corrective action. Our audit included consideration of internal controls relevant to the preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for expressing an opinion on the effectiveness of internal control or to identify any significant deficiencies in their design or operation. The matters and detailed control points that we have identified are graded within the follow framework to assist the Trustees in assessing their impact. |**Grade**|**Grade type**|**Grade characteristics**| |---|---|---| |**Significant**|These findings are considered to be significant to the management of
risk in the business, representing a serious weakness in systems and
controls currently in place or a potentially fundamental control that
has been omitted from the risk management systems as currently in
operation.|•
Key control omitted
•
Key control not designed or operating effectively, for
example as indicated by numerous exceptions found
during our review work
•
Evidence of override of controls in place with significant
or potentially fraudulent outcomes
•
Non-compliance with laws and regulations| |**Important**|Important findings that should be reviewed by management, pending
corrective action and or updates to systems and controls.|•
Errors and exceptions noted during our testing that had
corrected retrospectively during the year by
management.
•
Potential improvement to existing control noted
•
Possibility for override of controls exists
•
Our review noted numerous exceptions but not in key
controls| |**Limited**|Findings that identify non-compliance with established systems and
controls.|•
Minor control weakness, for example limited exceptions
noted during our review work| |**Advisory**|Items requiring no immediate action but which may be of interest to
management or best practice advice|•
Information for department management
•
Control operating but scope for efficiency and/or
effectiveness improvements exist
•
Control operating but not necessarily in accordance with
best practice
•
Recent or anticipated developments may necessitate
new controls.| 5 **Caritas -Anchor House – Audit Findings Report** | YEAR ENDED 31 MARCH 2021 We wish to bring the following matters to your attention which arise from the current year audit as well as the latest status of outstanding issues arising from previous year audits. If we consider that the trustees’ proposed response to a point that we have graded “Significant” is not adequate and/or a “Significant” point has not been resolved during the subsequent financial year, we may have a duty to report this to the Charity Commission: ## **Current year** There are no points raised for the current year. ## **Prior years** There are no unresolved points brought forward from earlier years. 6 **Caritas -Anchor House – Audit Findings Report** | YEAR ENDED 31 MARCH 2021 ## **5. Emerging issues** The following are certain key issues which affect charities and which have recently come into effect or are currently being debated and are likely to impact the sector within the next year. During the current pandemic, we have set up a dedicated COVID 19 webpage for charities. This can be found at https://www.haysmacintyre.com/covid-19-not-for-profit. This web page is updated daily to ensure that you are up to date with the most relevant information. ## **A. Legal and governance matters** ## **Law Commission** The Law Commission published a review of technical issues relevant to Charity Law back in 2017. It has been a long time coming, but on 22 March 2021 the Government published its responses to the Law Commission’s report and has accepted the majority of the recommendations. A summary of the key changes are: - 1) **Charity registration thresholds** – The Government has accepted, but not yet agreed on changes to the current registration threshold for charities to register with the Charity Commission, acknowledging the administrative and financial burden of regulation for such small charities. This is currently £5,000 of income. - 2) **Permanent Endowment** – The definition of permanent endowment is to be reformulated with the aim of capturing any fund held subject to a restriction that the capital cannot be spent. This refined definition is to make clear that the definition of endowment funds will not apply to special trusts where a fund is held subject to a restriction that it can only be expended on a specific purpose, or a fund subject to a general restriction that only a certain percentage of it can be spent each year. There will also be an extension to the power currently conferred in the Charities Act sections 281 and 282 allowing unincorporated charities to release permanent endowment and spend the capital (particularly where the fund is so small that the costs of administering the fund is disproportionate to the fund value) and extending this power to corporate charities and CIO’s. - 3) **Borrowing from permanent endowment.** The Government has accepted that charities should have a power to borrow from the charity’s permanent endowment. The power would allow the charity to borrow up to 25% of the permanent endowment subject to a requirement that they recoup the expenditure within 20 years. This power is intended for ‘investment’ permanent endowment and it is not intended for functional permanent endowment. - 4) **Changing charitable purposes and governing documents** – The government acknowledged that the current process for changing or amending a governing document is complex, and there are various different ways in which it had to be carried out depending on the legal structure of the charity. Unincorporated charities are to be given a new power to amend any provision in their governing documents, subject to a limited number of changes which would still require the permission of the Charity Commission such as ‘regulated’ alterations (Charitable objects, dissolution provision and trustee benefit provision for example), provisions that would alter permanent endowment and provisions that would have required the agreement/consent of others. - 5) **Cy-Pres schemes and fundraising appeals** – In relation to fundraising in particular, the need to obtain a cy-pres scheme or to approach every single donor where, perhaps, an appeal raised more than was needed, or the appeal failed to raise adequate funds, was time consuming and often costly. The Law Commission recommended thresholds below which charities would not have to contact donors and a simplification of the process. The recommendation, which has been accepted, is that there will no longer be a need to contact a donor to offer to return the donation provided that the donation was less than £120 in total in a financial year, and the donor has not stated that the donation should be returned if the appeal fails. ## **Good Governance** The Charity Governance Code has long been seen as a best practice guidance for charities and this guidance was updated and a refreshed code published in December 2020. The updated code followed consultations during 2020 that received over 800 responses 7 **Caritas -Anchor House – Audit Findings Report** | YEAR ENDED 31 MARCH 2021 The enhancements to the code focus on two of the key principles, Principle 3: Integrity, and Principle 6: Diversity, which they have retitled Equality, Diversity and Inclusion. For Integrity the code emphasizes ethics and the right of everyone who has contact with the charity to be safe, and for EDI the Code recommends four stages of practice for charities in their EDI journey. Boards should: 1. Think about why equality, diversity and inclusion is important for the charity and assess the current level of understanding. 2. Set out plans and targets tailored to the charity and its starting point. 3. Monitor and measure how well the charity is doing. 4. Be transparent and publish the charity’s progress. The revised code can be found at: www.charitygovernancecode.org ## **Fraud** Whilst the world battles with the current pandemic, it has sadly given rise to an increase in attempted fraudulent behavior. Much has been written about the most common frauds and being vigilant, particularly with unusual requests for making payments, or changes to bank account details for suppliers. Fraudsters are quick to adapt, and the most recent attempts have extended to mimicking an employee and requesting the bank account details to be change for the payment of salary. The same level of due diligence and checks should also be put in place for changes to salary information as you should for making changes to suppliers. 8 Haysmacintyre LLP 10 Queen Street Place London EC4R 1AG T 020 7969 5500 F 020 7969 5600 E marketing@haysmacintyre.com www.haysmacintyre.com @haysmacintyre - © Copyright 2021 Haysmacintyre LLP. All rights reserved. haysmacintyre is the trading name of Haysmacintyre LLP, a limited liability partnership Registered number: OC423459 Registered in England and Wales Registered to carry on audit work in the UK & Ireland and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales A list of members’ names is available for inspection at 10 Queen Street Place, London EC4R 1AG ## A member of the ICAEW Practice Assurance Scheme Disclaimer: This publication has been produced by the partners of Haysmacintyre LLP and is for private circulation only. Whilst every care has been taken in preparation of this document, it may contain errors for which we cannot be held responsible. In the case of a specific problem, it is recommended that professional advice be sought. The material contained in this publication may not be reproduced in whole or in part by any means, without prior permission from Haysmacintyre LLP.