**Charity number 1150394**
## **TRANSFORMING CHURCHES & COMMUNITIES**
**ANNUAL REPORT AND FINANCIAL STATEMENTS**
## **FOR**
**THE YEAR ENDED 31 AUGUST 2024**
## **Transforming Churches and Communites Contents of the Financial Statements for the Year Ended 31 August 2024**
Income recognition..............................................................................................................................11
**Transforming Churches and Communites Administratve Informaton for the Year Ended 31 August 2024**
## **TRUSTEES**
Revd Cathy Bird - resigned December 2024 Revd Peter Powers – appointed December 2024 Kristian Main (chair) – resigned September 2023 Rev Caroline Wickens (chair) – appointed December 2023 Sandra Waddington Rev Michael Tindsley – resigned January 2024 Stephanie Roux – appointed December 2023
**KEY STAFF** Abigail Parr **REGISTERED OFFICE AND** Unit 16, Wesley Centre **PRINCIPAL PLACE OF BUSINESS** Royce Road Manchester M15 5BP **INDEPENDENT EXAMINER** Leanne Nield ACA Arc Accountancy Solutions Limited 51 Laverton Road Lytham St. Annes Lancashire FY8 1EN
**BANKERS** Unity Trust Bank plc Nine Brindley Place Birmingham B1 2HB
1
## **Transforming Churches and Communites Trustees' annual report for the Year Ended 31 August 2024**
The trustees present their annual report together with the financial statements of the charity for the year ended 31[st] August 2024.
## **REPORTING FRAMEWORK**
The financial statements comply with the Charities Act 2011, the CIO governing document, and Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS102) (effective 1 January 2019), referred to as the Charities SORP (FRS 102) (second edition – October 2019).
## **OBJECTIVES AND ACTIVITIES**
## **Charitable objects**
Charity’s objectives are:
1. To promote any charitable purpose for the benefit of the public, principally but not exclusively in the geographical area covered by The Methodist Church in Britain and its environs (hereafter called the “area of benefit”) and, in particular, build the capacity of third sector organisations including Methodist churches, other Christian denominations and other faith communities and provide them with the necessary support, information and services to enable them to pursue or contribute to any charitable purpose, where,
- a. “third sector” means charities, voluntary organisations and social enterprises;
- b. “charities” are organisations established for exclusively charitable purposes in accordance with the law of England and Wales, including Methodist Churches, other Christian denominations and other faith communities;
- c. “voluntary organisations and social enterprises” are independent organisations, which are established for purposes that add value to the community, and which are not permitted by their constitution to make a profit for private distribution. Voluntary organisations and social enterprises do not include local government or other statutory authorities.
2. To promote, organise and facilitate co-operation and partnership working between third sector, statutory and other relevant bodies in achievement of the above purposes within the area of benefit.
## **Activities**
The Charity achieves its objectives by the delivery of information, advice and guidance (IAG), consultancy, project management and other activities.
## **Public benefit**
In shaping our objectives for the year and planning our activities, the trustees have considered the Charity Commission’s guidance on public benefit, including the guidance on public benefit and fee charging. The charity relies on grants and the income from fees and charges to cover its operating costs. In setting the level of fees and charges the trustees give consideration to the accessibility to activities for individuals and organisations with low income.
## **ACHIEVEMENTS AND PERFORMANCE**
The activities of TCC are mainly based on outreach support provided for on a needs led basis. The mainstay of the service is organisational and community development. The fundamental belief is that TCC is an enabler and seeks to empower the people it works with to develop their skills, knowledge and experience to do their best for their members and communities. Sustainability and self-determination is always at the forefront of our support delivery.
## **TCC’s main activities are:**
**1. Information, Advice and Guidance (IAG) Service:**
The IAG service provides a range of, mainly, electronic based resources accessed through our website. This includes policy documents, fact sheets and useful information on current funding and other organisational development opportunities.
