brunelcare Annual Report and Financial Statements For the year-ended 31 March 2022 Registered charity no. 201555 Registered company no. 601847 Care Quality Commission registration no. CRT1-579008632 Homes England registration no. LH0269 01- CHAIR AND CHIEF EXECUTIVE'S INTRODUCTORY STATEMENT Brunelcare celebrated its 80th year of operation in 2021, and, just like our founding in the aftermath of the Blitz on Bristol, this year has once again been dominated by a crisis.. the Covid-19 pandemic. The year began with the easing of restrictions following a third national lockdown, followed by a 'ping-demic' summer, with high levels of colleague absence, which in turn was followed by the arrival of the Omicron variant in the winter. But, despite the ongoing pressures of Covid, and frequent changes to government guidance, we began to emerge and recover f rom the pandemic in early 2022. The most signilicant milestone of this recovery was the opening up of our care hornes to more visitors and the lessening of restrictions. Our care home5 once again feel more like real homes, busy with family and friends and while masks are still being worn and precautions followed, we are in a much better position. Despite Covid continuing to loom large, we still made progress in a number of significant area5. Customer engagement was a key focus for the year. with the launch of our'Together with Customers, initiative. Customer surveys, focus groups and meetings helped to create our 'Together with Customers Charter,. Containing six key commitments designed to improve the relationship Brunelcare has Wlth its tenants, residents, clients and guests. Another signifrcant focus has been recruitment and retention. We simply wouldn't be able to provide our vital services without our 1,101 strong workforce. In April 2022. we officially became a Real Living Wage Employer, guaranteeing every employee a starting rate of pay of at least £9.90 per hour. We are the largest social care provider in Bristol to have achieved this so far. We have also pushed ahead with an ambitious programme of IT and digital transformation. The single biggest project in this programme is the replacement of our legacy housing management system. This is a truly significant piece of work. both in terms of its scope and scale and its ability to improve the way we work, with more and better information at our fingertips. In 2021, we welcomed two new Trustees. Jo Makinson, Chief Financial Officer at GreenSquareAccord, a registered provider of social housing with a significant care and support portfolio, joined us as a Trustee. Andrew Sloman, Director of Financial Services for housing provider Livewest, joined us as a Trustee and became Chair of our Audit, Risk and Finance Committee. We also said goodbye to lan Turner who stepped down as a Trustee in September 2021. Our total income for the year increased from £36.96m in 2020121 to £40.38m. Our operating surplus reduced from £2.65m to £1.31m. Income benefited from additional Government Covid funding but we incurred additional agency costs as well as increased bad debt provisions. Looking ahead to 2022123 and beyond, while the Covid pandemic may be largely behind us now, a new crisis is not far away. The rising cost of living and energy prices will have a significant impact on Brunelcare, Annual Report and Actounts for 2021-22 our customers and our colleagues in the months. if not years ahead. While Brunelcare alone does not have the means to help everybody, this will become a key focus of our work. Linked to this will be our efforts on sustainability and ensuring that our homes and properhes are as energy efficient as possible - both saving customers money and reducing our carbon footprint. Brunelcare has weathered many storms in its 80-year history, but the pandemic and the new cost of living crisis are possibly the most signiticant yet. We know that these will be worrying and challenging times but our first priority will continue to be, as it has been since 1941, the people we provide care and support for and those who enable us to do it. Deborah Evans Oona Goldsworthy Chief Executive Chair Annual Report and Accounts for 2021-22 02- ABOUT THIS ANNUAL REPORT WHAT INFORMATION WILL YOU FIND IN OUR ANNUAL REPORT Our Annual Report provides information about how we performed in 2021-22, describe5 what we will do during the next 12-months to further improve the services we provide and explains how important it is for us to work with and listen to our tenants, clients and commissioners, so that we can continue to deliver services that meet their needs. As a company limited by guarantee, a registered charity and a social housing provider, Brunelcare is required to prepare it5 annual report and financial statements in accordance with: FRS 102; the Financial Reporting Standard applicable in the UK and Republic of Ireland,. The Statement of Recomrnended Practice ISORPI for social housing providers 2018,. The Accounting Direction 2019,. The Companies Act 2006,. The Charities Act 2011 and relevant Charity Commission guidance,. and The Charities (Protection and Social Investment) Act 2016. This Annual Report therefore comprises.. A report from the Board of Trustees that include5 disclosures required by appropriate legislation and regulation; A section on the structure, governance and management of Brunelcare,. Legislative and regulatory disclosures,- A statement o* the responsibilities of Trustees; An independent auditor's report,. and The Financial Statements. Annual Report and Accounts lor 2021-22 03- TRUSTEES REPORT Established in 1941, Brunelcare is a Bristol based charity providing high quality housing, care and 5UPPOrt for later living in the South West. How our activities deliver public benefit As reported in previous annual reports, Brunelcare offers a complete care and support pathway in our communities, starting in re5ident5' own homes, right through to our care homes. This means we can offer the best choices for later living, which fit with what residents want or need. We have nearly 1,000 sheltered homes across 31 sites, with three extra care housing schemes and a retirement village, all within the greater Bristol area. Care is provided in people's own homes, in five specialist care homes and two reablement facilities across Bristol, South Gloucestershire and Somerset, Brunelcare works to support over 2,000 people to remain as independent as possible, in their communities, for as long as possible. To deliver all of its vital services, Brunelcare employs a dedicated team of over 1,000 people. How we are funded Our principal Sources of funding are the monies we receive from our social housing and extra care housing rent5, shared ownership schemes and care fee5 from the Local Authorities we partner with through long-term block contracts or spot placements, and from individua15 who fund their own care. As a Charity we are focused on investing any surplus back into making us a quality provider and great employer. Most of our expenditure is either for the direct provision of care (mainly staff costs) followed by the provision of suitable home environments Isuch as repairs and maintenance costsl plus funding of the relevant support Services (for example, recruitment and trainingl. What our customers say about us Influenced by the National Housing Federation's work on 'Together with Tenant5', in 2021-22 we undertook a major customer engagement initiative which we called 'Together with Customer5'. and it included a full customer satisfaction survey, events and focus groups, which culminated in the creation of a 'Together with Customers Charter,. The Charter was developed with customers and reflects what matters most to them and it was approved at the Board meeting held on 29 June 2022 together with a delivery plan The Charter aims to embed a culture that values the voice and experience of customers and strengthens the relationship Brunelcare has with them. Annual Report and Account5 lar 2021-Z2 The Charter contains six commitments. They are: Relationships - Our relationships with our customers will be based on openness, honesty and transparency. Communication - Customers will receive clear, accessible and timely communication on the issues that matter to them, including informatr.on about where they live, how the charity is run and how we are improving our services. Voice and influence - We will seek and value the views of customers and we will use this information to inform the decision5 we make. Every customer will feel listened to on the issues that matter to them. Accountability- Customers will work in partnership with Brunelcare to scrutinise and hold us to account for the decisions we make that affect the quality of the services they receive. Quality - Customers can expect the services they receive to be good quality, safe and well managed. Services will be delivered in a person-centred way, and customers will always be treated with respect. When things go wrong- Brunelcare recognises that things can go wrong. When they do, our customers can expect a simple and accessible way to raise any issue5 they have and will receive timely advice and support to resolve them. Work is now underway to commence delivery of the Charter, including offi'cially laUnch￿ng it to our customers and colleagues. The success of the Charter will be measured through.. Surveys: Customer feedback will be measured through satisfaction surveys. We will review our approach to surveying customers and consider a more regular 'pulse' or 'tracker' survey in addition to the anticipated requirement IRegulator of Social Housing) for a full annual survey. Self-assessment: Completion of an annual self-assessment against the delivery of each Charter commitment capturing all actions taken in the year. This will include a customer scrutiny 'sense-check'. Involved customers: A record of the number of involved customers from each service from which we can track growth in future years. Events,. A record of the number of Together with Customers events and other engagement opportunities. Customer Satisfaction Survey Satisfaction Surveys were sent to key customer group5 in October 2021. Six different surveys were sent in total. They were.. Sheltered Housing Extra Care Housing Retirement Village (Woodland Courtl Care Home Community Help When You Need It Icommunityl Annual Report and Accounts lor 2021-22 A total of 825 completed surveys were returned, representing a 44% response rate with a sampling error of +2.6%. Overall, 87Yo of CLtstomers said they are satisfied with the services provided by Brunelcare. Satisfied 87% NeSther Dlssatlsfied 5% Below are details of the satisfaction with services provided by type.. Sat15fied u Neither • Dissat15fied Extra Care1911 2°A 5% Shekered13911 12% RetlTernentwllage1311 16% 94% Care home$11031 3% 3% Community Care11631 5% 4QA HWYNI1141 We were delighted to see that 910/4 of all customers feel the staff are friendly and approachable - our highest area of satisfaction. The full report on the Satisfaction survey can be found at htt www.brunelcare.o ut-US re orts- ublications cust action-surve The survey was conducted on our behalf by Acuity., who specialise in providing services to the social housing sector Annval Report and Accounts for 2021-22 Our vision, mission and strategic objectives In 2020-21 we fi'nalised a new strategic plan for the charity. Brunelcare: Our Future. The plan includes a new mission, vision. set of values and three new strategic aims - all designed to achieve better outcomes for our customer5 as articulated in a set of 'outcome measures, which have been produced in consultation with them. Our Mission To provide person-centred care, housing and support for later life. To do this we will embrace new partnerships and engage with our communities, to achieve better outcomes for all. Our Vision Later living makes the most of every moment. Our Values We ore positive and passionate We approach our work with positivity.. as individuals, as teams and as one organisation. We are passionate about what we do and who we do it for. We are caring and kind We care about every interaction.. with our customers and their loved ones, our colleagues and our partners, our communities and our planet. We are diverse and one team We are one team and we see our diver51ty as our Strength. We aim to celebrate it, promote it and encourage it. We go the extra mile We're prepared to go the extra mile to deliver for our customers. We challenge ourselves to think differently: we listen to others, we learn and we're open to change and new ideas. We act with honesty and integrity We do the right thing, we speak up, we are honest and we are respecfful. Outcome Measures Our customers have told us that is is important for them to be able to say.. I have a place to live l am proud to call my home I have a home in which I feel safe and secure I have a home that gives me long term stability I feel financially comfortable living in a Brunelcare property I have a home where l am warm and comfortable Receiving care and support from Brunelcare enables me to live an independent life I feel healthier and happier due to the care and support l receive Annual Report and Accounts lor 2021-22 I feel that my dignity and privacy are always respected when I receive care and support I have piece of mind knowing I will be cared for should my needs change I feel reassured knowing there is always support and assistance when I need it Brunelcare helps me to feel safe and welcome in my Socal community Living in a Brunelcare property enables me to have the social life I want Our Strategic Aims Aim I: A place to call home Whether we're helping our customers to retain or regain their independence at home, to return home. or to live well in one of our homes, we believe everyone should feel comfortable and safe wherever they call home. Aim Z: The right care and support Achieving the best possible outcomes, means putknng our customers at the heart of everything we do. By understanding each person's needs now and anticipating how they might change, we'll work with our colleagues, customers and our partners, to provide the care and support that's right for everyone. Aim 3: A good quality of life in the community We aim to help our customer5 achieve the best possible quality of life, so that they can make the most of every moment. Whether it's through the services we provide directly, or by making connections in their community, we want our customers to thrive and live life well. THE QUALITY OF OUR CARE SERVICES Delivering care that is person-centred and focused on ensuring a positive experience for our clients and their families is always our main focus and priority. Our care homes, extra care homes and community domiciliary services are regulated by the Care Quality Commission ICQCI. They assess whether services are providing care that's safe, caring, effective, responsive to people'5 needs 2nd well-led. CQC awards ratings to homes and services based on their inspections in four categorie5: Outstanding,. Good,. Requires Improvement. and, Inadequate. As at 31 March 2022, all our care homes, reablement, community and extra care housing services had achieved ratings of good or above (see table l and 2 below) for full details of the outcome of CQC inspections - links to inspection reports are available on our website. Little Heath Care & Reablement was successfully opened in April 2020 and an inspection was undertaken by CQC in April 2022. The report was published in July 2022 and disappointingly a rating of 'Requires Improvement, was awarded. An action plan to address all of the issues raised is in place and the CQC have confirmed that they will be undertaking a re-inspection at the earliest opportunity. Annual Report and AccouTht5 for 2021-22 Table l.. CQC ratingfor Care Homes and Reablement Centres Latest CQC Inspection Detai15 Ratings for Key Areas Care Home Took Report Publishe Overall Well Safe Effective place on Caring Responsive don Rating led 13,15& 19 Aug 2019 eerhurst 5Dec 2019 Outstandlng lastonbur 18&19 17 Jan Good Dec 2018 2019 rchard 191une 181uly 2018 Good rove 2018 oblnson 21&27 3Feb Good ouse lan 2020 2020 affron 8&12Nov 4Dec Good ardens 2018 2018 ittle Heat 6 April 2022 51ulv 2022 Requlres . Improvement Rl Rl are Table 2.. CQC rotingsAor Extra care Housing Latest CQC Inspection Details Ratings for Key Areas Extra Care Housing Took Report Published Overall Well Safe Effective place on Rating Caring Responsive led on 27 Feb BC Centre 29 May 2020 Good 2020 olliers ardens 21 Nov 19 Dec Good 2019 2019 averley ardens 6Dec 10 January 2019 Good 2018 oodland 24 Apr 2018 25 Mav 2018 Good ourt Annual Report and Accounts for 2021-22 Toble 3. CQC roting5for domiciliary services Latest CQC Inspection Details Ratings for Key Areas Community Services Took Report Published Overall place on Safe Effective Carlng Responsive Well led Rating on Brunel¢a Domiclliar 11,12,13 &14 12 Oct Servtces: Brlstol and Good Sept 2018 2018 South Glos Brunelcare Domicilia l April 2022 23 April 2022 Good Servlce5: As we reported last year, an inspection of our domiciliary services delivered in Somerset was undertaken in early 2019 and two areas were found to require improvement. Since the inspection a number of changes have been made to structures and staffing to ensure safe services that are well-led. We are delighted to report that an inspection undertaken by CQC on I April 2022 resulted in a rating of 'good' which is testament to the amount of hard work and dedication of our community services team. Quality Clinical Care Our Care Homes continue to strive to provide a high standard of clinical care. We have been recognised with accreditation from the Gold Standards Framework for our excellence in End of Life Care. Using advanced care planning, we are able to identify people's preferred priorities of care at the earliest opportunity. This enables us to ensure that unplanned, unnecessary hospital admissions are avoided and people can remain in the place that has become home, cared for by people who are familiar to them, with the ability for loved ones to be with them in the last days of life. Good deaths are facilitated in the homes with only a small number of deaths occuring in a hospital setknng. Excellent relationships with partner GPS in all of our Care Homes ensure that regular treatment and health review5 take place on a weekly basis e.g. medication, long term condition, nutrition, pain management etcclients and their families are involved in decision making wherever P055ible. Annual Report and Accounts for 2021-22 io Clinical training for our Nursing and Senior Care Teams is delivered by an external nurse educator from St George's NHS Trust, London. By using this external educator, we ensure that we are in line with current best practice whilst creating a clinical training plan that lits with our Care Homes, policies and procedures. Dementia Care- a Human Rights based approach We are fortunate to have the skillset of our Dementia Care Lead, Stuart Wright. who shares his expertise across the charity. Training is delivered based upon a Human Rights approach. This ensures that individualised, person centred care is at the core of what we do for people living with or without a Dernentia. Monitoring the 'Lived Experience, for the people in our Care Homes enables us to understand how we can improve wellbeing and the social aspects of the care that we provide. Community Care and Extra Care Housing Our community division strives to deliver person centred care and support services into individuals own homes across South Gloucestershire, Bristol and 5omerset. Over the past year we continued to work in partnership with Somerset County Council to provide and grow a new discharge to assess service allowing people to leave hospital in a timely manner and receive an assessment of their needs within their own environrnent. OUR HOUSING SERVICES We want all of Brunelcare's Customers to feel proud of their homes and where they live, but we know this isn't always the case. A number of our homes are in need of investment to bring them up to a more energy efficient standard and local environments a150 need improvement. Our homes are ageing and some are beyond economic repair, with changing demographics and expectations which combined with the results from the stock condition survey, point to a need for significant investment, remodelling or in some cases disposal. Brunelcare's Asset Management Strategy IAMS} 2020-2025 was approved and launched in June 2020 recognises and responds to this. It is a critical business tool that aligns Brunelcare's property assets with business needs. It is a key strand of the strategic golden thread that links the Board's Strategic Plan to the delivery of improved outcomes for our tenants and clients, and it is supported by the 30 year Business Plan. In 2021-22 we pro9ressed the AMS Action Plan by.. Catching up with planned work5 that were delayed because of Covid. Completed all budgeted planned works l£1.6ml replacing identified kitchens, bathrooms heating and fire alarms. Annual Report and Ac£ounts lor 2021-22 li Completing the 2021-22 programme of planned building safety and compliance works including fi're safety within the budget l£1.25ml, including fire door replacement and alarm upgrade. Using the new Property Standard to develop the Voids standard. in consultation with residents, and assess all homes against this new standard. Prepared a project plan identifying the required investment and a programme to achieve this. Providing linancial investment and redevelopment data to inform the 30 year Long Term Finance Plan. Completing a revised planned works contract for the replacement heating units, smoke detectors and kitchens. Continuing with the fire door replacement programme,. at the time of writing the sheltered housing sites were IOOYO completed, with the remainder in Extra Care and Care to be completed by the end of the 2022123 financial year. Completing four fire alarm upgrade programmes across our sites, by March 2022. Starting to draft a new Property Energy, Environment and Sustainability Strategy. Completing 300 stock condition surveys. io. Completing detailed site feasibility studies for the 10 identified priority sheltered sites to identify alternative uses, costings and options for the site. ii. Cornpleting the sheltered feasibility preferred redevelopment and disposal options and project plans for the delivery of top three priority sites, with outline plans for remaining six. 12. Appointing a new Development Manager to work with our stakeholders to progress the top three priority sheltered sites to obtain funding approval and planning permission. 13. Agreeing measures to assess the effi'ciency and effectiveness of the responsive repairs service as well as customer feedback. 87% of residents were satisfied with the repairs service in 2021-22. 14. Reviewing the effi'ciency of the delivery of the repairs service through an internal audit. The audit outcome was that of 'reasonable assurance,. The audit has identified area5 to focus on in 2022-23, including costs and procurement of materials. During the last 12-months, we faced diffi'cult circumstances with the continuing COVID-19 restrictions and also recruiting new staff to the asset team. Following consultation with the Resident Involvement Group, Resident Repair Responsibilities were introduced from I September 2021. We also reviewed the skills and roles of the Direct Labour Organisation with a view to creating a multi trade team as part of the steps we are taking to strengthen and develop the timeliness of our responsive repairs service and increase customer satisfaction. Each operative has a bespoke Annual Report and Acrount5 lor 2021-22 12 development package in order to maximise the potential of the repairs service and continue to bring in house works which would usually be assigned to a contractor Progress has been made in relation to making our contribution to mitigating the climate emergency by improving the energy efficiency of our most difficult to heat hornes, with the appointment of Ambue IPAS 2035 Assessors and Designers) in late 2021-22 to support Brunelcare in developing three archetype energy improvement solutions for our schemes with EPC'S below C, to support our bid for SH DF Wave 2.1 funding in late summer 2022. Decent Homes Standard IDHSI Ensuring that all our properties comply with the DH5 15 3 key target. Over the next five years potentially 654 dwellings will fail the decent homes standard, 70.9% of these failures occur in year one and two. Decent homes failures affect all aspects of our properties,. sheltered housing, ECH and Care Homes. While Care Homes are not governed by the DHS a number of properties will have reached the end of their expected life cycle and are in need of major investment. Brunelcare ha5 reached a critical point in non decency which has been influenced by a combination of factors- lack of historic investment in infrastructure such as wiring and heating systems - kitchens and bathrooms have been replaced at void with using an ad hoc approach. A number of sites are of the same age and are at risk of reaching non decency at the same time. In addition to this the pandemic introduced delay with planned works projects previously procured and we are still in a position of working through the backlog. There are long term strategic plan5 and budgets in place to resolve the non decency in the most appropriate way. In 2021-22, the Board was made aware of 90 properhes that did not meet the DHS. Brunelcare ended the year with two non decent properties, the failing component being the front door. These two addresses have been captured in the continued fire door replacement programme. Tenant Involvement Brunelcare encourages tenant involvement in decision-making by promoting mechanisms for their involvement. We employ a wide range of methods to communicate with our tenants, including.. Issue of an annual report to tenants Suggestion boxes in all sheltered sites Site notice boards Quarterly site meetings Our quarterly Grapevine magazine Information on our website Annual Report and Atcaunt5 for 2021-22 13 Repairs call back survey Exit survey for departing tenants Brunelcare Tenant Feedback Group The sheltered housing sites, quarterly site meetings enable tenants to raise concerns and discuss ideas for their site. In 2022-23, the 'Together with Customers Charter, will drive engagement with all customer groups with the goal of further strengthening our relationships with them. Property Health and Safety Data Integrity Audit Brunelcare's Internal Auditor, RSM, undertook a follow-up review of 'Property Health and Safety Data Integrity, in November 2021. The findings of this audit were reported to the Audit and Risk Committee. RSM concluded that-. The Board could take reasonable assurance that the controls in place to manage the integrity of property health and safety data were suitably designed and consistentlv applied. There was a defined process in place for the completion of and monitoring of inspections. RSM reported that there was one circumstance of non compliance with controls which was linked to Gas Safety and Fire Risk Assessments. This generated a medium action which has since been addressed. Property Compliance Works Despite the continuing impact of the COVID-19 pandemic on staffing and the ability of staff and contractors to get access to properties, in 2021- 22 we completed the following health and safety compliance works and checks., Health and safety Compliance Check Number Compleled Fixed Wire Tesling - Domestic & Communal 114 Domestic Gas SeNices 74 Commercial Gas Services 18 Fire Risk Assessment 32 Lifting Operations and Lifting Equipment Regulations 1998 ILOLERI Checks 84 The matter of Cloned Asbestos Surveys was brought to the Board'5 attention on 10 March 2020, as a potentially serious breach. Brunelcare subsequently made the Regulator for Social housing Annual Report and Accounts lor 2021-22 14 aware ofthi5 matter. During 2021-22 we continued to work with Tersus, an Asbestos Survey provider, to survey all previously cloned properties. Originally 276 unsurveyed properties were identified, as at the end of March 2022 the figure had been reduced to 14 properknes. The on-going issues related to COVID-19 and access to properhes continues to impact on the timeline for thi5 survey work. As reported last year. during 2020-21 all common area landlord asbestos management surveys were undertaken and Brunelcare was found to be fully compliant. Reports from the Regulator of Soclal Housing In May 2021, the Regulator for Social Housing IRSHI upgraded their assessment of Brunelcare's governance arrangements, conlirming Brunelcare's upgrade to 'GI' the regulator'5 highest grade of governance compliance. In its judgement, the RSH said Brunelcare had: 'strengthened its corporate risk manogement (Jnd internal controlsframework. and 'has oppropriate system5 ond processe5for providing assurance on complionce with landlord heolth and safety requirements., The full judgement can be found here: hlt s'.Ilwww. ov.ukl overnmenll ublicationslre ud emenl-brunelcare-26-ma -2021 ulalo ernent-brunelcare--21currenl-re ulator As reported in previous Annual Reports, in January 2020, the RSH also decided to regrade the Charity's financial viability assessment, from