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2024-03-31-accounts

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

27[th] September 2024

North East Housing Association Limited

Jesmond house, Clayton road, Jesmond, Newcastle upon Tyne, NE2 1UJ. Telephone: 0191 281 1233

Kinnair Associates Limited Aston House 21 Redburn Road Newcastle upon Tyne NE5 1NB

Dear Sirs

We provide this letter in connection with your audit of the financial statements of North East Housing Association Limited for the year ended 31 March 2024 for the purpose of expressing an opinion as to whether the financial statements give a true and fair view of the financial position of the charity as at 31 March 2024 and of the results of its operations for the year then ended in accordance with UK Generally Accepted Accounting Practice (“UK GAAP”).

We confirm that the following representations are made on the basis of sufficient enquiries of management and staff with relevant knowledge and experience and, where appropriate, of inspection of supporting documentation and that, to the best of our knowledge and belief, we can properly make each of these representations to you.

  1. We acknowledge our responsibility for the financial statements of the charity and for their fair presentation in accordance with UK GAAP.

  2. We acknowledge as trustees our responsibility for making accurate representations to you.

  3. We acknowledge our responsibility for the design and implementation of internal control to prevent and detect fraud and errors.

  4. We confirm that we have received confirmation from each director who was a director at the time of the approval of the financial statements that:

  5. (a) they have taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that you are aware of that information and

  6. (b) that so far as they are aware there is no relevant audit information of which you are unaware.

  7. We have provided you with all accounting records and relevant information and granted you unrestricted access to persons within the entity, for the purposes of your audit.

  8. All the transactions undertaken by the charity have been properly reflected and recorded in the accounting records or other information provided to you.

  9. The methods, data and significant assumptions used by us in making accounting estimates, and their related disclosures, are appropriate to achieve recognition, measurement and disclosure that is reasonable in the context of the applicable financial reporting framework.

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

  1. We have considered the adjustments set out in the Audit Findings Report proposed by you. We confirm that, in our judgement, these adjustments are appropriate given the information available to us. We further confirm that we have now made these adjustments to the financial statements.

  2. We confirm that we do not wish to adjust the financial statements for the actual errors set out in the Audit Findings Report as we believe that the errors are immaterial, both individually and in aggregate, to the financial statements as a whole.

  3. We reaffirm that the written representations previously made with respect to the prior period remain appropriate and in particular they remain appropriate in connection with the restatement made to correct a material misstatement in prior period financial statements that affect the comparative information, and in connection with misstatements arising from the previous year’s audit as set out in Appendix three to the audit management report that may materially affect current year’s results.

  4. We are not aware of any actual or possible litigation or claims against the charity whose effects should be considered when preparing the financial statements.

  5. All grants, donations and other incoming resources, the receipt of which is subject to specific terms and conditions, have been notified to you. There have been no breaches of terms or conditions in the application of such incoming resources.

  6. We are not aware of any breaches of our charitable trusts and that we have advised you of the existence of all endowments and funds maintained by us.

  7. There have been no events since the balance sheet date which require disclosure or which would materially affect the amounts in the financial statements. Should any material events occur which may necessitate revision of the figures in the financial statements, or inclusion in a note thereto, we will advise you accordingly.

  8. We have assessed that there is no significant risk that the financial statements are materially misstated as a result of fraud.

  9. We are not aware of any fraud or suspected fraud affecting the charity involving those charged with governance, management or other employees who have a significant role in internal control or who could have a material effect on the financial statements.

  10. We are not aware of any allegations by employees, former employees, regulators or others of fraud, or suspected fraud, which would have an impact on the charity’s financial statements.

  11. We are not aware of any known or suspected instances of non-compliance with those laws and regulations which provide a legal framework within which the charity conducts its business.

  12. We confirm that complete information has been provided to you regarding the identification of related parties and that we are not aware of any significant transactions with related parties.

  13. We confirm we have appropriately accounted for and disclosed related party relationships and transactions in accordance with applicable accounting standards and with the recommendations of the applicable charity SORP.

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

  1. We believe that the charity’s financial statements have been correctly prepared on a going concern basis of accounting on the grounds that current and future sources of funding or support will be more than adequate for the charity's needs. We confirm that our plans for future actions required to enable the charity to continue as a going concern are feasible. We also confirm that, having considered our expectations and intentions for at least the next twelve months and the availability of working capital, the charity will continue to be a going concern throughout that period. We are not aware of any events, conditions, or business risks beyond the period of assessment that might cast significant doubt on the charity’s ability to continue as a going concern.

  2. There are no liabilities or contingent liabilities or guarantees that we have given to third parties other than those disclosed in the financial statements.

  3. We have no plans or intentions that might materially alter the carrying value or classification of assets and liabilities reflected in the financial statements.

  4. We confirm that the value of voids is correctly stated in the financial statements and amounted to £72,714 for the year.

