2024-08-31-accounts

Cist drysor Ysgol Gynradd Gymunedol Y Parc Llai Ffordd yr Ysgol Llai Wrecsam LL12 0TR

Treasure Chest Park Community Primary School Llay School Road Llay Wrexham LL12 0TR Tel No: 01978 859100/07565313055 e-mail: [e-mail]

Treasure Chest

Report of the Trustees

For the period of July 2023 to August 2024

The trustees present their report with financial statements of the charity for the period of July 2023 to August 2024.

Objectives and Activities

Objective and aims

• A) To provide the necessary facilities for the daily care, recreation and education of children during out of school hours and

• B) To advance the education and training of the persons in the provision of such care, education and recreational facilities.

Activities and Achievements

Treasure Chest are able to provide full-day care for children from 2 -11 years old from 7.30am to 5.30pm. Treasure Chest provides childcare throughout the year for the maximum of 80 children of both genders, all needs and abilities, depending on the area of the provision.

The childcare areas within the provision are as follows:

Early Birds Breakfast Club – open from 7.30am until 8.45am for pre-school children or for school age children to attend before the school’s free breakfast club initiative opens at 7.45am at the cost of £2.00. This provision is held in the school halls. Up to 16 children can attend this service at any one time.

Free breakfast (Council)

The free Breakfast club starts at 7.45am at the cost of £3.00 until 8.15am, this is paid to the council. All children are offered some breakfast and a drink. From 8.15am to 8.30am children are allowed to attend for free.

Little Gems – runs two funded Flying Start sessions during the day. Up to 19 children can attend this service at any one time in the Little Gems room. Children aged 2 to 3 can also attend our paying all day childcare at various prices and times from £15 to £33.

Little Treasures – provides Funded Early Education sessions which start in January through to July, these sessions run Monday to Thursday AM and PM for eligible 3 year olds.

Treasure Chest Wrap Around – provides wrap around care from children who attend our Nursery provision. Children are able to stay before or after their nursery session. Some children may be eligible for the 30 hours free childcare offer. We are able to provide up to 16 children this provision per session. At the cost of £15.00.

After School Club – runs from 3.00 – 5.30pm daily to provide childcare outside of school hours. Club runs from its own specified area within the school, the main hall, studio hall and utilises the Treasure Chest. Up to 80 children can attend this service at any one time at he cost of £4 up to 4pm and £10 up to 5.30pm.

Holiday Club – runs during the school holidays to provide out of school hours care for 2-11 year olds.

Up to 30 children can attend Treasure Chest at any time.

As the service runs for 51 weeks per year and some elements of the provision only operate during term time, staff will be deployed across whichever childcare rooms are required in order to adequately staff the number of children attending during the school holidays. The cost of these sessions range from £12 up to £33.

Policies

Admissions and fees policy Arrival and collection policy & procedure Anti-Bullying policy & procedure Asthma policy & procedure Accident, incident & illness policy & procedure Behaviour management policy & procedure Children’s participation policy Confidentiality policy Complaints policy & procedure Environmental Awareness policy & procedure Emergency/fire evacuation risk assessment/procedure Equal opportunities policy Excluding children with illness policy Health & Hygiene policy & procedure Health & Safety policy Lost children policy & procedure Medication policy & procedure Nappy changing procedure Outings policy & procedure Play equipment & resources policy Play policy Parental involvement policy Special needs policy & procedure Safe internet usage policy Settling in & child induction policy Student & volunteer policy Staff recruitment policy Snack/mealtime & healthy eating policy & procedure Staff disciplinary procedure

Transition policy Uncollected children policy & procedure

Financial review

Reserves policy

The trustees will maintain sufficient reserves to ensure there are sufficient funds to cover 1 months running costs and redundancy payments for staff

Structure, Governance and Management

Governing document

Treasure Chest is a Charitable Incorporated Organisation and is governed by the Charities Act 2011. Treasure Chest became a registered charity on the 3[rd] May 2018.

Recruitment and appointment of new trustees

The policy and general management of the affairs of the Club is carried out by trustees which consists of the Chairman, Secretary, and Treasurer and not less than two or more than eight other members of the Club elected at the Annual General Meeting.

Other persons may be co-opted onto the Committee in an advisory capacity as required.

Reference and Administrative Details

Registered Company number

CE013984 (England and Wales)

Registered Charity number

1178219

Principal address

Park CP School School Road Llay Wrexham LL12 0TR

Trustees

S Owen Chairperson (appointed 3/5/19) Mrs Martin Hon. Secretary (appointed 3/5/18) Mrs L Jones (appointed 3/5/18) Mrs R Billington (05/22) Mrs C Lucas. Treasurer (appointed 20/09/23)

Approved by order of the board of trustees on 14/01/25

and signed on its behalf by : S.Owen . Scot Owen - Trustee

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Treasure Chest Report 2023124 24/11/2024 Deborah Foulkes MIIA

