**REGISTERED COMPANY NUMBER: 08159144 (England and Wales) REGISTERED CHARITY NUMBER: 1152236**
## **REPORT OF THE TRUSTEES AND AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022**
## **FOR**
## **THE CONSTRUCTION SECTOR TRANSPARENCY INITIATIVE**
Magma Audit LLP Magma House 16 Davy Court Castle Mound Way Rugby CV23 0UZ
**THE CONSTRUCTION SECTOR TRANSPARENCY INITIATIVE**
## **CONTENTS OF THE FINANCIAL STATEMENTS for the year ended 31 December 2022**
|||**Page**||
|---|---|---|---|
|**Report of the Trustees**|1|to|5|
|**Report of the Independent Auditors**|6|to|7|
|**Statement of Financial Activities**||8||
|**Statement of Financial Position**||9||
|**Statement of Cash Flows**||10||
|**Notes to the Statement of Cash Flows**||11||
|**Notes to the Financial Statements**|12|to|17|
## **THE CONSTRUCTION SECTOR TRANSPARENCY INITIATIVE (REGISTERED NUMBER: 08159144)**
## **REPORT OF THE TRUSTEES for the year ended 31 December 2022**
The trustees who are also directors of the charity for the purposes of the Companies Act 2006, present their report with the financial statements of the charity for the year ended 31 December 2022. The trustees have adopted the provisions of 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 (FRS 102) (effective 1 January 2019).
## **ACHIEVEMENT AND PERFORMANCE**
CoST experienced significant achievements in 2022 at the national and international level, a selection of which are listed below. For more on our other achievements visit www.infrastructure transparency.org.
## **Anti-corruption**
Tackling corruption remained a vital part of our work in 2022. The deterrent effect of transparency for example, contributed to CoST Thailand securing financial costs savings of $720m, a proportion of which is likely to have resulted from a reduction in corrupt practice.
We shared this and the experience from other members at a range of international events including a Water Integrity Network Conference, US State Depart 'Tech-Sprint', the International Anti-Corruption Conference (IACC) and a FIDIC International Anti-Corruption Day Seminar. Topics addressed included water integrity, multistakeholder working, corruption and global challenges and the SDGs.
## **Transforming Transparency**
We continued to promote transparency and highlight its importance in rooting out corruption. This was particularly clear from the work of CoST members. CoST Uganda and Thailand for example published detailed assurance reports that informed stakeholders and enabled them to exercise accountability. Guidance on using our groundbreaking 'Infrastructure Transparency Index' was provided in Filipino, Indonesian, Malay, Thai and Vietnamese.
In Latin America, CoST Bogota made updates to its open data portal, and support was provided to the municipality of Guadalajara to establish a formal disclosure requirement.
Malawi became the third country in Africa to adapt to the OC4IDS, following Uganda's adoption the year before.
## **Training and guidance**
Training was provided to journalists in Latin America, the Caribbean and Uganda. It was designed to help them interpret data on infrastructure investment and report on it in ways likely to provoke public debate and hold decision-makers to account.
CoST also ran training focused on transparency and accountability in decision-making for the sustainability of public infrastructure as part of a joint project by the United Nations Environmental Programme; United Nations Institute for Training and Research and GIZ.
We published guidance on completing scoping studies as part of new CoST programmes.
## **New alliances**
CoST welcomed two new members in 2022. The Municipality of Coamo became the first jurisdiction in Puerto Rico and the United States to join CoST and the Dominican Republic became the first CoST member from the Caribbean.
CoST joined the RISE Ukraine Coalition, an alliance of Ukrainian and international organisations working to ensure integrity, sustainability and efficiency in reconstruction efforts.
CosT also established a new relationship with the Municipality of Quito, Ecuador and provided technical support for the process of selecting an operator of their new metro.
## **Driving social change**
CoST continued to highlight the importance of mitigating the impact of climate change and of improving gender equality and accessibility for people with disabilities. We took part in and ran events focused on climate change and climate finance. We hosted learning sessions focused on gender for West Lombok and Thailand, the need for which arose from them carrying out a self-assessment using our Mainstreaming Gender Equality guidance. CoST Uganda also considered the impact or efforts made for groups such as women, young people, people with disabilities and HIV/AIDS awareness.