2
## **Transforming Churches and Communites Trustees' annual report for the Year Ended 31 August 2024**
A regular, monthly, email bulletin is circulated to our contacts, sharing good practice, funding opportunities and training opportunities.
## **2. Consultancy Service:**
The consultancy service provides a greater level of in-depth support. The needs that are identified through the first level process will often lead to an increased range of support and will almost certainly be a longer-term relationship. This service has a cost attributed to it, whether it is a direct payment to TCC, as the training or consultancy deliverer, or it may include engaging external consultants with the necessary skills, knowledge and experience that TCC may not have, to ensure the most appropriate level of support. In either case TCC will manage the support agreed with the beneficiary.
## **3. Project Management:**
TCC provides a comprehensive project management service for organisations, churches and projects. The range of the services can be as small or as large as the organisation requires.
## 4. Service support
TCC provides business as usual support to churches, Methodist Districts and Circuits in matters of treasury, bookkeeping and property management.
We also continue to support our existing activities and ensure that as many people across the North West and beyond know of our work and services on offer. In order to achieve this, we constantly share our successes, attend numerous events such as Synods and Methodist Conference, share a monthly e-bulletin and constantly increase the mailing list.
## **FINANCIAL REVIEW**
## **Overview**
The charity had an increase for the year on unrestricted funds of £59,653, and increase in restricted funds of £7,899, giving total reserves carried forward of £78,362.
## **Risk management**
The Trustees have identified the major risks facing the Charity and have taken steps to mitigate those risks.
## **Reserves**
The reserves policy is to hold at least three months of expenditure. This was met at 31[st] August 2024. At the year-end our free reserves (unrestricted funds not invested in fixed assets or otherwise designated) was £32,297 and there was a designated fund of £4,138 for severance pay.
## **Going concern**
The Trustees have considered whether the charity is entitled to prepare the accounts on the going concern basis, they have concluded that it is appropriate because free reserves are substantial and the charity’s order book and prospects are good.
## **FUTURE PLANS**
- To continue to increase our profile to Methodist Church Districts outside the North West
- Seek to develop our historic offerings to better suit the needs of our clients.
- Seek strategic development in a way that best serves the needs of our clients and the changing situation of the Methodist Church
- Form closer relationships with potential partner organisations such as the Learning Network to ensure an efficient use of time, and coverage for the needs of our clients.
3
## **Transforming Churches and Communites Trustees' annual report for the Year Ended 31 August 2024**
## **STRUCTURE, GOVERNANCE AND MANAGEMENT**
## **Governing Document**
The Charity is a Charitable Incorporated Organisation (CIO), number 8193683, its CIO-Association conversion is dated 9 November 2018.
It was registered with the Charity Commission as a charity with effect from 8 January 2013 with the charity number 1150394.
Although membership of the charity is not restricted, the current membership comprises all members of the District Council of the Manchester and Stockport District of the Methodist Church of Great Britain, to whom the CIO is responsible by virtue of the Methodist Church Act 1976 and the Constitutional Practice and Discipline of the Methodist Church (as approved by its governing body, the Conference of the Methodist Church of Great Britain). This clarifies the statements made in earlier Trustees Reports regarding membership of the charity.
An individual ceases to be a member of the charity when they cease to be a member of the District Council.
## **Appointment of Trustees**
The Trustees are appointed by the members in general meeting and are collectively known as the Board. At each AGM, one third of the trustees retire by rotation, being the longest in office and are eligible for re-election. The Board has the power to co-opt trustees, but such people only hold office until the next AGM, and do not count in determining those retiring by rotation but are eligible for election.
The Trustees who served during the year, together with any changes up to the date of approving this report are listed on page 1.
## **Trustee recruitment, induction and training**
Trustees are recruited for their commitment and the skills and knowledge they can bring to the organisation. All trustees receive induction information and training as appropriate to their needs and there is an opportunity to access on-going training for personal development.
## **Register of interests**
Trustees are required to complete a form on appointment, which is updated annually, registering their interests, including the membership of other voluntary organisations. The Board procedures ensure that Trustees do not participate in decisions in which they have an interest.
