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1b4dcf462de827c8652a73e9bb319dfc2f8f8bbfb937513a64fcd5ac7941a0b5 Document ID: 1b4dcf462de827c8652a73e9bb319dfc2f8f8bbfb937513a64fcd5ac7941a0b5 Document ID: 1b4dcf462de827c8652a73e9bb319dfc2f8f8bbfb937513a64fcd5ac7941a0b5 Document ID: 1b4dcf462de827c8652a73e9bb319dfc2f8f8bbfb937513a64fcd5ac7941a0b5 Document ID: 1b4dcf462de827c8652a73e9bb319dfc2f8f8bbfb937513a64fcd5ac7941a0b5 Document ID: 1b4dcf462de827c8652a73e9bb319dfc2f8f8bbfb937513a64fcd5ac7941a0b5 Document ID: 1b4dcf462de827c8652a73e9bb319dfc2f8f8bbfb937513a64fcd5ac7941a0b5 Document ID: 1b4dcf462de827c8652a73e9bb319dfc2f8f8bbfb937513a64fcd5ac7941a0b5 Document ID: 1b4dcf462de827c8652a73e9bb319dfc2f8f8bbfb937513a64fcd5ac7941a0b5 Sheffield Hallam University Student Union ort BHP 02 BHP Contents Audit Summary Audit Status and Expected Opinion Financial Highlights Error! Bookmark not defined. Identified Audit Risks 11 Systems and Control Observations 15 Appendix I: Audit Adjustments and Deficit Reconciliation 19 Appendix 2: Summary of Unadjusted Misstatements 20 Appendix 3: Specific Representations 21 Appendix 4: Keeping You Informed 22 Audit Summary BHP Introduction Instances of fraud This report forms parl of the ongoing communication we are reqUI￿d io make under the relevanl audiling slandard Ilnternational Standard on Auditing IUKI 2601. Our work did noi highlight any actual or suspected instances of fraud perpetrated either internally or externally and we have not been made aware ol any such instances. The purpose of this documenl is to report lo those charged with governance. the findings following our audit ol the financial statements and receive feedback on the performance of the audit team. Materiality Our approach to d￿erminIng materiality has not changed from planning to completion stage. Our materiality has been sel on the benchmark of Income. As explained in our audit plan. we are responsible for forming and expressing an opinion on the financial statements that have been prepared by management with the oversight of those charged with governance. The audit of the financial slatemenls does nol relieve management or ihose charged with governance of their responsibilities and ddails of our respective responsibilities are summarised in our letter of engagement dated 23 September 2025. We report to you any misstatements in excess of 5°A of materiality- This is detailed in appendix 2. Triviality is usually considered io be 5/0 of maleriality unless ihe potential errors notes are material by nature. Related party transactions We would like lo take this opportunity lo thank Joanne Moss for the assistance ihal she has provided to us during our audit. The Trustees are required lo disclose transactions with related parties of the charity where those transactions are malerial to either the related party or lo the Charity. As part ol the letter of representation. we ask you. as Trustees. lo confirm lo us ihal the related paty disclosure in the accounts is complete. Independence At planning we communicated to you our review of auditor independence and the safeguards we have put in place to mitigale any actual or perceived threats to our independence. No new related parties were identified during our work however we were unable to obtain updated register of interest forms for various Trustees. This has been noled as 8 management letter poinl. We confirm ihal we have reviewed and considered our independence at audit cOmpl￿10n. having remained alert ihroughoul the audit. and there are no changes to be brought to your attention since our communications al planning. Changes to audit approach There have been no significant changes to the planned audil approach. Audit Summary BHP Audit risks Trustees. Annual report (incorporating the Directors, Report) We have Satisfactori￿ concluded on all audit risks. Section 4 lays out these in detail and sets out both the work done and our conclusions. No new risks were identified during our audil. The charity qualifies as small in accordance with Companies Act 2000 and large in accordance with the requirements of Charilies Ad and SORP IFRS1021. We are satisfied that the Trustees. Annual Report Iwhich incorporates the Directors. Report) is consistent with the financial slalemenls and has been prepared in accordance with the legal requirements. Going concern Our work has confirmed the Trustees, use of the going concern basis is appropriate and ihat the disclosures wiihin the financial statements fairly reflect the going concern basis of preparation. and we anticipate issuing an unmodified opinion. Matters of governance interest During our review of relaled parties, we noted that some Trustees were nol listed at Companies House and the Charity Commission. We recommend updating ihese records at your earliesl convenience. Systems and controls In accordance with the auditing standards, we have documented and evalualed key internal controls which are relevant lo the financial reporting process in order design and tailor our audit approach. The transfer of undertakings from the unincorporated charity has been accounted for using merger accounting. the financial statements as drafted present the combined charities are presented as though they had always been part ol the same reporting charity. Appropriate disclosure has been included as required by FRS102 and the Charities SORP. Our audit work is not designed to identify all significant weaknesses in the charity internal controls but is designed primarily for the purpose of expressing an opinion on the financial ￿atementS. However. where. as part