1.Introduction 1.1 Baekground Information about Treasure Chest, Ilay Treasure Chest, based at Park CP School in Uay, Wrexbam, is a comprehensive and flexible childcare service dedicated to providing quality care and educational opportunities for children aged 2 to ii. Their mission is to create a safe, nurturing) and stimulating environment where children can learn> play* and grow. They offer a variety of childeare provisions designed to meet the diverse needs of families in the community, including: Flying Start (Little Gems): A free early-years education program for eligTr>le families. Early Education (Little Treasures): A structured early years eurriculum, preparing young children for school readiness. Nursery Wraparound: Tailored &qre for children attending morning or afternoon nursery sessions. Breakfast Club: A nutritious and fun start to the school day. After School Club: A relaxing and engaging space for children after school. All Day Care for Under 3's: Specialized care for our youngest children. Holi(lay Club: Full-fill￿ holiday prO￿aM$ during school breaks. They operate from 7.3oam to 5.3opm 1.2 The Importance of QU￿lty Childcare Services The demand for flexible and accessible childcare services has grown significant]y in recent years, driven by an increasing number of working parents and a desire for more diverse and personalized cbildcare options. servI￿s like Treasure Chest are integra] in supporting the well-being and development of children while offering peace of mind to paTents. 1.3 A Growing Need for A￿essIble Childcare Childcare services like Treasure Chest are essential in tOda￿S society. They support families by offering a range of services that align with parents, busy schedules, ensuring chlldren have access to quality care, socialization, and development opportunities. This helps children develop the skills they need to succeed both in and out of the classr(K)m. Moreover, these programs often provide critical support to parents juggling careers, edueation, and family life, malung flexible, reliable ehildcare an invaluable asset for many families. Please note that Treasure Chest is separate from the school and operates independently with its own pr(￿ureS and policies. 1.4 Payment Information At Treasure Chest, they use ParentPay for all bookings and payments. This system ensures a Srn￿th and secure process for parents, allowing them to manage their bookings, make payments, and aece&8 detailed infonnation about your child's care Itesting of the parent pay system was out of the audit scope). Treasure Chest 2023124

1.5 Impact of Declining Pupil Numbers on Treasure Chest Child Care Servlce, Uay The Tre&8ure Chest Child Care Ser¥oee in Ijayj a key provider of early education and childcare in the region, faces the challenge of adapting to a potential dedine in pupil numbers due to demographic shifts. Declining birth rates, changing local economic conditions, and evolving migration patterns all contribute to the changing demand for thildcare se￿ieS. If the local population of nursery and infant-aged children is expected to decrease over the next 3 to 5 years, as suggested by national trends of declining fertility rates, the service will need to adjust its operations to remain sustainable. 1.6 Key Demographic Trends in Uay and Wrexlwn Whilst specific local population projections for Uay and Wrexham are n(rt immediately available at the point of the review, broader trends suggest a slowing p)pulation growth in nllal and suburban areas, alongside a shift toward urban ￿ntres. Nationally fertility rates have been decIining, leading to fewer children in the population overall. Wrexham, whieh is part of the North Wales region, has seen fluctuating growth, with some areas experiencing a slight decrease in child numbers due to migration and changing socio-economic conditions. Projections from the Office for National Statistics (ONS) and local authorities suggest that this trend could continue, especially in rural or less densely populated areas like Ijay. 1.7 Potential Impacts on the Treasure Chost Child Care Service Reduced Enrolment and Revenue: As the population of ebildren in the nursery and infant age groups declines, the number of children attending the Treasure Chest Child Care Service is likely to decrease. This could lead to reduced revenue, affecting the financial sustainability of the service. The reduetion in the number of children attending n￿Y make it harder to maintain current staffing levels or justify the eosts associated with maintaining the facility at full capacity. Increased Competition: A smaller pool of children may intensify competition among local childcare providers. If other nurseries or childminders in the area also face similar demographic shifts, the service will need to differentiate itself through quality offerings, flexible pricing, or enhanced services to retain and attract families. Changes in IL)cal Employment: With feiver families and children in the area, loeal emplojment patterns may shift. If parents are working fewer hours or movins to larger towns or cities for eTnploymenL this could affect the demand for full-time ehildcare. The service may see an increase in demand for part-time care or after- school programs rather than full-day care. 1.8 Strategic Planning and Adaptation To ensure continued success, the Treasure Chest Child Care Service will need to plan proactively and adopt a flexible approach in response to declining pupil numbers. Key strategies might include: Cbst Efficiency and Staffins Adjustments: demand for services decreases, the Organization may need to review its staffing model to ensure that it remains cost- efficient while still providing high-quality care. This could involve reducing staff hours, consolidating roles, or considering flexible staffing models based on denwid. However, maintsining a ratio of staff to children that Complies with regulatory requirements must remain a priority. Diversiflcation of Services: To eater to a broader range of famili&s, the service could consideT expanding its offerings. This might include specialised programs for children with additional needs. Developing a reputation for hIgh￿llaI1ty specialised services could help attract more families even in a deelining population. Community Engagement and Partnerships: The service should strellgthen its ties with the local co]nmunity. Engaging with parents and caregivers, understanding Treasure Ch05t 20231d4

their needs, and offering tallored solutions could help retsin existing clients. Additionally, partnerships with local schools, health providers, and other organisations may provide OPF()rtunities for joint programs that could increase visibility and demand. Marketing and Branding: In the face of demographic changes, effective marketing will become increasingly important. The Se￿ice should emphasise its unique value proposition-whether that's experienc￿ staff, excellent facilities, or a comrnitment to children's well-being. Digitsl marketing campaigns targeting I￿1 families, as well as word-of-mouth from satisfied parents, could help attract new families despite population dedines. Monitorins and Responding to Population Tren(Ls: Whilst population projections indicAte a potential decline, staying infonned on local demographie trends Mill be essential. The seTviee should engage with local government and educational authorities to traek any shifts in population growth OT significant infrastructure developments in the area that might affect ch71dcare demand. Flexible Pricing Models: If eeonomic conditions change or families face financial pressures due to a reduced number of working-age adults in the area, the Treasure Chest Child Care Service could consider implementing flexible pricing models, offering discounts for siblingsj or creating loyalty programs to retain dients. Conclusion The Treasure Chest Child Care Service in Llay will face challenges in the coming years due to potentially declining pupil numbers. However, by adapting to demographic shifts, diversifying services, maintaining high-quality eare, and staying responsive to community needs, the service can continue to thrive despite these changes. Proactive planning. informed by both local trends and broader national projections, will enable the senTice to stay resilient in an evolving landscape. 1.9 Auditee Details Treasure Chest Manager, Elaine Owen, or Assistant Manager Jessica Williams: Contact number: 07565313055 Email: treasuTechest]lay@gn]ail.com Treasure Chest 2023124