## **Organisation**
The Board, which must not be less than three members but is not subject to any upper limit, administers the Charity and meets as necessary during the year.
The day-to-day operations of the Charity are the responsibility of the Senior Development Manager to whom the Trustees delegate authority for operational matters including finance, employment and development, within the overall strategy agreed by the Board.
## **Co-operation with other organisations/charities**
Whilst the Charity’s income derives almost exclusively from the Methodist Church, we have a number of operational and strategic links with other Charities and charitable projects who share our commitment to public benefit. We also work with churches from other Christian denominations, and in the past year have done some small projects for the United Reform Church and the Church of England. These are however very much in the minority.
4
## **Transforming Churches and Communites Trustees' annual report for the Year Ended 31 August 2024**
## **TRUSTEES’ RESPONSIBILITIES IN RELATION TO THE FINANCIAL STATEMENTS**
The trustees are responsible for preparing the Trustees’ Annual Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Charity law requires the trustees to prepare financial statements for each financial year, which give a true and fair view of the state of affairs of the CIO and of the incoming resources and application of resources, including the income and expenditure, of the CIO for that period. In preparing these financial statements, the trustees are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charities SORP (FRS 102) (second edition October 2019);
- make judgements and estimates that are reasonable and prudent;
- state whether applicable UK 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 CIO will continue in operation.
The trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charitable incorporated organisation and enable them to ensure that the financial statements comply with the relevant legislation. They are also responsible for safeguarding the assets of the CIO and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Approved by the Board of Trustees and signed on its behalf by:
Rev. Caroline Wickens (Chair)
Date:
5
## **Transforming Churches and Communites Independent Examiner’s Report for the Year Ended 31 August 2024**
I report to the charity trustees on my examination of the accounts of the CIO for the year ended 31[st] August 2024 which are set out on pages 7 – 17.
## **Responsibilities and basis of report**
As the Charity’s trustees you are responsible for the preparation of the accounts in accordance with the requirements of the Charities Act 2011 (‘the Act’).
I report in respect of my examination of the charity’s accounts carried out under section 145 of the Act and in carrying out my examination I have followed all the applicable Directions given by the Charity Commission under section 145(5)(b) of the Act.
## **Independent examiner's statement**
I have completed my examination. I confirm that no material matters have come to my attention in connection with the examination giving me cause to believe that in any material respect:
1. accounting records were not kept in respect of the charity as required by section 130 of the Act; or
2. the accounts do not accord with those records; or
3. the accounts do not comply with the applicable requirements concerning the form and content of accounts set out in the Charities (Accounts and Reports) Regulations 2008 other than any requirement that the accounts give a ‘true and fair view’ which is not a matter considered as part of an independent examination.
I have no concerns and have come across no other matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the accounts to be reached.
Leanne Nield ACA Arc Accountancy Solutions Limited 51 Laverton Road Lytham St. Annes Lancashire FY8 1EN
Date: ...........................................
6
## **Transforming Churches and Communites Statement of Financial Actvites for the Year Ended 31 August 2024**
|**Notes**
**Incoming resources from generated funds:**
Donatons and Legacies
**2**
Charitable actvites
**3**
Other income
**4**
**TOTAL INCOME**
**EXPENDITURE**
Expenditure on charitable actvites
5
**TOTAL EXPENDITURE**
**NET INCOME BEFORE TRANSFERS**
Transfers between funds
**NET MOVEMENT IN FUNDS**
**14**
**TOTAL FUNDS BROUGHT FORWARD**
**14**
**TOTAL FUNDS CARRIED FORWARD**
**14**|**Restated**
**Unrestricted**
**Restricted**
**Total**
**Total**
**Funds**
**Funds**
**2024**
**2023***
**£**
**£**
**£**
**£**
**-**
**31,500**
**31,500**
30,760
**137,540**
**-**
**137,540**
73,791
**10,559**
**-**
**10,559**
21,925|
|---|---|
||**148,099**
**31,500**
**179,599**
126,476|
||**111,945**
**23,601**
**135,546**
129,529|
||**111,945**
**23,601**
**135,546**
129,529|
||**36,154**
**7,899**
**44,053**
(3,053)
**-**
**-**
**-**
-|
||**36,154**
**7,899**
**44,053**
(3,053)
**381**
**10,810**
**11,191**
14,244|
||**36,535**
**18,709**
**55,244**
11,191|
_* see note 20 for prior year adjustment details_
The notes on pages 9 to 16 form part of these financial statements.