Vl to V2 to reflect the additional forecast expenditure on our housing stock as well as the risk of sales within our new Extra Care scheme in South Bristol. The Regulator's judgement confirmed that Brunelcare complies with the financial viability element of the Governance and Financial Viability Standard and that it has an adequately funded business plan and sufficient security in place. The updated gradings issued by the Regulator are: Measure Previous grade New grade Governance G2 Gl Viability V2 V2 Annual Report and Account5 for 2021-2Z 15 OUR COLLEAGUES The strength of Brunelcare lies in the quality of its employees We recognise the importance of investing in our colleagues and supporting them to develop and achieve their personal and career aspirations. We offer a range of apprenticeships, health and social care qualifi'cations, leadership skills training and other development. Brunelcare's Workforce Strategy was launched in January 2022, it was developed in consultation with the SLT, the Remuneration & Nominations Committee, various divisional leadership teams, the Colleague Voice Committee and the Equality Forum. There has been overwhelming support for the content and in response to feedback some helpful additional activities have now been included. The Strategy incorporates ongoing HR activities and projects in addition to a range of specific interventions focused on improving Brunelcare's ability to recruit and retain a highly motivated and well trained workforce, which in turn will have a positive impact on the Services delivered and results achieved. Planned activities include partnership working to attract interest from 'hard to reach groups, and develop new talent pipelines. Contract of Employment During 2020-21, all Term5 and Conditions were combined into one document- the Contract of Employment. A suite of contract templates for all types of employment Sltuations are available on the digital recruitment platform, allowing a streamlined and automated process which will increase our efficiency, lessen the environmental impact and ensure compliance with the latest employment law. The review of the Contract of Employment was carried out in partnership with Burges salmon LLP. The new Contract of Employment Is in line with changes to the law which requires employees to be provided their Terms and Conditions, before day one of their employment. Brunelcare's previous system provided Term5 and Conditions in two parts, some of which are provided once employment has commenced. Ensuring the wellbeing of our colleagues is os important as it isfor our residents and tenants and so we have introduced a number of urrangements, including.. Annual Report and Accounts for 2021-22 16 Mental health First Aiders Brunelcare 15 committed to treating mental health as seriously as physical health and general employee wellbeing. As part of this continuing commitment, there are 48 Mental Health First Aiders across the Charity who are able to provide first-line support to colleagues who may be in need of assistance. We will be aiming to train additional colleague5 now that COVID-19 restriction5 are being eased. Mental Health First Aiders have: An understanding of mental health and the factors that can affect wellbeing,. Practical skills to spot the triggers and signs of mental health issue5; Confidence to step in, reassure and support a person in di5tre55,' Enhanced interpersonal skills such as non-judgemental listening,. and Knowledge to help someone recover their health by guiding them to fiirther support - whether that's 5elf-help resources, through their employer, the NHS, or a mix. Care First As part of our commitment to our colleagues we continue to provide Care First. Care First offers comprehensive advice, information and articles covering personal and work-related issues. They offer 24-hour telephone access where every call is answered immediately by a Care First directly employed and qualified counsellor who can immediately begin providing support for personal or work-related issues. They also offer online and face-to-face counselling, which includes real-time one-to-one secure acce55 to support through their online messenger style service. Confidentiality, security and anonymity are guaranteed. The online service connects individua15 Wlth one of their qualified counsellors. Finally, they offer an information service providing telephone and online access to a team of dedicated, professionally qualified information specialists who can provide practical informats'on and advice on all common topics including- Consumer, Legal, Finance, Housing, Benefi'ts, Family and much more besides. Lone Working Devices We continue to use the lone working app called Stay Safe, This has replaced the older Solo Protect devices. The app links a lone worker with 24/71365 support. Users are able to log on and off the system and it will automatically raise an alarm if the user does not log off following an appointment. In addition, it has a panic facility that can be used should a colleague experience verbal abuse or physical aggression. Annual Report and Accounts for 2021-22 17 The devices have been distributed within the property, housing and community teams and their use of them is monitored internally by the appropriate manager. Colleague Voice In 2019-20 we responded to colleagues, views by completely changing our approach to colleague engagement, and introduced 'Colleague Voice,. Colleague Voice is the consultative bodv representing the interests of all employees, and ensures that there is an opportunity for genuine involvement for all in the Charity's activities and plans. There were three Colleague Voice Groups, one for Community Service5 and ECH, one for Care Homes and one overarching committee for the whole charity. Members were elected or nominated by colleagues and received full training on how to effectively carry out the role. Senior Leadership Team members attend each meeting and are able to listen and respond to any colleague's concerns and ideas. New elections took place in autumn 2021 and the three Colleague Voice Groups stood down. The newly constituted Colleagues Voice Committee represents all directorates. Speaking Up Policy In December 2020, the Board approved its Speaking Up Policy. This sets out the principles and approach to be followed by those working for or on behalf of Brunelcare when they have a concern about client andlor tenant safety, malpractice or wrongdoing. It is one element of a wider set of arrangements we have in place to uphold high standards and prevent wrongdoing. In particular, these arrangements also include our Fraud, Corruption and Bribery Policy. Other parts of our governance framework a150 frame and direct our approach, including the Code of Conduct, our StandinE Orders, Register of Interests, Gifts and Hospitality Policy, Financial Regulations and our commitment to transparency. Gender Pay Brunelcare is committed to delivering equality of opportunity regardless of gender and has a pav and grading structure to support this. We aim to treat everyone fairly at work, across all levels and locations. This includes making sure everyone has the same opportunities for recognition, reward and career development. Thanks to our pay grading system, we know that we provide men and women with equal pay for the roles they hold. We are committed to ensuring that leadership positions are available to the widest pool of talent regardless of gender. We are committed to ensuring that leadership position5 are available to the widest pool of talent regardless of gender. We are proud that our leadership team has an excellent gender balance,. of our seven executive5, four are women including our Chief Executive.. Annual Report and A£counts for 2021-22 IB In April 2022, we published our gender pay gap report for 2021-22. Our mean pay gap for 2021-22 was 13.15Yo,' this is higher than 2000-21 by 0.32Yo. Our median pay gap was 4.79°A which is 1.61 /0 lower than the previous year and over IO% better than the national figure of 15.4Yo in 2021. Equality, Diversity and Inclusion We value our employees and promote equality and diversity wherever we can. Equality, Diversity and Inclusion IEDII is an integral part of our employee induction programme, lethng new starters know from the outset its importance and how to represent this Wlthin Brunelcare. To sUPPOrt this we have an Equality and Diversity Policy and Acceptable Behaviour Policy in place. An Equality, Diversity & Inclusion Plan was launched in January 2022. this has nine specific areas of activity, including overarching activities such as delivering all eight pledges contained within the City of Bristol Equality Charter. Partnerships have been set up with a range of organisations to promote diverslty in recruitment. These include.. I. ACH - a refugee and employment organisation who are supporting us to understand the cultural aspects of employing refugees and asylum seekers as well as providing support to employ refugees. 2. City of Bristol College supporting continuous professional development, language skills and work experience 3. Mums Worklab supporting long term unemployed loften single) mothers to return to the workplace 4. The Apprenticeship Diversity Champions Network IADCNI We have retained Investors in People accreditation for the past 19 years and have remained a Disability Confident employer (previously known as Two Ticks) for the past 16 years. A management development programme has been rolled out to ensure the principles of person centred care are applied to the rnanagement of our employees Ito treat everybody a5 an individual and to understand their individual needs). These principles encompass the true meaning of inclusion and embrace diversity within our workforce As an inclusive employer, we are committed to recruiting and retaining employees from all backgrounds and ethnicities- 23Yo12351 of colleagues have said that they identify within a minority ethnic group. Our selection processes are competency based and equality training is included within our induction process and ongoing development activities. Our pay grades and job familie5 ensure that all employees are paid the correct rate of pay for the role irrespective of any other factors. Succession planning and career progression are based on merit and available to all employees. We continue to consider all additional opportunitie5 to do more. Annual Report and Accounts for 2021-22 19 Following the Black Lives Matters protests in 2020, the Board and SLT realised that the organisation needed to do much more to address EDI issues across the Charity. A colleague-led Equalities Forum was established to oversee and strengthen EDI arrangements. Remuneration The remuneration of the Senior Leadership Team and colleagues 15 reviewed annually by the Remuneration and Nominations Committee. We do not operate any incentive schemes. The Trustees give their time freely but are entitled to claim out of pocket expenses. Real Living Wage We are delighted that, as of l April 2022, Brunelcare became an accredited Real Living Wage Employer. The Board agreed that one of its priorities for 2021-22 would be to 'A55es5 the viability of becoming a Reul Living Wage employerby the end of 2021-22,. At that time, 704 of Brunelcare's employees were on pay bands where the hourly rate was below the Real Living Wage rate of £9.50. From l April 2022, all colleagues at Brunelcare are paid at or above the Real Living Wage of £9.90 per hour. Set by the Living Wage Foundation, the Real Living Wage has been independently calculated according to the real cost of living, which is based on a basket of household goods and services. This wage applies to all workers over the age of 18. The need to improve the overa51 employment package has become increasingly compelling. Brunelcare is experiencing significant diffi'culty in recruiting and retaining employees, with a risk that this will worsen with a predicted severely challenging winter in health and social care ahead. Brunelcare's experiences echo the 'Social Care Funding and Staffing Crisis, highlighted in the national pre55. HEALTH, SAFETY AND WELLBEING We are committed to driving continuous improvement in our health, safety and well-being arrangements and are constantly reviewing and strengthening its arrangements to achieve this. There were a total of 76 reported accidents/incidents in 2021-22. 29 of these resulted in injury, including cuts and bruises. Of the 76 some 50 or166%1, were related to slips, trips and falls. 16 falls required treatment and 7 client5 attended hospital following a fall. There was one dangerous occurrence reported this related to a potential carbon monoxide ICOI 20 Annual Report and Account5 for 2021-22 leak at an ECH site. The Fire service, gas board and our approved contractor attended, the area was tested resulting in a normal reading. The majority of accidents/incidents reported related to slips, trips and falls, the majority of these were as a result of a clients frailty and clinical presentation. Work is ongoing with the Director of Nursing and Care Services to look at how we report client falls that are due to their clinical presentation and those that were due to a health and safety matter. There are currently two ongoing claims against Brunelcare that relate to accidents that occured on Brunelcare premises, investigations and documentation have been submitted. We are awaiting feedback from our liability provider. Health and Safety Enforcement (Statutory Breache51 The ABC Centre was visited by Bristol City Council on 2 February 2022. At this time a food hygiene audit was undertaken and the site disappointingly received a food hygiene rating of I, indicating that major improvement was necessary. Three areas were inspected at this time, that included: How hygienically the food is handled14 C's Cooking, Cooling, Cleaning, and Cross Contaminationl. The condition of the Structure of the premises, including cleanliness and layout. How the premises manage5 and records what it doe5 to ensure food is safe to eat. Safer Food Better Business ISFBBI. Immediate action was taken to address the issues raised in the report and strengthened assurance arrangements have been put in place RIDDOR Reportable Incidents Brunelcare had two reportable accidents in 2021-22. Both were due to manual handling incidents which resulted in strained backs. Personal Injury Claims There was one employee liability claim made in relation to accidents at work and injuries to members of the public during 2021-22. Annual Report and Accounts lor 2021-22 21 PROCUREMENT Over the past 12-months, we continued to review our approach to procurement and mapped out the requirements of a centre-led procurement f unction which reflects the f uture needs of the Charity and best practice. We reviewed our procurement policies, training, systems, support and reporting arrangements. ENERGY CONSUMPTION AND EMISSIONS We take our impact on the global climate seriously. We are aware that a significant proportion of our sheltered homes are inefficient, with Energy Performance Certiftcates IEPCI which can be as low as E. Our aim is to provide homes with affordable energy and reduce carbon and greenhouse gas emissions and reduce f uel poverty. The priority is to deliver a fabric fi'rst solution and ensure all our homes meet the Government's EPC C by 2030 target, as part of our journey to deliver Net Zero carbon by 2050. This will include developing alternative solutions, like on site energy generation and storage from renewables. We currently have 487 homes143% of sheltered and extra care homesl in 15 schemes, with an average EPC below C. Our bid for the West of Englarld Combined Authority low carbon challenge scheme retrofit grant (£200,000 ERDF grant) to improve the energy performance of 25 units at Spinney Croft to EPC C, was not successful, but we learnt a great deal from this experience and we are now developing our Social Housing Decarbonisation Fund ISHDFI Wave 2.1 bid with our appointed consultants Ambue following the PAS 2035 process (see details below), including assessment, coordination and design. Brunelcare's Long Term Financial Plan currently includes £3.2m over the next 8 year5 to deliver EPC C by 2030, but its success will rely on securing 5HDF funding from the Department for Business, Energy and Industrial Strategy IBEIS). Our SHDF wave 2.1 bid proposal will potentially include 3 sheltered housing sites that reflect the majority of our property archetypes with EPC'S below C, as detailed below.. l. Garden Close139 units) 2. SpinneyCroft135 units) 3. Chestnut Close167 units) The outcome5 from the PAS 2035 design process will allow us to.. Finalise the scope of works and then clone these solutions across all our other schemes with EPC'S below C. PA$2035 15 the neivov¢raTchingdotunyÈntbÈing used t05UPPOrtfunding bid5 ollLle5sentTtrltypTOvides o sP￿￿fiC0rFO￿f0r the eneroyretrofvt oy dornestic building5. anddEtuils bEStprocttce guidtsnte lord0￿￿$t*Crgtr0fitPrQl￿crS ondportof the DeptsrtmentforBysiness, Energy and Industriol 5trfjlegy IBEISl5ociol Hou5in9 DEcttrbonisotion Ftsnd ISHDFIyunding requyrements.Tocofflplete the bid to WAVE ive propose thot ¥ve appointa 5pErioIi5t con5ultunt to tomplete thÈreouiredPA5 3035 ossÈssrnents desi9n to determinepotentttslNetZero Corbon Solurions onddeliveron EPCCby2030. PA52035 Is aspecifictsttonfor whtttis ctslled'whole-hobse. oi'whole buildin9'retrolit. This is on oppiooch 10 the in5tollution of en¢igy efftcyentYm¢OSures IEEMSI which tokes inio tsCCOunt thÈre4uiremÈy)tolthe entlre btsildino. boihfrom o rechnico15rondpointand con5idefingfottorslikeoccuponrycomlort. Annual Report and Accounts for 2021-22 22 Stress test the impact of the design solutions and likely grant funding on our current business plan assumptions. Finalise our SHDF Wave 2.1 bid proposal and bid consortium arrangements. In addition, we have completed commercial EPC surveys of our Care Homes Inon-domestic surveys) and will use these findings in future option appraisals. Electricity accounts for 91% of our total energy consumption. Natural gas consumption accounts for 9Yo of the total energy consumption. We have five minibuses and the majority of employees use their own vehicles for business use. We have completed commercial EPC surveys of our Care Homes Inon-domestic surveys) and will use these findings in future option appraisals. SECTION 172 STATEMENT Brunelcare qualifies as a large company under the Companies Act 2006 as it meets at least two of the following criteria.. Turnover of more than £36m; Balance sheet total of more than £18m- More than 250 employees. We are therefore required to disclose in this strategic report a "Section 17211) Statement" describing how directors have had regard to the matters set out in sections 172llllal-If) of the Companies Act 2006 when performing their duty under the section. This states that.. A director of a company must act in the woy he considers, in goodfaith, would be most likely to promote the success of the companyfor the benefit of it5 member5 as a whole, and in doing so hove regard (amongst other motters) to.- (a) the likely consequence5 of any decision in the long term,. (b) the interests of the company's employees,. (c) the need to foster the company's business relationships with suppliers, customers and other5,. (d) the impact of the compuny'5 operations on the community and the environment,. (ej the desirability of the company maintoining a reputationfor high standords of business conduct,. and (f) the need to actfairly between members of the company. The following is a statement by the Trustee5 in performance of their statutory duties in accordance with 517211) of the Companies Act 2006. The Board of Trustees of Brunelcare consider, both individually and together, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the Charity for the benefit of its members a5 a whole Ihaving regard to the stakeholders and the matters set out in 5172lllla-fl of the Act) in the decisions taken during the year ending 31 March Annual Report and Accounts for Z021-22 23 2020. On page 27 we have set out how we have engaged with key stakeholders during the 2021-22 financial year. The principal decisions taken by the Board during the year were: Principal decision I: Sole of land ot Trendlewood Way, Nailsea The three acre site at Trendlewood Way, located in a residential suburb of Nailsea, was bequeathed to the Charity and St Peter's Hospice by Miss Shepstone, a local resident, in 2002, on a one third/two thirds split. In June 2021, the Board approved the sale of the site subject to.. al Entering into a S.106 Agreement with North Somerset Council as part of the planning approval for the site. bl Completing a Surrender Agreement with a Mr Billy Smith to compensate him for the forfeiture of his agricultural occupation of the land with an associated payment of £30,000 as compensation. cl Legal advice that the Charity had followed all the required charitable statutory procedure5 in disposing of the land. dl The Charity's marketing agents following an open marketing exercise, and confirming that best value had been received Following the marketing of the Trendlewood site an offer of £3.2m was received and accepted. The Charity's receipt of thi5 fund was £2,133,333 due to the ownership of the site being split 60130 with St Peter's Hospice. The Board approved the sale of the site at Trendlewood Way, Nailsea for a sum of £3.2 million to IBRIP 6 (Nailsea BCI LLP trading as Acorn Property Group). The Board agreed to the transfer of the three acre site at Trendlewood Way, Nailsea B548 4PQ under title number ST215442 to Acorn Property Group Isubsidiaryl. The sale was concluded in early 2022-23. Principal decision 2: Sale of the community services offi'ces at High Street, King5wood The Kingswood Office had been in the Charity's ownership since 1995. It was originally a Brunelcare charity shop. The Community Service5 South Gloucestershire home care Service had operated from its shop f ront and offices on Kingswood High St. since 2012. Over the last few years it had become apparent that there was no longer a need for the whole three storey building, with most of the building unoccupied. It has no parking and is in need of investment. In April, the Kingswood Community Services team moved to new offi'ces in Woodland Court, which meant that the King5wood offices were surplus to operational requirements. In June 2021, the Board approved the sale of the site subject to.. al an open marketing exercise that met the requirements of the Charity Commission to achieve best value for the building. bl legal advice on contract disposal terms. Annual Report and Accounts for 2021-22 24 cl the Charity's marketing agents following an open marketing exercise, and confirming that best value has been received. Principal decision 3: Approval of Revised Long Term Finonciul Plon The Long Term Financial Plan ILTFPI forms 3 key part of Brunelcare's financial governance arrangements. In June 2021, the Board the 2021-22 iteration of the LTFP. In line with Brunelcare's Stress Testing Policy and the requirements of the Regulator for Social Housing IRSHI, stress tests relevant to Brunelcare's business model were applied, these also reflected its key risks and those from the sector risk profi'le, and link to the asset and liability register. Both single stress tests and multivariate scenarios were applied to demonstrate the resilience or otherwise of the plan to a variety of changing circumstances. Principal decision 4: Energy Suppliers The Board agreed to start consultations with tenants, under Section 20 of the Landlord and Tenant Act 1985 lamended by section 151 ofthe Commonhold and Leasehold Reform Act 20021, with a view to lengthening the term of energy contracts from one to three years and moving to individual meters where possible. Principal decision 5: Adoption of on Outcome5 Fromework In June 2020, the Board approved a new Outcomes Framework Ithe Frameworkl. Housing LIN were commissioned to develop the Framework to guide the development of a standard set of outcome measures that could be used to track the impact that the services provided by Brunelcare have on the quality of life and wellbeing of people receiving care, support and housing services. Through stakeholder engagement, outcome5 that are valued by Brunelcare's customers were identified and a 'theory of chanEe' statement developed for each of Brunelcare's strategic aims, see below= 'A place to call home,: Brunelcare wants to be able to demonstrate that by providing a home, the outcome for CL*Stomers 15 that they have a place to live they are proud to call home, feel safe and secure in their home, have a home that gives them long term stability, feel that where they live is good value for money and have a home where they can be warm and comfortable. 'The right care and support.: Brunelcare wants to be able to demonstrato that by providing the right care and support the outcome for the customer is that they are able to Annual Report and Accounts for Z021-22 25 live as independently as possible, feel as healthy and happy as they can be, feel that their dignity and privacy are always respected, feel reassured and have peace of mind. A good quality of life in the community,. Brunelcare wants to be able to demonstrate that by providing a good quality of life in the community the outcome for the customer is that they have a sense of purpose in their life, have the social life they want, feel safe and welcome in their local community, and feel accepted and included within the Brunelcare community. The Framework applies to all activities across all parts of the Charity. The key purpose of the framework is to.. Support the move towards an assessment and management process centred around service quality, effectiveness and efficiency measures; The establishment of a benchmarking process to underpin continuous performance improvement,. and The strengthening of performance and accountability arrangements. Principal decision 6: Development ond odoption of o Together with Customers Charter The Board agreed the approach to developing a 'Together with Customers, charter in June 2021. Throughout 2021-2022, we worked closely with our customers to help us better understand what matters most to them. Influenced by the National Housing Federation's 'Together with Tenants, initiative, the outcome of this work was the Brunelcare 'Together with Customers Charter, (The Charter), which was approved by the Performance. Quality and Experience Committee in May 2022 and the Board in June 2022. The Charter aims to embed a culture that values the voice and experience of customers and strengthens the relationship Brunelcare has with them. Each of the six Charter commitments aim to ensure our customers are involved in the delivery of our services and demonstrates how Brunelcare will meet these commitments. Principal decision 7: Reduction of the number of operational directors Included in the CEO'S objectives for 2020-21 was a requirement to undertake a f ull review of the organisational design of the Senior Leadership Team ISLTI. A review process was implemented in December 2020 and an external consultant was engaged to provide support. The pandemic delayed progress but following a series of workshops, in which the full SLT was engaged, a set of organi5ational principles were agreed to inform the new structure. AnThual Report and AccoLsnts for 2021-22 26 The Board approved the recommendation made by the CEO and supported by the Remuneration, Nominations and Workforce Committee to reduce the number of operational directors from three to two i.e. a Director of Housing Services and a Director of Care Services. The new structure brought the following benefits.. Bring Care services under one lead Director to help rationalise support, avoid duplication and widen expertise across all care services le.g. clinical and dementia leads). Consolidate Housing and ECH expertise within one Directorate to bring together landlord and customer services. Empower all Registered Managers to run their service. Create cross cutknng responsibilities within all Director roles. Ensure that all operational managers are fully involved in decision making. Capture responsibility for all required services and activities. Principal decision 8: Adoption of a new Trustee Code of Conduct The Board approved a revised Code of Conduct to replace that adopted in 2013. The revised Code of Conduct respects and endorses the principles of good governance in the Charity Governance Code lupdated 20201, and incorporates the seven principles of public life (the Nolan Principles). It includes a series of statement5 that Trustees of Brunelcare will be expected to adhere to and Trustees are required to confirm that they have read the Code, fully understand it and accept the requirements set out in the Code. Principal decision 9: Adoption of a Contract of Employment The approved a new Contract of £mployment that combined all Terms and Conditions into one document- the Contract of Employment. The new Contract of Employment is in line with recent changes to the law which requires employees to be provided their Terms and Conditions, before day one of their employment. Principal decision 10 and 11: Chonges to existing Lloyds lending In October 2021, The Board approved a change to