of our testing. we identify any control weaknesses. we have rewrted ihese to you at section 5. This lays out any systems and controls observations identified durin9 the audil and follows up on observations raised in the previous audit. Our work did not encompass a detailed review of all aspecls of the internal controls and cannot be relied upon to disclose all deficiencies or other irregularities. or to include all improvements in internal control. The charity managemenl is responsible lor the identification, assessment. managemenl and monitoring of risk. for developing. operating and moniloring the system of internal control and for providing assurance that li has done so. Audit Summary BHP Audit status and expected opinion As part ofour audit close out procedures. we will ask theTrustees and management to confirm in writing that there have been no further issues arising since the CoMpl￿10n of our fieldwork which could be considered either adjusting posl balance sheet events or posi balance sheet events which alihough not adjusling. are of such significance that they should be reported within the financial statements in order to show a Irue and fair view. We will discuss these matters with marnagemenl and ask managemenl to confirm on behalf of the Board of Trustees. through a letter ol representalion. Our audit work is substantially complete wilh the matters outslanding as set out= Outstanding item Requested from Management accounts up to the date of sign off Joanne Moss once the accounts have been approved Subject lo the ￿ceipt of the signed letler of representation. which includes the specific representations as included in Appendix 3. we can confirm that we anticipate issuing an unmodified opinion on the financial ￿atementS. Receipt of signed Annual Report and Financial Statements and Trustee Letter of Represenlalion Truslees upon approval Audit Status and Expected Opinion BHP Audit summary status Our audit fieldwork has not highlighted any additional areas of risk, other than those previously reported to you. The Prev￿USIY reported risks. along with a description of our audit approach and conclusions, are set oul in the neKf section. During the course ol the audil. we encountered several challenges and made the following observations: The workbook was received on September. which caused delays in the accounts preparation process due to the workbook requiring significant adjuslments. particularly in reallocaling desi9naled funds back to the Siatemenl of Financial Activities ISOFAI. Due to these delays and the additional work required. the audit had to commence prior lo the finalisalion of the accounts. n￿e$s11atin9 a revisit once the draft accounts We￿ available. We also experienced delays in receiving certain key pieces ol informalion. which further impacted the audit limeline. Examples include.. Event Date per audit planning memorandum Date delivered Accounts workbook 8" September 2025 8" September 2025 g, September 2025 15" September 2025 Bank statements Payroll reconciliation h September 2025 17h September 2025 Cash income reconciliation 8th Seplember 2025 Igh Seplember 2025 Register of interest forms 8, September 2025 8, September 2025 6" October 2025 22rO September 2025 18, September 2025 Board meeting mirnules Truslees. Annual Report Oulslanding The delays encountered resulted in the audit work being carried out later than originally scheduled. As a consequence. staff resources had to be reallocated to ensure completion of the audit lesting. Additionally. there were delays in responding lo audit queries. which further impacted the timeline. These cumulalive delays have subsequenily affected the timely review of the audit file by ihe manager. Audit Status and Expected Opinion BHP Going concern In our audit planning report dated 10 October 2025. we set out the respective responsibilities of the trustees and auditors in relalion lo going concern. which is a fundamental principle that underlies the preparation of a tharity s financial stalement& These are not repeated in this document but should be referred to before ihe Irustees finalise and authorise the charity s annual report for issue. We are pleased to report that we were provided with the information we requested at Ihe planning stage, and we saw evidence of the policies and procedures being operaled as described. Our principal observalions arising from our review of the truslees, assessment are.. The block grant funding has been confirmed for 2025126 ai £2.58m. Sheffield Hallam University Students Union are anticipating further restructuring costs. Free reserves are below the target of £346k - £369k Audit Status and Expected Opinion BHP Goin9 concern - continued At this point in the audit. we are therefore able lo concur with the directors, assessment that a material uncertainty does not exist. The curreni disclosures in the trustees. reporl and accounting policy adequately cover the challenges and the steps the Iruslees have taken. Similarly. we must revisit this matter immedialely before we issue our opinion. so if you believe we have misunderstood any aspect, let us know. We request you keep us updated on any favourable or unfavourable developments at the earliest opportunity. Based on the information above. we anticipate issuing an unmodified audit opinion. Stalus of going concern work During the planning phase of the audit, we considered the risk that the use of the going concern basis of accounting may be nappropriate and the risk that a material uncertainty in relation lo going concern may exisl. Overall. we did not consider the risk that there may be a material uncertainty with regard to going concern to be high. Our audit work on going concern is complete. Financial highlights BHP Income 2025 2024 Movement Comments Donalions and legacies Trivial increase from the granl received from Sheffield Hallam University and a £lk granl received for Community Fridge. 