7
**Transforming Churches and Communites Balance Sheet for the Year Ended 31 August 2024**
|||||**Restated **|**Restated**|
|---|---|---|---|---|---|
||**Notes**|**2024**|**2024**|**2023***|**2023***|
|||**£**|**£**|**£**|**£**|
|**FIXED ASSETS**||||||
|Tangible fixed assets|**9**||**-**||-|
|**CURRENT ASSETS**||||||
|Debtors|**11**|**7,060**||7,916||
|Cash at Bank and in Hand|**10**|**75,957**||7,059||
|||**83,017**||14,975||
|**CREDITORS**||||||
|Amounts falling due in one year|**12**|**27,773**||3,784||
|**NET CURRENT ASSETS**|||**55,244**||11,191|
|**NET ASSETS**|||**55,244**||11,191|
|**FUNDS**||||||
|Unrestricted|**13, 14**||**36,535**||381|
|Restricted|||**18,709**||10,810|
|**TOTAL FUNDS CARRIED FORWARD**|||**55,244**||11,191|
_* see note 20 for prior year adjustment details_
These financial statements have been prepared in accordance with the provisions applicable to the current legislation.
For the year ending 31 August 2024, the CIO was entitled to exemption from audit and are as such have been independently examined.
## **Trustees’ responsibility**
The trustees acknowledge their responsibilities for complying with the requirements of the Act with respect to the accounting records and the preparation of accounts.
The notes on pages 9 to 17 form part of these financial statements.
## **Approved by the Board and authorised for issue on: And signed on their behalf by:**
## **Rev. Caroline Wickens (Chair)**
8
**Transforming Churches and Communites Notes to the Financial Statements for the Year Ended 31 August 2024**
## **1. ACCOUNTING POLICIES**
## **Basis of preparation**
The financial statements of the Charity, which is a public benefit entity under FRS 102, have been prepared in accordance with the Charities Act 2011 and the Charities SORP (FRS 102) 'Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS102) (effective 1 January 2019). The financial statements have been prepared under the historical cost convention.
The Charity has taken advantage of the provisions in the SORP for charities applying FRS 102 Update Bulletin 1 not to prepare a Statement of Cash Flows.
## **Income recognition**
All income is recognised once the Charity has entitlement to the income, it is probable that the income will be received and the amount of income receivable can be measured reliably. The following applies to particular types of income:
**Grants** , whether of a capital or revenue nature, are recognised when the Charity has entitlement to the funds, any performance conditions have been met and it is probably that the income will be received.
**Donations** from individuals and other bodies (not being of the nature of a grant) are recognised when receivable.
**Earned income** is measured at the fair value of the consideration received or receivable for services and goods supplied, net of discounts and VAT.
## **Deferred income**
Income is only deferred and included in creditors when:
- The income relates to a future accounting period
- A sales invoice has been raised ahead of the work being carried out and there is no contractual entitlement to the income until the work has been done
- Not all the terms and conditions of the grant have been met, including the incurring of expenditure and the grant conditions are such that unspent grant must be refunded
## **Expenditure and irrecoverable VAT**
Expenditure is recognised once there is a legal or constructive obligation to make a payment to a third party, it is probable that the settlement will be required and the amount of the obligation can be measured reliably. Expenditure is classified under the following activity headings:
Costs of raising funds Including those associated with fundraising activities, managing investments and commercial trading by the subsidiary company.