1. Scope of Financial Review for Treasure Chest, Ilay (2023124) Objective The prirnary objective of this financial review is to assess the financial performance, internal controls, and financial management procth8es of Treasure Chest, Llay for the fiscal year 2023/24. This review Mryll ensure that the organisation operates efficiently and sustainably, while a]so meetkng its obligations as a registered charity. 2.1 Scope of the Review The review cover the financial asw of the Treasure Chest operations, with particular attention to the following are&8: Income and Revenue Analysis Review of ParentPay usage and reconciliations. Asse&8ment of funding sources, including any government funding (e.g., Flying Start and any grants received). Analysis of any special discounts, subsidies, or funded places. Comparison of projeeted revenue versus actual revenue for the 2023124 period. Expenditure and Cost thntrol Detailed review of operating Costs, including salaries and wages for staff (e.g., Treasure Chest Manager, Assistant Manager, and other childcare staffj. . Financial Reporting and Recordkeeplng Relryew of internal Controls and procedures for tracking income and expenditure, ensuring that the organization complies with charity accounting Verification that all income is accurately recorded and appropriately allocated in accordance with the charitys objectives. Cash Flow and Liquidity Review of cash flow management practices, ensuring sufficient liquidity to meet operational needs. 2.2 Methodology Document Review: Examination of financial records, bank statements, income and expenditure reports, any prior audit reports for the period under review. Interviews and Discussions: Discussions with the Treasure Chest Manager (Elaine Owen) and key financial staff regarding day-to4ay financial operations and control pro(£w. Data Reconciliation: Cross-referencing income data from ParentPay with financial reeords and bank statements. Trnasur• Chest 2023124

Analysis.. Benchmarking financial perforniance against industry standards for childcare and charitable organisations, focusing on key financial ratios and perforniance indicators. 2.3 Key Deliverables A Financial Review Report highlighting key findings) induding any discrepancies, areas for improvement, and compliance with financial regulations. Recommendations for improving financial praciices, internal contro]s, and budgeting procedures. An asstssment of sustainability, including how well Treasure Chest can continue to meet community needs without compromising financial health. 2.4 &)nelusion The financial review aims to provide a thorough analysis of Treasure Chest, LIa￿S financial standing for the 2023124 period, ensuring that the cbarity is effectively managing its resources to continue delivering hIgh-qu￿lty childcare services. This review will highlight strengths and areas for improvement, offering actionable insights to n￿ints1n financial S￿inablI1ty and ensure continued success as a regisiered charity. Treasure Chest 2023124

3.Finding8: _ Income and Revenue Analysis Review of ParelltPay usage and reconciliations. Assessment of ￿nd]Thg sources, including any government funding (e.g., Flying Start and any grants received). 3.1 Findings and Observations - ParentPay Usage and Reeonciliation8 Mi&sing Documentation and Insufficient Evidence: Monthly ParentPay Reports are not being eonsistently downloaded and Teconciled the bank statements. This lack of monthly reconciliation creates a risk of income being misreported or inaccurately allocated. Recommendation: Set up a system to doNvnload and save monthly reports from ParentPay, ensuring each report corresponds with the bank statement to allow for proper reconciliation. 3.2 We]sh Government Funding Mi&sing Documentation for the Welsh Government: Key Welsh Government funding paperwork is missing, and not all ne(Essary documentation is filed correctly. This raises Concerns about potential arrears in funding or delayed payments. Without proper docurnentation, it's difficult to deternine whether all funds owed have been received, or if any payments are overdue. Recommendation: Collect and organise all Welsh Government-related paperwork, ensuring that every ￿ndIng agreement, payment confirmation, and relevant documentation is stored in a single, accessible ffle. Regularly verify with the Welsh Government whether all outstanding payments have been received. 3.3 Wrexham County Borough Council (WCBC) Funding Missing WCBC Documentation: Similar to the Welsh Government, WCBC funding documentation is missing. This could potentially result in discrepancies in the amount of funding received or owed by the CL)uncil. Ilecommendation: Verify Muth Wrexham County Borough Covncil to confirni the exact funding amounts due to Treasure Chest and track all incoming payments. Collect any missing documentation to ensure proper record-keeping and accurate reconciliation with bank statements. 3.4. ParentPay Arrears and Income Allocation Potential Arrears In ParentPay Income: The audit suggests that there n]ay be some arrears in ParentPay payments, meaning that some income expected in the 2023/24 period could have been carried over into the 2024/25 financial year. Treasure Ch•st 2023124