Page 1
## **THE CONSTRUCTION SECTOR TRANSPARENCY INITIATIVE (REGISTERED NUMBER: 08159144)**
## **REPORT OF THE TRUSTEES for the year ended 31 December 2022**
## **CoST events**
CoST ran a variety of events, with high attendance, attracting both existing and new stakeholders. "Imagine an Africa without infrastructure transparency", with almost 100 stakeholders across Government, development, private sector, civil society and the media, gathered virtually with the commitment to continue working together to promote transparency and accountability in Africa.
Around the same number of stakeholders attended CoST's climate finance webinar, with panellists from Green Climate Fund, the Expert Group on Climate Finance, University College London and Makerere University, Uganda.
CoST and its Latin America programmes participated in the online event as part of Open Government Week, a civic space in which CoST exchanged achievements and lessons learned from its activities that were included in OGP action plans.
Internally, CoST ran the first edition of the new annual Alfredo Cantero Awards, named in honour of Alfredo Cantero, a founding member of CoST Honduras and a member of the CoST board. CoST Uganda won, with CoST Thailand receiving an honourable mention.
## **International recognition**
CoST was also invited to take part in various international events, both face to face, and virtually. This includes the OGP Africa and Middle East regional meeting, OECD Infrastructure Forum and a session by UNDP's FCDO funded FairBiz Programme.
CoST also received recognition from the G7 in their report on Achieving the Sustainable Development Goals in times of multiple crises and from our Basel Institute of Governance award nomination for Outstanding Achievement in Collective Action.
## **OBJECTIVES AND ACTIVITIES**
CoST's objectives are for the public benefit:
To promote ethical and transparent standards of conduct, compliance with the law, and accountability in the provision of infrastructure and infrastructure services in any part of the world, which may include (but not be limited to) the following means: (a) Promoting the public disclosure of project information; (b) Enabling stakeholders to hold decision-makers to account. To relieve and prevent poverty, suffering and distress caused by waste, corruption, mismanagement or inefficiency in the provision of infrastructure and infrastructure services in any part of the world.
- To advance education, knowledge and the exchange of experience in the provision of infrastructure and infrastructure services.
- To advance health or save lives by increasing public safety in the provision of infrastructure and infrastructure services.
To further such other exclusively charitable purposes according to the law of England and Wales as the Trustees in their absolute discretion from time to time determine. CoST's Aim is to:
- Help improve the value for public money invested in infrastructure.
- Help improve the quality of public infrastructure and services.
CoST undertakes a range of activities including:
- Developing and disseminating principles, standards and approaches.
- Providing technical assistance and capacity building support.
- Advocating for transparency and accountability.
- Building partnerships and collaborating with others.
## **Principal Officers**
The Construction Sector Transparency Initiative ("CoST") had no employees in 2022.
## **Management of Major Risks**
Page 2
## **THE CONSTRUCTION SECTOR TRANSPARENCY INITIATIVE (REGISTERED NUMBER: 08159144)**
## **REPORT OF THE TRUSTEES for the year ended 31 December 2022**
The Trustees retain responsibility for a system of internal controls that are designed to manage major risks. These systems provide reasonable but not absolute assurance against inappropriate or ineffective use of resources and against the risk of errors or fraud. The Trustees delegate authority to the International Secretariat to conduct an annual review of the major strategic and operational risks that CoST faces and the ways in which they are being monitored, managed and mitigated. The outcomes of this review are reported to the Trustees by the International Secretariat and changes in policy are made where necessary. The Trustees are satisfied with the systems in place to monitor, manage and mitigate CoST's exposure to major risks.
The Trustees have assessed the major risks to which the company is exposed, in particular those related to the operations and finances of the company, and are satisfied that systems and procedures are in place to mitigate our exposure to the major risks. Details of the risk assessment were published in the CoST Business Plan 2017 - 2020 published in June 2017. An updated risk register will be included in the CoST Business Plan 2021- 2025.