Charitable activities Costs of undertaking the work of the charity.
The Charity is currently not registered for VAT, however the trustees have determined they went over the VAT threshold during October 2023 and is therefore in the process of applying for late registration. Input tax charged is therefore recoverable on expenditure from October 2023 onwards, with costs after this date stated net of VAT.
## **Allocation of support costs**
Support costs are those functions which assist the work of the charity either by supporting the delivery of charitable activities or by supporting the generation of funds. They include office costs, depreciation, other support costs and governance costs as set out in note 4.
## **Tangible fixed assets and depreciation**
Individual assets costing more than £1,000 are capitalized at cost and are depreciated over their estimated useful lives on a straight line basis as set out below.
9
**Transforming Churches and Communites Notes to the Financial Statements for the Year Ended 31 August 2024**
## **1. ACCOUNTING POLICIES (continued)**
Depreciation rates are as follows:
Computer equipment 30% straight line Other equipment 20% straight line
## **Debtors**
Trade and other debtors are recognised at the settlement amount due and prepayments are valued at the amount prepaid.
## **Cash at bank and in hand**
Cash at bank and in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.
## **Creditors and provisions**
Creditors and provisions are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provision are normally recognised at their settlement amount.
## **Financial instruments**
The Charity has only basic financial instruments which are initially recorded at costs, and with the exception of investments (as set out above) subsequently measured at their settlement value.
## **Judgements and key sources of estimation uncertainty**
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
## **Pension costs and other post-retirement benefits**
The charity operates a defined contribution pension scheme. Contributions payable to the charity’s pension scheme are charged to the Statement of Financial Activities in the period to which they relate.
## **2. DONATIONS AND LEGACIES**
|Core grant – The Methodist Church – North West Districts
_* see note 20 for prior year adjustment details_|**Unrestricted**
**2024**
**£**
**Restricted**
**2024**
**£**
**Total**
**2024**
**£**
**Total**
**2023***
**£**
-
31,500
31,500
30,760|
|---|---|
||-
31,500
31,500
30,760|
|||
## **3. INCOME FROM CHARITABLE ACTIVITIES**
|Project fees and charges|**Unrestricted**
**2024**
**£**
**Restricted**
**2024**
**£**
**Total**
**2024**
**£**
**Total**
**2023**
**£**
137,540
-
137,540
73,791|
|---|---|
||137,540
-
137,540
73,791|
10
## **Transforming Churches and Communites Notes to the Financial Statements for the Year Ended 31 August 2024**
## **4. OTHER INCOME**
|**OTHER INCOME**||
|---|---|
|Salary recharge income|**Unrestricte**
**d**
**2024**
**£**
**Restricted**
**2024**
**£**
**Total**
**2024**
**£**
**Total**
**2023**
**£**
10,559
-
10,559
21,925|
||10,559
-
10,559
21,925|
## **5. CHARITABLE EXPENDITURE**
|**5.**
**CHARITABLE EXPENDITURE**||
|---|---|
|**_Direct costs_**
Salaries
Project and travel costs
**_Support costs & governance_**
Premises & insurance
Advertsing
Recruitment
Staf training
Ofce costs
Depreciaton
Other support costs
Governance costs
**Governance costs comprise:**
Accountancy, legal & professional
**6.**
**DETAILS OF CERTAIN TYPES OF EXPENDITURE**
**Fees for the examinaton of the accounts:**
Independent examiner’s fees
-
Report
-
Other accountancy services|**Unrestricted**
**2024**
**£**
**Restricted**
**2024**
**£**
**Total**
**2024**
**£**
**Total**
**2023**
**£**
99,126
23,601
122,727
120,520
3,038
-
3,038
2,966
866
-
866
742
271
-
271
-
229
-
229
-
1,509
-
1,509
-
5,581
-
5,581
3,547
-
-
-
-
75
-
75
104
1,250
-
1,250
1,650|
||111,945
23,601
135,546
129,529|
||**Unrestricted**
**2024**
**£**
**Restricted**
**2024**
**£**
**Total**
**2024**
**£**
**Total**
**2023**
**£**
1,250
-
1,250
1,650|
||1,250
-
1,250
1,650|
||**2024**
**£**
**2023**
**£**
1,250
1,200
-
-|
## **7. STAFF INFORMATION**
|**a)**
**Employees**
Salaries and wages
Employer’s pension contributons
Employer’s NI contributons|**Unrestricted**
**2024**
**£**
**Restricted**
**2024**
**£**
**Total**
**2024**
**£**
**Total**
**2023**
**£**
93,903
22,358
116,261
113,109
3,759
895
4,654
2,337
1,464
348
1,812
5,074|
|---|---|
No employees earned more than £60,000 p.a. in either year.