This could lead to discrepaneies in the totsl income figures foT the year if the arrears are not accounted for. Recommendation: Implement a process to identify and traek ParentPay arrears, ensuring that any outstanding payments are recorded and carried over correctly into future periods. Regularly reconcile ParentPay income bank statements and check that all payments have been received by verifying balances against the reports from ParentPay. 3.5. Total IncoJDe Summary as Per Bank Statement The following summary outlines the total income received during the period under Income Source NATIONAL SAVINGS £25,586.00 BAC COMP VOUCHER SERV £2,750.00 BAC DWP RESOURCE MANAGER £105.00 BAC EDENRED £1,386.00 BAC ENJOY BENEFITS LTD- MAISIEEDWARD £787.00 BAC PARE￿PAy LTD- TRE4SURE CHEST £33,7T/.40 BAC WREXHAM Coul￿y BC £75,850.53 BAC WEISH GOVERNMETr￿- TREASURE CHEST £109,582.50 BAC WIDER PLAN LTD. KEIRA sM￿H £1,650.00 Total Income £2519474.43 The totsl income summary per the bank statement for 2023124 15 £2519474.43. Childcare income listed on the bank statement is £u.523.86, M4)ich appears to be a breakdoMTr of income directly related to the childcare sernees provided by Treasure Chest. Recommendation: Cross-reference this childcare income with ParentPay monthly Teports to ensure no discrepancies exist. Note: This total is based on reported transactions. Summary and Recommendations ParentPay Income: Ensure that all monthly ParentPay reports are downloaded, store(t and reconciled with the bank statement. Develop a dear audit trail for voucher transaetions to enhance transpareney. Missnng Documentation: Immediate action should be tsken to gather all mi&8ing documentation related to the Welsh Govenllnent and Wrexham Col￿ty Borough Council payments. Confirm outstanding payments and reconcile them th the bank accounts to ensure that Treasure Chest is actually receiving the income they are entitled too (errors can be made by outside organisations). Treasurè Ch•st 2023124

Potential Arrears: PaTentPay arrears should be tracked and reconci]ed, with attention given to any potential income carried into the next fiscal year. This will ensure that total income is accurately reported. Financial Reconcxliation: Regular Teconciliation of income against bank statements. alongside maintaining detailed financial records, will improve accuracy d help identify discrepancies early. This audit has highlightsd areas where improvements can be made in financial record- keeping} reconciliation, and d(￿ll￿entatiOn, which will enhance transparency and ensure that Treasure Chest is compliant with its financial management obligations. FINDINGS 4. - VAT Refund Eligibility for Charities in Wale8 Charities in Wales (and the UK) are often eligible to claim VAT refunds on goods and senrices purchased in relation to their non-business activities, including chiRd&qre services. The nlles governing VAT refunds for charities are set by HM Revenue & Customs (HMRC). The key areas to (J)nsider are: Non.business vs Business Activitles: Non-business activities: Services provided to the public for free or at a low cost, such as childcare (e.g., after school dubs, holiday elubs. etc.), are usually exempt from VAT. Business activities: If the charity charges for serkices or activities that could be cl8tssified as ￿UsInesS activities," then VAT would generally apply to those activities. This could include income from fee-pa>ing childcare seTric£s where the charity is charging VAT. Treasure Chest primaiily offers ehildcAre services that are non-bThginess in nature, which means it is likely that most of the services it proTrides would be exempt from VAT. However, it may still be eligible to claim back VAT on certain purchases that are used for its non-business aetivities. 4.1 Time Period for Claiming VAT Refunds Findings: No VAT has been daimed back for over 4 years. Charities can generally backdate VAT refund daims for a period of4 years. However, for a claim to be valid, it must relate to purchases made within this 4-year window, and the charity rn￿st ensure that it has retained the proper invoices and records to substantiate the claim. For example, a charity can claim VAT refunds on purchases made in the 2020/21 financial year if they are daiming in the 2024125 financial year* provided the appropriate reeords are available. Key Conslderation: Claims can be made for purchases made in any of the last 4 years. Claims niust be submitted by the end of the fourth year (e.g., purchases made in 2020 can be claimed for until the end of 2024). 4.2 Period for Claiming VAT Refunds Treasure Ghest 2023124

Charities can generally backdate VAT refund daims for a period of 4 years. However. for a claim to be va]i(L it must relate to purchases made within this 4-year window, and the charity must ensure that it has retained the proper invoices and Tecords to substsntiate the daim. For example, a charity can claim VAT refunds on purchases made in the 2020121 finaneial year if they are claiming in the 2024125 financial year, pro￿lded the appmpriate records are available. Key Consideration: Claims call be made for Purchases made in any of the last 4 yeaTS. aaims must be submitted by the end of the fourth year (e.g., purchases made ill 2020 can be claimed for until the end of 2024). 4.3 Process for Claiming VAT Refunds Charities can reclaim VAT on purchases using the CharityVAT Refund Scheme. This is a scheme a(Iministered by HMRC that allows charities to reclaim VAT on goods and services used for non-business activities. The proce&s of submitting a VAT refijnd daim typically involves the following steps: Stepby-step Process for aaiming VAT Refund: Determine Eligibility: Ensure the charl￿S a(tivities are primarily non-business and the purchases are relevant to the non-business activities. Retain Invoices and Records: Collect and maintain VAT invoices and receipts for all relevant purchases. For example, rf the charity purchases items like toysg books, educational supplies, or even building maintenance used in their chi]dcare activities, VAT on these purchases could be reclaimed. VAT 126 Fonn: Complete the VAT 126 fom to reclaim VAT. This form is specificglly designed for charities to claim VAT refunds. The form requires detailed infonnation on the VAT incurred, including: Abreakdomm of purchases and services. The VAT paid on those purcha￿. The period for which the claim is being made. Submit Claim to HMRC: Submit the completed VAT 126 form to HMRC. Claim8 &qn be made online through HMRC'S VAT online services portal. Refund Pa)Thent: Once the clairn is processed, HMRC will issue a refimd to the charity. Important Documents for VAT Claim: Invoices with dear VAT details. Recelpts for all qualifying purehases. Accounting records detailing how VAT has been attributed to non-busine8S activiti&s. Treasur• Chest 2023124 10