## **FINANCIAL REVIEW**
## **Financial position**
## Accounts
The accounts for the year ended 31 December 2022 are shown in this annual report. The accounts show income for the period of £660,124 and resources expended were £617,360 resulting in a surplus of £42,764 for the period.
## Restricted Funds
The balance on restricted funds at 31 December 2022 is £33,925.
## Unresticted Funds
The balance on unrestricted funds at 31 December 2022 is £9,719.
## Reserves
The Trustees have introduced measures aimed at increasing our unrestricted income. This includes taking on more commercial work, but only where than can be done without competing directly with companies who we want to support CoST. This will allow us to gradually build a reserve to help insulate our charitable activities against changing circumstances
Given that CoST does not employ staff, rent property or hold debt, our exposure to risks resulting from changing circumstances is minimal. However, we consider in prudent to establish a reserve to enable us to provide transitional support to partners should our ability to support them be reduced.
## Going concern
The trustees have assessed the financial position of the charitable company. In 2022/2023 FCDO approved £700K for CoST with £500K approved for 2023-24. We have also secured new agreements for CoST with GiZ, The World Bank and The OECD. This will allow the CoST to have sufficient resources to meet its liabilities as they fall due for at least twelve months and secure its financial position in the longer term.
## **STRUCTURE, GOVERNANCE AND MANAGEMENT**
## **Governing document**
The charity is controlled by its governing document, a deed of trust, and constitutes a limited company, limited by guarantee, as defined by the Companies Act 2006.
## **REFERENCE AND ADMINISTRATIVE DETAILS**
**Registered Company number** 08159144 (England and Wales)
## **Registered Charity number**
1152236
## **Registered office**
167-169 Great Portland Street 5th Floor London W1W 5FP
Page 3
**THE CONSTRUCTION SECTOR TRANSPARENCY INITIATIVE (REGISTERED NUMBER: 08159144)**
**REPORT OF THE TRUSTEES for the year ended 31 December 2022**
**Trustees** C J Poortman G Ofori (resigned 17 May 2023) P M Matthews V Lazatin (resigned 17 May 2023) G English N Forsyuk (resigned 17 May 2023) C Schouten R Lifuka (appointed 17 May 2023) O Sobolev (appointed 17 May 2023)
The Executive Board Members are also the directors of the charitable company for the purposes of company law and its trustees for the purposes of charity law.
## **Company Secretary**
S Henderson
## **Auditors**
Magma Audit LLP Magma House 16 Davy Court Castle Mound Way Rugby CV23 0UZ
## **Bankers**
National Westminster Bank PO Box 414 38 Strand London WC2N 5JB
## **FINANCIAL INSTRUMENTS**
The principal financial instruments of the charity comprise bank balances, other receivables and other payables. The main purpose of these instruments is to raise funds for the charity's operations and to finance its continuing operations. Liquidity risk is managed by the use of a bank balance along with efficient monitoring of cash flows to ensure there are sufficient funds to meet liabilities.
## **PLANS FOR FUTURE PERIODS**
CoST is adjusting to new circumstances in which demand for our services continues to increase, but also in which securing funding to support our work is more difficult. The inevitably means that we have to find ways to do more with less. Measures to achieve this include diversifying our sources of income, increasing the amount of commercial work we undertake and introducing a new business model in which CoST members take more responsibility for meeting their own funding needs.
Despite the challenges we face, global recognition of our work remains very high. We will seek to translate that recognition into new partnerships and practical support. We will prioritise working with those members which have lost momentum recently due to the pandemic, shifting priorities and inadequate funding. We will admit new members, but will stipulate that they need to cover the costs of their programme. We will continue to develop, refine and promote our tools and standards and where possible, utilise them to generate income.
Our ambition remains undimmed and we will continue our innovative and award-winning work for the benefit of people and businesses throughout the world.
## **STATEMENT OF TRUSTEES' RESPONSIBILITIES**
The trustees (who are also the directors of The Construction Sector Transparency Initiative for the purposes of company law) are responsible for preparing the Report of the Trustees and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Page 4
## **THE CONSTRUCTION SECTOR TRANSPARENCY INITIATIVE (REGISTERED NUMBER: 08159144)**
## **REPORT OF THE TRUSTEES**
## **for the year ended 31 December 2022**
## **STATEMENT OF TRUSTEES' RESPONSIBILITIES - continued**
Company 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 charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period. In preparing those financial statements, the trustees are required to
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charity SORP;
- make judgements and estimates that are reasonable and prudent;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in business.