11
**Transforming Churches and Communites Notes to the Financial Statements for the Year Ended 31 August 2024**
## **7. STAFF INFORMATION (continued)**
## **b) Key management personnel**
The key management of the charity comprise the trustees and senior staff (as set out on page 1)
The trustees do not receive any remuneration for their services.
|**Key management personnel**
The key management of the charity comprise the trustees and senior staf (as set
The trustees do not receive any remuneraton for their services.|out on page 1)||
|---|---|---|
|The total employee benefts of other key management were as follows:|**2024**|2023|
||**£**|£|
||**39,450**|25,993*|
_* Last year the key management personnel figure was under-reported by £2,406 as it did not have included the employer NIC and employer pension contributions of £991 and £1,415 respectively. Therefore, the comparative figure in this year’s accounts has been amended to reflect this correction._
## **c) Average staff numbers**
|The average number of employees was as follows:
Employed solely within the charity
Employed on joint contracts of employment|**2024**
2023
Average
number
Average
number
**6**
5
**1**
1
**7**
6|
|---|---|
The salary costs of the employees who are on a joint contract of employment are paid in full by the other party and the monies received are included as income as well as the salary costs in this charity.
## **8. TRUSTEE REMUNERATION AND BENEFITS**
None of the trustees have been paid any remuneration or received any other benefits from an employment with their charity or a related party.
No trustee expenses have been incurred.
## **9. TANGIBLE FIXED ASSETS**
|**Cost or valuaton**
As at 1 September 2023
As at 31 August 2024
**Depreciaton**
As at 1 September 2023
Charge for the year
As at 31 August 2024
**Net Book Value**
As at 31 August 2024
As at 31 August 2023|**Equipment &**
**ftngs**
**£**
**Total**
**£**
6,682
6,682|
|---|---|
||6,682
6,682|
||6,682
6,682
-
-|
||6,682
6,682|
|||
||-
-|
||-
-|
12
**Transforming Churches and Communites Notes to the Financial Statements for the Year Ended 31 August 2024**
## **10. CASH AT BANK AND AT HAND**
|Cash at bank and on hand
**11. DEBTORS**
Grant and fees receivable
Prepayments
**2. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR**
Trade creditors
Accruals
VAT creditor|**2024**
**£**
**2023**
**£**
**75,957**
7,059|
|---|---|
||**75,957**
7,059|
||**2024**
**£**
**2023**
**£**
**6,200**
7,698
**860**
218|
||**7,060**
7,916|
||**2024**
**£**
**2023***
**£**
**1,930**
-
**2,725**
3,784
**23,118**
-|
||**27,773**
3,784|
## **12. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR**
_* see note 20 for prior year adjustment details_
## **13. MOVEMENT IN FUNDS**
|**Unrestricted funds:**
General fund
Designated – severance pay
**Total unrestricted funds**
**Restricted funds:**
Core grant – The Methodist Church –
North West Districts
**Total restricted funds**|**01/09/2023**
**Income**
**Expenditure**
**Transfers**
**31/08/2024**
**£**
**£**
**£**
**£**
**£**
(1,872)
148,099
(111,945)
(1,885)
32,297
2,253
-
-
1,885
4,138|
|---|---|
||381
148,099
(111,945)
-
36,535|
||**01/09/2023**
*****
**Incoming**
**resources**
**Resources**
**expended**
**Transfers**
**31/08/2024**
**£**
**£**
**£**
**£**
**£**
10,810
31,500
(23,601)
-
18,709|
||10,810
31,500
(23,601)
-
18,709|
_* see note 20 for prior year adjustment details_
The purpose of the designated fund is for the funding of severance pay if the situation arises where redundancies are necessary to make.