4.4 Most Effective and Efficient Way to Manage VAT Claims Managing VAT re￿n￿$ efficiently involves maintaining a elear and organised system for tracking all VAT-related transactions. Here are several best practices to ensure efficient management of VAT elaims for Treasure Chest.. . Organised Record.Keeping: Ensure that all invoices and receipts are kept in an organized system, categorised by the tsTre of purch&8e (e.g., childcare materials, equipment, utilities). Implement a digital system for storing invoices to reduee the risk of lost documentation. Regular Reconeiliation: Reconcile all VAT pasrynents regularly with the chariws financial records. This will ensure that no VAT pasrynents are overlooked and proTride an ongoing view of any VAT that can be reclaimed. This should be done monthly or quarterly as part of the regular financial review process. Dedieated VAT Management: Assign a peTson or team (e.g., a financial officer or accountant) to s￿]fiCallY manage VAT claIn￿ and ensure compliance with HMRC requirements. If the charity does not have the expertise in-house, it is advisable to consult with a VAT specialist or accountant who has experience workkng with charities. Timing of Claims: Submit VAT claims regularly, ideally at the end of each financial year, but no later than the end of the 4-year period from the date of purchase. Avoid waiting until the last minute to submit claims, as this lead to erroTS or miss&1 opportunities for refunds. Consultation with HMRC: If there is any confusion about what can or cannot be claimed, or rf Treasure Chest is unsure about the categorisation of certain expenses, it is advisable to eontaet HMRC directly for clarification. HMRC offers advice on VAT refunds for charities and can provide support ith any eomplicated or unusual &￿es. 4.5 Qlndusion and Recommendations Treasure Chest, Llay is eligible for VAT rthn(Ig on goods and services purchased in relation to their non-businw activities (primarily childcare services). To ensure maximum financial efficiency, the charity should: Gather and organise all relevant purchase invoices from the past 4 years to verify VAT paid. Treasure Chest 2023124 11

CA)mplete and submit the VAT 126 form for refLmds on eligible purchases. Fstablish a clear, efficient VAT tracking system to ensure all eligible VAT is reclaimed and no purchases are overl(K)ke Consult wlth & VAT specialist if the proce&q is unclear or if complex VAT issues arise. Ensure that claims are submitted on time (within the 4-year backdating window) to avoid missing potential refunds. By implementing these best prnctices, Treasure Chest can optimise its VAT refund process, ensuring that it is financially sustainable and efficient in managing its resources. The Auditor provxde a template to assist the Treasure Chest, along a to track VAT-related transactions. Additionally? relevant internet links will be provided to direct you to the official HMRC website for the necessary forms and for submitting online VAT claims. VAT Clalms Process: For your fiTSt VAT claim. we recommend that you review all eligible expenses from the past four years, as this could result in a significAnt refund. As a charity. you are eligible to claim VAT on certain items. Pl&￿e note: Items/services typically excluded from VAT claims: (Indude any exclusions, such as VAT on certain staff-related costs, non-business activities, ete.) We suggest drafhng a covering letter to HMRC explaining that this is your first VAT daim and requesting that your charity be set up for electronie submissions. In the letter, ask HMRC to provide you with a unique Gateway number and any other detsils required for accessing their on]ine services. We recommend that you organise your invoices by year and cornplete a spreadsheet to record each VAT traDsaction (it Mryll be easier then to copy and paste the inforniation electronically over to the paper fom or the online site). Begin by completing the paper form for the initial elaim year, then proceed with the online submission for subsequent years. Once the electronic setup is complete, VAT reftu]ds are tjyically processed prompdy, which will greatly benefit the Treasure Chest's finances. We trust this guidanee wlll be help￿1 in facilitating the VAT claim process. Treasure Chest 2023124 12

5Audit Analysis of Treasure Chest After School Club (Charity) - Financial Discrepancies and Risks The follomung analysis presents an in-depth review of key discrepancies and issues identified during the financial audit of Treasure Chest, Llay for the 2023124 period. These issues indude mismatches between the bank statements and the Treasure Chest balanee sheet and missing documentation. The review highlights the financial risks associated non-compliance and missed payments, along with recommendations for improving the fU￿ne181 oversight and reconciliation prO￿$s. 5.1. Discrepancies Between Bank Statements and Balance Sheet Multiple instances were identified where figures on the bank statement did not ali with the correspondiug entries in the Treasure Chest balance sheet. These discrepancies include: Unreconciled Transactions: In several cases, the amounts on the balance sheet did not match the amounts recorded on the bank statement. For example, a payment of £23?426.80 (as per the bank statement dated 12110/2023) was recorded as £17*449.24 on the balance sheet. These discrepancies were not adequately explained or documented, leading to Confusion about the accuracy of the financial records. MissingTransaetions: Payments from People's Partnership were recorded on the bank statement for 0110512024 and 31105/2024 (totaling £855.58 and £891.26, respectively), but there were no corresponding entri&s in the baIance sheet. These missing amounts raise coll￿rns about y)tential accounting errors or missed payments. No Audit Trail: In multiple instances, documentation was not available to verify the knnsactions listed in the bank statements, such as payments made to HMRC, People'8 Partnership, and others. Without supwjrting evidence, the accuracy of these entries cannot be confimed, creating a risk of financial misreportiDg. Although, after meeting with Management and staff this infornydtion can be domryaoaded electronically. It was therefore advised to proTride this information in futhre. 5.2. Missing Dlreet Deblt Payments (DD) Direet Debit Discrepancies.. Several Direct Debit (DD) pa￿Dents were either missing from the balance sheet or had discrepancies in amounts recorded in the financial documentation. For example, payments to People's Partnership were recorded on the bank statement but did not appear in the balance sheet for the corresponding months. Missing from Balance Sheet: A review of the transactions between April and May 2024 revealed DD payments from People's Partnership (totaling £855.58 and £891.26), which were not refieeted in the balance sbeet. This could indicate either a data entry error, a missed payment, or an oversight in updating the ba]ance sheet. 5.3 HMRC Liabilities and Non-Pa￿ent Risks Treasure Chesi 2023124 13