the existing Lloyds lending to interest pricing reflecting SONIA where applicable (fixed rates) given the abolition of LIBOR on 31 December 2021. Later in the financial year the Board approved a New Barclays Facility Agreement. Annual Report and A£count5 for 2021-22 27 Principal decision 12: New Vice Chair The Board approved the appointment of Harry Hayer, Trustee, to the role of Vice Chair. Principal decision 13: Rent Increoses In January 2022, the Board agreed a rent increase of 4.1%, based on the CPI of 3.1% in September 2021 plus 1%, for all Social rented properties, effective from 4 April 2022 Ifor tenancie5 Wlth April dated uplifts). Principal decision 14.. Wide Area Network supplier The Board agreed to the selection of High-speed Office as the Wide Area Network supplier after a fully compliant tender process had identified them as having matched Brunelcare'5 price and quality requirements. It also agreed that the contract be awarded for a period of 5 years, this differs from the tender's 4+2 as after discussions with suppliers it was more economically advantageous for Brunelcare. Principal decision 15: New ITStrotegy Recognising that technology can be a key driver for transformational change, the Board approved a new IT Strategy in December 2021. The Strategy focuses on ensuring we have the right infrastructure and systems to provide the best possible service to our customers. An IT and Digital Transformation Programme and Project Group has been established led by the Director of Strategy and Transformation with a dedicated project manager. Principal decision 16: Procurement ond Implementation of a new Housing System A key element of our digital transformation is investment in a replacement Housing Management System. In December 2021, the Board approved the procurement and implementation of the Civica Cx modules to provide a cloud hosted integrated system to replace Universal Housing, PIMSS and the Responsive Repairs System through the direct award process. Principal decision 17: Cote Poddock The Board agreed to draft Term5 of Reference provided to guide a partnership with the Society of Merchant Venturers ISMVlto determine the long term options for the Cote Paddock sheltered housing 51te. It a150 agreed to jointly commission with SMV a valuation for the site to inform redevelopment optr.ons and that following receipt of a commercial valuation and a viability assessment, it would further consider options for the site. Annual Report and Account5 for 2021-22 2B STAKEHOLDER ENGAGEMENT Our COVID-19 response and recovery and our focus on custorner engagement have dominated our stakeholder communications in 2021-2022. Colleagues: it remained important to keep our colleagues up to date as government guidance changed and our homes opened up to visitors. The recruitment and retention crisis being faced by the sector ha5 a150 made good communication with colleagues more important than ever. Customers: beyond updating customers on COVID guidance, our Together with Customers initiative has seen us seek the views and opinions of all of our various customer groups across all of our services. Commi55ions/Local Authorities.. we have worked to strengthen our relationships with our commissioners and local authority partners. These relationships are key to developing new and securing existing services. Public Health.. we have continued to work closely with Public Health, both following their advice during outbreaks and supporting us to reopen services. The media: we have continued to engage with the media to raise awareness of our work. Fortunately, this year, this has included much more positive news, in contrast to the more challenging days of the pandemic, as we shared our experience of opening up our services. RISK MANAGEMENT Embedding effective risk management remains a key priority forthe Board. Our approach to risk management has been designed to ensure that risks are identified, assessed and prioritrsed and appropriate mitigating actions taken. Systems implemented to manage risk at various levels of the organisation include: A comprehensive Corporate Risks Register ICRRI; Review of the CRR at Senior Leadership, Audit and Risk Committee and Board meetings,. The monitoring of the internal control system by the corporate governance team, internal and externa5 audit functions that can provide an independent perspective on the management of risk,. Audit, Risk and Finance Committee meetings with the auditors, in the absence of management, at least once a year. The Corporate Risk Register is updated regularly and highlights the top risks facing Brunelcare, changes to existing risks and any new risks identifi'ed together with actions to manage these risks, fu rther action to be taken and assurance arrangements. Annual Report and Accounts for 2021-22 29 Principal Risks and Controls At the start of each financial year, a detailed assessment of the risks impacting on the Charity is undertaken, this includes a review of the Sector Risk Proh'le published by the Regulator for Social Housing, sector risks highlighted by the Care Quality Commission and the Health and Safety Executive. The Board together with the Senior Leadership Team identified the major strategic risks to which Brunelcare could be exposed and the Senior Leadership Team ensured controls were in place to mitigate/manage them. The Corporate Risk Register ICRRI was reviewed at each Audit, Risk and Finance Committee and Board meeting. The principal areas of risk to which the Charity was exposed in 2021-22 were identified and reviewed throughout the year and, for each of these, an assessment was made as to their impact, severity, and probability. Each risk on the CRR was reviewed at a Board Strategy and Development Session held in January 2022, alongside the Sector Risk Profile developed by the Regulator for Social Housing and the World Economic Forum's Global Risk Report for 2021. Relevant health and social care risks were also discussed. Board members raised the following points which they wished to be f urther considered as part of the development of the next iteration of the CRR.. The clear categorisation of risks i.e. financial, workforce, quality, safety etc., The impact of a possible change in government,. Changes to regulatory requirements,. Whether opportunities to borrow when interest rates were low should be considered in order to mitigate against financial ri5ks,' Brunelcare's ability to respond to cyber security threats; How proposed reforms to adult social care may impact on commi55ioning and care costs; How the Together with Tenants initiative may result in more complaints and impact on Brunelcare's reputation,. and The safety of services. In light of the above feedback, the consideration of the outline priorities for 2022-23 and recent Issues identified in relation to service charge5, an updated CRR was presented to the Audit, Risk and Finance IAR&FI Committee when it met on 16 February 2022 and approved by the Board on 22 March 2022. Annual Report and Accounts for 2021-22 30 The table below provides an overview of the risks set out in the Corporate Risk Register at 31 March 2022.. RISK POTENTIAL IMPACT MITIGATING FACTORS Brunelcare is unable to recruit or retain, staff in key positions Quality and safety of service compromised Increase in agency costs Workforce Strategy agreed bv the Board in Decernber 2021 Increases in spine point rates taking the organisation closer to being a RLW employer Recruitment of a Candidate Attraction officer Review of HR Structure and roles to further improve support for manager5 in relation to recruitment and retention Number of initiatives (including the i55ue of vouchers, purchase of electric bike51 to ensure staff feel valued Further COVID outbreaks Closure of admissions to care home5 and ECH facilities resulting in a high number of voids Outbreak Plan- regularly updated Infectlon control rnea5ures Regular lateral flow tests Vaccinations and vaccination policv Continued use of PPE Visitor temperature checks and LFTS Quality, safety, sustainability and Ilnancial viability or service5 Increasing costs of insurance premiums Costs of insuring Services prohibitive leading to linancial loss if claim5 made Early negotiations with insurance brokers have started Brunelcare's carbon footprint is not reduced Brunelcare's impact on climate change not mitigated against Green energy contracts for gas and electricity have been secured Funding for Imprtsvements to Brunelcare's carbon footprint being built into 2022-23 financial plans Development of a energy and sustain3bility strategy scheduled for 2022-23 Asset Management Strategv in place Purchase of electric bikes for community staff The c05t of running domiciliary services is higher than the income received Financial sustainability of services External change management experknse secured Annual Report and Accounts lor 2021-22 31 Improvement action plan in place but not all Steps implemented or embedded vet New rostering system being purchased Increase in houily rates for carers- Should help with recruitment Review of individual staff contracts to make hour5 worked more family friendlv and flexible Review of trdvel route5 to reduce travel cost5 Offer of electrical bikes Funding from SG1250kl for recruitment and retention Negotiations ongoing with LA'5 Te. contracts and fee5 Investment in training Working with SG to look at options for the p¥ovision of reablement in the communitv The expectations of our custorners are not understood Satisfaction levels fall Customer satisfaction survey5 provide a baseline of ustomer satisfaction. Outcome framework and measures in place More proactive tenancv management and engagement Development of Customer Charter and the Together with Customers work Enga8ement with residents . service charges Exploration of the securing of longer energy contracts Complaints increase Inadequate or out of date IT systems Service effectiveness, efficiency IT Strategy approved by the Board in December 2021 Directorate of Strategy and Transformation established which will lead on the PTogTamme management of projects, including IT projects Appointment of 3n external project manager to oversee the Housing Mana8ement System project Housing Managernènt System supplierlcontract approved ènd work on implementation started. ew rostering system secured and implementation Poor data and cyber security and management. Annual Report and Attounts for Z021-22 32 in progress Contract for WAN supply awarded WiFi contract being finalised. Interest Rate rises Poor financial sustainability Consideration to be given to borrowing prlor to any further increases Brunelcare's properties and services do not meet customer expectations Increased voids, Asset mana8ement Strategy in place and prioritised actions being taken fOn￿ard as part of the Annual Business Plan Compliance dashboard in place with regular reports being reviewed and scrutinised by the SLT, HS&W Committee and PQ&E Committee Contracts for planned compliance work for future years being tendered Regular audits and checks being completed by the Compliance team and the H&S Advisor Intrea5ed complaints Bunelcare's properties do not meet regulatory requirernents Harm to Customers. Regulatory sanction5. Prosecution. Asset m3lla8ement Strategy in place and prioritised actions being taken fOn￿ard as part of the Annual Bu5ines5 Plan Compliance dashboard in place with regular reports being reviewed and scrutinised by the SLT, HS&W Committee and PQ&E Committee Contracts for planned compliance work for future vears being tendered Regular audits and checks being completed by the Compliance team and the H&S Advisor Loss of reputation impacting on ability to grow the business. As we moved into 2022-23 we began to evaluate the longer term impact of rising energy prices. inflation increases and the reform of social care as a result the following additional risks were agreed by the Board when it met in June 2022. Soclol Care Reform.. in September 2021, the Department for Health and Social Care IDHSCI published "Building Back Better" this contained its plan for reforming the funding of Health and Social Care reform. This was followed in November 2021 by the publication of the White Paper Annual Report and Account5 for 2021-2Z 33 for reforming the delivery of Adult Social Care "People at the Heart of Care" There are four main proposals within the consultation a care cap, mean5 testing, fair cost of care and care brokerage. Initial scenario modelling completed by the Finance Team highlights that the change5 proposed could have a significant negative impact on income. Rising Energy Cost5.' Brunelcare purchases energy on behalf of tenants in the majority of our extra care and sheltered housing sites. This means that residents are not protected by the Apri1 energy price cap of £1,9713 year. The Cap is likely to rise again in October to £2,062. Capacity to Handle Risk Ensuring effective risk management is a key priority for the Board as it is integral to enabling the delivery of our objectives, both strategic and operational, and most importantly to the delivery of safe, high quality services. The Risk Management and Assurance Framework, sets out the processes and mechanisms for the identification, assessment and escalation of risks. It has been developed to create a robust risk management culture across Brunelcare by setknng out the approach and mechanisms by which the Board will: Make sure that the principles, processes and procedures for best practice risk management are consistent across the Charity and fit for purpose; Ensure risks are identified and managed through a robust organisational Assurance Framework and accompanying Corporate and Directorate Risk Registers,. Embed risk management and established local risk reporting procedures to ensure an effective integrated management process across the Board's activities; Ensure strategic and operational decisions are informed by an understanding of risks and their likely impact,. Ensure risks to the delivery of the Board's strategic objectives are eliminated, transferred or proactively managed,. and Keep the Board and its Committees suitably informed of significant risks facing the Board and associated plans to treat the risk. Risk Appetite HM Treasury {20061 define risk appetite as-. 'The amount of risk that an organisotion is prepared to accept, tolerate, or be exposed to at any point in time,. In December 2021, the Board revisited its Risk Appetite Staterllent. Thi5 set out the Board's strategic approach to risk-taking by defining its risk appetite thresholds. It is a 'live' document that is regularly reviewed and modified, so that any changes to the organisation's strategies, objectives or its capacity to manage risk are properly reflected. In reviewing and updating the Risk Appetite Statement careful consideration was given to Brunelcare's capacity and capability to manage risk. Annual Report and Accounts for 2021-22 34 The Risk Appetite Statement will be re-visited again in December 2022. INFORMATION GOVERNANCE Brunelcare continues to work towards a culture of compliance with the UK GDPR, DPA 2018. Privacy and Electronic Communications Regulations and official guidance based on the above. During 2020-21, the Charity achieved entry-level status to the NHS Data SecLtrity and Protection Toolkit, contributed to making this toolkit more relevant to the social care sector, and contributed to two pilots run by the National Cyber Security Centre INCSCI. This status wa5 maintained in 2021-22. Risks relating to information are managed and controlled in accordance with the Charity's Information Governance Policies. All information governance issues are escalated to Brunelcare's Corporate Governance Team who review5 and as5esse5 each one to ensure any breaches are identified and concerns addre55ed. ASSESSMENT OF FINANCIAL AND OPERATIONAL PERFORMANCE The 2021-22 financi31 year saw the emergence of the UK from the Covid pandemic but the effects of the measures taken to suppress the later waves of infection continued to have an impact on the business. Our sites were frequently closed to new admissions due to Covid cases, which suppressed OCCUP2ncy throughout the year- we experienced increased costs, particularly in staffing and agency expenditure, because Covid caused increased absences from work, additional workload to comply with isolation requirements plus an inability to move staff between locations. However, we also received Covid support through our local authority partners, which was welcome, which amounted to £1.3m and helped to offset some ofthe additional costs incurred. In the year, we sold the remaining five shared ownership flats at our Waverley Gardens extension plus we let all the remaining flats at what has proved to be a popular and successful scheme. Our Little Heath care home continued to increase the number of residents and has reached full occupancy a5 at the date of signing of these accounts. We a150 extended our services in the year to provide support to the NHS and help it reduce occupancy pressures by taking older patients from hospitals and helping them rehabilitate and return home. Recruitment has continued to be difficult but has improved since we moved to paying the Real Llving Wage as a minimum and we continue to see the benefits of this pay policy as retention of staff has also improved and we have been able to reduce our reliance on agency staffing. Annual Report and Account5 for 2021-22 35 We have also invested in central IT systems, replacing and upgrading our payroll, HR and linance systems in the year. Value for Money Matrix Brunelcare utilises data within both the Regulator for Social Housing Value for Money metrics and the Housernark Sector Scorecard to monitor its activities in order to ensure that we continue to deliver value for money and make progress towards our strategic objectives. The Scorecard sets out a number of indicators covering business health, outcomes delivered, effective a55et management and operating effi'ciencies. An analysis of Brunelcare's score against each of these indicators is set out below. The prevalence o* the COVI D-19 pandemic has naturally had a signifi'cant impact on these indicators. In addition to these sector-wide benchmarks we a150 have a series of internal metrics that monitor key risks to the business. All of these metrics are monitored regularly by the Senior Leadership Team and Trustees to ensure that we focus on delivering the best value tor our stakeholders. Key Metrics Metric l.. Reinvestment BRUNELC4AE 2020-21 2Q21.22 2.3% REINVESTMENT% Measure Lowér uarljle M8dlan Relnvestment a5 a rcentage of exlstin stotk s.i% 8.096 Since completion of our Waverley Gardens extension, we are reviewing our housing sites with a view to redevelop the worst performers. Metric 2.. New Supply BRUNEiCAPE NEW SUPPLY DEUVERED% Measure 20tt.22 lower uartile Me¢fi8rt U rlile al housing unitsdeveloped as %of owned &4% 1.9% Non-social housin develo ed as % of owned In 2020-21 we added our Waverley Gardens extension but there won't be further additions in the next few years. Metric 3.. Gearing Annual Ileport and AccoL¢nts for 2021-22 36 BRUNELCARE GEAAING % AsurÈ Lower uartile Median U 17.7% 33.8% uartile 47.2% Geari 7% ￿8% Gearing remains relatively low compared to the Housing sector but we will be taking on more debt in due course when we start redeveloping several of our older sites. Metric 4.. EBifDA interest cover RUNELCARE TDA MRI INTEREsfcovER% E8ITDA MRI 8s % of interest Measure 202thJ 20ll.22 Lower uarlile medi￿ U 15&¢YA 216.0% uartile 343.7% Interest cover 15 strong given low overall borrowing but the cover 15 lower than last financial year due to a lower surplus and higher capitalised repairs in 2021-22. The strong EBITDA-MRI combined with low gearing highlights the opportunity for positive inward re-investment. The current prudent position is appropriate to the Charity's sustainability and long term goals of providing vital community services. Metric 5.. Heodline Sociol Housing Cost per Unit BRUNELCARE HEADUNESoC￿l HOUSJNG COSTPERUNIT Total c05t Tunlt Measure lower arttle Medlan 3,233 3,891 uartlle 5.101 5.573 7.523 Our costs per housing unit remain high compared to the sector average and the large increase in the latest year is driven by higher fuel costs and additional capital investment in our housing units. Metrlc 6.. OperatFng M(yrgin BRUNELCARE OPERATNG MARGIN Measure 2020.tt 3)21.22 13.3% 7.1% Lower uarlile Mtdian 17.5% 15.7% uartile Operating margin social housin8 lettings Operating mar in overall 25.5% 23.5% 31.3% Our overall operating margins are low due to the mix of housing and care plus within housing we buy services for our residents that the average doesn't include and this includes, in particular, fuel which has increased considerably and is a main reason for the reduction from the previous year. Metric 7.. Return on Capital Employed DAUNELCARE 2020-21 2021-22 REfuRN ONCAPITALEMPLOYED% Return on capltal ern Mga5ur8 Lower uartlla ModlaTh U 3.1% uartlle 4.3% zi% Return on capital employed is boosted by being calculated on depreciated historical cost, which is below the assets, current value. Annual Report and Account51or 2021-22 37 Pension Our financial result includes a significant reduction of £1.6m in the net liability valued by the scheme actuary for the Charity's share of the SHPS delined benefit pension scheme. This reverses a large increase in the previous financial year that reduced our operating surplus in that year to an outturn deficit for the year. Whilst these large movements are outside the control of the Charity and non-cash flow we continue to support enhanced deficit funding I£0.7m in the prior yearl. We have also ensured our forward financial plans *und a likely extended period meeting the additional cost of managing this deficit. The Charity has also mitigated the risk of increased future deficits by closing our defined benefit scheme to new and current members at the end of March 2019. We expect the impact of the triennial review will be reported in next year'5 result5 New Developments There were no new developments in the year. The Waverley Gardens extension opened in April 2020 reached full occupancy, plus the remaining shared ownership flats were sold, with each staircasing to the maximum 75% ownership. The Little Heath Care Home a150 opened in April 2020 and continued to build occupancy through the year. In the year, Brunelcare upgraded or replaced its finance, HR and payroll system5 plus started work on replacing its housing and care management systems, work on which was ongoing at the year-end. Now that our two most recent development5, the expansion of our Waverley Gardens extra care scheme and our Little Heath Care Home are open and operating successfully, we have turned our attention to our next development objectives. We have reviewed our existing housing stock and identih'ed several sites with poorer build quality, space st8ndards, energy performance and lower satisfaction levels and we are developing plans to rebuild or change these schemes to make them fit for the future. Current high level proposals indicate a total projected spend of around £34m including displacement and financing costs with the first rebuild starting in the 2023-24 financial year. Cash Flow And Working Capital Management Cash balances at the year-end were strong at £7.Im, an increase of £1.5m in the year due to strong cash generation from operations plus delays in fulfilling our capital programme. Since the year-end, we have completed the Sale of the land at Trendlewood for slightly more than the year-end carrying value which has increased our cash holdings by a further £2m and we are Annual Report and Accounts for 2021-22 38 in negotiations with potential lenders to boost cash further to fund our planned redevelopment of several sites in the next few year5. Accounting Policies Brunelcare's principal accounting policies are set out on pages 71 to 77 of the financial statements and have been prepared in accordance with the Statement of Recommended Practice 2018. Payment Of Creditors In line with government guidance, Brunelcare's policy is to pay purchase invoices within 30 days of receipt, or earlier if agreed with the supplier. To achieve this, we perform weekly payment runs and one-off payments where required. We have submitted a return to the Government's Payment Practices Service with the following outputs- Percentage of invoices paid within 30 days 65% Percentage of invoices paid between 31 and 60 days 26% Percentage of invoices paid after 60 days We paid 37% of our invoices outside of the agreed time but the majority of these were due within a week or sooner and we are working to improve our turnaround times for authorising invoices for payment to reduce this figure. The average number of days taken to pay our invoices in the period was 35. Fixed Assets Details of changes to Brunelcare's lixed assets are shown in notes 10 and 11 to the tinancial statements. Reserves At the end of the year Brunelcare had total reserves of £29.63m12021 £26.0Sml. Within that fi'gure the Revenue Reserves I"Free" Reserves) totalled £27.96m12021.. £24.33). The main reasons for this improvement are the pension movement and the surplus achieved in the year. 8runelcare generates net surpluses in each linancial year which are reinvested in existing properties and service5 alongside new projects, and to provide reserves with which to meet anv emergency funding requirements that may arise. Annual Report and Accounts for 2021-22 39 The Board is satisfied that the level of reserves reported is reasonable. Treasury Management & Strategy Brunelcare has a formal Treasury Management Policy which is approved by the Board. The purpose of the policy is to agree and maintain a framework within which the exposure to risk related to cash investments and borrowings can be managed. The policy requires an Annual Report to the Board setting out the application of the policy for the past 12 months and the strategy for the next financial year. Brunelcare's cu rrent debt profile shows term loan borrowings from two lenders.. Lloyds TSB and Capita PIC Iorchardbrook Limitedl. During the year, Brunelcare renegotiated the £5.Om revolving credit facility provided by Barclays in 2019. The original ten year facility, which had seven years to run, was replaced by a five year facility on the same terms but omitknng one of the three covenants that was restricting the Charity's decision-making. There were no drawings or repayments on the facility in the year. Going Concern Our long term financial plan confirms the Board has a reasonable expectation that Brunelcare ha5 adequate resources to continue in operational existence for the foreseeable future, being a period of twelve months after the date on which the report and financial statements are signed. For this reason, it continues to adopt the going concern basis in the financial statements. Additional details are provided in the strategic report starting on page 3. Board Internal Targets The Board also uses internal operational targets as follows: Trlrget l., Quality of core Internal Measure 2019-20 2020-21 2021-2 I. IOOYO of our CQC regulated services are rated a5 'Good' or 'Outstanding' 90.9% 90.9Yo 90.9Yo Please see the section on the quality of our care services above which provides a table showing our current CQC ratings. All care services were rated 'Good' in the year with the exception of Somerset Homecare Services which was rated 'Requires Improvement,. Following the year end, a CQC inspection was undertaken at Somerset Homecare in April 2022. This resulted in the service being rated as 'Good'. Torget 2.. HeL7d Offi'ce performance Annua1 Report and Atcounts for 2021-22 40 ntqrDa.l.Measuio 30$9-2q,, , 2. Central support services spend to be managed up to IOQA of income 6.6%, 7.0% 7.9% 'adjusted frtsm the figure of 6.4% included in the 2019-20 report Brunelcare's support C05t5 continue to be managed well and are low by sector standards and overheads are below other social housing providers. This reflects efficiencies necessary for value for money services. Target 3.. Sickness ubsence Internal Measure 2019-20 2020-21 2021-22 3. Reduce sickness absence in line with the social care sector average 5.1% 3.99% 5.48% Sickness absence levels have increased in the year mainly due to the continued impact from COVID-19 related absence. Target 4.. Employee retention Internal Measure 2019-20 2020-21 2021-22 4. Achieve an employment retention level of higher than 75°A 72.4% 72.44Yg 65.47% This target has not been achieved and has reduced compared to 2020-21 and 2019-20. Employee retention remains a key issue in the care sector and continues to be a key part of our corporate strategy with a range of activities being taken to improve this figure. Internal workforce data has shown a positive trend with an increase in starters compared to leavers during the current financial year. Target 5.. Occupancy Internal Measure 2019-20 2020-21 2021-22 5. Achieve a level of occupancy in Care Homes of higher than 92% Occupancy in Care Homes 95.6% 89.8° 94.7% Annual Report and At£ount5 for 2021-22 41 Occupancy in our care homes met its 92% target by the end of 2021-22. This has shown a significant increase over the previous year with there having been less restrictions in place with regards to