13
**Transforming Churches and Communites Notes to the Financial Statements for the Year Ended 31 August 2024**
## **13. MOVEMENT IN FUNDS (continued)**
## **Comparatives for movement in funds**
|**Unrestricted funds:**
General fund
Designated – severance pay
**Total unrestricted funds**
**Restricted funds:**
Core grant – The Methodist Church –
North West Districts
**Total restricted funds**|**01/09/2022**
**Income**
**Expenditure**
**Transfers**
**31/08/2023**
**£**
**£**
**£**
**£**
**£**
(5,711)
105,716
(109,654)
7,777
(1,872)
10,030
-
-
(7,777)
2,253|
|---|---|
||4,319
105,716
(109,654)
-
381|
||**01/09/2022**
*****
**Incoming**
**resources***
**Resources**
**expended**
**Transfers**
**31/08/2023**
*****
**£**
**£**
**£**
**£**
**£**
9,925
20,760
(19,875)
-
10,810|
||9,925
20,760
(19,875)
-
10,810|
_* see note 20 for prior year adjustment details_
## **14. ANALYSIS OF COMPANY NET ASSETS BETWEEN FUNDS**
|**Fund balances at 31st August 2024 are represented by:-**
Tangible fxed assets
Net current assets
**Fund balances at 31st August 2023* are represented by:-**
Tangible fxed assets
Net current assets|**Unrestricted**
**Funds**
**Restricted**
**Funds**
**Total**
**£**
**£**
**£**
-
-
-
36,535
18,709
55,244|
|---|---|
||36,535
18,709
55,244|
||**Unrestricted**
**Funds**
**Restricted**
**Funds**
**Total**
**£**
**£**
**£**
-
-
-
381
10,810
11,191|
||381
10,810
11,191|
_* see note 20 for prior year adjustment details_
14
## **Transforming Churches and Communites Notes to the Financial Statements for the Year Ended 31 August 2024**
## **15. FINANCIAL INSTRUMENTS**
**The carrying amounts for each category of financial instrument is as follows:**
|**The carrying amounts for each category of fnancial instrument is as follows:**|||
|---|---|---|
||**2024**|**2023**|
||**£**|**£**|
|**Financial assets**|||
|That are debt instruments measured at amortsed cost|**83,017**|14,975|
||**2024**|**Restated**|
|||**2023***|
||**£**|**£**|
|**Financial liabilites**|||
|Measured at amortsed cost|**(27,773)**|(3,784)|
_* see note 20 for prior year adjustment details_
Financial assets measured at amortised cost comprise: cash at bank and in hand; income receivable and other debtors; and prepayments.
Financial liabilities measured at amortised cost comprise; trade creditors; other taxes and social security; accruals; and deferred income.
## **16. CONSTITUTION**
The organisation is a Charitable Incorporated Organisation regulated by the Charity Commission in the event of it being wound up the members are committed to contributing £1 each.
## **18. 17. TAXATION**
The Charity is a registered charity and is entitled to claim annual exemption from UK corporation tax.
## **18. CAPITAL COMMITMENTS**
There were no capital commitments authorised and contacted for at the end of the year (2023 £Nil).
## **19. RELATED PARTY TRANSACTIONS**
The trustees are unrelated to each other and the charity is not under the control of one individual or entity.
There are no related party transactions to disclose in either year.