2.587.800 2.586.000 1.800 Charitable aclivities 244.944 238.604 6,340 Merchandise sales have increased in line with the merchandising slralegy. The reslricled income. which relates to societies, varies dependin9 on fundraising activities and membership levels. Oiher trading aclivities 72.018 69.583 3.035 Increase in fees received from the Radar Leisure contract and various smaller ad hoc contracts. Investments 28.001 53.296 124.6951 Interest bearing Flagslone accounts were closed mid-way through the year and cash balance were transferred to currenl and savings accounts. Oiher income 875 25,684 124.8091 Income has declined due to the transilion away from processing licket sales ihrough Totum. Total 2,934,838 2,973.167 138,329) Financial highlights BHP Expenditure 2025 2024 Movement Comment Raising funds 180.338 137,905 51,205 Charitable Activilies 3.005.405 2.800.839 296.210 The increase is mainly driven by incorporatiorFrelated activities. redundancy expenses. and inflationary pressures. Total 3.185.743 2,938.794 347.371 Wages and salaries 2025 2024 Movement Comments Wages and salaries 1.727.245 1.543.647 183.598 The increase reflects a 3% pay award. the addilion of four new staff members. and redundancy costs totalling £27,337. Social security costs Contribution to defined contribution pension schemes Current service costs of defined benefit pension schemes Total 174.044 136.373 37.071 In line with the wages and salaries increase. 90.024 56,313 33.711 In line with the wages and salaries increase. 19,000 119.0001 Pension was transferred out to ihe University on l August 2024. 1.991,313 1.755,333 235,980 Financial highlights BHP Fixed Assets 2025 2024 Movement Comment Tangible assets 7.733 35.069 127.336) Various disposals of in the year in addition to a depreciation charge of £18.4k. Current Assets 2025 2024 Movement Comment Stock 17.253 15,291 1.962 Nalural fluctuations in slock levels. This is primarily due to a reduction in Irade debtors and prepayments. In the prior year. a significant balance of 61.012 £06.6k was outstanding from Radara Leisure Tech. The decrease in prepayments is largely attributable to the transition from Exchequer. with new service providers now being paid monihly. Debtors 79.558 18.546 Investments 7.733 35,069 127.3301 The majority of Flagstone investment accounts were closed during the year. The remaining balances, consisting solely of savings, are now classified under cash. Cash al bank and in hand 1.202.978 742.118 460.860 Total 1.299.789 1.459.635 1159.846) Financial highlights BHP Current Liabilities 2025 2024 Movement Comment Trade creditors 63.890 95,993 132.1031 Mainly due to timing of invoices. Year end creditor to Sheffield Hallam reduced from £32.9k io £6.2k. Other taxation and social security Oiher creditors 59.031 33,411 25.620 Increase in staff numbers and VAT creditor. 98.731 70,368 28,363 The increase is primarily due lo some Team Hallam accounts king classilied as a creditor instead of debtor in current year. Accruals and deferred income 436.297 306.747 129.550 Increase in electrictly. heat and water accruals for another year. Pension 96,250 82,923 13,333 Movement in pension liability Total 657,494 589.442 68.052 Non-current liabilities 2025 2024 Movement Comment SUSS pension deficit 12.245,4851 12.341,7411 96.256 Movement in pension liability- Funds 2025 2024 Movement Comment Designated funds Unreslricled funds Pension reserve Unrestricted funds Restricted 79.042 215,775 1136.1331 The decrease is primarily due to expenditure on incorporation. the events team, and the digltal transformation project. 1224.8921 Movemenl to reflect the income and expenditure for the year. 182.9231 Movement in pension. 451.031 675.923 12,424.6641 12.341.74 (1,811,068) (1.522.966) 118.900 96.847 22.053 Increase income from Clubs and Societies. One off £lk grant for Community Fridge. 10 Identified Audit Risks BHP During the course ol the audil planning. we identified audit risks and other key mallers and conSide￿d the impact of these on our approach. These were established ihrough discussion with both ihose charged with governance and management and also our review of the systems and procedures and a review of the detailed financial informalion. We set oui below the significant audil risks and key accounting estimales that we have focused our work on. in order to reduce the risk of material misstatement in the financial ￿atementS. Set out below is the summary of our assessment of the key business and audil risks alfecling the financial stalemenls. lo9￿her with an overview of our planned audil procedures. Risk Description Our approach {how we addressed the risk) Audit conclusion We reviewed and tested income. deferred and accrued income to ensure all income relevant to the accounting perii)d was recognised and recorded in the correct period. Risk of material misslalement arising from income recognilion Auditing standards state that there is a presumed risk that income may be misslaled through fraud and l or error. This was done mainly through proof in total le.g. block We have followed our audit approach and based grant) and transactional testing. which focused on the completeness of income and a review of cut-off procedures. on our testing.. income is free from material misstatement. For