care home admissions during 2021-22 due to the COVID-19 pandemic. Annual Report and Attounts for 2021-22 42 04- STRUCTURE, GOVERNANCE AND MANAGEMENT Brunelcare's Legal Structure Founded in 1941, Brunelcare is a company limited by guarantee without share capital (registered company number 601847) and a registered charity (registration number 2015551. The charitable objectives of Brunelcare, as set out in its Articles of Association are the relief of those within the United Kingdom who are in need by reason of age (whether or not that need is exacerboted by ill heolth, disobility and/orfinancial hordshipj,. and the relief of those within the United Kingdom who are in need by reoson of ill-health, disability ond/orfinancial hardship. To fulfill the above objectives, Brunelcare is registered with the Regulator for Social Housing and provides social housing across a range of sites in the Bristol area. It is also registered with the Care Quality Commission as a provider of care homes, extra care housing and a range of community services in Bristol, Somerset and South Gloucestershire. Further detai15 about the care Brunelcare provides and the types of housing and the areas where they are provided can be found by visiting our website.. brunelcare.org.uk. Articles Of Association Articles of Association are one of the constitutional documents of a company which set out the basic management and administrative structure of the company. The articles are a public document open to inspection at Companies House. Companies have freedom in drafting their articles although Brunelcare is subject to relevant provisions of the Charities Act 2011 and Companies Acts. Charities who are a150 companies limited by guarantee may adopt model articles set out by the Charity Commission. Brunelcare's Articles of Association were reviewed during 2020-21 and a revised set of Articles were approved by Special Resolution on 28 January 2021, following approval by the Charity Commission. As far as possible the draft Articles have been based on the Model Articles of Association for a Charitable Company as issued by the Charity Commission in August 2014 and updated in Januarv 2017. The Board Of Trustees The Board sits at the top of the organisation's governance and assurance systems. Its principal role is to exercise effective leadership, provide strategic direction and control. The Board is accountable for governance and internal control in the organisation, and the Chief Executive is responsible for maintaining appropriate governance structures and procedures. Annual Report and Account5 for 2021-22 43 In summary, the Board: Sets the strategic direction of the organisation,. Establishes and maintains high standards of corporate governance- Ensures the delivery of the aims and objective5 of the organisation through effective challenge and scrutiny of performance across all areas of responsibility,. Monitors progress against the delivery of strategic and annual objectives- and ensures effective financial stewardship by effective administration and economic use of resources. The Trustees, as the directors and charity trustees, are collectively responsible for the affairs of Brunelcare. Board Meetings Ourir)g 2021-22 the Board held four scheduled formal meetings, 4 development sessions and two additional formal meetings. Through these meetings the Board- Oversaw the continued arrangements for the management of the organisation's COVID-19 management and monitoring arrangements; Agreed a revised Strategic Plan and related corporate objectives,. Agreed a new Performance Management Framework,. Agreed an Outcomes Framework and related measures,. Oversaw the continued development and review of the organisational risk register including the monitoring and management of risks and the assignment of risk5 to key committees of the Board,. Received, considered and discussed financial performance and the related risks being managed by the Board. Discussed and approved capital projects, contracts and tender proposals in line with agreed deSegated authority levels- and Routinely received assurance reports from the Committees of the Board. All formal meetings of the Board held in 2021-22 were appropriately constituted with a quorum. Attendance at Board meetings was formally recorded within the minutes, detailing where apologies have been received. Attendance at Board meetings in 2021-22 is set out in the following table. Please note attendance is expressed as the number of meetings attended out of the number eligible to be attended. 29 June 28 Sept 2021 26 Oct 21 Dec 25 Jan 22Ma Trustee Attendance 2021 2021* 2020 2022* Alison Comley 516 Deborah Evans 616 Annual Report and Accoynts lor 2021-22 44 Harry Hayer 316 Nick Hooper 516 Phil Hope 616 Kate I nnes Istiiii 616 Jo Makinson 313 Anthony Oldlield 616 Andrew Sloman 516 lan Turner 212 Tony Wilson 516 Executive Directors: Oona Goldsworthy 616 Chris Wall 616 l. Andrew Sloman took up the role ofTrustee on I September 2021 2. lan Turner resigned as Trustee on 28 September 2021 3. Jo Makinson took up the role ofTrustee on 7 October 2021 * Denote5 an additional formal meeting Standing Orders, Scheme Of Reservation And Delegation Of Powers And Standing Financial Instructions In March 2020, the Board agreed to the Standing Orders for the regulation of proceedings and business. Together with the adoption of a Scheme of Reservation and Delegation of Powers matters reserved to the Board and Standing Financial Instructions they provide the regulatory framework for the business conduct of the Board and define its 'ways of working,. These documents, together with a range of corporate policies set by the Board contribute to the organisation'5 governance framework. Annual Report and Accounts for 2021-22 45 In alignment with the development of Standing Order5 and Committee terms of reference, a detailed review of the Board'5 Scheme of Reservation and Delegation of Powers was also undertaken. The document, which was approved by the Board in March 2020, therefore sets out the matters that are: reserved for the full Board; delegated to Committees of the Board; delegated to Trustees; and delegated to the CEO. Standing Orders, the Scheme of Reservation and Delegation of Powers and the Standing Financial Instructions are subject to annual review. the last review being undertaken in December 2021. There is a clear demarcation between executive and non-executive roles. The Trustees delegate day-to-day executive control of the Charity to the Chief Executive Officer and the Senior Leadership Team, which meets regularlv. The Chief Executive Officer is responsible for running the charity in accordance with the direction set by the Board and the powers delegated to them by the Board. The Chief Executive Officer is accountable to the Trustees for their performance and that of the Senior Leadership Team. Trustee Terms of Appointment Brunelcare's Articles of Association allow for the appointment of up to 12 Trustees. Trustees are appointed on the basis of the skills and experience they can bring to overseeing the activities of the Charity. The skills and backgrounds collectively represented on the Board should reflect the population it serve5. New appointments are made on merit, taking account of the specific skills and experience, knowledge, personality and approach needed to ensure a well-rounded Board. In term5 of diversity, the objectives are to.. Consider aspects of diversity when reviewing the composition and balance of the Board,. Ensure that candidate lists for Trustee positions are compiled by drawing from as diverse a range of candidates as possible who possess suitable skills and qualities; Aspire to increase Board diversity without setting specific targets or compromising on the calibre of Trustees. All Trustees are appointed for terms not exceeding three years and are eligible for re-appointment for a maximum of three terms. To be eligible for appointment Trustees must meet eligibility requirements, as specilied in Article 21 of Brunelcare's Articles of Association. The Charity's Standing Order5 Isee 5.2.41 require Board members to confi'rm in writing their continued eligibility on an annual basi5. Annual Report and Account5 for 2021-22 46 Trustee Resignations and Appointments There were two new Board appointments made during the year, Andrew Sloman on I September 2021, bringing housing and financial expertise to the Board and Jo Makinson on 7 October 2021, bringing expertise in social housing and finance. There was one resignation during the year, lan Turner on 28 September 2021. The Board Composition as at 31 March 2022 was.. Name Role Took up Appolntment on Area of Interest 9 June 2017 as Trustee Deborah Evans Chair of the Board and was appointed as Chair l January 2019 Relativelcarer Health Trustee and Chair of Nick Hooper the Performance, Quality and Experience Committee 13 March 2018 Strategic Development Housing Tony Wilson Trustee 4January 2019 Tenant Engagement Trustee, Vice Chair and Chair of the Harry Hayer Remuneration, Nomination and 15 February 2019 HR and OD Workforce Committee Health and Social Phil Hope Trustee 28 February 2019 Care, Strategv Development Kate Innes IStiIII Trustee 8 May 2019 Housing Alison Comley Trustee 22 September 2020 Social care Property, investment and funding opportunities Anthony Oldfi'eld Trustee 22 September 2020 Annual Report and AccouThts lor 2021-22 47 Trustee and Chairof the Audit, Risk and Finance Committee Andrew Sloman I September 2021 Housing Finance Jo Makinson Trustee 7 October 2021 Social housing Finance Oona Goldsworthy Chief Executive Officer 19 May 2020 Housing Chris Wall Director of Finance 12 November 2020 Finance OUR TRUSTEES Appointed 9 June 2017 Deborah Evans- Chair Deborah has worked as a manager and Chief Executive in the NHS for 35 years. She was Primary Care Trust Chief Executive in Bristol, working closely with the City Council and with many third sector organisations. Within the last five year5, Deborah was Managi ng Director of the West of England Academic Health Science Network, an NHS funded body whose role is to stimulate in novation in the NHS and to spread best practice in care. Deborah was appointed as Chair of Trustees in January 2019. She has extensive experience a5 a carer. Appointed 13 March 201S Nick Hooper Nick has spent most of his career in local government, but has also worked in the voluntary and private sectors. His background is in housing development and in the nearly 30 years he spent with Bristol City Council - the last 12 as Director of Housing Solutions- he developed expertise in homelessness, private housing renewal, commissioning, strategy and policy development as well as organisational development. Nick is Chair of 16'.25 Independent People, a youth homelessne55 charity. Appointed 4 Jt7nuary 2019 Tony Wilson Tony, an octogenarian and great grandfather, became a tenant of Brunelcare in 2013. His career background includes extensive engineering risk management on behalf of clients such a5 Annual Report and Accounts for 2021-22 48 Network Rail, Dublin LUA5 tram main contractor, MOD Navy and suppliers such as BAe Filton. He also ran a recruitment agency, followed by practice as a counsellor and group facilitator. Tony also volunteers as a Trustee with Bristol Older People's Forum, as a youth mentor with 1625 Independent People, a board member with Driving and Mobility West of England, and is community navigator with Bristol Community Health. Appointed 15 February 2019 Harry Hayer Harry has been on the boards of numerous companies and organisations for 25 years. His experience spans the N HS, the charity sector, national and local government, academia, regulation and the music industry. He has travelled extensively with his work, leading large-scale transformation, restructuring, merger, acquisition, closure and change programmes. He has specialist experience in HR and organi53tion design and development. He is currently HR Director of Su5trans, the national cycling charity. Appointed 28 February 2019 Phil Hope Phil is a partner in Hope Consultancy and Training that works with health and social care organisations to help them navigate the changing landscape of the health and care sector,. and to develop excellent and sustainable care 5ervice5 for older people. He is also visiting professor at the Institute for Global Health Innovatron at Imperial College. London and chaired the Imperial College report 'Creating Sustainable Health and Care Systems in Ageing Societies,. Phil is a former Member of Parliament11997-20101 and served in a number of Ministerial roles with responsibilities for local government, Skills, charities, social enterprise and social finance. As Minister of State for Care Services his work included development of the White Paper 'Building a National Care Service,, the National Dementia Strategy, the National Mental Health Strategy 'New Horizons., and the National Autism strategy. Appointed 8 May 2019 Kate Innes Kate has worked in social housing for around 15 years. Her career has covered rent and service charge management for small and medium housing associations in London and Bath. Kate has carried out previous trustee roles with Bristol based housing associations and so has a good understanding of what the role requires. Annual Report and Accounts for 2021-22 49 Appointed 22 September 2020 Alison Comley Al ison, a native Bristolian, has combined a 3Q year senior local authority career in the city, with an artistic life as co-artistic director of Theatre West. Having started life as a social worker in the city, Alison has managed social care services and been the Director of Adult Social Services. She ha5 also managed housing, community safety, safeguarding and was a Non Exec Director for The National Treatment Agency for 6 years. She was awarded an MBE in 2011 for Services to Local Government for her work in tackling substance misuse in Bristol. Appointed 22 September 2020 Anthony OldfTeld Anthony is a Chartered Surveyor and leading expert in the care home and retirement living property markets having worked in the UK healthcare market for over 15 years. Anthony is a Director at Jones Lang Lasalle with particular responsibility for facilitating investment into the extra care and care home market5 through new sites, forward funding opportunities, disposals, and acquisitions of operational healthcare assets and real estate backed businesses. Appointed I September 2021 Andrew Sloman Andrew is the Director of Financial Services for LiveWe5t and has over 15 years of housing experience in associations of various sizes. Professionally qualih'ed as a chartered accountant and corporate treasurer, he has experience of leading both finance and procurement teams and has worked extensively on aligning culture and working practices for linance teams and the wider organisation following several mergers. He has detailed knowledge of asset management reviews, including options for improvement, regeneration or disposal, the insourcing and outsourcing of maintenance services and fleet services. Appointed 7 October 2021 Jo Makinson Jo is a qLialified accolintant and has worked iri the health and social housing sectors for the past 15 years. Jo started her career in London working with a social development consiiltancy before nioving to Bristol and spending six years in Pwc's public sector team. During that time, Jo trained as a chartered accountant and worked alongside a range of purpose-driven organisations working Annual Report and Accounts for 2021-22 50 to make live5 better for vulnerable people and communities. She is currently Chief Financial Officer at GreenSquareAccord, a registered provider of social housing with a significant care and support portfolio. Conflicts of Interest Trustees are aware of their legal duty to act in the best interests of Brunelcare and to make a declaration when they have a Conflict of Interest. Any Trustee who has a conflict of interest in relation to any matter discussed by the Board must declare this at the start of a meeting. The meeting chair in consultation with the Company Secretary make5 a decision in relation to how the conflict will be managed and this is recorded in the minutes of the meeting. In addition, Trustees are required to complete a declaration of interest form on an annual basis, any declarations made are recorded in a Register of Interests. Declarations are updated as and when a Trustees circumstances change. Trustee Remuneration All of our Trustees are volunteers and therefore receive no remuneration. Trustees are entitled to be reimbursed for reasonable travel and subsistence costs and Brunelcare arranges indemnity insurance cover on behalf of the Board. BOARD COMMITTEE ARRANGEMENTS The Board is clear that robust governance is reliant upon effective and efficient Board Committee arrangements, which ensure a balance of focus between strategic development, gaining assurance and scrutiny and driving the right culture. During 2021-22 the following Board Committees were in place.. The Audit, Risk and Finance Committee; The Remuneration, Nomination and Workforce Committee,. The Performance, Quality and Experience Committee. and The Health, Safety and Well-being Committee AUDIT, RISK AND FINANCE COMMITTEE During 2021-22, the Committee met six times.. 18 May 2021 9 June 2021 19 August 2021 21 September 2021 18 November 2021 16 February 2022 Annual Report and Accounts for 2021-22 51 All meetings were quorate. The meeting held on 18 May 2021 was chaired by former Trustee, Richard Gaunt, due to the absence of the Committee Chair. As at 31 March 2022, the Committee comprised the following Trustee Members.. Member Role Attendance lan Turner Committee Chair (appointed August 20181 resigned September 20211 314 Andrew Sloman Committee Chair lappointed October 20211 212 Kate Innes Member (appointed March 20191 516 Anthony Oldfield Member (appointed October 20201 516 Jo Makinson Member lappointed November 20211 212 The Chief Executive Officer and Director of Finance attend (the Chief Executive Officer by invitation) but are not members of the Committee. The Chair and members of the Committee are appointed by the Board. Committee meetings were regularly attended by representatives from.. RSM, Brunelcare's Internal Auditors118 May 2021, 19 August 2021, 21 September 2021, 18 November 2021 and 16 February 20221,. and KPMG, Brunelcare's External Auditors118 May 2021, 21 September 2021 and 16 February 20221. Amongst the key issues considered by the Committee during 2021-22 were the following: Annual Report and Financial Statements for 2020-21 and narrative report Annual review of key governance documents and Standing Orders including Articles of Association. Scheme of Reservation and Delegation and Financial Regulations Approval of policies aligned to the Committee's remit Approved the Internal Audit Plan for 2022-23 Asset5 and Liabilities Register.. annual review and progress updates Audit recommendations: progress reports Business Planning.. stress testing and development Capital spend Charitable Governance Code.. compliance review Corporate Governance and assurance update lincluding self-assessment against the RSH Governance and Viability 5tandardl Corporate Risk Register Draft and Final Budget for 2022-23 (including process, timetable and 3s5umptionsl Economic Standards.. self-assessment Annual Report and Account5 for 2021-22 52 External Auditors report on the audit of the Financial Statements and draft Letter of Representation External Governance Review.. progress update Financial Statements: quarterly updates Governance and assurance progress updates (including external reviews of governance arrangements, Board Assurance Framework and fraud, bribery, corruption and money laundering action plan) Hardship Fund.. policy and process Insurance arrangements Integrated financial performance report Loans and funding arrangements lincluding covenant reviews) Long Term Financial Business Plan Losses and Special Payments Annual Report for 2020-21 Management Accounts.. Quarterly updates Mid-year budget revisions for 2021-22 (including workforce pay reviewsl Register of Interests annual report for 2020-21 Rent, Service Charge and Fee Review process for 2022-23 Review and development of the 30 Year Business Plan Review of Debtors Review of policies and procedures for preventing and detecting fraud, bribery, corruption and money laundering lannuall Review of Risk Appetite Statement lannuall Treasury Management Report and strategy= quarterly update5 Treasury Strategy and Policy lannual review) A Committee Chair's Assurance Report wa5 submitted to the Board following each meeting, outlining matters considered by the Committee. decisions made and matters that it wished to escalate to the Board for information or consideration. The Committee reviewed and approved the audit strategies and plans for the auditor5 as listed below and received audit reports produced in support of them during 2021-22.. External Auditors, KPMG Internal Auditors, RSM In approving the strategies and plans, the Committee ensured that they were robust and linked to the Charity's risk profile. The Committee approved the internal plan for 2022-23 on 16 February 2022. During the year the Committee received Internal Audit reports in line with the agreed programme for 2021-22, including the management response from the relevant member of the Senior Leadership Team. Where reports received a less than reasonable assurance audit rating or where there were specific areas of concern, the appropriate members of the Senior Leadership Team were requested to attend Committee meetings. This process provided opportunities to discuss the Annual Report and Account5 for 2021-22 53 reports more fully, and for the Committee to satisfy itself that the findings and recommendations raised in the reports were being addressed in a timely manner and implemented to address control weaknesses or compliance issues. The Committee also received regular reports on progress with the implementation of the recommendations arising from internal audits. Authority to extend the deadline for the implementation of recommendations or to close audits where all recommendations were considered to be implemented was sought from the Committee where necessary. The membership of the Committee is kept under continual review to ensure that the membership presents an appropriate skill set to monitor, address and lead on those areas aligned to the Committee's remit and the ongoing risks the Charity faces. REMUNERATION, NOMINATION AND WORKFORCE COMMITTEE During 2021-22, the Committee met three times.. 15 June 2021 14 October 2021 13 January 2022 All meetings were quorate. The meeting held on 14 October 2021 was chaired by Nick Hooper, Trustee, due to the absence of the Committee Chair. As at 31 March 2022, the Committee comprised the following Trustee Members.. Member Role Attendance Harry Hayer Committee Chair (appointed August 20201 213 Deborah Evans Member (appointed October 20181 313 Tony Wilson Member (appointed August 20201 313 Jo M3kinson Member lappointed March 20221 NIA Amongst the key issues considered by the Committee during 2021-22 were the following= Remunerotion Horizon scanning Policies.. approval of HR related policies Real Living Wage- progress updates and next steps Review of CEO'S performance, achievements and annual objectives Senior leadership Team.. annual review of objectives and achievements Senior Leadership Team remuneration and rewards review Updated contract templates and terms and conditions Updates from the Director of HR&OD Annual Report and Attount5 for 2021-22 54 Workforce Performance Reports, including Key Performance Indicators Workforce Strategy.. progress updates and workforce planning Gender Pay 2021-22 Nominations Board Committee membership for 2022-23 Nomination of Trustee Lead5 in Safeguarding and Speaking Up/Complaints Review of the Chair of the Board's achievements and annual objectives Trustee Code of Conduct Trustee recruitment update and remuneration discussion Trustee achievement reviews and summary of development issues arising Selection and Appointment of New Board Members Committee Governance Annual Review of Committee Terms of Reference Committee Work Programme for 2021-22 Equality, Diversity and Inclusion action plan Modern Slavery and Human Trafficking Statement for the 2020-21 Financial Year Remuneration, Nominations and Governance Committee Annual Report for 2020-21 PERFORMANCE, QUALITY AND EXPERIENCE COMMITTEE During 2020-21, the Committee met four times.. 3 June 2021 7 September 2021 7 December 2021 7 March 2022 All meetings were quorate. As at 31 March 2022, the Committee comprised the following Trustee Members.. Member Role Attendance Nick Hooper Committee Chair lappointed May 20201 414 Phil Hope Member (appointed May 20201 4/4 Alison Comley Member (appointed October 20201 414 Tony Wilson Member (appointed July 20201 414 Amongst the key issue5 considered by the Committee during 2021-22 were the following= Annual Assessment against the RSH'S Consumer Standards Annual Bu5ine55 Plan for 2021-22.. agreement of key performance measures and targets Anrbual Report and Attounts for 2021-22 55 Annual review of the Committee's Terms of Reference Committee Annual Report for 2020-21 Committee Risk Register Committee's work programme for 2022-23 Complaints, Compliments and Concerns updates Engagement with our Customers.. Together with Customers Falls.. comparative report for the 2019 and 2020 calendar years Findings of audits, reviews and inspections relevant to the Committee's remit Information Governance Compliance Health, Safety and Well-being updates Integrated Performance Report and Dashboard reviews Outcome of Charity-wide customer satisfaction Surveys Outcomes Framework.. progress and agreement Property Health and Safety Compliance Review and approval of policie5 related to the Committee's remit Safeguarding and Mental Capacity Act IMCAI and Deprivation of Liberty Safeguards IDOLS) Compliance The Committee ha5 a specific responsibility for providing accurate, evidence based Iwhere possible) and timely advice to the Board in respect of.. the ongoing development of an improving performance culture which continuously strives for excellence and focuses on improvement in all aspects of the Charity's business, in line with the Board's Framework for Improving Performance; and an operating model which aligns resources effectively to support the achievement of the Board's strategic aims, objectives and prioritie5. Given the remit of the Board in relation to overseeing the delivery of the Charity's mission and vision, and also enstjring compliance with regulatory and legislative requirements, the Board recognised that performance measures reviewed by the Board should be developed further so that they are= aligned to the delivery of Brunelcare's strategic objectives and hence incorporate realistic but stretching outcome measures,. embrace the standards set by the Care Quality Commission ICQCI and the Regulator for Social Housing IRSHI,. and appropriately reflect relevant sector scorecards. In line with the above aim5, the Committee scoped and recommended a refreshed Integrated Performance Report and Dashboard which was used throughout 2021-22 to monitor and track performance across the Charity. It was recognised that this would be an ongoing process and be refined through future iterations of the report. Annu31 Report and Account5 for 2021-ZZ 56 During 2020-21 the Performance, Quality and Experience Committee was given the remit to develop an Outcomes Framework and concise set of outcome measures that encompass the full remit of Brunelcare Idelivery of social care and housing). This work was completed during 2020-21. The Outcomes Framework was approved by the Committee and ratified by the Board in June 2021. HEALTH, SAFETY AND WELL-BEING COMMITTEE The 8oard recognises that its employees understand the risks in the workplace best. Therefore, to ensure timely and appropriate engagement and consultation the Board of 8runelcare has established a Health, Safety and Well-being Committee. The Committee takes a strategic overview of health, safety and well-being issues affecting Brunelcare. It also ensures best practice in health and safety, by promoting communication, co-operation and consultation across the Charity. The Committee is chaired by the Chair of the Board and has representatives from all area5 of the Charity. Representatives have been elected to the Committee to act as contact points within their service areas on matters of health, safety and well-being. The Committee met 4 times in 2021-22 on 22 April 2021. 