It was noted that there were outstanding PAYE liabilities with HMRC, resulting in a tax underpayment for the 2023/¥ perio(L The following details outline the underpayment amounts due to HMRC: Underpayment Details (2023/24): Febrnary 28, 2024: PAYE underpayment of É2.561.25, broken down as follows: Tax: £872.54 Class i NIC: £1,667.20 Interest: £21.51 March 199 2024: PAYE underpayment for January 2024. totaling £2,572.00, broken down as follows: Tax: £872.54 Class i NIC: £32.26 Interest: £32.26 This underpa)rynent has Taised con(Erns about potential interest and penalties aceruing if these HMRC liabilities are not settled promptly. Interest and Penalties: If th￿e outstanding liabilities are not addressed on time, there is a risk of additional interest charges and penalties. These Could exacerbate the charitys financial situation. For a charity like Treasure Chest, any delay in HMRC payinents could also lead to reputational damage and incre&se the likelihood of regulatory scrutiny. Non-compliance: Failure to meet HMRC'S tax obligations is a significant i&8ue, particularly for a registered charity like Treasure Chest, whicb is subject to rigorous financial oversight. Prolonged non-payment could jeopardize the chariws charitable status and lead to further compliance issues. Incorrect Staff Payinents: l)uring discussions with management, it w&8 noted that there were instances where staff payments were incorrect. Wl)ile staff took corrective action by resubmitting adjusted amounts, this process has caused confusion regarding the HMRC calculations. This discrepancy has Contributed to the complications in the tax underpa)qnent and must be addressed to ensure accurate and timely submissions moving forwar Recommendation: To mitigate the above risks, it is crucial tbat a dear and strneknred payment schedule is established for HMRC liabilities. The charity should work closely with an accountant to e]Mire full compliance with all PAYE, NIC, and tax obligations. Additionally, an independent reTrryew of HMRC liabilities should be conducted monthly to ensure that pajrnents are made on time and that no further arrears accumulate. Speeial attention should be given to resolving any inconsistencies in staff payments and ensuring that these are accurately reflected in HMRC fflings. By implementing these measures, the charity Ian better ensure timely and accurate tax compliance, reducing tbe risk of penalties and safeguarding its charitable statijs. 5.4 Evaluation of the Financial Reporting Structsre: Accuracy and Transparency of Financial Statements: The financial reporting is fairly detailed, listing Ix)th ineome and expenditure for each month. with a clear breakdowm of the categories such as staff wages, HMRC payments, consunthblesl grants, etc. However, some rnissing balances and incomplete data are noted, such as the December income and expenditure not being reported and several months where a balance sheet is not provided (e.g., September, February, March). Treasure Chest 2023124 14

There is a variance noted between actual figur08 recorded in the balanee sheets and reported figures in several months. For example, in June, there is a variance of £891.26 between the expenditure reported and the actu21 balanee sheet total, indicating discrepancies. Transparency: While the charity reports various categories of income and expenditure, there is a lack of clarity or inconsistency in some data (e.g.. missing entries for 'Peoples Partnership, dlrect debits and absenee of audit trails for certain expenditure items like bank charges and consultancy fees). The absence of a complete balance sheet for several months also suggests gaps in financial documentation, which could affect the transparency of reporting. 6. Review of Internal Controls and Procedures for Tracking Income and Expenditure: Tracking Income and Expenditure: The charity has a robust categorisation system, tracking income sources such as government grants (e.bn, Welsh GovernAnent, EE grants, WCBC), and expenditure such as staff wage8, consultancy) and services (e.g•g Rentokil, HMRC). However, the aceuracy of recording is an issue in several areas. For instance, some pa￿nents to HMRC (e.g., PAYE liabilities) and other regular paJThents, like to Peoples Partnership, are mi&sing from the balance sheet or not recorded in a timely manner. For example, missing direct debits and payments not reconciled with the bank statements present a risk of inaccurate reporting. IAck of Audit Trail for (krtain Expenditures: There were instances of lack of supporting documentation or audit trai￿ Management however, can download the majority of the expenditure documentation electronically and was advised to provide it going forward. Treasure Chegt 2023124 15

1. Verification that All Income is Aecurate]y Recorded and Appropriate]y Allocated: Income Allocation and Verifieation: The reported income sources, including voueher payments, bank transfers, government grants, and fees from services {e.g., Parent Pay), are listed in the breakdowns, with most months showing no signifi&2nt discrepancies between the reported ineome and the balanee sheet totals. However, in Januaryg there is a variance of £2,250 between the reported income and balance sheet totals. This suggests that some income might be underreported or incorrectly allocated, indicAting potential wealulesses in income tracking or recording. The missing balanee sheet in December further complicAtes verifieation, as this key month laek8 hjll reporting, which impairs the charity's ability to properly allocate income and ensure it matches the chariws operational goals. However, the balance sheet is stored electronically by Management and in future all balanee sheets will be provlded going forward. Treasure Chest 2023124 q6