new and existing 9rants/contracls. we reviewed the signed agreements and ensured recorded income was in line with these. Other income was agreed from source documentation. Identified Audit Risks BHP We used Dala Analylics sofiware which scanned the entire financial data sel ol each entity lo identify higher-risk transactions. We reviewed the transaclions highlighied to ensure they correspornded with our expeclalions. In addition. we performed the following procedures= A sample of journals identified by Inflo have been tested and agreed to Su￿porI1ng documentation. Risk of material misslalement arising from management override of controls Considered the financial reporling process and made inquiries of individuals involved Discussed with management how they identified transactions or other events ihal gave rise lo the need for accounling estimates Reviewed accounting eslimales for susceptibility to misstatement due to management bias or fraud Performed a retrospective review of management judgemenls and assumptions relating lo accounting estimates recorded in the prior year Evaluated the business rationale for significant transactions outside the normal course of business We have mined IOOYO of the database using Inflo and have selected those Iransaclions which are deemed higher risk. These has been invesligaled further. and no evidence of managemenl override was found. Auditing standards state thai the presumed risk of management override of controls exists in all entities. Furthermore. our review of minutes and discussions with management did not identify any instances of management override. As parl of our Iransaclional testing of income. we reviewed the sources of income to assess whether they had been appropriately recorded as restricled funds. We selected a sample of expenditure allocated against restricted funds to ensure thai ihe funds h￿1 been correctly applied for ihe purposes lor which they were received. We also reviewed the calculations supporting any transfers between funds and the use of designated funds. Fund accounting is key to true and fair Risk of material financial reporting for charilies and carn misslalement be a complex area. There is a risk that arising from income and expenditure in relation to inaccurate fund reslricled funds is not correctly accounting disclosed or spent for the relevant purpose. Our work on funds has not identified any inaccurale fund accounling. Funds are nol materially misstaled. We ensured that material brought forward and carried forward fund balances were in line wilh fund allocations approved by the board. and ihal expendilure had only been allocated in accordance with the specific designations as roved. 12 Identified Audit Risks BHP Risk relaling lo the accuracy of payroll Given the size of the payroll. there is an increased risk that fictitious employees could be included. or that wages may be misstated if employees are paid at incorrect rates. There is also a risk thal leavers are not taken off the payroll re orts. We reconciled payroll reporls to the accounting records to confirm completeness and accuracy. We selected a sample of employees and verified that their pay rales agreed lo auihorised records. as well as confirmed iheir exislernce by reviewing ID documentat￿n. In addition. we reviewed BACS payment runs to identify any duplicate bank account delails. No issues were identified. and payroll was confirmed to be accurale. with no evidence of fictitious employees or duplicate payments. Risk of incomplete disclosure of related party transactions Related party transactions may not be Register of interest forms were completed by senior We have raised two management letter points in correctly disclosed or at an arm's management and truslees prior to the commencemenl of respect of not being able to obtain updated register length basis. Disclosure ol related party audii fieldwork. and we completed searches for undisclosed of interest forms and also the inilial related party Iransaclions must be in accordance inleresls. We tested lor related party transactions during our disclosure being incomplete. The disclosure was with FRS 102 and SORP 2019. transactional testin lor income and ex endilure. updated during the audit. We concluded ihal no instances of non-complian or claims were idenlified based on our review of minutes. correspondence. and discussions with mana9emenl. Risk ol non- compliance with laws and re ulations Failure lo comply could result in a major financial or repulalional impact on the Charity. We reviewed ihe minutes of the Charity. correspondence with regulalors. and held discussions with management to identify instances of non-compliance and claims. Risk relaling to the occurrence of expenditure Given the size of ihe entity and the We selected a sample of expenditure transaclions from the volume of manual inputs required, nominal ledger and iraced each ilem lo the corresponding there is a risk ihat expenditure records supplier invoice or other supporting documentation. In may be inaccurate as a resuli of human doing so. we verified ihai the descriptiorn. date. and value of error. the expenditure recorded in the nominal ledger agreed lo the underlying evidence. We also confirmed that the expenditure had been recorded in the correct period, classified appropriately within the ledger. and included at the correct amount. No issues were identified, and expendilure was confirmed to have occurred. been accurately recorded. and appropriately classified. Risk relaling lo Given the size of ihe accounts payable, the there is an increased risk that creditor completeness of balances may be misslaled. either due creditors to duplicale. liclitious. or incorrectly recorded liabililies We tested trade creditors by reconciling recorded balances with external confirmations and performed a post-year*nd review of invoices to identify any unrecorded liabilities. In addition. we recalculated accruals and deferred income to ensure their accur No material misslalemenls were idenlified, and creditor balances were considered complete and accurately stated. 