22 July 2021, 21 October 2021, 20 January 2022. Annual Report and Accounts for 2021-22 57 05- LEGISLATIVE AND REGULATORY DISCLOSURES Regulator for Social Housing Governance and Financial Viability Standard Brunelcare undertakes annual 5elf-assessments to monitor its on-going compliance with both the Governance. Economic and Consumer Standards. These self-assessments are reviewed by Committees of the Board before being approved by the Board. Any change5 or implications arising within the year are reported on an ad-hoc basis. The self-assessments at the time of reporting showed that the Charity continues to be materially compliant with Governance, Economic and Consumer Standards. Any areas for relinement or improvement have been identifi'ed and transferred to the Integrated Governance Improvement Plan. The Charity has the capability and capacity to meet all the compliance standard5. Statement of adherence to the fundraising regulator code Brunelcare seeks to comply fully with all regulations and relevant code5 of practice. Fundraising is not a significant income stream for 8runelcare and therefore we are not required to report under section 162A of the Charities Act 2011. However it applies the principles of the Code of Fundraising Practice. For example, by directing all supporters to use the JustGiving platform to ensure funds are raised in a transparent manner and quickly transferred to Brunelcare. Brunelcare does not, at present, proactively run fundraising campaigns or initiatives. Instead, the charity responds to the generosity of supporters by facilitating their efforts to raise funds in aid of the charity. The option to support Brunelcare 15 promoted on the charity's website. Brunelcare does not employ or engage third party professional f undraisers and is not aware of any complaints being made about its fundraising activities. All employees strive to protect the rights and promote the interests of our clients and tenants. It is the policy of Brunelcare that under no circumstances should any employees offer advice or act as a witness to the Will of a resident. The board's Self assessment of its effectiveness In March 2021, the Board undertook an assessment against the NHF Code of governance. The Charity Governance Code and UK Corporate Governance Code. The outcome of this was that the Board agreed to adopt the Charity Governance Code from l April 2021. The Charity Code of Governance is reflected within key policies and procedures. Further, within our system of internal control, there are a range of mechanisms in place which are designed to monitor our compliance with the code, these include.. self-assessment,. internal and external audit,. and independent reviews. The Board is clear that for the year ending 31 March 2022, it complied with the main principles of the Code, and conducted its business openly and in line with the Code. A self-assessment against the recommended practice set out in the Code was undertaken in February 2022 and 10 improvement actions were agreed by the Board when it met in March 2022. These improvement Annual Report and Accounts for 2021-22 58 actions are being taken forward as part of the Corporate Governance Team's Improvement PL3n for 2022-23. External review of governance arrangements An external review of Brunelcare's governance was undertaken by 21st Century Housing Governance and the fi'ndings were reported to the Board in December 2020. The report concluded that Brunelcore had been on a journey over the10st couple of years. Issues arisingfrom the IDA ond the consequential regulatory downgrode have resulted in o programme of work aimed at delivering both enhanced governance perform(ynce and regulatory alignment to the standards. The boord has demonstroted good oversight of the deliveroblesfrom the Integrated Governonce Improvement Plan (IGIP) and whilst it Is undoubtedly true that the impact of the COVID-19 pandemic ha5 constrained the (Jbility of the bord ond the executive, the vost majority of the actions on the IGIP have been completed. Given that there is always a time lag between activities being completed and outcomes being achieved, there is still some way to go before the overall objectives of the IGIP Gre both realised ond embedded. That being sold, there ure a number of are05 where the governance arrangements ore still in the process of being strengthened, ond these are set out below. However, it is cleor thut with one p055ible exception, these areas Gre alreody known to the board and executive and work is eitherpending or already underway to addre55 ony weaknesses. The chollengefor the board, in on uncertoin ond volatile operating environment, is how to prioriti5e them and allocote the appropriate resources. Eight recommendations were made in the report,. relating to.. l. Strategy 2. IT, systems and data 3. Customer experience and the work of the Performance, Quality and Experience Committee 4. Cross-subsidy 5. New Code of Governance 6. Equality, Diversity and Inclusion Strategy 7. Scope of the Audit, Risk and Finance Committee 8. Voice of the Customer All recommendations were accepted by the Board and addressed in 2021-22. Review of effectiveness of system of internal control The Board put mechanisms in place for the review, on an on-going basis, of the effectivenes5 of the systems of internal control operating across a11 functions of the Charity. A review and evaluation of the adequacy of the system of internal control has been informed by the Senior Leadership Team who have responsibility for the development, implementation and maintenance of the internal control framework; the work of the committees established by the Board; the Annual Report and Atcounts for 2021-22 59 Board'5 interna l auditors and the feedback and views of external auditors set out in their annual audit letter and other reports. The processes in place to maintain and review the effectiveness of the system of internal control includes: The maintenance of an overview of the overall position with regard to internal control by the Board and its Committees through routine reporting processes and the engagement of all Board members in the development and maintenance of the Board Assurance Framework and Corporate Risk Register; The embedding of the Assurance Framework and the receipt of internal and external reports on the internal control processes by the Audit, Risk and Finance Committee,. and Audit, Risk and Finance Committee oversight of aLtdit, risk management and assurance arrangements. We are satislied that the mechanisms in place to assess the effectiveness of the system of internal control are working well and that we have the right balance between the level of assurance received from the Senior Leadership Team, Board and Board Committee arrangement5 and Internal Audit Services. Steps to further strengthening and continuous improvement of the system of internal control are in place and this is aligned to the work being taken forward to embed the Board Assurance Framework and Risk Management Framework. Internal audit Internal audit provide5 the Board through the Audit and Risk Committee with a flow of assurance on the system of internal control. A programme of audit work was commissioned in 2021-22 and the scope of this work was agreed by the Audit, Risk and Finance Committee and was focussed on significant risk areas and local improvement priorities. In total seven internal audit assignments were undertaken during the year,. Audlt Opinion Status at Time of Reporting Actlons Agreed Safeguarding Substantial Assurance Final Report Agreed Business Planning Subslanlial Assurance Final Report Agreed Cyber Security Reasonable Assurance Final Report Agreed Annual Report and Accounts for 2021-2Z 60 DLO Efficiency and Effectiveness Reasonable Assurance Final Report Agreed Community Setvices Income Partial Assurance Draft Report Issued Follow-up Audit Reasonable Progress Final Report Agreed Advisory Audit and Training Support.. General Data Protection Regulations IGDPRII Governance Framework Advisory Final Report Agreed The overall opinion by the Head of Internal Audit on governance, risk management and control is a function of this risk based audit programme and contributes to the picture of assurance available to the 8oard in reviewing effectiveness and supporting our drive for continuous Improvement. THE HEAD OF INTERNAL AUDIT HAS CONCLUDED: Based on work carried out in 2021-22.. 'The orgonisotion hos on odequote and effectiveframeworkfor risk munagement, governance and internal control. However, our work hos identifiedfurther enhancements to theframework of risk monagement, governonce and internal control to ensure thot it remoins odequote ond effective., As well as the audit assignments referenced above the following areas helped to inform the Head of Internal Audits opinion: Acceptance of internal audit management actions; and Implementation of internal audit management actions While Brunelcare's internal auditor's did not deliver a specific review of Brunelcare's governance arrangements consideration wa5 given to assurance reporting and monitoring arrangements in each audit and they attended each meeting of the Audit, Risk and Finance Committee, where they observed the review of the risk register, stress testing and financial performance monitoring reports. Annual RÈport and Aicount5 for 2021-22 61 06- TRUSTEES, RESPONSIBILITIES STATEMENT Statement of trustees, responsibilities in respect of the annual accounts The Trustees, of Brunelcare (who are also Directors of the Charity for the purposes of company lawl are responsible for preparing the Strategic Report, the Trustees Annual Report and the Financial Statements in accordance with relevant law and regulations. Company law requires the trustees to prepare financial statements for each financial year. Under company law the trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affair5 of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period. In preparing these financial statements, the trustees are required to.. select suitable accounting policies and apply them con51Stentlv,' observe the methods and principles in the Charities SORP,. make judgments and estimates that are reasonable and prudent; state whether applicable UK accounting standards have been followed, subject to any departures disclosed and explained in the fi'nancial statements,. and prepare the account5 on a going concern basis unless it is inappropriate to presume that the charity will continue in business. The trustees are responsible for maintaining proper accounting records which disclose with reasonable accuracy at any time the linancial position of the charitable company and to enable them to ensure that the accounts comply with the Companies Act 2006 Iscotland.. the Charities and Trustee Investment15cotlandl Act 2005 and the Charitie5 Accounts Iscotlandl Regulations 20061. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Financial statements are published on the charity's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance 2nd integrity of the charity's website is the responsibility of the trustees. The trustees, responsibility also extends to the ongoing integrity of the financial statements contained therein. Trustees are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Disclosure of Informat70n to auditors On behalf of the Board of Trustees, I confirm that in so far as the trustees are aware at the time of reporting: There is no relevant audit information of which the Charity's auditor is unaware,. and Annual Report and Account5 for 2021-22 62 The Trustees have taken 311 steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information. Approval The Trustees, report. including the Strategic Report and Financial Statements, was approved by the Trustees at a Board meeting held on 28 September 2022 and signed on its behalf by: Deborah Evans Chair 28 September 2022 Annual Report and Account5 for 2021-22 63 07- INDEPENDENT AUDITOR'S REPORT Independent auditor's report to the members of Brunelcare Opinion We have audited the financial statements of Brunelcare I"The Charity") for the year ended 31 March 2022 which comprise the Statement of Comprehensive Income, Statement of Change5 in Equity, Statement of Financial Position, Cash Flow statement and related notes, including the accounting policies in Note 2. In our opinion the financial statements= Give a true and fair view of the state of affairs of The Charity as at 31 March 2022 and of its surplus for the year then ended,. Have been properly prepared in accordance with UK accounting standards, including FRS102 The Financial Reporknng Standard applicable in the UK and Republic of Ireland. and Have been prepared in accordance with the requirements of the Companies Act 2006, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2019. Basis for opinion We conducted our audit in accordarlce with International Standards on Auditing IUKI I'ISAS IUKI"l and applicable law. Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the Charity in accordance with, UK ethical requirements including the FRC Ethical Standard. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Going concern The Trustees have prepared the fvnancial statements on the going concern basis as they do not intend to liquidate the Charity or to cease its operations, and as they have concluded that the Charity's financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over it5 ability to continue as a going concern for at least a year from the date of approval of the tinancial statements I'the going concern period'l. In our evaluation of the Trustees, conclusions, we considered the inherent risks to the Charity business model and analysed how those risks might affect the Charity's financial resource5 or ability to continue operations over the going concern period. Our conclusions based on this work: we consider that the Trustees, use of the going concern basis of accounting in the preparation of the linancial statements is appropriate,. we have not identilied, and concur with the Tru5tees' assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may Annual Report and Accounts for 2021-22 cast significant doubt on the Charity's ability to continue as a going concern for the going concern period. However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are incon51Stent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Charity will continue in operation. Fraud and breaches of laws and regulation5- ability to detect Identsfying and responding to risks of moterial mi55tatement due tofraud To identify risk5 of material misstatement due to fraud I'fraud risk5"1 we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunitv to commit fraud. Our risk assessment procedures included= Enquiring of Trustees, the audit cornmittee and internal audit as to the Charity's high-level policies and procedures to prevent and detect fraud, including the internal audit function, and the Charity's channel for "whistleblowing" as well as whether they have knowledge of any actual, suspected or alleged fraud. Reading Board and audit committee minutes. Using analytical procedures to identify any unusual or unexpected relationships. Obtaining a copy of the Charity's fraud register. We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit As required by auditing standards, and taking into account possible pressures to meet loan covenants and regulatory performance targets and our overall knowledge of the control environment, we perform procedures to address the risk of management override of controls and the risk of fraudulent revenue recognition in particular.. the risk of bias in accounting estimates such as pension assumptr'ons, development assumptions and valuation of financial instrument5,' the risk that income from property sales and non social housing income is recorded in the wrong period,. and the risk that management may be in a position to make inappropriate accounting entries. We did not identify any additional fraud risks. In determining the audit procedures we took into account the results of our evaluation and testing of the operating effectiveness of the Charity-wide fraud risk management controls. We also performed procedures including: Identifying journal entries to test for all full scope components based on risk criteria and comparing the identified entries to supporting documentation. These included those posted to unusual accounts involving a f raud risk, journals posted by senior members of Annual Report and Accounts for 2021-22 65 staff, unusual combinations of journal posting to cash and/or borrowings and unexpected debit posting to community service income. Assessing whether the judgements made in the accounting estimates are indicative of potential bias including asse55ing the assumptions used in pension valuations and the value of housing stock held in current assets. Identtfying and responding to risks of material misstatement related to compliance with law5 and regulations We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussion with the Trustees las required by auditing standard51, and from inspection of the Charity's regulatory and legal correspondence and discussed with the Trustees the policies and procedures regarding compliance with laws and regulations. We communicated identilied laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. The potential effect of these laws and regulations on the financial statements varies considerablv. Firstly, the Charity is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related Companies Act legislation), taxation legislation, pension legislation, disclosures required by Housing legislation and requirements imposed by the Regulator for Social Housing. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. Secondly, the Charity is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the linancial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect.. health and safety, data protection laws, anti-bribery, employment law and liquidity, and certain aspects of company legislation recognising the financial and regulated nature of the Charity's activities. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Trustees and inspection of regulatory and legal correspondence, if any. Therefore if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach. Context of the ability of the audit to detectfraud or breaches of law or regulation Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements. even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the h'nancial statements, the less likely the inherently limited procedures required by auditing standard5 would identify it. Annual Report and Account5 for 2021-22 66 In addition, as with any audit, there remained a higher risk of non-detection of fraud, a5 these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal contro15. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations. Other information The Trustees are responsible for the other information, which comprises Annual Report and Trustees Report. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except a5 explicitly stated below, anv form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether. based on our financial 5tatement5 audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work.. We have not identified material misstatements in the other information,- In our opinion the information given in Annual Report and Trustees report for the financial year is consistent with the financial 5tatements,' and In our opinion that report has been prepared in accordance with the Companies Act 2006. Matters on which we are required to report by exception Under the Companies Act 2006 we are required to report to you if, in our opinion.. Adequate accounting records have not been kept by the Charity, or returns adequate for our audit have not been received from branches not visited by us- or The Charity financial statements are not in agreement with the accounting records and returns,. or Certain disclosures of directors, remuneration specilied by law are not made,. or We have not received all the information and explanations we require for our audit. We have nothing to report in these respects. Trustees, responsibilities As explained more f ully in their statement set out on page 59, the Trustees are responsible for.. the preparation of the financial statements and for being satisfied that they give a true and fair view,. such internal control as they determine 15 necessary to enable the preparation of financial statements that are free from material misstatement, whether due to f raud or error,. assessing the Charity's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Charity or to cease operations, or have no realistic alternative but to do so. Annual Report and Accounts for 2021-22 67 Auditor's responsibilities Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are f ree f rom material misstatement, whether due to fraud or error and to issue our opinion in an auditor's report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit conducted in accordance with ISAS IUKI will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. A fuller description of our responsibilities is provided on the FRC'S website at www.frc.or ,ILidilorsrL-IS The purpose of our audit work and to whom we owe our responsibilities This report is made solely to the Charity's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and section 128 of the Housing and Regeneration Act 2008. Our audit work has been undertaken so that we might state to the Charity's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Charity and the Charity's members, as a body, for our audit work, for this report, or for the opinions we have formed. Harry Mears (Senior Statutory Auditor) for and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants 66 Queen square, Bristol, BSI 4BE 28 September 2022 Annual Report and Accoun15 for 2021-22 68 08- STATEMENT OF COMPREHENSIVE INCOME Statement of comprehensive income For the year to 31 March 2022 Notes 2021-22 2020-21 £000 £000 Turnover 40.379 36,963 Operating costs Operating surplus 358 139,067} 1,311 134,3161 2,647 Interest receivable Interest payable Change in fair value of investment properties Surplus for the year 15811 1.247 15901 73 1,978 2,132 Actuarial gainlllossl in respect of pension schemes 22 1.618 13,3361 Total comprohensive income for the year 3,596 11,2041 All the above results derive f rom continuing operations. These fi'nancial statements were approved by the Board on 28 September 2022 and signed on its behalf by.. bJvQ. fv6L) Deborah Evans Chair Mandy Collins Company Secretary The accompanying notes form part of these fi'nancial statements. Annual Report aryd Accounts for 2021-22 69 Statement of changes in equity For the year to 31 March 2022 Accumulated capital fund £000 Revenue Reserve Total £000 £000 Al April 2021 Surplus for the year Other comprehensive income Transfers 1,729 24.326 26,055 1,978 1,978 1,618 1,618 1621 1,667 41 1211 29,630 Total funds al 31 March 2022 27,963 Annual Report and Accounts lor 2021-22 70 09- STATEMENT OF FINANCIAL POSITION Statement of financial position at 31 March 2022 Notes 2022 2021 £000 £000 Tangible fixed assets Tangible fixed assets- properties Tangible fixed assets- other assets Investment properties Total fixed assets 10 54,892 55,496 11 1,542 1,493 12 2,000 720 58,434 57,709 Current assets Properties held for sale 13 453 687 I Stock 69 Trade receivables 14 3.100 3,702 5,580 ' Cash 7,115 10,668 10.038 Creditors.. amounts falling due within one year Net current asset5 15 17,5251 3,142 {6,6751 3,363 Total assets less current liabilities 51,576 61,072 Creditors.. amounts falling due after more than one year 16 128,721) 129.661 } Provisions.. pensions deficit 21 (3,2251 15,3561 Net assets 29,630 26,055 Equity Designated reserves Revenue reserves 1.667 1,729 27,963 24,326 Total funds 29.630 26,055 These financial statements were approved by the Board on 28 September 2022 and signed on their behalf.. b6bcnL fvTh. Deborah Evan5 Chair Mandy Collins Company Secretary Annual Report and AccoLsnts for ZOZI-22 71 10- CASH FLOW STATEMENT Cash flow statement for the year to 31 March 2022 2020-21 restated Notes 2021-22 £000 £000 Cash flow from operating activities 4,138 3,901 Interest received Interest paid Cash oufflow from financing activities 14711 1470} 15481 15461 Cash outflow to capital expenditure Purchase or construction of housing properties 11.2451 15021 Purchase or construction of nursing properties Purchase of other fixed assets 1401 14531 1381 11401 611 Capital grants received Expenditure on stock Fixed asset disposal proceeds Total cash loulllin flow from capital activities 1691 275 325 11,4131 137 Financing New loans drawn Housing capital loans repaid Total cash oufflow from financing 1720} 17201 12,5581 12,5581 Net change in cash and cash equivalents 1.535 934 Cash and cash equivalents al the start of the year Cash and cash equivalents al the end of the year 5,580 4,464 7,115 5.580 Annual Report and Accounts lor 2021-22 72 Reconciliation of operating surplus to net cash inflow from operating activities for the year to 31 March 2022 2021 Restated 2022 £000 £000 Operating surplus before interest Depreciation and impaiiment of tangible fixed assets Granl amortisalion 1,311 2,647 1,747 1,758 {3211 220 1322} 139} {5801 3,464 Deficit on disposal of tangible fixed assets Pension movement (5131 2,445 Cash inflow from financing activities Worklng capital movernents Ilncreasel in debtors Increase in creditors 13411 841 {7701 1.135 Less fair value changes in assets and liabilities Net cash inflow from operating activities 1.193 73 4.138 3,901 Statement of changes in net debt For the year to 31 March 2022 Cash and cash equivalents Borrowings Total i Nel debt al 1 April 2021 Cash flow in the year | Nel debt al 21 March 2022 5,580 113,2041 720 17,6241 2,255 1,535 7,115 112,4841 15,3691 AnnL¢al Report and Accaunt5 for 2021-22 73 11- NOTES TO THE FINANCIAL STATEMENTS l. Legal Status Brijnelcare is a charity registered with the Charities Commission, under the Companies Act 2006, and with the Regulator for Social Housing a5 a social landlord. It is a cornpany limited by guarantee, registered in England and Wales and, as such, has no share capital. The liability of the members, in the event of winding up, is limited to an amount not exceeding £1 per member. Brunelcare meets the definition of a public benefit entity. 2. Accounting policies 2.1. Basis of accounting The financial statements have been prepared in accordance with Financial Reporting Standard 102 the applicable financial reporting standard in the U K and Republic of Ireland IFRS1021 and the Statement of Recommended practice.. Accounting by Registered Social Housing Providers 2018 and comply with the Accounting Direction for Private Registered Providers of Social Housing 2019. The presentation currency of these financial statements is sterling. All amounts in the financial statements have been rounded to the nearest £1,000. The accounting policie5 set out below have, unless otherwise stated, been applied consistently to all periods presented in these financial statements. 2.2. Accounting estimates and judgements The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for income and expenditure during the year. The organisation based its estimates and assumptions on parameters available at the time the financial statements were prepared. Existing circumstances and assumptions about future developments may change due to market circumstances, legislation or other circumstances beyond the organisation's control. Such changes are reflected in the assumptions and eskn'mates when they occur. The judgements on estimated useful lives of property, plant and equipment have had the most significant effect on amounts recognised in the financial statements. 2.3. Estimated lives of Property, Plant and Equipment At the date of capitalising tangible fixed assets, the organisation estimates the useful life of the asset based upon management's judgement and experience. 2.4. Impairment of trade and other receivables The company makes an estimate of the recoverable value of trade and other account receivables. When assessing the impairment, management considers factors including the current credit Annual Report Accounts for 2021-22 74 rating of the account, the ageing profile and historical experience. See note 14 for the net position of debtors and associated provision. 2.5. Valuation of housing properties The Company tests annually whether there are any impairment triggers that would require the company to undertake a f ull impairrnent review of housing properties or other cash generating unit activities under FRS 102. The recoverable value is assessed as the higher of fair value or value in use. The SORP 2018 Social Housing Providers considers depreciated replacement Cost as a reasonable estimate for value in use taking into consideration the service potential of social housing. The valuation of housing properties at the year-end have therefore been assessed using depreciated replaced cost. These calculations require the use of assumptions and estimates, in particular in relation to the identification of cash generating units, expected replacement cost and the service potential of the asset. 2.6. Measurement convention The fi'nancial statements are prepared on the historical cost basis with Investment Properties and the Pension Deficit marked to Fair Value based on external valuations. 2.7. Going Concern Brunelcare has sufficient financial resources based on forecasts and current expectations of future sector conditrons. As a consequence, the Board believes that Brunelcare is well placed to manage their business risks successfully. The Board considers that Brunelcare has adequate resources to continue in operational existence for the foreseeable future. The Board therefore continue5 to adopt the going concern basis in preparing these financial statements. 