The trustees are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the charitable company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
In so far as the trustees are aware:
- there is no relevant audit information of which the charitable company's auditors are unaware; and
- the trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.
## **AUDITORS**
The auditors, Magma Audit LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.
31.7.23 Approved by order of the board of trustees on ............................................. and signed on its behalf by:
........................................................................
C J Poortman - Trustee
Page 5
## **REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF THE CONSTRUCTION SECTOR TRANSPARENCY INITIATIVE**
## **Opinion**
We have audited the financial statements of The Construction Sector Transparency Initiative (the 'charitable company') for the year ended 31 December 2022 which comprise the Statement of Financial Activities, the Statement of Financial Position, the Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
- In our opinion the financial statements:
- give a true and fair view of the state of the charitable company's affairs as at 31 December 2022 and of its incoming resources and application of resources, including its income and expenditure, for the year then ended;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
- have been prepared in accordance with the requirements of the Companies Act 2006.
## **Basis for opinion**
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
## **Conclusions relating to going concern**
In auditing the financial statements, we have concluded that the trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charitable company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.
## **Other information**
The trustees are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Report of the Independent Auditors thereon.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
## **Opinions on other matters prescribed by the Companies Act 2006**
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Report of the Trustees for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Report of the Trustees has been prepared in accordance with applicable legal requirements.
## **Matters on which we are required to report by exception**
In the light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Report of the Trustees.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of trustees' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit; or
- the trustees were not entitled to take advantage of the small companies exemption from the requirement to prepare a Strategic Report or in preparing the Report of the Trustees.
Page 6
## **REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF THE CONSTRUCTION SECTOR TRANSPARENCY INITIATIVE**
## **Responsibilities of trustees**
As explained more fully in the Statement of Trustees' Responsibilities, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the trustees are responsible for assessing the charitable company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.
## **Our responsibilities for the audit of the financial statements**
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Independent Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Based on our understanding of the charity and the industry, we have identified that the principal risks of non-compliance with laws and regulations, and we have considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as Companies Act 2006 and The Charities Statement of Recommended Practice (SORP). We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to posting inappropriate journal entries, and management bias in accounting estimates. Audit procedures performed included:
- Enquires with management for consideration of known or suspected instances of non-compliance with laws and regulations and fraud.
- Challenging assumptions made by management in their accounting estimates, such as those used to assess the ability to continue as a going concern;
- Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations, journal entries crediting revenue, journal entries crediting cash and journal entries with specific defined descriptions.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting in error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentation, or through collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Independent Auditors.
## **Use of our report**
This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Victoria Craig (Senior Statutory Auditor) for and on behalf of Magma Audit LLP Magma House 16 Davy Court Castle Mound Way Rugby CV23 0UZ
Date: ............................................. 1.8.23
Page 7
## **THE CONSTRUCTION SECTOR TRANSPARENCY INITIATIVE**
## **STATEMENT OF FINANCIAL ACTIVITIES for the year ended 31 December 2022**
**----- Start of picture text -----**
2022 2021
Unrestricted Restricted Total Total
fund fund funds funds
Notes £ £ £ £
INCOME AND ENDOWMENTS FROM
Charitable activities 3
Charitable activities - 660,088 660,088 641,650
Investment income 2 - 36 36 32
Total - 660,124 660,124 641,682
EXPENDITURE ON
Charitable activities 4
Charitable activities - 609,440 609,440 950,606
Governance costs - 7,920 7,920 6,180
Total - 617,360 617,360 956,786
-
NET INCOME/(EXPENDITURE) 42,764 42,764 (315,104)
Transfers between funds 11 9,719 (9,719) - -
Net movement in funds 9,719 33,045 42,764 (315,104)
RECONCILIATION OF FUNDS
Total funds brought forward - 880 880 315,984
TOTAL FUNDS CARRIED FORWARD 9,719 33,925 43,644 880
**----- End of picture text -----**
The notes form part of these financial statements
Page 8
## **THE CONSTRUCTION SECTOR TRANSPARENCY INITIATIVE (REGISTERED NUMBER: 08159144)**
## **STATEMENT OF FINANCIAL POSITION 31 December 2022**
**----- Start of picture text -----**
2022 2021
Notes £ £
CURRENT ASSETS
Debtors 8 258,455 48,064
Cash at bank and in hand 41,235 27,431
299,690 75,495
CREDITORS
Amounts falling due within one year 9 (256,046) (74,615)
NET CURRENT ASSETS 43,644 880
TOTAL ASSETS LESS CURRENT LIABILITIES 43,644 880
NET ASSETS/(LIABILITIES) 43,644 880
FUNDS 11
Unrestricted funds 9,719 -
Restricted funds 33,925 880
TOTAL FUNDS 43,644 880
**----- End of picture text -----**
These financial statements have been prepared in accordance with the provisions applicable to charitable companies subject to the small companies regime.