13 Identified Audit Risks BHP Accounting Audiling standards slate that significant estimates- accounting estimates should be tested We reviewed 311 accounting estimates. including the SUSS and SYPF for appropriateness. The revised assumplions made in the SYPF and SUSS pension scheme pension ISA540 requires an in-depth challenge valuations. which were considered key estimates. We schemes of estimales and judgements that reviewed these in detail io ensure they had been reported in materially impact on the performance line with the Charities SORP IFRS1021 guidance. of ihe business. We concluded that the Actuarys competencies, along with ihe dala and assumptions used. were appropriale and aligned with currernl markel conditions. The SYPF pension scheme was Iransferred oul into the Universi onlAu ust 2024. Risk thai Going Concern assumption is inappropriate In the current environment. the Iruslees, assessment of the going concern basis of preparation is inherently more complex due to the increasing staff costs and funding level This involved reviewing forecasts that projected at least uncertainties, we consider it twelve months from the date the accounts were approved. appropriate to elevate our audit risk We also considered how the forecasts would change under assessment and proposed work. different plausible scenarios and reviewed management's current strategic plans. Due to the unprecedented circumstances presented by ihe economic climate, we performed an enhanced level ol audit We have reviewed the budgets for 12 months from work over the Iruslees. going concern assessment. sign off. We have reviewed current year budgels lo actuals to ensure that they are reasonable. We have reviewed the level of free reserves held by the charity. 14 Internal Controls BHP Current year The purpose ol the audit was to form an opinion on the financial ￿atementS. As part of our audit. we have considered the inlunal controls relevant lo the preparation of the financial slatemenls. in order lo design audit procedures to allow us lo express an opinion on the financial stalements. bul not for IkE purpose of expressing an opinion on the effecliverness of internal controls. The matters reported are limited to ihose deficiencies in internal conlrols which came to our attention during the course of our audit work. This does not constitute a comprehensive slalement of all deficiencies ihal may exist or of all improvemenls which may be made and has addressed only those matters which have come lo our attention as a result of the audit procedures performed. Our findings and recommendalions are noted below. We have assigned a priority indicalion to each finding lo reflect the urgency we consider management should place in addressing each item. Implies 8 high priority issue requiring immediate management attention Implies an important issue that should be reviewed andlor implemented at your earliest convenience Implies an advisory issue that is raised purely for management information and possible further discussion Observation Risk Rating Recommendation Managements Response Ofrficers are asked lo complete pre-employment paperwork in terms of being a Trustee, including Rols after they are elected in March. therefore the date that the forms are signed can be prior lo their start dale. Officers who are relurning for a 2nd year are asked io complete new form ai ihe starl of the 2nd year. The 4 officers idenlified all only served l year in office bul completed their paperwork prior lo iheir start date. Lay Truslees are sent annual reminders. and these are completed in November. Student Truslees complete their ROI on recruitment and like others are updated annuall Register of interesi forms are not regularly updaled. we were unable to obiain updated register of interest forms for some trustees where there have been no changes. There is a risk that transactions may occur with related parties that are nol recorded and therefore not disclosed in the accounts. Ensure register of interest forms are updaled annually. where there are no changes ensure the Trustee or Sabbatical Officer documenlalion is relained to evidence this. 15 Internal Controls BHP Observation Risk Rating Recommendation Managements Response The fixed assel register has been reviewed during the year and all ilems that have been disposed of or are no longer used have been removed from the register. The reason for the fully depreciated items is mostly due lo the organisalion planning to move so items have not been replaced. There are assets with a cost of £579.745 which are fully deprecialed. There is a risk that tlems are held on the FAR that have been disposed or 8re no longer in use. There is also a risk that the depreciation policy is resulting in items being depreciated too last. Review the FAR for ilems that no longer exist or are in use and dispose ol them from the FAR. Review the depreciation policy to ascertain if this should be adjusled. When completing our lesling ol related party transactions. we identified some Trustee expenses which were not included in ihe initial related disclosure The expenses that were nol included in the initial related party transactions belonged io Ofrficers ihal are employed by the organisation and the expenses relaled to their employment raiher ihan to the role as a truslee. Ensure all Truslee donations are recorded and included within the accounts disclosure. There is a risk ihal not all related party transactions are disclosed. 