2.8. Turnover Turnover represents housing property rental income and service charge5 receivable, care home fees, day centre and domiciliary care fees receivable, fees receivable for home care services provided based on care hours provided and income from donations, and Social Housing Grant amortisation. 2.9. Revenue Recognition Rental income 15 recognised from the point when properties under development reach practical completion or otherwise become available for letling. Income from first tranche sale5 and sales of properties built for sale is recognised at the point of legal completion of the sale. Revenue grants are receivable when the conditions for receipt of agreed grant funding have been met. Charges for support services funded under Supporting People are recoEnised as they fall due under the contractual arrangements with Administering Authorities. 2.10. Value added tax Brunelcare charges value added tax IVATI on some of its income and is able to recover part of the VAT it incur5 on expenditure. The financial statements include VAT to the extent that it is suffered Annual Report and A£count5 for 2021-22 75 by Brunelcare and not recoverable from HM Revenue and Customs. The balance of VAT payable or recoverable at the year-end is included as a current liability or asset. 2.11. Land and buildings Works to existing properties are works which reS￿1t in an increase in the net rental income, such as a reduction in future maintenance costs, or result in a signifi'cant extension of the useful economic life of the property in the business are capitalised. Subsequent additions have been, and future additions will be, taken in at cost, and a policy of periodic valuation has not been adopted. 2.12. Investment properties Investment properties are fixed asset5 that we intend to sell for a capital gain. They are held at fair value and revalued annually until sale by an experienced third-party valuer. 2.13. Shared Ownership properties held for sale Shared ownership first tranche sales, completed properties for outright sale and property under construction are valued at the lower of cost and net realisable value. Cost comprises materials, di rect labour and direct development overheads. Net realisable value is based on estimated sa les price after allowing for all f urther costs of completion and disposal. Shared ownership properhes are split proportionally between current and fixed assets based on the element relating to expected first tranche sale5. The first tranche proportion of shared ownership properties is classed as a current asset in the Balance Sheet. Related sale proceeds will be included in Turnover in the year of sale. The remaining element of shared ownership properties is held in fixed assets and included in Shared Ownership Properties Held for Lethng. 2. 14. Leasehold propertie5 held for sale Buyback properties are valued at current market rates by an independent estate agent, prior to buyback. These are stated in the financial statements at the cost of the buyback. Buybacks are recognised in the accounts as a creditor when the deed of surrender has been received. Cash sales are recognised on completion with any sale proceeds included in Turnover and Costs of sales in expenditure. 2.15. Impairment Housing properties which are depreciated over a period in excess of 50 years are subject to impairment reviews annually. Other assets are reviewed for impairment if there is an indication that impairment may have occurred. Where there is evidence of impairment, fixed assets are written down to their recoverable amount. Any such write down is charged to the income and expenditure account. Annual Report and AccoL¢nts for 2021-22 76 2.16. Depreciation Social housing properties are depreciated on a straight-line basis over their estimated useful lives under component accounting. These components are.. omponenl Useful Ilf¢. Structure 75 years Pitched roof 50 years Flat roof 15 years Doors & windows 30 years Bathrooms 15 years Kitchens 10 years Wiring 30 years Heating 20 years Alarm/Call system 15 years Lifts 25 years Ground works 30 years Leasehold land Lease Term Freehold land is not depreciated. Care homes are depreciated on a straight-line basis over their estimated useful lives under component accounting. Land is not depreciated. The land element for each property has been estimated at 15Yo of the total value, where not known. 2.17. Other fixed assets Tangible fixed assets are stated at cost less accumulated depreciation. Depreciation is charged on a straight-line basis over their usef ul estimated lives: sset group Useful Ilfe Computer equipment 4 years Motor vehicles 5 years Office equipment 5 years Annual Report and Account5 for 2021-22 77 Fixtures and fithngs 5 years Office5 75 years 2.18. Capitalisation limit The 'de minimis, limit for the capitalisation of purchased fi'xed assets was £1,000 per item during the year. 2.19. Social housing grant5 Social housing grant ISHGI is receivable from Homes England Iformerly the Homes and Communities Agency) and is utilised to reduce the capital costs of housing properties, including land costs. SHG due or received in advance is included in creditors. SHG received in respect of revenue expenditure is credited to the income and expenditure account in the same period as the expenditure to which it relates. SHG is subordinated to the repayment of loans by agreement with the Homes England. SHG released on sale of a property May be repayable but is normally available to be recycled and is credited to a Recycled Capital Grant Fund and included in the balance sheet in creditors. 2.20. Other capital grant5 These include grants from local authorities and other organisations. Other grants are initially recogni5ed at fair value as a long term liability, specifically as deferred grant income and released through the statement of consolidated income as turnover over the life of the structure of housing properties in accordance with the accrual method applicable to social landlords accounting for housing properties at cost. Grants in respect of revenue expenditure are credited to the statement of consolidated income in the same period as the expenditure to which they relate. 2.21. Interest payable Interest is capitalised on borrowings to finance developments to the extent that it accrues in respect of the period of development, if it represents either= a) Interest on borrowings specifically financing the development programme after deduction of interest on social housing grant1SHGI in advance,. or bl Interest on borrowings of the company as a whole after deduction of interest on SHG in advance to the extent that they car) be deemed to be financing the development programme. Other interest payable is charged to the income and expenditure account in the year. 2.22. Leases Where Brunelcare enters into a lease, which entails taking substantially all the risks and rewards of ownership of an asset, the lease is treated as a 'finance lease,. The asset is recorded in the Annual Report and Accounts for 2021-22 78 balance sheet as a tangible fixed asset and is depreciated over its estimated useful life or the term of the lease, whichever is the shorter. Future instalments under such leases, net of finance charges, are included within creditors. Rentals payable are apportioned between the finance element, which is charged to the income and expenditure account, and the capital element, which reduces the outstanding obligation for future instalments. All other leases are accounted for as 'operating leases, and rentals are charged to the income and expenditure account on a straight-line basis over the life of the lease. 2.23. Service charge sinking funds Included within the housing units managed by the organisation are 15 leasehold units. Sinking funds are maintained for the two 51te5 involved to cover medium term cyclical maintenance. In addition, a maintenance fund is maintained to cover day-to-day services. Within Community Services there are 56 units which also have a sinking fund. 2.24. Pension costs Brunelcare is a member of the Social Housing Pension Scheme defined contribution section. In the year was also a member of the defined benefi't section which provided benefits based on final pensionable pay or career average salary for some employees but was closed to new and existing staff in March 2019 For the Social Housing Pension Scheme defined benefit section, scheme assets are measured at fair values. scheme liabilities are measured on an actuarial basis using the projected unit credit method and are discounted at appropriate high quality corporate bond rates. The net surplus or deficit is presented separately f rom other net assets on the Statement of financial position. A net surplus is recognised only to the extent that it is recoverable by the Group through reduced contributions or through refund5 from the plan. The current service cost and costs from settlements and curtailments are charged against operating surplus. Past service costs are recognised in the current reporting period. Interest is calculated on the net delined benefit liability. Remeasurements are reported in other comprehensive income. 2.25. Supporting People Charges for support services funded under Supporting People are recognised as they fall due under the contractual arrangements with Administering Authorities. 2.26. Cyclical repairs and maintenance Due to the number of properties held and the establishment of regular programmes of repair and maintenance, Brunelcare does not make provision for f uture works but charges actual costs incurred to the income and expenditure account unles5 capitalised under component accounting. Annual Report and AccoLEnt5 lor 2021-22 79 2.27. Tax Brunelcare is considered to pass the tests set out in Paragraph I Schedule 6 Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporats'on tax purposes. Accordingly, the charity is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes. 2.28. Liquid resources Liquid resources are readily disposable current asset investments. They include some money market deposits, held for more than 24 hours, which can only be withdrawn without penalty on maturity or by giving notice of more than one working day. 2.29. Reserves Brunelcare establishes restricted reserves for Specific purposes where their use is Subject to external restrictions and designated reserve5 where reserves are earmarked for a particular purpose. Brunelcare has a designated reserve which is the Accumulated Capital Funds reserve. Donations to capital appeals are accounted for as non-operating, ordinary activities in the Income and Expenditure Account and then taken to the designated Accumulated Capital Funds reserve. Transfers from the reserve are then made annually in proporhon to the depreciation charge for the assets, which were purchased using the proceeds of the appeal. Anntsal Report and Accounts for 2021-22 80 3. Turnover, cost of sales, operating costs and operating surplus Table A Operating surplusl Ideficill £000 Operating costs Turnover Cost of sales £000 £000 £000 Soclal housing lettings (Table B} other social housing activity First tranche home ownership sales Charges for support services Other income 8.652 18,1411 511 550 14121 138 223 11651 90 58 357 447 Actlvitles other than social housing Care homes 23.197 {23.500} {621 {6,8781 {3031 191 469 Market rent 53 Other 7.347 Total 40,379 {4121 138,6561 1,311 Annual Report and Atcounis for 2021-22 81 Table B General Supported I Shared Total, needs Housing ownership. 2021-22 £000 £000 £ooo' Total 2020-21 £000 £000 Turnover from social housing lettings Rent receivable nel of identifiable service charges Service charges receivable Other inwme 18 5,486 133 5,637 5,139 2.564 55 2,623 2,386 49 55,, 236 73 Amortised Government grants Government granls in income Other grants amortised Turnover from social housing lettings 228 238 18 71 12 83, 82 23 8,416, 213 8.652,, 7,927 Expenditure on social housing lettlngs Management services Service charge costs Routine maintenance 1,823 2.729 45 1,874 1,095 2,772 63, 2.798 546 12 5621 362. Planned maintenance 52 57 Major repairs expenditure Depreciation Bad debts 170 172 198 1,098 52 1,122 10 Other costs 1.445 72 1.519, 1.317 Operating expenditure on social housing lettings 22 7.873 246 8.141 ,, 6,920 Operating surplus on sosial housing lettings Void losses 543 1331 511 1,007 85 85 121 Void losses are rental income lost as a result of property not being let, although it is available for letknng. Annual Report and Atcoynts for 2021-22 82 4. Accommodation in management and development At the end of the year units owned for each class of accommodation were: 2021-22 2020-21 Social housing Social rent general needs housing Social rent supported housing and housing for older people 1.100 1.110 Low cost home ownership 14 Social leasehold units owned 30 25 1,143 1,153 Social housing units owned but not managed Social housing units owned bul not managed 10 Non-social housing Total non-social housing rental units owned 301 301 Non-social rental housing units managed but not owned 88 88 Non-social leasehold units owned 56 56 445 445 Annual Report and Accounts for 2021-22 83 5. Operating surplus 2021-22 2020-21 £000 £000 Depreclation of fixed assets 1,747 1,758 Operating lease rentals Plant and machinery 21 71 Land and buildings 801 793 Vehicles 77 78 Auditor's remuneration Audit of these financial statements 48 39 Other services 6. Interest receivable and other income 2021-22 2020-21 £000 £000 Income from short term deposits 20 20 7. Interest payable and similar charges 2021-22 2020-21 £000 £000 Bank loans and overdrafts 471 534 Pension remeasurement interest 110 56 581 590 Annual Report and Accounts for 2021-22 8. Employees 2021-22 2020-21 Number Number Average monthly number of employees 1,110 1,110 Average monthly employees, expressed as FfEs 854 846 £000 £000 Employee costs Wages and salaries 20,135 19,396 Social security costs 1,745 1,594 Defined benefit pension costs 91 Pension costs 509 409 22,389 21,490 The average monthly employees, expressed as full time equivalents, is calculated from monthly data collected by Brunelcare's HR department which records Starters, leavers, hours worked, gender etc. The data are circulated monthly to aid managers, decisions. Brunelcare employees are entitled to membership of the Social Housing Pension Scheme ISHPSI. Some members of the SH PS also contribute additional voluntary contributions to The Pension Trust's Growth Plan. Brunelcare also complies with the Government scheme of auto enrolment and has legal duties to enrol eligible job-holders into a qualifying workplace pension scheme and make contributions toward5 It. Further information on the scheme is given in Note 23. Brunelcare has the following numbers of employees earning £60,000 or more, shown in bands of £10,000. 2021-22 2020-21 Number Number £60.000 10 £70,000 £70.000 10 £80,000 £80,000 10 £90,000 £90.000 10 £100,000 £120,000 to £130,000 Annual Report and Accounts for 2021-22 85 9. Board members and executive directors The key management personnel are deemed to be the board members and executive directors. Remuneration Pension contributions 2021-22 tot81 2020-21 lolal £000 £000 £000 £000 Oona Goldsworthy 120 124 115 120 124 115 None of the non-executive board-members received emoluments. The emoluments of the highest paid executive director, the Chief Executive, was £120,40512021'. £115,640). The Chief Executive is a member of the Charity's defined contribution pension scheme on the same basis a5 Other staff. She is entitled to three month's notice and is required to give the Same. The total emoluments of the executive directors, including pension contributions, were £601,922 for the year ended 31 March 202212021.. £568,590). The £604,045 wa5 made up of salaries of £588,688 and pension contributions of £16,235. Annual Report and Account5 for 2021-22 86 CL ¢n I I 12. Investment properties 2021-22 2020-21 £000 £000 Land cost al start of period 720 647 Additions al cost in the year 33 Changes in fair value in the year 1,247 73 2,000 720 The land held as an investment property is two-thirds of the value of a plot of land in Nailsea, North Somerset, that was gifted without restriction to Brunelcare and St Peter's Hospice by the late Mrs Mary Sophia Shepstone. The two charities have been granted planning permission and, at the year-end. had agreed to sell the land to a developer for around £2.0m. After the year-end, the land was sold for £2.017m 13. Properties held for sale 2021-22 2020-21 £000 £000 Properties held for sale 453 687 453 687 14. Debtors 2021-22 2020-21 £000 £000 Rents, fees and service charges receivable 3,230 3.027 Less provisions for bad debts 11,3531 15711 1.878 2,456 Prepayments 728 785 Accrued income 494 461 3.100 3,702 Annual Report and Accounts for 2021-22 90 2021-22 2020-21 £000 £000 Rent arrears Housing current tenants 82 114 Housing former tenants 19 Extra care current tenants 29 45 Extra care former tenants Gross social housing rent arrears 121 179 15. Creditors.. amounts falling due within one year 2021-22 2020-21 £000 £000 Bank loans within one year 712 720 Trade creditors 677 739 Rent and service charges received in advance 795 318 Other laxalion and social security 621 615 Payroll costs 1,781 1,833 Other creditors 803 1,264 Accru8ls & Deferred income 2,136 1,186 7.525 6,675 16. Creditors: amounts falling after more than one year 2021-22 2020-21 £000 £000 Bank loans 11.772 12,484 Other long-lerm creditors 469 351 Social housing grant 11,436 11,759 Other grants 4.954 5,035 Recycled capital grant fund 85 Annual Report and Accounts for 2021-22 91 Pension liability 23 28,721 29.661 17. Deferred capital grants Social Housing Grants Other Grants £000 £000 Balance brought forward 12,000 5,117 Amortised in the year 12401 1811 Moved lo Recycled Capital Grant Fund 1851 Balance carrled forward 11,675 5,036 18. Bank loan analysis 2021-22 2020-21 £000 £000 Bank loans due within one year 712 720 Bank loans due after one year 11,772 12,484 12.484 13,204 The bank loans are secured by individual charges over individual properties. The bank loans are repayable by instalments at fixed rates of interest ranging from 3.5Yo and 11.7Yo Wlth three loans totalling £4,461k on Libor rates. Based on the lender's earliest repayment dates, borrowings are repayable as follows.. 2021-22 2020-21 £000 £000 Within one year 712 720 Between two and five years 2,893 2,882 After five years 8,879 9,602 12,484 13,204 Annual Report and Ac£ount5 for 2021-22 92 19. Financial commitments Capital expenditure commitments were as follows.. 2021-22 2020-21 £000 £000 Aulhorised by the Board bul not contracted 4,870 1,584 Contracted bul not delivered by the year-end 2,462 1.345 The above commitments will be financed using existing cash reserves and drawings from our £5m revolving credit facilitv. The future lease payments payable under non-cancellable leases are as follows.. 2021-22 2020-21 £000 £000 Land and buildings Less than one year 788 789 One to five years 3,079 3,067 Beyond five years 13.752 14,515 17,619 18,371 Office equipmont, computers and vehicle5 Less than one year 91 90 One lo five years 118 168 209 258 20. Contingent liabilities There were 10 Woodland Court properties remaining as 31st March 2022 which are owned by the current residents where their lease includes a buyback obligation clause. As such, Brunelcare may be obliged to buy back these properties at some future date and the properties would then be resold. On 31st March 2022 no buyback clauses had been activated. These transactions are uncertain and therefore an amount has not been disclosed12021- nil}. On 5th April 2022 we suffered a lire in a flat at one of our housing properties, where the occupant sadly lost their life. The fi're defences at the site operated as planned and the fi're was contained within the single flat and the running of the block is otherwise unaffected. At the Annual Report and Accounts for 2021-22 93 moment, no detrimental financial effects are expected from the incident. 21. Related parties The Social Housing Pension Scheme, managed by The Pensions Trust, is a related party. The details of the relationship are set out in Note 22 22. Pension schemes The Charity participates in two defined benefit pension schemes, the Social Housing Pension Scheme and the Growth Plan, both of which are multi-employer final salary schemes. Both schemes are now closed to members. It is not Possible for the Charity to obtain sufficient information to enable it to account for the Growth Plan as a defined benefit scheme. Therefore, it accounts for the scheme as a defi'ned contribution scheme. The Charity's current liability for the Growth Plan is £8k12021.' £42kl. Brunelcare h35 been notified by the Trustee of the Scheme that it has performed a review of the changes made to the Scheme's benefit5 over the years and the result is that there is uncertainty surrounding some of these changes. The Trustee has been advised to seek clarification from the Court on these items. This process is ongoing and the matter is unlikely to be resolved before the end of 2024 at the earliest. It is recognised that this could potentially impact the value of Scheme liabilities, but given the current level of uncertaintie5, It is not possible to calculate the impact of th is issue, particularly on an individual employer basis, with any accuracy at this time. No adjustment has been made in these financial statements in respect of this potential issue. 22.1 Social Housing Pension Scheme- Defined Benefit section The Charity participate5 in the scheme, a multi-employer scheme which provides to some 500 non-associated employers. The scheme is a delined benefit scheme in the UK and The Pension Trust, which administers the Social Housing Pension Scheme, has undertaken an exercise to disaggregate the assets and liabilities of the fund between the various participating members so that, for both financial years, Brunelcare's full share of the assets and liabilities are shown on the balance sheet. The movement in the year comprise5 the movements between the opening and c105ing scheme assets and liabilities attributable to Brunelcare. The movement in the year in the pension scheme on the defined benefit approach is.. Annual Report and Accounts for 2021-22 94 Fair value of plan assets, present value of defined benefit obligation and defined benefit asset/lliabilityl 31st March 2022 31st March 2021 £000 £000 Fair value of plan assets 22,265 21.470 Present value of defined benefit obligation 25.490 26,826 Deficit in plan 13,225} 15,3561 Unrecognised surplus Defined bènefit liability to be recognised 13,225} 15,3561 Reconciliation of opening and closing balances of the defined benefit obligation 2021-22 £000 Defined benefit obligation al start of period 26,826 Expenses 36 Interest expense 578 Actuarial losses due to scheme experience 1,063 Actuarial gains due lo changes in demographic assumptions 14151 Actuarial gains due lo changes in financial assumptions 11.9731 Benefits paid and expenses 16251 Defined benefit obligation at the end of the period 25,490 Reconclliation of opening and closing balances of the fair value of plan assets 2021-22 £000 Fair value of plan assets al start of period 21,470 Interest income 468 Experience on plan assets lexcluding amounts included in interest income) gain 269 Employer contributions 683 Benefits paid and expenses (6251 Fair value of plan assets at the end of the period 22,265 Annual Report and Accounts lor 2021-22 95 Defined benefit costs recognised in Statement of Comprehensive Income 2021-22 £000 Expenses 36 Nel interest expense 110 Defined benefit costs included in the Slalement of Comprehensive Income 146 Defined benefit costs recognised in Other comprehensive income 2021-22 £000 Experience on plan assets lexcluding amounts included in interest income) gain 269 Experience gains and losses arising on plan liabilities- Ilossl 11,0631 Effects of changes in the demographic assumptions underfying the present value of the defined benefit obligation - gain 415 Effects of changes in the financial assumptions underlying the present value of the defined benefit obligation - gain 1,973 Total actuarial gains and losses (before reslriclion due to some of the surplus not being recognisablel gain 1,594 Effects of other changes in the amount of surplus that is not recoverable (excluding amounts included in the nel interest costl gainlllossl Total amount recognised in Other Comprehensive Income- gain 1.594 Assels 31st March 2022 31 st March 2021 £000 £000 Global equity 4.273 3,422 Absolute return 893 1,185 Distressed opportunities 797 620 Credit relative value 740 676 ALlernalive risk premia 734 809 Fund of hedge funds Emerging markets debt 648 867 Risk sharing 733 781 Insurance-linked securities 519 516 Property 601 446 Annual Report and Account5 lor 2021-22 96 Infraslruclure 1,586 1,431 Private debt 571 512 Opportunislic illiquid credit 748 546 High yield 192 643 Opportunistic credit 79 589 Cash 76 Coiporale bond fund 1,485 1.268 Liquid credit 256 Long lease property 573 421 Secured income 830 893 Liability driven investment 6.212 5,456 Currency hedging 1871 Nel current assets 62 131 Total assets 22,265 21,470 None of the fair values of the assets shown above include any direct investments in the employer's own financial instruments or any property occupied by, or other assets used by. the employer. Key assumptions 31st March 2022 31 st March 2021 /0 per annum /v per annum Discount rate 2.79 2.18 Inflation IRPII 3.57 3.27 Inflation ICPII 3.19 2.87 Salary growth 4.19 3.87 Allowance for commutation of pension for cash al retirement 75/oof maximum allowance maximum allowance The mortality assumptions adopted at 31st March 2022 imply the following life expectancies: Annual Report and Accounts for 2021-22 97 Life expectancy at age 65 Years Male retiring in 2022 21.1 Female retiring in 2022 23.7 Male retiring in 2042 22.4 Female retiring in 2042 25.2 22.2. Social Housing Pension Scheme- Defined Contribution section Brunelcare has a legal duty to enrol eligible employees into a qualifying workplace pension scheme and make contributions towards it. The employee is not required to take any action in order to become an active member of the scheme. An employee who has been automatically enrolled is free to opt out and get a refund of the contributions they have paid. Brunelcare uses the Social Housing Pension Scheme - Defined Contribution Section to invest these contributions. 