2. Assessment of Budgeting Proeesses. Induding Foreeasts and Variance Budgeting and Forecasting: Budgetin8 appears to be reactive rather than proactive. There is no explicit mention of formal budget forecasts for 2023124 or an annual budget within the documentation. Variance ana]ysis seems to be done post- factum, as seen in the monthly financial reporLg. where actual income and expenditure are Compared with balance sheet tots]s. However. the variance analysis is incomplete in ￿rtain months, and some diseTepancies (e.g., June's £891.26 variance, January's £2)250 variance) lack detsiled explanations or eontext. While the ineome versus expenditure analysis shows an overall balance (with small discrepaneies), there is no detailed discu&8ion about whether the charity met its financial goals or whether the budgets were realistic for each category of expenditure. For instance, significant spending in categorles like staff wages, HMRC, and consultancy fees could benefit from dearer explanations in the context of the charity's overall objectives. y￿lance tracking (Ftheen actual income and projected income) does not seem to have a forn]alised process, which might lead to inefficient or suboptimal financial planning. Inconsistencies in Recordkeeping". Some diserepaneies exist between the recorded figures and the actual balance sheet totsls, with missing data for certain months. These inconsistencies suggest that the financial records might not always be up-t(Fdate or accurate. which undermines the integrAty of finAneR81 lack of Complete Documentation: Abalanee sheets and incomplete audit could raise concerz]s about the Charitys internal controls and its ability to track income and expenditure reliably. Audlt and Transparency Concerns: Missing dr￿mentatIOn for certain expenditure categories (e.g., consultancy and bank charges) compromises transparency and may hinder proper oversight. Variance In Ineome and Expenditure Allocation: The charity appeaTS to be reasonably go(A at tracking income sources, but ineonsistencies and unexplainable variances (e.g., missing direct debits) suggegt weakne&8es in income allocation and overall financial reconciliation. Budgeting and Financial Planning Gaps: While there is some form of financial tracking and reportingi a more structured approach to budgeting and forecasting is needed. The lack of detailed variance explanations and forecasted figures hinders the charitys ability to proactively manage finances aDd plan for future financial Treasure Chest 2023124 17

Recommendations: Improve Documentation and Audit Trails: Ensure that a]1 expenditure, especially smaller items like bank charges, consultancy fees, and training costs, are properly documented with supporting r￿ipts or contracts. Maintain uTrto-date balanee sheets for every month and ensure that no dats is missing. Strengthen Internal Controb: Irnplement stricter pro(thures for tracking and reconciling direct debits, grants, and bank transfers, ensuring that all payments are correctly recorded and aligned with the financial statements. Enhance Budgeting Practices: Fstablish a dear budgeting process with forecasts for each financial year and track the aetual perforniance against budget on a monthly bosis, induding detailed variantr analysis. Increase Transparency and Reporting Accuracy: Conduct regular independent reTruews and audits of the financia] records to verify the accuracy and transparency of the financial reporting, ensuring that the charity complies with charity accounting standards. The auditor can provide Treasure Ch&st with a budgeting spreadsheet should they require. Treasure Chest 2023124

1. Key Observatlons: osing Balance Trends: The opening balanee for September 2023 Starts high at £809479.p but gradually decre&8es to £54,689.35 by August 2024. The overall trend shows a gradual depletion of cash reserves, with several months showing a negative profit/loss, where the debit (expenditure) exceeds the credit (income), causing a reduction in the closing balance. 7.2 Profit/lA>SS (Net Cash Flow) Trends: 7.3 Negative Cash Flow: Several months show a negative cash flow (e.g., August, July, June, April, February? December. and September), meaning the charity's expenses exceed its Income in those months. 7.4 The largest negative profitlloss occurs in November 2023, where the loss is- £20)994.69, followed by June 2024 at-£8?556.13. 7.5 Positive Cash Flow: Some months. such as May 2024 (+£16,266.76) and January 2024 (+£4,001.60), show positive cash flow, where income exc£eds expenses. This helps partially offset the negative months but do&sn't fully reverse the downward trend in the cash balance. Treasure Chest Month Open Balance Deblt Credlt ProfltlLoss Uoslng balance Aug-24 58612.53 20702.56 16779.38 -3923.18 54689.35 c105in8 balance Jul-24 Jun-24 May-24 Apr-24 Mar-24 Feb-24 J3n-24 Dec-23 Nov-23 Oct-23 Sep-23 59068.72 26232.25 25776.06 67624.85 22693.03 14136.9 51358.09 22575.93 38842.69 58274.69 22941.99 16025.39 62644.07 27787.05 23417.67 70468.26 29492.85 21668.66 66466.66 22801.53 26803.13 73968.(K> Wl 23254.55 1115753.15 80862.75 22581.19 1586.5 65227.41 25096.06 80479.71 25629.72 456.19 -8556.13 16266.76 -6916.6 -4369.38 -7824.19 4CKII.6 -7501.4 -20994.69 15635,34 -15252.36 58612.53 59068.72 67624.85 51358.09 58274.69 62644.07 70468.26 66466.66 59868.06 80862.75 65227.35 40731.4 10377.36 Opening balance- Closlng balance 80479.71 54689.35 25790.36 Treasure Chest 2023124 19