The financial statements were approved by the Board of Trustees and authorised for issue on ............................................. and were signed on its behalf by: 31.7.23
............................................. C J Poortman - Trustee
............................................. P M Matthews - Trustee
The notes form part of these financial statements
Page 9
## **THE CONSTRUCTION SECTOR TRANSPARENCY INITIATIVE**
## **STATEMENT OF CASH FLOWS for the year ended 31 December 2022**
**----- Start of picture text -----**
2022 2021
Notes £ £
Cash flows from operating activities
Cash generated from operations 1 13,768 (377,063)
Net cash provided by/(used in) operating activities 13,768 (377,063)
Cash flows from investing activities
Interest received 36 32
Net cash provided by investing activities 36 32
Change in cash and cash equivalents in
the reporting period 13,804 (377,031)
Cash and cash equivalents at the
beginning of the reporting period 27,431 404,462
Cash and cash equivalents at the end of
the reporting period 41,235 27,431
**----- End of picture text -----**
The notes form part of these financial statements
Page 10
## **THE CONSTRUCTION SECTOR TRANSPARENCY INITIATIVE**
## **NOTES TO THE STATEMENT OF CASH FLOWS for the year ended 31 December 2022**
## **1. RECONCILIATION OF NET INCOME/(EXPENDITURE) TO NET CASH FLOW FROM OPERATING ACTIVITIES**
|**ACTIVITIES**||||
|---|---|---|---|
|**Net income/(expenditure) for the reporting period (as per the**
**Statement of Financial Activities)**
**Adjustments for:**
Interest received
Increase in debtors
Increase/(decrease) in creditors||**2022**
**£**
**42,764**
**(36)**
**(210,391)**
**181,431**|2021
£
(315,104)
(32)
(32,675)
(29,252)|
|**Net cash provided by/(used in) operations**||**13,768**|(377,063)|
|**2.**
**ANALYSIS OF CHANGES IN NET FUNDS**
At 1/1/22
£
**Net cash**
Cash at bank and in hand
**27,431**||Cash flow
£
**13,804**|**At 31/12/22**
**£**
**41,235**|
||**27,431**|**13,804**|**41,235**|
|**Total**|**27,431**|**13,804**|**41,235**|
The notes form part of these financial statements
Page 11
**THE CONSTRUCTION SECTOR TRANSPARENCY INITIATIVE**
**NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2022**
## **1. ACCOUNTING POLICIES**
## **Company status**
The company is a company limited by guarantee. The members of the company are the Trustees named on page 1. In the event of the company being wound up, the liability in respect of the guarantee is limited to £1 per member of the company.
## **Summary of significant accounting policies**
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.
## **Basis of preparing the financial statements**
The financial statements of the charitable company, which is a public benefit entity under FRS 102, have been prepared in accordance with 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 (FRS 102) (effective 1 January 2019)', the Charities Act 2011 and the Companies Act 2006.
The presentational currency of the financial statements is sterling (£).