22.3. Dementia Care Trust group personal pension scheme The acquisition of the assets and liabilities of the Dementia Care Trust IDcfi in July 2007 meant that the existing pension arrangements for employees of DCT, who remain on DCT employment contracts, became part of the overall Brunelcare pension arrangements. The scheme is a defined contribution scheme and Brunelcare contributed at the rate of 5Yo of salary with employees contributing at rates between nil and 5Yo. Being a defined contribution scheme there are no ongoing liabilities for Brunelcare. As at 31st March 2022 there were no members of the scheme, the final one having retired from Brunelcare's employment. Annual Report and Accounts lor Z021-22 98 12- DETAILS OF KEY INDIVIDUALS Detai15 of key individuals and orga nisations involved in the leadership, oversight and audit of Brunelcare in the yearto 31 March 2022 TRUSTEES Deborah Evans Chair of The Board lan Turner Vice Chair of the Board and Chair of the Audit, Risk and Finance Committee luntil 28 September 20211 Andrew Sloman Chair of the Audit, Risk and Finance Committee (from I September 20211 Chair of the Performance Quality and Experience Committee Chair ofthe Remuneration and Nomination Committee Nick Hooper Harry Hayer Phil Hope Alison Comley Kate Innes (Still) Anthony Oldfield Tony Wi150n Senior Independent Director Jo Makinson (from 7 October 20211 SENIOR LEADERSHIP TEAM Oona Goldsworthy Chief Executive Officer Brian Whittaker Director of HR and OD Chris Wall Director of Finance Iresigned in September 20221 Matthew Bell Director of Strategy and Transformation Michelle Caine Director of Community Services luntil 30 August 20211 Michelle Richards Director of Housing Services Sandra Payne MBE Director of Nursing and Care Services Mandy Collins Company Secretary and Head of Corporate Governance Registered Office Saff ron Gardens Prospect Place, Whitehall Bristol, B55 9FF Tel..101171914 42001 Fax.'10117} 987 3502 E-mail.. info@brunelcare.org.uk Web= www.brunelcare.org.uk Registered Numbers Company- 601847 (registered by guarantee) Charity- 201555 Regulator for Social Housing- LH0269 Care Quality Commission registration no. CRTI-579008632 Annual Report and Accounts for 2021-22 99 External Auditors KPMG LLP 66 Queen Square Bristol BSI 4BE Internal Auditors RSM Risk Assurance Services LLP Hartwell House 55-61 Victoria Street Bristol BSI 6AD Annual Report and Accounts for 2021-22 loo Year eno reDorl 2021122 Brunelcarg October 2022 ## **Key contacts** Your key contacts in connection with this report are: **Harry Mears** Partner Tel: 07801 901178 Harry.Mears@kpmg.co.uk ## **Charles Morris** Manager Tel: 07392 863318 Charles.Morris@kpmg.co.uk |**Contents**|**Page**| |---|---| |Introduction|3| |Our audit findings|5| |Significant risks and other areas of focus|6| |Key accounting estimates|11| |Audit misstatements|12| |Other matters|13| |**Appendices**|14| ## **Tom Hood** In-charge Tel: 07510 376438 Tom.Hood@kpmg.co.uk © 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 2 **Document Classification: KPMG Confidential** ## **Brunelcare** ## Introduction ## **To the Audit, Risk & Finance Committee of Brunelcare** ## **How we have delivered audit quality** We were pleased to have the opportunity to meet with you on 13 September to discuss the results of our audit of the financial statements of Brunelcare (as a company limited by guarantee without share capital and as a registered charity who provide social housing, we will therefore refer the entity as the ‘Association’), as at and for the year ended 31 March 2022. We are providing this report in advance of our meeting to enable you to consider our findings and hence enhance the quality of our discussions. This report should be read in conjunction with our audit plan and strategy report, presented on 16 February. We will be pleased to elaborate on the matters covered in this report when we meet. Our audit is now complete. There have been no significant changes to our audit plan and strategy. Audit quality is at the core of everything we do at KPMG and we believe that it is not just about reaching the right opinion, but how we reach that opinion. We consider risks to the quality of our audit in our engagement risk assessment and planning discussions. We define ‘audit quality’ as being the outcome when audits are: - Executed consistently, in line with the requirements and intent of applicable professional standards within a strong system of quality controls and - All of our related activities are undertaken in an environment of the utmost level of objectivity, independence, ethics and integrity. Subject to the Board’s approval, we will sign our audit opinion on the Association’s financial statements on 28 September 2022. We expect to issue an unmodified Auditor’s Report. We draw your attention to the important notice on page 4 of this report, which explains: - The purpose of this report; and - Limitations on work performed; - Restrictions on distribution of this report. Yours sincerely, Harry Mears 28 September 2022 © 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 3 **Document Classification: KPMG Confidential** **Brunelcare** ## Important notice ## **Purpose of this report** This report is presented under the terms of our audit This Report has been prepared in connection with our audit of the financial statements of Brunelcare (the ‘Association’), prepared in accordance with FRS 102 the Financial Reporting Standard applicable in the UK and the Republic of Ireland, as at engagement letter. and for the year ended 31 March 2022. Circulation of this report is restricted. This report summarises the key issues identified during our audit but does not repeat matters we have previously communicated to you. The content of this report is based solely on the procedures necessary for our audit. This report has been prepared for the Audit, Risk & Finance Committee, in order to communicate matters of interest as required by ISAs (UK), and other matters coming to our attention during our audit work that we consider might be of interest, and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone (beyond that which we may have as auditors) for this report, or for the opinions we have formed in respect of this report. ## **Limitations on work performed** This Report is separate from our audit report and does not provide an additional opinion on the Association’s financial statements, nor does it add to or extend or alter our duties and responsibilities as auditors reporting to the Association’s members in accordance with the Charities Act. We have not designed or performed procedures outside those required of us as auditors for the purpose of identifying or communicating any of the matters covered by this Report. The matters reported are based on the knowledge gained as a result of being your auditors. We have not verified the accuracy or completeness of any such information other than in connection with and to the extent required for the purposes of our audit. ## **Status of our audit** Our audit is complete ## **Restrictions on distribution** The report is provided on the basis that it is only for the information of the Audit, Risk & Finance Committee of the Association; that it will not be quoted or referred to, in whole or in part, without our prior written consent; and that we accept no responsibility to any third party in relation to it. © 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 4 **Document Classification: KPMG Confidential** ## **Brunelcare** ## Our audit findings **----- Start of picture text -----**
Significant audit risks Pages 6-8 Uncorrected audit misstatements
Page 12
Significant audit
Risk change Our findings
risks We have not identified any uncorrected
misstatements
Valuation of post Our testing over this area is ongoing. We are
retirement benefit  No change in the process of evaluating the SHPS
obligations pension liability
Revenue
 No change See results of our testing on page 7
recognition
Management No issues were identified from our testing in
 No change
override of controls this area
Key accounting estimates Page 11
Number of Control deficiencies
SHPS pension asset Assumptions were found to be optimistic but
Optimistic Page 17
and liability within our acceptable range
Significant control deficiencies 0
Other control deficiencies 3
Prior year control deficiencies
2
remediated
Outstanding matters
Our audit is complete
**----- End of picture text -----**
© 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 5 **Document Classification: KPMG Confidential** ## **Brunelcare** ## Audit risks Cautious Neutral Optimistic **Valuation of post retirement benefit obligations (SHPS)** Risk of error in relation to the valuation of post retirement benefit obligations ## **Significant audit risk** ## **Our response** We performed the following procedures: ## **The risk** An inappropriate amount is estimated and recorded for the defined benefit obligation. The valuation of the post retirement benefit obligations involves the selection of appropriate actuarial assumptions, most notably the discount rate applied to the scheme liabilities, inflation rates and mortality rates. The selection of these assumptions is inherently subjective and small changes in the assumptions and estimates used to value the Association's pension liability could have a significant effect on the financial position of the Association. The effect of these matters is that, as part of our risk assessment, we determined that post retirement benefits obligation has a high degree of estimation uncertainty. The financial statements (note 22.1) disclose the assumptions used by the Association in completing the year end valuation of the pension deficit and the year on year movements. - Evaluate the competency, objectivity of the Scheme actuaries to confirm their qualifications and the basis for their calculations; - Agree the data provided by the audited entity to the Scheme Administrator for use within the calculation of the scheme valuation; - Challenge, with the support of our own actuarial specialists, the key assumptions applied, being the discount rate, inflation rate and mortality/life expectancy against externally derived data. - Confirm that the accounting treatment and entries applied by the Association are in line with FRS102 and the SORP; - Consider the adequacy of the Association’s disclosures in respect of the sensitivity of the deficit to these assumptions. - Confirmed that the pension note included all required information as set out in FRS102. ## **Our findings** - We did not identify any issues with regards to the competency and objectivity of the scheme actuaries. - The overall set of assumptions used for SHPS are considered to be optimistic but within our acceptable range - We have not identified any issues as a result of our review of the pensions disclosure. © 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 6 **Document Classification: KPMG Confidential** ## **Brunelcare** ## Audit risks ## **Revenue recognition** ## **Significant audit risk** ## **The risk** - Professional standards require us to make a rebuttable presumption that the fraud risk from revenue recognition is a significant risk. - We do not consider there to be financial incentives that give rise to incentives or pressure that increase the risk of fraudulent revenue recognition. - We have rebutted the fraud risk in respect of the below revenue streams based on the fixed income value of the streams with limited manual intervention or scope for manual intervention. Due to the predictability of this revenue stream there is deemed to be limited opportunity for the fraudulent revenue recognition. This applies to the following streams Cautious Neutral Optimistic Fraud risk related to misstatement of revenues ## **Our response** For community services income stream we shall perform an additional procedure to assess whether transactions either side of the balance sheet date at year end are recognised in the correct period. We have evaluated the design and implementation of a control to ensure that revenue is recognised when sales legally complete. We have selected a sample of revenue recognised either side of the balance sheet date and ensure the sale completed in the period where it is recorded. ## **Our findings** We have evaluated the designed and implementation of the control around revenue recognition with no issues identified. We performed cut off testing over these revenue streams and noted that all income was recognised in the correct period. We have identified two audit misstatements relating to care home debtors and deferred fuel income. See page 12 for further details. - Social housing rent receivable; - Service charge income; - Care home rent receivable © 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 7 **Document Classification: KPMG Confidential** ## **Brunelcare** ## Audit risks ## **Management override of controls** Fraud risk related to unpredictable way management override of controls may occur ## **Significant audit risk** ## **Our response** We performed the following procedures: ## **The risk** Professional standards require us to communicate the fraud risk from management override of controls as significant. Management is in a unique position to perpetrate fraud because of their ability to manipulate accounting records and prepare fraudulent financial statements by overriding controls that otherwise appear to be operating effectively. We have not identified any specific additional risks of management override relating to this audit - In line with our methodology, we tested the operating effectiveness of controls over journal entries and post closing adjustments. - Substantively tested identified high risk journals to supporting evidence. In addition we substantively tested all material post closing adjustments. - Assessed the appropriateness of changes compared to the prior year to the methods and underlying assumptions used to prepare accounting estimates. - Assessed the appropriateness of the accounting for significant transactions that are outside the component's normal course of business, or are otherwise unusual. ## **Our findings** - We evaluated the design and implementation of controls over journal entries and post closing adjustments, - We did not identify any issues from our review of journal entries and post closing adjustments - We did not identify any significant unusual transactions for the current year © 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 8 **Document Classification: KPMG Confidential** **Brunelcare** ## Audit risks ## **Going Concern** Risk relating to disclosures related to going concern including the judgement of whether there is material uncertainty ## **Our response** ## **Other area of audit focus** We performed the following procedures: ## **The risk** Management’s assessment of the entity’s ability to continue as a going concern involves significant judgment with respect to future revenues. We have not currently identified a significant risk in relation to going concern but we will continue to assess this during the audit COVID-19, coupled with the potential ongoing impacts of Brexit may cast significant doubt on the entity’s ability to continue as a going concern and may indicate the existence of a material uncertainty. Management’s assessment of the entity’s ability to continue as a going concern does not appropriately consider the impact of the COVID 19 pandemic, including plausible but severe downside scenarios. Disclosures in the financial statement and the annual report are not adequate with regard to the effect of COVID 19 risks on the entity’s financial position, performance, business model and strategy - Evaluated how m anagem ent’s risk assessm ent process identifies business risks relating to events and conditions that m ay cast significant doubt on the ability to continue as a going concern. - — Evaluated the m odels m anagem ent uses in its assessm ent, including use of the w ork of experts, and evaluate how the inform ation system captures events and conditions that m ay cast significant doubt on ability to continue as a going concern. - — Evaluated w hether m anagem ent’s assessm ent has failed to identify events or conditions that m ay cast significant doubt on going concern and w hether the m ethod used by m anagem ent is appropriate. - — Evaluated w hether sufficient and appropriate audit evidence has been obtained to conclude w hether a m aterial uncertainty exists and the appropriateness of m anagem ent’s use (or otherw ise) of the going concern basis of accounting. - — Evaluated w hether there is adequate support for the assum ptions underlying m anagem ent’s assessm ent, w hether they are realistic and achievable and consistent w ith the external and/ or internal environm ent and other m atters identified in the audit - — Challenged m anagem ent’s plans for future actions, and verify the reliability and relevance of data used. Determ ine w hether the outcom e of these plans is likely to im prove the situation and w hether m anagem ent’s plans are feasible. - **Our Findings** — We review ed m anagem ent’s assessm ent and considered the im pact on the loan covenants set at the entity - — No going concern issues have been identified through this w ork - © 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 9 **Document Classification: KPMG Confidential** ## **Brunelcare** ## Audit risks ## **Regulatory compliance, litigation and claims** Compliance with reporting requirements in respect of regulatory compliance, litigation and claims. ## **Other area of audit focus** ## **The risk** The Association will again be required to confirm in their 2021/22 annual report that they comply with all aspects of the Regulator of Social Housing’s Governance and Financial Viability Standard. The Association will also need to be aware of any litigation or claims, which may then require disclosure or provision in the financial statements. ## **Our response** Our consideration of the Associations' regulatory compliance included the following procedures: - We reviewed evidence as to how the Association gains assurance that it complies with all aspects of the Regulator of Social Housing’s Governance and Financial Viability standard; and - We made enquiries with key members of management, those charged with governance, and internal audit as appropriate - We challenged the adequacy and appropriateness of any provisions booked by management. Using our entity level understanding we assessed the completeness and consistency of any provisions with other information such as committee minutes and communications with the regulator. ## **Our findings** - We performed inquiries with management and reviewed board minutes to ensure there are no material litigation, claims or regulatory issues in progress that could affect the entity materially. We have nothing to report in these respects © 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 10 **Document Classification: KPMG Confidential** ## **Brunelcare** ## Key accounting estimates –Overview ## **Our view of management judgement** ## **Key** Our views on management judgments with respect to accounting estimates are based solely on the work performed in the context of our audit of the financial statements as a whole. We express no assurance on individual financial statement captions. Cautious means a smaller asset or bigger liability; optimistic is the reverse. Cautious Optimistic Current year Prior year **YoY Asset/liability Our view of management Balance change Our view of disclosure of class judgement (£m) (£m) judgements & estimates Further comments** Needs Best Cautious Neutral Optimistic improvement Neutral practice **Pension** SHPS Pension **3.2 (2.2)** The assumptions used were deemed to be optimistic but within our acceptable Liability range © 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 11 **Document Classification: KPMG Confidential** ## **Brunelcare** ## Audit misstatements ## **Materiality = 950k** ## **Audit misstatements –Outturn position** Management has approved the correction of the audit misstatements detailed on page 19 and they are reflected in the draft financial statements. A summary of the corrected audit misstatements is detailed on page 19. The misstatements identified, and their estimated financial impact, are summarised in the table on the right. The most significant disclosure misstatements relate to - An incorrect omission of Mar-22 starters from the average headcount figure - An incorrect omission of 10 x social leasehold properties from the property numbers disclosure (note 4) In line with ISA (UK) 450 we request that you correct uncorrected misstatements. ## **Key comments** - For our views on management estimates – see Page 11 (Key accounting estimates) - A detailed summary of corrected and uncorrected audit misstatements and omissions and errors in disclosure is included in the appendix |**Matter**
**ISA/IFRS ref**
**Comment**
Staff disclosure – Headcount
Property numbers – Social
Leasehold
N/a
N/a
29 x individuals employed in Mar-22 incorrectly
excluded from annual avg headcount (impact
on avg = 1,110 to 1,113)
10 x social Leasehold properties incorrectly
excluded from draft stats note 4 summary
table. Impact = from 20 to 30 properties
**Disclosure**
Type
£k
Comment
**Draft accounts**
Corrected misstatements
–
Pension movement
Factual
658
See page 19
–
Deferred fuel income
Factual
75
See page 19
–
Care home debtors P13 journal
Factual
589
See page 19
**Our assessment**
**1,322**|**Matter**
**ISA/IFRS ref**
**Comment**
Staff disclosure – Headcount
Property numbers – Social
Leasehold
N/a
N/a
29 x individuals employed in Mar-22 incorrectly
excluded from annual avg headcount (impact
on avg = 1,110 to 1,113)
10 x social Leasehold properties incorrectly
excluded from draft stats note 4 summary
table. Impact = from 20 to 30 properties
**Disclosure**
Type
£k
Comment
**Draft accounts**
Corrected misstatements
–
Pension movement
Factual
658
See page 19
–
Deferred fuel income
Factual
75
See page 19
–
Care home debtors P13 journal
Factual
589
See page 19
**Our assessment**
**1,322**|**Matter**
**ISA/IFRS ref**
**Comment**
Staff disclosure – Headcount
Property numbers – Social
Leasehold
N/a
N/a
29 x individuals employed in Mar-22 incorrectly
excluded from annual avg headcount (impact
on avg = 1,110 to 1,113)
10 x social Leasehold properties incorrectly
excluded from draft stats note 4 summary
table. Impact = from 20 to 30 properties
**Disclosure**
Type
£k
Comment
**Draft accounts**
Corrected misstatements
–
Pension movement
Factual
658
See page 19
–
Deferred fuel income
Factual
75
See page 19
–
Care home debtors P13 journal
Factual
589
See page 19
**Our assessment**
**1,322**| |---|---|---| |**Matter**|**ISA/IFRS ref**|**Comment**| |Staff disclosure – Headcount
Property numbers – Social
Leasehold|N/a
N/a|29 x individuals employed in Mar-22 incorrectly
excluded from annual avg headcount (impact
on avg = 1,110 to 1,113)
10 x social Leasehold properties incorrectly
excluded from draft stats note 4 summary
table. Impact = from 20 to 30 properties| © 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 12 **Document Classification: KPMG Confidential** ## **Brunelcare** ## Other matters ## **Annual report** We have read the contents of the Annual Report (including the Strategic Report, Directors Report and Statement of Compliance with the Governance and Financial Viability Standard). We are in the process of completing our checks over the financial statements in this area, including checking for inconsistencies between the contents of the Strategic and Director’s Reports and the financial statements. We have reviewed compliance with the Accounting Direction for Private Registered Providers of Social Housing 2022. As Directors you confirm that you consider that the annual report and accounts taken as a whole are fair, balanced and understandable and provide the information necessary for regulators and other stakeholders to assess the Association’s performance, business model and strategy. ## **Independence and Objectivity** ISA 260 also requires us to make an annual declaration that we are in a position of sufficient independence and objectivity to act as your auditors, which we completed at planning and no further work or matters have arisen since then. We confirm this. ## **Audit Fees** Our fee for the audit was £39,750 plus VAT (37,950 in 2020/21). We have also completed non audit work at the Association during the year on tax arrangements and have included in appendix four confirmation of safeguards that have been put in place to preserve our independence. © 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 13 **Document Classification: KPMG Confidential** ## Appendix ||**Page**||**Page**| |---|---|---|---| |Required communications with the Audit and Risk|15|Confirmation of independence|20| |Committee||FRC’s focus areas|22| |Recommendations raised and followed up|17|ISA (UK) 315 Revised Overview|24| |Audit differences|19|ISA (UK) 240 Revised Summary of changes|25| © 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 14 **Document Classification: KPMG Confidential** ## **Appendix one** ## Required communications with the Audit and Risk Committee |**Type**||**Response**| |---|---|---| |**Our draft management representation letter**|**OK**|We have not requested any specific representations in addition to those areas normally covered by our
standard representation letter for the year ended 31 March 2022.| |**Adjusted audit differences**|**OK**|Three adjusted audit difference was identified see page 19| |**Unadjusted audit differences**|**OK**|We did not raise any unadjusted audit differences| |**Related parties**|**OK**|There were no significant matters that arose during the audit in connection with the entity's related
parties.| |**Other matters warranting attention by the**
**Audit and Risk Committee**|**OK**|There were no matters to report arising from the audit that, in our professional judgment, are significant
to the oversight of the financial reporting process.| |**Control deficiencies**||We communicated to management in writing all deficiencies in internal control over financial reporting of| ||**OK**|a lesser magnitude than significant deficiencies identified during the audit that had not previously been| |||communicated in writing.| |**Actual or suspected fraud, noncompliance**||No actual or suspected fraud involving management, employees with significant roles in internal control,| |**with laws or regulations or illegal acts**|**OK**|or where fraud results in a material misstatement in the financial statements was identified during the| |||audit.| © 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 15 **Document Classification: KPMG Confidential** ## **Appendix one** ## Required communications with the Audit and Risk Committee |**Type**||**Response**| |---|---|---| |**Significant difficulties**|**OK**|No significant difficulties were encountered during the audit.| |**Modifications to auditor’s report**|**OK**|None.| |**Disagreements with management or scope**|**OK**|The engagement team had no disagreements with management and no scope limitations were imposed| |**limitations**||by management during the audit.| |**Other information**|**OK**|No material inconsistencies were identified related to other information in the annual report, Strategic and| |||Directors’ reports.| |||The Strategic report is fair, balanced and comprehensive, and complies with the law.| |**Breaches of independence**|**OK**|No matters to report. The engagement team have complied with relevant ethical requirements regarding| |||independence.| |**Accounting practices**|**OK**|Over the course of our audit, we have evaluated the appropriateness of the Association‘s accounting| |||policies, accounting estimates and financial statement disclosures. In general, we believe these are| |||appropriate.| |**Significant matters discussed or subject to**|**OK**|No significant matters were noted arising from the audit| |**correspondence with management**||| © 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 16 **Document Classification: KPMG Confidential** ## **Appendix two** ## Recommendations raised and fo **l** owed up **The recommendations raised as a result of our work in the current year are as follows:** ||||**Priority rating for recommendations**||| |---|---|---|---|---|---| ||**Priority one:**issues that are fundamental and||**Priority two:**issues that have an important||**Priority three:**issues that would, if corrected,| ||material to your system of internal control. We||effect on internal controls but do not need||improve the internal control in general but are| ||believe that these issues might mean that you||immediate action. You may still meet a system||not vital to the overall system. These are| ||do not meet a system objective or reduce
(mitigate) a risk.||objective in full or in part or reduce (mitigate) a
risk adequately but the weakness remains in
the system.||generally issues of best practice that we feel
would benefit you if you introduced them.| |**Priority rating for recommendations**|**Priority rating for recommendations**|**Priority rating for recommendations**|**Priority rating for recommendations**|**Priority rating for recommendations**|**Priority rating for recommendations**|**Priority rating for recommendations**|**Priority rating for recommendations**| |---|---|---|---|---|---|---|---| |||**Priority one:**issues that are fundamental and
material to your system of internal control. We
believe that these issues might mean that you
do not meet a system objective or reduce
(mitigate) a risk.|||**Priority two:**issues that have an important
effect on internal controls but do not need
immediate action. You may still meet a system
objective in full or in part or reduce (mitigate) a
risk adequately but the weakness remains in
the system.||**Priority three:**issues that would, if corrected,
improve the internal control in general but are
not vital to the overall system. These are
generally issues of best practice that we feel
would benefit you if you introduced them.| |**#**|**Risk**||**Issue, Impact and Recommendation**|||**Management Response / Officer / Due Date**|| |**Financial Statements**|||||||| |1
2
3|

||**HR retention of key starter documentation**
(Issue)Per controls testing of starters 1 x sampled starter had no retained copy of employment offer
letter on file
(Impact)Potential for unauthorised/approved recruitment of employee contracts and addition to
payroll
(Recommendation)Enforce and monitor a more rigorous policy around retention of key starter
documentation (including signed employment offer letters)
**HR retention of key leaver documentation**
(Issue)Per controls testing of leavers 1 x sampled leaver had no retained copy of communications
held between line manager and employee evidencing termination of employment contract
(Impact)Potential for unauthorised/approved termination of employment contracts and incorrect
removal from payroll
(Recommendation)Enforce and monitor a more rigorous policy around retention of key leaver
documentation (including written communication evidencing termination/resignation)
**Bank reconciliation – Documentation of reconciling items**
(Issue)Per controls testing of monthly bank recs it was noted no formal documentation is retained
with respect to investigation of reconciling items. Further, for 7 x recs sampled, no formal
documentation was viewable to evidence appropriate review had taken place
(Impact)Unreconciled items may be inappropriately assumed as timing difference related without
proper investigation and review, resulting in cash mis-matches between ledger and bank
(Recommendation)Include documentation around formal investigation of unreconciled items in the
monthly bank recs, and evidence of appropriate review/sign-off taking place|||These documents should be on file and a log is kept
recording the receipt of all new starter documents (DBS,
right to work, signed contract etc.). A process was
added recently to the HR system to record the dates
where the employee's line manager was chased to
obtain missing documentation if they are not received
before the employee's start date. Moreover, staff are
deemed by law to have accepted the contract terms and
contracts by turning up to work.