15
## **Transforming Churches and Communites Notes to the Financial Statements for the Year Ended 31 August 2024**
## **20. PRIOR YEAR ADJUSTMENT**
In the 22-23 accounts, a prior year adjustment was made for the 21-22 Manchester & Stockport District retainer grant that was received, as it was believed that this income should have been recognised as deferred income rather than as unrestricted income as it was accounted for in the 21-22 accounts. During 23-24, and upon further investigation, the trustees have realised that this income should have been accounted for as restricted income and recognised when initially received during 21-22, rather than being deferred as a liability. There was also an additional £885 restricted retainer grant in 22-23 that was treated as deferred income when it should have also been recognised as restricted income during the 22-23 year. Therefore, there was a total of £10,810 deferred income that was carried forward at the end of the 22-23 financial year that needs to be reversed and recognised as restricted income in the respective 21-22 and 22-23 years.
The tables below summarises the impact of these amendments on the 22-23 opening and closing restricted fund balance, as well as the effect on income recognised and the deferred income balance (within creditors).
**Financial accounts impact of the 21-22 deferred income adjustment required to the 21-22 accounts, and thereby amending the 22-23 brought forward funds balance**
|**thereby amending the 22-23 brought forward funds balance**||||
|---|---|---|---|
||**Before**
**adjustment**|**Adjustment**|**Afer**
**adjustment**|
|**Statement of Financial Actvites**||||
|**Grant Income**|**15,075**|**9,925**|**25,000**|
|**Net movement in funds**|**-8,042**|**9,925**|**1,883**|
|**Balance Sheet**||||
|**Deferred income (within Creditors)**|**9,925**|**-9,925**|**0**|
|**Restricted funds**|**0**|**9,925**|**9,925**|
|**Total funds**|**4,319**|**9,925**|**14,244**|
**Financial accounts impact of the 22-23 deferred income adjustment required to the 22-23 accounts, and thereby amending the 22-23 comparative figures**
|**thereby amending the 22-23 comparatve fgures**||||
|---|---|---|---|
||**Before**
**adjustment**|**Adjustment**|**Afer**
**adjustment**|
|**Statement of Financial Actvites**||||
|**Grant Income - restricted**|**19,875**|**885**|**20,760**|
|**Grant income - unrestricted**|**10,000**||**10,000**|
|**Total income**|**125,591**|**885**|**126,476**|
|**Net movement in funds**|**-3,938**|**885**|**-3,053**|
|**Balance Sheet**||||
|**Assets**|**14,975**||**14,975**|
|**Deferred income (taking into account the adjustment above)**|**885**|**-885**|**0**|
|**Remaining creditors (taking into account the adjustment above)**|**3,784**||**3,784**|
|**Net Assets (taking into account the adjustment above)**|**10,306**|**885**|**11,191**|
|**Unrestricted funds**|**381**||**381**|
|**Restricted funds (taking into account the adjustment above)**|**9,925**|**885**|**10,810**|
|**Total funds (taking into account the adjustment above)**|**10,306**|**885**|**11,191**|
16
## **Transforming Churches and Communites Notes to the Financial Statements for the Year Ended 31 August 2024**
## **21. NON-ADJUSTING POST BALANCE SHEET EVENT**
Subsequent to 31[ST] August 2024, the charity identified that it was required to register for VAT from October 2023. As a result, a VAT liability of £23,118 has been recognised in the financial statements for the year ended 31 August 2024.
Additionally, a further VAT liability of approximately £17,443 has accrued for the period from September 2024 to April 2025. This amount will be accounted for in the financial year ending 31 August 2025.
## **22. CONTINGENT LIABILITY**
As a result of the late VAT registration, the charity may be subject to penalties and interest from HMRC. The charity is in the process of submitting an appeal against all these penalties on the grounds that a dispute over a VAT repayment was ongoing during the period in question.
Based on HMRC’s penalty rules, the potential penalties and interest could be approximately £5,000 for the year ended 31 August 2024 and £3,000 for the year ending 31 August 2025. However, as the appeal is ongoing, the actual liability remains uncertain, and no provision has been made in these financial statements.
17