16 Internal Controls BHP Prior year We have also set out the deficiencies identified in the previous year's audit with an update on the position in the current year. Impli8S 8 high priority issue requiring immediate management attention Implies an importafbt issue that should be reviewed andlor implemenied at your earliest convenience Implies an advisory issue that is r8lS8d purely for management informalion and possible hjrther discussion Observation Risk R•tiry | Recommendation Updates in Current Year There is a risk that items are held on the FAR that have been disposed or are no longer in use. There is also a risk that the depreciation policy is resulting in items bein recialed too last. Review the FAR for ilems thal no longer exist or are in use and dispose ol them from the FAR. Review the depreciation policy to ascertain if this should be adjusled. There are assets with a cost of £037.747 which are fully deprecialed. There have been various disposals in the year however this point is reinstated. During a review of the fixed assel register we have noted 9 items that are calegorised as 'Online-. Online expenses should be included as intangible assets and not tan ible. There is a risk that tangibles are overslaled. and intangibles are understated. To split out tangibles and intangible assels on Those items have been disposed of and have a the balance sheet. nil NBV therefore not reinstated. During a review ol the fixed assel register. we have noted ihal a deprecialion rate of 50% has been used. this gives the asset a useful life 012 years. This is a shorter period of time than any of the categories in the deprecialion policy. There is a risk that depreciation is not following the accounting policy in the account. Ensu￿ ihal ilems entered into the FAR are This was in relalion to an intangible asset, deprecialed in line with the accounting policy. which has been disposed of. Nol reinstated. 17 Internal Controls BHP Observation Risk Rating Recommendation Updates in Current Year When completing our lesling ol related party transactions. we identified some Trustee expenses which were not included in ihe art disclosur There is a risk that not all related party transactions are disclosed. Ensure all Trustee donations are recorded and included within the accounts disclosure. This point has been ￿l￿stated Register of interest forms are not regularly updaled. we were unable lo obiain updated register of interest forms for some trustees where there have been no chan es. There is a risk that transactions may occur with related parties that are nol recorded and Iherefore not disclosed in the accounts. Ensure register of inlerest forms are updaled This point has been reinstated and reclassified annually. where there are no changes ensure as amber. If the records are outdated. there is the Trustee or Sabbatical Officer a risk of overlooking related party transactions. documenlalion is relained io eviden￿ this. which are material by nature. Unable to locale payroll authorisation for November's payroll. Noted that previous Finance Director was presenl during this month and would likel be able to locate. There is a risk that payroll may be incorrecl if not correctly authorised. Ensure documernlalion of payroll athhorisalion for all months. This has not been reinstaled. 18 Appendix I: Audit Adjustments and Deficit Reconciliation BHP We sel out below the idenlilied audil misslalemenls ihat have been adjusted in the financial stalemenls and show a reconciliation between the surplus/ldeficitl per the Irial balancelmanagemenl accounts provided at the planning stage and that reporled in the financial slatements. Total Deficit er Trial Balance Bfwd funds difference Pension expenditure allocation Total deficit per final financial statements 1337.814 13751 82.500 1255.6891 On behalf ol the board. I hereby approve the adjustments summarised above= Sigrned.. Date: Name......................................................... 19 Appendix 2: Summary of Unadjusted Misstatements BHP Sheffield Hallam Students Union We set out below the misstalements above ihe level of 'clearly trivial.. that we have identified during our audit testing. These misslatements were nol considered material either individually or in aggregate and so have noi been adjusted in the financial statements. Delail Income & Expenditure Balance Sheet DR CR DR CR Credit balances on debiors led er 2.864 2.864 Under accrual for NUS Conference that occurred in the 2.754 2.754 ear Difference on blfwd balances on fixed assets 3,117 3,117 Total Total effect of these misstaternents 2,754 5,981 8.735 12.7541 Increase in deficit 20 Appendix 3: Specific Representations BHP Proposed paragraph wording Reason for inclusion We confirm ihai the energy costs totalling £313.082 are accurate and have been appropriately estimated by management. Where supplier invoices were not available at the reporting dale. the eslimate of energy costs consumed bul rnol yel billed was To reference the accrual for the eslimaled energy costs totalling £313.082 this is for a delermined using historical consumption dala. known tariff rates. seasonal usage period ol several years and is very material to the balance sheel. patterns. and available forward pricing information. Managemeni believes these assumptions provide a reasonable basis for the estimated amount recognised. 