The leaver process has been streamlined in the financial
year to reduce the transfer of paperwork. Now, site
managers can notify HR of a new leaver by Google
Form or online Help Desk Portal and, while they are
requested to forward any email or letter of resignations,
these decisions are quite often communicated verbally
to the employee's manager.
(HR Department)
Bank rec discrepancies are investigated and resolved
and the evidence for this is that they are not present on
future bank recs. All bank recs are reviewed and, from
the middle of the 2021-22 financial year, annotated to
show this fact.
(Finance Department)|| © 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 17 **Document Classification: KPMG Confidential** ## **Appendix two** ## Recommendations raised and fo **l** owed up ## **We have also followed up the recommendations from the previous years audit, in summary:** |**Total number of recommendations**|**Total number of recommendations**|**Total number of recommendations**|**Total number of recommendations**|**Number of recommendations implemented**|**Number of recommendations implemented**|**Number outstanding (repeated below):**|**Number outstanding (repeated below):**| |---|---|---|---|---|---|---|---| |2||||1||1|| ||||||||| |**#**|**Risk**||**Issue, Impact and Recommendation**||**Management Response / Officer /**
**Due Date**||**Current Status (Aug 2022)**| |**Financial Statements**|||||||| |1
2||
|**Community Services control environment**
The controls around the community services revenue are not operating effectively. Of our
sample test of 64 items, we found 11 misstatements. This includes amounts per the
underlying invoices differing from the amounts in the ledger and it includes revenue
being recognised for an individual who has been receiving care in hospitals.
We recommend that each revenue invoice is matched against cash received for that
invoice to identify and correct where variances were highlighted.
**Bank Reconciliation**
No formal investigation of unmatched items in the bank reconciliations
It is recommended that all significant unmatched items on the bank reconciliation are
investigated||In the prior year management
agreed controls needed to be
tightened to reduce the level of
errors.
See management response on
page 17||Resolved – Our work over
community services and its
control environment has not
identified a recurrence in current
year audit
Unresolved/Recurring – See
current year recommendation no.
3 above| © 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 18 **Document Classification: KPMG Confidential** ## **Appendix three** ## Audit Differences Under UK auditing standards (ISA (UK) 260) we are required to provide the Audit and Risk Committee with a summary of unadjusted audit differences (including disclosure misstatements) identified during the course of our audit, other than those which are ‘clearly trivial’, which are not reflected in the financial statements. In line with ISA (UK) 450 we request that you correct uncorrected misstatements. However, they will have no effect on the opinion in our auditor’s report, individually or in aggregate. As communicated previously with the Audit and Risk Committee, details of all adjustments greater than £47.5K are shown below: We have not identified any unadjusted audit differences. Under UK auditing standards (ISA (UK) 260) we are required to provide the Audit and Risk Committee with a summary of adjusted audit differences (including disclosures) identified during the course of our audit. The adjustments below have been included in the financial statements. |**Adjusted audit differences (£’000s)**|**Adjusted audit differences (£’000s)**|**Adjusted audit differences (£’000s)**|**Adjusted audit differences (£’000s)**|**Adjusted audit differences (£’000s)**| |---|---|---|---|---| |**No.**|**Detail**|**SOCI Dr/(cr)**|**SOFP Dr/(cr)**|**Comments**| |1|Dr Change in Pension (4000)
Cr Pension provision (8880)|£657,947.56
-|-
£(657,947.56)|Throughout the year Brunelcare debit the deficit reduction payments to the pension
provision. These payments are included in the SHPS figures provided by TPT but
this year Brunelcare didn't reverse out these in-year journals.| |2|Dr Bad debts written off (2990)
Dr Bad debt provision (7803)
Cr Accrued Income (7510)|£75,043.44
-
-|-
£68,296.70
£(143,340.14)|Brunelcare accrued income in prior years for fuel in agreement with residents to
recharge them over the following three financial years. The agreement ended at the
end of the most recent financial year, so there should be no accrued income
remaining. Consequently, this income was never invoiced. But the automatic journal
posted this balance. Hence this adjustment removes the journal posting| |1|**Dr**Care Home Fees (1020)
**Cr**Rent Fees and Service
Charges receivable (Various)|£588,887.62|-£588,887.62|Error due to care home debtors journal being posted into the current year's P13
instead of last years. Correction journal number 145306 posted following board
review| |Total||£732,911.00|£732,991.00|| > © 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 19 **Document Classification: KPMG Confidential** ## **Appendix four** ## Confirmation of Independence ## **We confirm that, in our professional judgement, KPMG LLP is independent within the meaning of regulatory and professional requirements and that the objectivity of the Partner and audit staff is not impaired.** To the Audit, Risk & Finance Committee members - Internal accountability ## **Assessment of our objectivity and independence as auditor of the Brunelcare Charity** Professional ethical standards require us to provide to you at the planning stage of the audit a written disclosure of relationships (including the provision of non-audit services) that bear on KPMG LLP’s objectivity and independence, the threats to KPMG LLP’s independence that these create, any safeguards that have been put in place and why they address such threats, together with any other information necessary to enable KPMG LLP’s objectivity and independence to be assessed. This letter is intended to comply with this requirement and facilitate a subsequent discussion with you on audit independence and addresses: - General procedures to safeguard independence and objectivity; - Independence and objectivity considerations relating to the provision of non-audit services; and - Independence and objectivity considerations relating to other matters. ## **General procedures to safeguard independence and objectivity** KPMG LLP is committed to being and being seen to be independent. As part of our ethics and independence policies, all KPMG LLP partners and staff annually confirm their compliance with our ethics and independence policies and procedures including in particular that they have no prohibited shareholdings. Our ethics and independence policies and procedures are fully consistent with the requirements of the FRC Ethical Standard. As a result we have underlying safeguards in place to maintain independence through: - Instilling professional values - Communications - Risk management - Independent reviews. We are satisfied that our general procedures support our independence and objectivity. ## **Independence and objectivity considerations relating to the provision of non-audit services** ## Summary of non-audit services Facts and matters related to the provision of non-audit services and the safeguards put in place that bear upon our independence and objectivity, are set out in the following table |**Description of**
**scope**|**Threats to**
**independence**|**Safe guards**
**applied**|**Value of service**
**and basis of fee**| |---|---|---|---| |KPMG tax
bridge software
license|Self-review|Tax is not
significant for
the audit and
therefore there
is not
considered to
be a self-review
threat.|Fixed, £3k| © 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 20 **Document Classification: KPMG Confidential** ## **Appendix four** ## Confirmation of Independence We have considered the fees charged by us to the organisation and its affiliates for professional services provided by us during the reporting period. Total fees charged by us can be analysed as follows: |**2021/22 (to date)**
**2020/21**|**2021/22 (to date)**
**2020/21**|**2021/22 (to date)**
**2020/21**|**2021/22 (to date)**
**2020/21**| |---|---|---|---| |||£’000|£’000| ||Audit of Brunelcare|39|38| |**Total audit**||**39**|**38**| ||Tax advisory services|3|3| ||**Total non-audit services**|3|3| |**Total Fees**||**42**|**41**| ## Fee ratio The anticipated ratio of non-audit fees to audit fees for the year at the time of planning is 0.07:1. We do not consider that the total non-audit fees create a self-interest threat since the absolute level of fees is not significant to our firm as a whole. ## Application of the FRC Ethical Standard 2019 We communicated to you previously the effect of the application of the FRC Ethical Standard 2019. That standard became effective for the first period commencing on or after 15 March 2020, except for the restrictions on non-audit and additional services that became effective immediately at that date, subject to grandfathering provisions. We confirm that as at 15 March 2020 we were not providing any non-audit or additional services that required to be grandfathered. ## **Confirmation of audit independence** We confirm that as of the date of this letter, in our professional judgement, KPMG LLP is independent within the meaning of regulatory and professional requirements and the objectivity of the partner and audit staff is not impaired. This report is intended solely for the information of the Audit and Compliance Committee and should not be used for any other purposes. We would be very happy to discuss the matters identified above (or any other matters relating to our objectivity and independence) should you wish to do so. ## Yours faithfully KPMG LLP © 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 21 **Document Classification: KPMG Confidential** ## **Appendix five** ## FRC’s areas of focus The areas of focus from the FRC’s Annual Review of Corporate Reporting 2020/21, annual letter to CEOs, CFOs and audit committee chairs along with the five thematic reviews issued in 2021 should be considered for reporting in the current financial period. The reports identify where the FRC believes organisations should be improving their reporting. Below is a high level summary of the key topics. We encourage management and those charged with governance to read further on those areas which are significant to the Registered Provider. ||In the current climate it is particularly important for entities to provide as much context as possible for the assumptions and predictions underlying the| |---|---| ||amounts recognised in the financial statements, including potential sensitivities or ranges of possible outcomes.| |**Judgements and**|Trusts should disclose the carrying amounts impacted by estimation uncertainty. Disclosures of key assumptions and sensitivities could be improved.| |**Estimates**|Preparers are encouraged to clearly distinguish between sources of estimation uncertainty with a significant risk of a material adjustment in the| ||following year and other, perhaps longer-term, uncertainties.| ||Significant accounting judgements should be clearly explained along with factors considered.| ||| ||Having raised a considerable number of queries in relation to revenue recognition policies and related disclosure, the FRC strongly encourage| ||preparers to read their thematic report which includes tips and examples of good and inadequate disclosure.| |**Revenue**|Entities should disclose significant judgements made in accounting for revenue. This could include judgements in relation to performance obligations,| ||transaction price and amounts allocated to performance obligations. Disclosures should clearly identify the methods used to estimate any variable| ||consideration.| ||| ||Organisations need robust reviews of the cash flow statement to ensure consistency with other parts of the annual report and to ensure preparation in| ||line with the accounting standard.| |**Statement of**
**Cash Flows**|Errors continue to be identified, including inappropriate classification of cash flows and inappropriate netting. The FRC also challenges organisations
on the composition of cash equivalents and on incomplete or incorrect related disclosures.| ||Organisations are reminded that even in the limited cases where borrowings can be included as a component of cash and cash equivalents in the cash| ||flow statement, the IAS 32 ‘Financial Instruments: Presentation’ criteria need to be applied to determine whether they can be presented on a net basis| ||in the balance sheet.| ||| ||APMs should not be given undue-prominence. Preparers should avoid statements appearing to provide APMs with more authority than IFRS measures| |**Alternative**|and are reminded that meaningful commentary on the IFRS figures is required.| |**Performance**
**Measures (APMs)**|APMs, including ratios, should be appropriately labelled and reconciled to the most directly reconcilable financial statement line item. It should be
clear how reconciling items are determined and companies should explain clearly why amounts are excluded from adjusted measures. Adjusting| ||items should include gains as well as losses, where relevant.| © 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 22 **Document Classification: KPMG Confidential** ## **Appendix five** ## FRC’s areas of focus |||||The annual report should provide a fair, balanced and comprehensive analysis of the development and performance of the business in the| |---|---|---|---|---| |**Strategic Report**||||financial year and of its position at the end of the year. In particular companies are encouraged to include discussion of relevant significant| |||||matters and performance against key strategic objectives.| |||||| |||||Provisions and contingencies should be clearly explained including the nature of the exposure, the timeframe and the basis for determining the| |||||amount. Any significant judgements and relevant assumptions should be disclosed clearly.| |**Provisions and**
**contingencies**||||There should be consistency between information provided in the annual report and accounts.| |||||If material provisions are dependent on the future performance of a business expected to be heavily impacted by climate change, this should be| |||||disclosed and detail provided on how climate change had been taken into account in the estimate.| |||||| |||||Lessees and lessors are required to disclose information that gives a basis for users to assess the effect of leases on financial position, financial| |**Leases**||||performance and cash flows. This could include information about variable payment features, for example. Judgements should be disclosed.| |||||Entity-specific accounting policies should be disclosed for material transactions.| |||||| |||||In addition to the topics summarised above, the FRC have indicated that routine monitoring for the 2021/22 cycle will include a focus on:| |||||-
judgement and uncertainty in the face of continuing economic and social impact of Covid-19; and| |||||-
climate-related risks and new disclosures.| |**2021/22 priorities for**||||Disclosure on judgements and assumptions about the future will remain important to users of reports, particularly when considering matters| |**FRC review:**||||such as going concern and liquidity. Therefore as part of their routine 2021/22 routines, the FRC will continue to consider whether entities:| |-|**Impact of**|**COVID-19**||-
Explain the significant judgements and estimates made;| |||||-
Provide meaningful sensitivity analysis or details of a range of possible outcomes;| |||||-
Describe any significant judgements made in determining whether there is a material uncertainty about their ability to continue as a going| |||||concern; and| |||||-
Ensure that assumptions used in the going concern assessment are compatible with those used elsewhere.| © 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 23 **Document Classification: KPMG Confidential** Low ## **Appendix six** ## ISA (UK) 315 Revised: Overview ## **Summary** ISA (UK) 315 Identifying andassessing the risks ofmaterialmisstatement incorporates significant changes from the previous version of the ISA. These have been introduced to achieve a more rigorous risk identification and assessment process and thereby promote more specificity in the response to the identified risks. The revised ISA is effective for the 2022-23 financial year onwards **.** The revised standard expands on concepts in the existing standards but also introduces new risk assessment process requirements – the changes will have a significant impact on our audit methodology and therefore audit approach. ## **Why have these revisions been made?** With the changes in the environment, including financial reporting frameworks becoming more complex, technology being used to a greater extent and entities (and their governance structures) becoming more complicated, standard setters recognised that audits need to have a more robust and comprehensive risk identification and assessment mechanism. The changes are aimed at (i) promoting consistency in effective risk identification and assessment, (ii) modernising the standard by increasing the focus on IT, (iii) enhancing the standard’s scalability through a principle based approach, and (iv) focusing auditor attention on exercising professional scepticism throughout risk assessment procedures. ## **What does this mean for an audit?** To meet the requirements of the new standard, auditors will be required to spend an increased amount of time across the risk assessment process, including more detailed consideration of the IT environment. We expect these changes to result in significantly increased audit effort levels which will, in turn, affect auditor remuneration. This additional effort is a combination of time necessary to perform the enhanced risk assessment procedures and the anticipated need to involve more technical specialists (particularly IT Audit professionals) in our audits. Given the level of changes to the standard, debate remains ongoing about the extent of impact on application of some paragraphs. Global regulators have committed to providing further clarification in this area in advance of adoption, and there may therefore be some later updates to our initial assessment of relative impact. **Expected effect on audit effort Increased professional scepticism Understanding the entity Understanding internal control IT systems and communication Control activities Identifying and assessing risks Control risk Stand-back assessment and documentation TOTAL EFFORT** **----- Start of picture text -----**
High
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© 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 24 **Document Classification: KPMG Confidential** Low High ## **Appendix six** ## ISA (UK) 315 Revised: Summary of key changes **----- Start of picture text -----**
Impact on
Area Summary of changes and impact
audit effort
Increased Increased focus on applying professional scepticism – particularly the need for auditors not to bias their approach towards
professional obtaining evidence that is corroborative in nature or excluding contradictory evidence, which requires more independent
scepticism evidence to be sought. In all cases, there will be enhanced documentation requirements in this area.
The previous standard included requirements for understanding components of the entity’s system of internal control. The
Understanding revisions add another step by requiring auditors perform evaluation procedures over these. This may require additional effort to
internal control evaluate the entity’s processes over risk assessment and monitoring activities over internal control systems to assess their
appropriateness to the entity’s size and complexity.
The requirements introduce an increased focus on understanding the entity’s own management of IT. This may entail
IT systems and performing additional risk assessment procedures and taking a broader view across the IT environment, considering more
communication systems and systems in greater depth, than previously. Given the complexity and specialist knowledge required to perform
these procedures, increased use of technical IT Audit specialists will be a natural consequence of this revision.
The revised standard enhances the way we identify IT applications and aspects of the IT environment that are subject to
assessed risks arising from IT. This may result in significant expansion of risk assessment procedures to obtain and evaluate the
necessary information. Further, the standard adds new requirements in control testing activities to mandate evaluation of
Control activities general IT controls that address risks arising from IT associated with significant risks and certain journal entries. For these
controls, the auditor is required to evaluate the design and implementation of the individual controls. This could result in a
significant change in approach, with more emphasis and effort spent on evaluating control activities. Again, we anticipate
integrating more specialised expertise into our audit team to meet the revised requirements.
The changes require more detailed assessment of risks at both the financial statement and assertion levels for classes of
Identifying and transactions, account balances and disclosures than previously. Further, the revisions introduce an inherent risk spectrum and
assessing risks new inherent risk assessment factors, each of which the auditor evaluates to assess the level of risk and thereby shape the audit
response. This will increase the audit effort needed to evaluate and document the risks of material misstatement.
New requirement to assess inherent risk and control risk separately for each risk of material misstatement identified where the
Control risk auditor plans to test the operating effectiveness of controls. The separation of assessments will require individual attention,
increased documentation and is likely to affect sample sizes for substantive procedures.
New requirement to perform a stand-back assessment for material classes of transactions, account balances or disclosures
Stand-back which have not been identified as significant, to assess whether this determination remains appropriate in the context of the
assessment overall audit. This will require increased consideration of aggregation risk and introduce additional documentation
requirements.
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© 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 25 **Document Classification: KPMG Confidential** Low High ## **Appendix six** ## ISA (UK) 240 Revised: Summary of key changes ## **Summary and background** ISA (UK) 240 The auditor’s responsibilities relating to fraudin an auditoffinancialstatements includes revisions introduced to clarify the auditor’s obligations with respect to fraud and enhance the quality of audit work performed in this area. The revised ISA (UK) is effective for periods commencing on or after 15 December 2021. Unlike ISA (UK) 315 which mirrors updates in the international ISA, the updated UK fraud standard is not based on international changes by the IAASB. The impact of the revisions to ISA (UK) 240 is less extensive compared to ISA (UK) 315, but will nevertheless result in changes to our audit approach. The table below summarises the main changes and our initial assessment of their impact. **----- Start of picture text -----**
Area Summary of changes and impact Effect on audit effort
[1] Increased focus on applying professional scepticism – the key areas affected are:
• the need for auditors not to bias their approach towards obtaining evidence that is corroborative in
nature or excluding contradictory evidence,
• remaining alert for indications of inauthenticity in documents and records, and
Risk assessment • investigating inconsistent or implausible responses to inquiries performed.
procedures and related
[2] Requirements to perform inquiries with individuals at the entity are expanded to include, amongst others,
activities
those who deal with allegations of fraud.
[3] Every audit now requires a specific determination as to whether to involve technical specialists (including
forensics) to aid in identifying and responding to risks of material misstatement due to fraud. This will result in
increased involvement of specialists and an expanded scope of work for these specialists, on audit engagements.
Internal discussions and Enhanced requirements for internal discussions among the audit team to identify and assess the risk of fraud in
the audit, including a requirement to determine the need for additional meetings to consider the findings from
challenge
earlier stages of the audit and their impact on our assessment of the risk of fraud.
Communications with New requirements for communicating matters related to fraud with management and those charged with
management / TCWG governance, in addition to the reporting in our audit reports.
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## **What does this mean for an audit?** The changes introduce new requirements which will increase audit effort and therefore the audit fee. The additional work is largely the result of investing more time identifying and assessing the risk of fraud during risk assessment and involving specialists to aid with both risk identification and the auditor’s response to risk. © 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. 26 **Document Classification: KPMG Confidential** © 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. **Document Classification: KPMG Confidential**