We wish to draw attention to the fact that, despite a projected loss of £25y780 for the 2023124 period, which results in a dosing balance of £54,689.35, the opening balance for 2021/22 was £659981.18. Furthermore, the brought forward balance for 2022123 was £8oy479.T/ As highlighted at the outset of this report, the financial perforniance of Treasure Chest is largely dependent on pupil numbers. Additionally? discussions with management have revealed that the increased room hire costs during the 2023/24 perlod have further impacted the financial outcome. 8 Cash Flowvokntility: The charity experiences significant volatility in its cash flow, with some months showing large negative cash flows, which leads to a reduction in liquidity. For 8.1.1 November 2023 Stands out with a massive loss, which can be attributed to large expenditures not matched by corresponding income. This kind of fluctuation in cash flow could signal that the charity is not consistently generating enough income to cover its expenses. 8.2 The profit/loss in Ortober 2023 and May 2024 are notable as positive eash floME that contribute to rebuilding the closing ba]ance. However, these surpluses are insuffirAent to counterbalance the months with negative cash flow. 9 LiquidityAn￿yS1s. 9.1 liquidity Risks". The doslng balance consistently decreases, which suggests that the charity might face liquidity challenges if this trend continues but again they are reliant on pupil numbers. If there are further months with negative cash flow, the charity may strnggle to meet its financial obligations Without securing additional ￿nding or adjusting its spending. 9.2 As of August 2024, the closing balance is £54,689.35 (please refer to Appendix A), which is still relatively healthy but repr&sents a significant reduction from the £80?479.p in September 2023. A continued reduction in reserves could lead to cash shortages, which would negatively impact on the chariws operations. io Ijnpact on Fluctuating ￿￿enditUreS aDd Income: Expenditure Management: The ehariws expenditure is highly variable across months. While some months show relatively moderate expenses, other months have spikes in spending that may not always be aligned with income patterns. This is evident in months like November, where expenditure exceeded income by a large margin. 10.1 Income Variation: Similarly. income levels fluctuate, with larger credits in May? October, and January, which are Dot consistently followed by similarly high levels of income in subsequent months. The cbarity's reliance on certain TroasuF¢ &J23124 20

incon]e sources, such as government grants or large onevoff payments, may explain some of this inconsistsncy. Recommendations for Improvement: i. Improve Expense Management: The charity has reviewed its petty cash expenditure, which is a positive step. It would also be beneficial to analyse expenditure patterns to identify additional cost-savlng opw)rtunities, especially in months with negative cash flow. 2. Stabilise Income Streams: The charity should fceus on diversifying its income sources to reduce cash flowvolatility. This could involve securing long-term sponsorships or other stsble funding streams. 3. Build Cash Reserves: The charity has some c&8h reserves, including a £26,000 reserve account. Accessing and utilising these Teserves effectively could provide an additional income stream if the interest rate is favourable. If there are difficulties accessing the account, consider seeking advice on transferring the fimds to a more suitsble account with better controls, such as exploring options with Unity Bank. 4. Cash Flow Forecasting and Budgeting: A more robust cash flow forecasting system should be implemented to anticipate potential financial strain and plan accordingly. Budgeting for larger expenditure months and securing income in advance can help mitigate cash flow challenges. A template can be provided to assist with this process. 5. Review tArge Expenditures: The charity should review any large, irregular expenses (e.g•) the November 2023 costs) to detemine rftbey are one-time costs or recurring. Effective management of such expenditures could help improve overall cash flow. For instance, while ￿nt income was high in one month, it's important to ensure future costs are better managed. 6. Staffing Adjustments: Due to declining numbers, the manager h&8 bad to make difficult decisions regarding staffing levels. Additionally, room hire costs &ssociated with programs like Flying SL￿ and Early Education have impacted finances. While grants have been available to cover staff costs, they do not cover room hire. Further attention should be given to managing these costs. Conclusion: Implementing these recommendations will help the charity maintain stable and S￿Stainable liquidity. We would like to thank the staff for their time and efforts and trust that the suggestions in this report will strengthen financial contro]s and support the chariws long-terni sustainability. We also ￿sh Treasure Chest continued success and anticipate that illcreased pupil numbers, potentially driven by I(￿1 housing developments, will contribute to future growth. Treasure Chest 2023124 21

APPENDIXA UTfLE TREASURES INCOME AND EXPENDITURE 2023124 BANK BALANCE BROUGHT FORWARD 2023124 LITFE TREASURES SUMMARY OF INCOME £80,479.77 DESCRIPTION Amixipir CHILD CARE INCOME NATIONAL SAVINGS A COMP VOUCHER SERV DWP RESOURCE MANAG EDENRED ENJOY BENEFITS LTD PARENTPAY LTD WREXHAM COUNTY BC WELSH GOVERNMENT WIDER PLAN LTD BACIDPC 14523.86 25586 2750 105 1386 787 33777.4 £75.850.53 £109,582.50 £1,650.00 £265.998.29 EJON62716 11357736 1041794207 BAC BAC 792451MAISIEEDWARD TREASURE CHEST 168437 TREASURE CHEST KEIRA SMITH BAC UTTE TREASURES SUMMARY OF EXPENITURE2023124 DESCRIPTION SUMMARY OF EXPENDITURE AMOUNT BANKLINE CHG PEOPLESPARTNERSHIP AVOW RENTOKIL WCBC HMRC E OWEN MORTON MICHEL LIMI MOTION PICTURE LIC PARENT PAY D FOULKES12 YRSI FIRST AID COMPANY LISA MARIE WINTER SHARON WILLIAMS STEVE IONES WORKNEST LIMITED TREASURE CHEST BLN CHG DD EBP EBP EBP EBP EBP EBP EBP EBP EBP EBP EBP EBP EBP EBP EBP £443.09 £336.00 £8,274.33 £1,323.00 £935.36 £5,569.50 £14,103.07 £2,SCrf).(M) £1,997.66 £183.59 £944.46 £1,4CO. £1,932.CO £60. £566.% £48.55 £4,581.92 £246,589.22 £29&78&n BALANCE CARRIED FORWARD £54.689.35 Treasure Chest 2023124