21 Appendix 4: Keeping You Informed BHP Accountancy and audit Accountancy and audit FRS 102 Triennial U date New SORP On 27 March 2024, the FRC issued amendments lo FRS102 The Financial Reporting Siandard applicable in the UK and Republic of Ireland and other FRSs- Periodic Review 2024. The exposure draft of ihe new Charities SORP was released in Spring which incorporaled the changes from the FRS102 Triennial Update together with a number of other significant changes to financial reporling for charities. The revisions in the standard will impact virtually all non-micro UK companies. charilies and LLPS. The effective date for most amendments is periods beginning on or after l January 2026. with early adoption permitted. The Iwo major changes are in the treatment of leases and revenue recognition. which will both substantially align with International Financial Reporting Standards. A major structural change is the introduction of a three-tier framework for SORP application based on a charity's income levels: Tier I income below £500k Tier 2 income between £500k and £15m Tier 3 income over £15m Changes to the Truslees Annual Report include.. Impact reporting for all charilies Sustainability reporting required for lier 3 charities and encouraged for liers l and 2 Disclosure of scale and nature of aclivilies undertaken by volunteers for all liers and information on number ol volunteers for tiers 2 and 3 Plans for the future to be required for all tiers More information on how legacies are included in the accounts for tiers 2 and 3 reconciliation ol reserves reported in the trustees, report to amounts in the financial statements where those figures don't directly correlale A cash flow slalemenl will now not be required lor tier l and tier 2 charilies where they are also small under FRSIO2. In line with IFRS 16 virtually all leases will come onlo balance sheel.. the distinction belween operaling and finance leases is removed. and only short-term and leases of low-value assets are exempt (low value being by reference lo the nalure of the asset. not the value lease paymenlsl. This resulis in all lease assets and liabilities being recognised on the balance sheet with an appropriale discount rate being applied. This could have a significant impact on companies with borrowing covenants or who are close to audit thresholds for assets. Income recognition will now be similar to the 5-slep model of IFRS15. For many entities nothing will change. but a few may be heavily impacted by this. The new SORP is expected to be released in Autumn 2025. 22 ## **Compliance and financial reporting** ## **Changes to the role of Companies House** - ✓ - ✓ - ✓ - ✓ - ✓ - ✓ - ✓ 23 Appendix 4: Keeping You Informed BHP Tax changes as a result of latest budget announcements Tax changes as a result of latest budget announcements National Insurance contributions: National Living Wage increase From April 2025. the National Living Wage increased as below: Aged 21 or over: £11.44 to £12.21 per hour Irepresenting an increase of £1.400 for an eligible full-time worker) Aged 18 to 20 years: £8.60 10 £10 per hour Apprentices or 16 and 17 years old: £6.40 10 £7.55 per hour The rale of employer National Insurance increased by 1.2% 10 15/ from 6 April 2025. The Secondary Threshold al which employers become liable to pay national insurance on an employee's salary also fell from £9.100 per year to £5.000 per year. For an employee on a salary of £30.000. the addilional cost to the employer is in the region of £650. once corporation tax relief has been considered. Taxation of company cars: The benefil percentage for zero emission and electric vehicles will increase incrementally to g % in 2029130. Cars with C02 emissions of I to 50g/km lincluding hybrid vehicles) will rise lo 18% in 2028129 and 19°A in 2029130. All other bands will increase by l /0 per year lo a maximum of 38Yo for 2028129 and 39% for 2029130. Employment Allowance: The Employment Allowance enables eligible employers lo reduce their National Insurance liability and increased from £5,000 to £10.500 from 6 April 2025. Whereas previously to be eligible for the Employers. Allowance a company would be required to have an Employer's Class l NIC liability of less ihan £IOO.000 in the previous tax year. receni Budget announcements included the removal of the £IOO.000 threshold for previous year National Insurance liabilities. Benefits In Kind reporting The UK government has delayed the mandalory payrolling of benefits from April 2026 to April 2027 to allow more preparation time. Employers will report taxable benefits in kind IBIKS) through the Full Payment Submission IFPSI wilh regular payroll. ensuring real-time calculalion and payment ol Income Tax and Class IA NICS. This aims to simplify ihe process and reduce reliance on year-end forms like PIID and PIIDlbl. New legislation to prevent charity tax rule abuses: The UK government has irnlroduced new legislation aimed at preventing abuses of charity lax rules. This legislation. sel lo take effect in April 2026. includes several key measures.. Tainted Donations: Simplifies the challenge pr￿esS by replacing the motive lest with an outcome lesl. Charitable Investments: Ensures investmenls are made for the charity's benefit. not for lax avoidance. Non-charitable Expenditure= Includes legacy income in the rules to ensure proper taxation of non-charilable uses. Compliance and Sanctions: Introduces new sanctions for charities thai fail to meet filing and paymenl obli9alions. 