## **Going concern**
The trustees have assessed the financial position of the charitable company following the net expenditure for the prior and current year. At 31 December 2022 the charity had net current assets of £43,644 (2021: £880) and net assets of £43,644 (2022: £880). In June 2022 FCDO confirmed that £1m has been approved for CoST in 2022-23 with £1m approved in principle for 2023-24 and 2024-25, a total of £3m. This will allow the CoST to have sufficient resources to meet its liabilities as they fall due for at least twelve months and secure its financial position in the longer term.
## **Incoming resources**
All income is recognised in the Statement of Financial Activities once the charity has entitlement to the funds, it is probable that the income will be received and the amount can be measured reliably.
Income tax recoverable in relation to donations received under Gift Aid or deed of covenant is recognised at the time of the donation.
## **Expenditure**
All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the category. Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with the use of resources. Support costs are those costs incurred directly in support of expenditure on the objects of the charitable company.
Charitable activities include direct expenditure associated with providing the charitable services and support costs relating to those activities.
Other resources expended consist of governance costs which include those incurred in the governance of the charitable company and are primarily associated with constitutional and statutory requirements.
## **Taxation**
The charity is exempt from corporation tax on its charitable activities.
## **Fund accounting**
General funds are unrestricted funds which are available for use at the discretion of the Trustees in furtherance of the general objectives of the company and which have not been designated for other purposes.
Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the company for particular purposes. The costs of administering such funds are charged against the specific fund. The aim and use of each restricted fund is set out in the notes to the financial statements.
Page 12
continued...
**THE CONSTRUCTION SECTOR TRANSPARENCY INITIATIVE**
**NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2022**
## **1. ACCOUNTING POLICIES - continued**
## **Financial instruments**
## (i) Financial assets
Basic financial assets, including trade and other debtors, cash and bank balances are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of future receipts discounted at a market rate of interest.
Such assets are subsequently carried at amortised cost using the effective interest rate method.
## (ii) Financial liabilities
Basic financial liabilities, including trade and other creditors are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
## **2. INVESTMENT INCOME**
## **3.**
|Deposit account interest
**INCOME FROM CHARITABLE ACTIVITIES**
Activity
Grants
Charitable activities
Grants received, included in the above, are as follows:
Dutch MinBuZa
The UK Foreign, Commonwealth & Development Office
Inter-American Development Bank
United Nations Development Programme
The World Bank
The Water Integrity Network
The Partnership for Transparency Fund
German Agency for Interantional Cooperation
The Organisation for Economic Cooperation and Development|**2022**
**£**
**36**
**2022**
**£**
**660,088**
**2022**
**£**
**-**
**473,381**
**33,217**
**57,963**
**46,456**
**18,744**
**-**
**25,343**
**4,984**
**660,088**|2021
£
32
2021
£
641,650
2021
£
238,419
367,778
-
8,810
-
13,915
12,728
-
-
641,650|
|---|---|---|
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continued...
## **THE CONSTRUCTION SECTOR TRANSPARENCY INITIATIVE**
## **NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2022**
## **4. CHARITABLE ACTIVITIES COSTS**
All of the funds are restricted
|**Provision of charitable services:**
Supporting national programmes
International programme costs|**Total Funds**
**2022**
**£**
**274,030**
**339,925**
**613,955**|Total Funds
2021
£
483,044
467,061
950,105|
|---|---|---|
|**SUPPORT COSTS**
Finance
£
Charitable activities
**416**
Governance costs
**-**
**416**
**NET INCOME/(EXPENDITURE)**
Net income/(expenditure) is stated after charging/(crediting):
Auditors' remuneration|Governance
costs
Totals
£
£
**-**
**416**
**7,920**
**7,920**
**7,920**
**8,336**
**2022**
2021
**£**
£
**7,920**
6,180||
## **5. SUPPORT COSTS**
## **6. NET INCOME/(EXPENDITURE)**
## **7. TRUSTEES' REMUNERATION AND BENEFITS**
There were no trustees' remuneration or other benefits for the year ended 31 December 2022 nor for the year ended 31 December 2021.
## **Trustees' expenses**
During the year, the trustees' received reimbursement of expenses of £nil (2021: £nil).
## **8. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR**
|Grant debtors
Prepayments and accrued income|**2022**
**£**
**-**
**258,455**
**258,455**|2021
£
12,728
35,336
48,064|
|---|---|---|
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continued...