24 Appendix 4: Keeping You Informed BHP Trustee Knowledge Bank Trustee Knowledge Bank Chari trustee welcome ack 5-minute uides As a new truslee. it's crucial to understand your legal dulles to effectively run your charity. The trustees welcome pack highlighis these duties ensuring your charity's activities supporl its purposes. benefit ihe public and that decision- making prioriltses your charity's interests. It also includes being aware of conflicts of interest. The Commissiorn has developed a collection ol short and engaging guidance on issues ranging from safeguarding people lo managing conflicts of interest. Dubbed the '5-Minute Guides,. the collection serves as a basic loolkii for truslees who are managing the many demands of running a charity. Trustee ex enses: what charities can The core suite of 5-minute guides includes advice on the following subject areas: / The UK governmenl guide on trustee expenses explains what costs charities can and cannot cover for their trustees. O Paying truslee expenses helps attract and retain Irustees by ensuring Ihey do noi face financial loss for their voluntary work. These expenses are not considered iaxable income and do not affect slate benefits. O The guide also emphasises the importance ol having a clear trustee expenses policy and disclosing expenses in the charity's accounts to maintain transparency and public trust. Delivering purpose Managing finances Conflicls of interest Making decisions Reporling information Safeguarding people Political campaigning 25 - ✓ - ✓ - ✓ - ✓ - ✓ - ✓ - ✓ - ✓ - ✓ - ✓ - ✓ - ✓ - ✓ - ✓ - ✓ ✓ ✓ - ✓ - ✓ 26 - ✓ - ✓ - ✓ - ✓ - ✓ - ✓ - ✓ - ✓ - ✓ ✓ - ✓ - ✓ - ✓ - ✓ - ✓ - ✓ - ✓ - ✓ - ✓ - ✓ 27 Appendix 4: Keeping You Informed BHP Fraud and Crime BHP Charity Hub Protect our chari from c ber crime BHP Chari Hub / The Charity Commission has released guidance which aims lo help charities create a culture of cyber awareness and resilience. ensuring they are well-prepared to handle cyber threals. It ouilines steps to mitigate risks, such as raising awarerness. implementing security measures. and having a response plan. O The guide also covers how lo respond to and report cyber attacks, emphasising the need for quick action and proper documentation. O li offers resources for further training and also mentions various cyber security services and iools available lo charities, such as the NCSC'S Aclive Cyber Defence tools. O Contact the Action Fraud 24n helpline if you are experiencing a live cyber attack. During the year. the BHP charity and not-for-profit team release regular articles giving updates on the latest sector developments. The latest ones can be found on the links below. BHP Chari Hub In addilion. we also hold regular webinars. Trustee Irairning and our annual conference. recordings off ihese can be found on our website= Charil Truslee Trainin 2025 - inlroduclion and advanced sessions. BHP 2024 Chari Conference key sessions from the day. including lopical accounting and regulatory update. Risk Managemenl in Charities and What does it mean to be a responsible investor? BHP Introduction to Ch8rit Tax and VAT webinar - an Intr(￿Uction to the key concepls in charity VAT and taxation. a critical guide to charity taxation for all finance Truslees Online fraud / The Charity Commission is warning charities about the risk of online fraud, as a survey found around one in eight charities112 /ol had experienced cybercrime in the previous 12 months. 51/0 of charities surveyed held electronic records on iheir customers and 37% enabled people lo donate online. which increases a charity's vulnerability. However. only 24°A of charities have a formal policy in place to manage this risk. O The survey also confirmed that there is an under-reporting of incidents when they do occur. with only a third134°Al ol affected charities reporting breaches. 28 Appendix 4: Keeping You Informed BHP Pensions Pensions Tra ed sur luses Tra ed sur luses - continued Many UK defined benefit schemes now find themselves in a surplus position as a result of the rise in government bond yields over the pasi few years. On ihe face of it this is good news for schemes but can be a cause for concern for sponsoring employers if there are rnol plans in place to access or deal with these surpluses. The key thing here is to strike a balance between flexibility for the employer and security for the scheme. The DWP is consulting on pension scheme surpluses and ihe current proposals could mean significant benefits for employers and schemes. but no changes are expected imminenily. so it's important for trustees and the employer to discuss what can work in their individual circumstances based on the current landscape. A surplus is considered to be "trapped- when the spornsoring employer cannol gain any value from the surplus either due to legislalion. the current funding agreement with the scheme or ihe scheme rules. Whether the employer can receive any return of a surplus depends on the scheme rules. In many cases and under current legislation. the scheme can only return a surplus to the employer on wind up. However. there may be other mechanisms. again depending on the scheme rules. Ihal an employer could ulilise lo gain value from any current or lulure surplus. These may include: Using the surplus to pay for scheme expenses Using the surplus lo pay lor the cost of future accrual lif the scheme is open lo accruall Incorporating a -switch off" mechanism into the Schedule of Conlributions (where contributions may be reduced or ceased if certain funding largets are metl Diverting contributions into escrow 29