## **THE CONSTRUCTION SECTOR TRANSPARENCY INITIATIVE**
## **NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2022**
## **9. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR**
|Trade creditors
Accruals and deferred income|**2022**
**£**
**17,925**
**238,121**
**256,046**|2021
£
26,900
47,715
74,615|
|---|---|---|
## **10. ANALYSIS OF NET ASSETS BETWEEN FUNDS**
|**10.**
**ANALYSIS OF NET ASSETS BETWEEN FUNDS**|||||
|---|---|---|---|---|
|Current assets
Creditors due within one year
**11.**
**MOVEMENT IN FUNDS**
At 1/1/22
£
**Unrestricted funds**
General fund
**-**
**Restricted funds**
Restricted funds
**880**
**TOTAL FUNDS**
**880**
Net movement in funds, included in the above are as follows:
**Restricted funds**
Restricted funds
**TOTAL FUNDS**||**Total funds**||Total funds|
|||**2022**
**(Restricted)**
**299,690**
**(256,046)**
**43,644**||2021
(Restricted)
75,495
(74,615)
880|
||Net
movement
in funds
£
**-**
**42,764**
**42,764**
Incoming
resources
£
**660,124**
**660,124**||Transfers
between
At
funds
31/12/22
£
£
**9,719**
**9,719**
**(9,719)**
**33,925**
**-**
**43,644**
Resources
Movement
expended
in funds
£
£
**(617,360)**
**42,764**
**(617,360)**
**42,764**||
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## **THE CONSTRUCTION SECTOR TRANSPARENCY INITIATIVE**
**NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2022**
## **11. MOVEMENT IN FUNDS - continued**
## **Comparatives for movement in funds**
|At 1/1/21
£
**Restricted funds**
Restricted funds
315,984
**TOTAL FUNDS**
315,984
Comparative net movement in funds, included in the above are as follows:
Incoming
resources
£
**Restricted funds**
Restricted funds
641,682
**TOTAL FUNDS**
641,682|Net
movement
At
in funds
31/12/21
£
£
(315,104)
880
(315,104)
880
Resources
Movement
expended
in funds
£
£
(956,786)
(315,104)
(956,786)
(315,104)|
|---|---|
A current year 12 months and prior year 12 months combined position is as follows:
|Net
movement
At 1/1/21
in funds
£
£
**Unrestricted funds**
General fund
-
-
**Restricted funds**
Restricted funds
315,984
(272,340)|Transfers
between
funds
£
9,719
(9,719)|At
31/12/22
£
9,719
33,925|
|---|---|---|
|**TOTAL FUNDS**
315,984
(272,340)|-|43,644|
A current year 12 months and prior year 12 months combined net movement in funds, included in the above are as follows:
|**Restricted funds**
Restricted funds|Incoming
Resources
Movement
resources
expended
in funds
£
£
£
1,301,806
(1,574,146)
(272,340)|
|---|---|
|**TOTAL FUNDS**|1,301,806
(1,574,146)
(272,340)|
Restricted funds relate to grants received towards completion of specific projects. These projects support the charities core objective of "helping participating countries deliver better value from public infrastructure". The charity is required to report the use of the funds to the funding providers.
All funds held at the year end were represented by net current assets.
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continued...
## **THE CONSTRUCTION SECTOR TRANSPARENCY INITIATIVE**
**NOTES TO THE FINANCIAL STATEMENTS - continued for the year ended 31 December 2022**
## **12. RELATED PARTY DISCLOSURES**
As detailed further in the Trustees' Report, the day to day management and finance function of the Charity is undertaken by staff of Engineers Against Poverty (registered charity no. 1071974). Petter Matthews, the Executive Director and a Trustee of the Charity, is also Executive Director of Engineers Against Poverty. During the year, Engineers Against Poverty recharged the Charity £357,459 (2021: £452,601) relating to workshop costs and staff time incurred on the Charity's behalf. At the year end in trade creditors there was £nil (2021: £9,250) and £230,992 (2021: £41,535) of accrued costs. The recharge includes an element of Petter Matthews time.
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