Yours faithfully ………………………………….………… Trustee Signed on behalf of the board

Head Office: Jesmond House, Clayton Road, Newcastle upon Tyne, NE2 1UJ Telephone: 0191 281 5466

A Company Limited by Guarantee. Registered in England No. 702712 Registered Office: Jesmond House, Clayton Road, Newcastle upon Tyne NE2 1UJ Housing Corporation Registered No. H2168 Charity Registration No. 201653 V.A.T. Registration No. 499 7268 65

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

Registered number: 00702712 Charity number: 201653

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

GOVERNORS' REPORT AND FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 MARCH 2024

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

CONTENTS

Page
Reference and Administrative Details of the Charity, its Governors and Advisers 1
Governors' Report 2 - 8
Independent Auditors' Report on the Financial Statements 9 - 12
Statement of Financial Activities 13
Balance Sheet 14 - 15
Statement of Cash Flows 16
Notes to the Financial Statements 17 - 41

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

REFERENCE AND ADMINISTRATIVE DETAILS OF THE CHARITY, ITS GOVERNORS AND ADVISERS FOR THE PERIOD ENDED 31 MARCH 2024

Governors Ms C Mortlock, Chair
Mr D M Gibson
Ms V Gray
Ms J Smith
Ms L Hitman
Mr D Smith
Mr M Armstrong
Mr G Reed
Company registered
number
00702712
Charity registered
number
201653
Registered office
Jesmond House
Clayton Road
Jesmond
Newcastle upon Tyne
NE2 1UJ
Company secretary
Mr P Nielsen
Independent auditors
Kinnair Associates Limited
Chartered Accountants
Aston House
Redburn Road
Newcastle upon Tyne
NE5 1NB
Bankers
National Westminster Bank
Northumberland Street
Newcastle upon Tyne
NE1 7EL
Solicitors
DWF LLP
Great North House
Sandyford Road
Newcastle upon Tyne
NE1 8ND
Investment Managers
Cazenove Capital
1 London Wall Place
London
EC2Y 5AU

Page 1

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

GOVERNORS' REPORT FOR THE PERIOD ENDED 31 MARCH 2024

The Governors present their annual report together with the audited financial statements of the Charity for the year 1 April 2023 to 31 March 2024. The Annual Report serves the purposes of both a Governors' report and a directors' report under company law. The Governors confirm that the Annual Report and financial statements of the Charity comply with the current statutory requirements, the requirements of the Charity's governing document and the provisions of the Statement of Recommended Practice (SORP) applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS102) (effective 1 January 2019).

The Charity is also a registered social housing provider. Where applicable additional information is provided in accordance with the Housing SORP 2018: Statement of Recommended Practice (SORP) for Registered Social Housing Providers, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2022. So far as the additional disclosures are concerned the financial statements have been prepared in accordance with the Accounting Direction 2022.

Since the Charity qualifies as small under section 382 of the Companies Act 2006, the Strategic Report required of medium and large companies under the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 has been omitted.

The Financial Statements do not present a Statement of Comprehensive Income or a Statement of Changes in Reserves as the Governors believe that the information that would be shown in these statements is already adequately disclosed in the Statement of Financial Activities and the Statement of Funds note to the Financial Statements.

Objectives and activities

Policies and objectives

The object of the company is the prevention or relief of poverty in the North East of England through the provision of affordable accommodation and other essential facilities to individuals in need.

The company is a registered social housing provider in the management and administration of Clapham House, John Dobson Street, Newcastle upon Tyne, NE1 8YW and Jesmond House, Clayton Road, Newcastle upon Tyne, NE2 1UJ.

Main activities undertaken to further the Charity's purposes for the public benefit

The Governors have referred to the guidance contained in the Charity Commission’s general guidance on public benefit when reviewing their objectives and activities and in planning future activities. The Governors are satisfied that the principles of public benefit have been and will continue to be addressed in past and future activities of the company.

Page 2

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

GOVERNORS' REPORT (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2024

Achievements and performance

Main achievements of the Charity

The provision of affordable social housing took place throughout the year in both houses in accordance with the Charity's objectives. This included assisting North East local authorities in placing individuals with housing needs.

Value for money

In accordance with the Value for Money Standard introduced by the Regulator of Social Housing in 2018 we set out below the charitable company's performance against our value for money targets by reference to a series of seven metrics set by the Regulator which seek to measure economy, efficiency and effectiveness:

Target Actual Target Actual 2024 2023 2023 2022 1 - Reinvestment % 0% 0% 0% 0%

Commentary - the reinvestment percentage is calculated by reference to works to the existing properties, divided by the net book value of housing properties at deemed cost. No new properties were developed or acquired and there is no capitalised interest.

2 - New supply % 0% 0% 0% 0% Commentary - The Governors have no plans to increase the number of social or non-social housing units.

3 - Gearing % -16.3% -14.6% -11.9% -14.1% Commentary - The charitable company has no debt and therefore has negative gearing. This is derived from its liquid resources divided by the net book value of housing properties at deemed cost. The Governors have no intention to borrow.

4 - EBITDA MRI Interest cover % 0% 0% 0% 0% Commentary - The charitable company has no borrowing and the Governors have no intention to borrow.

5 - Headline social housing cost £6,047 £6,049 £5,729 £4,734 Commentary - the headline social housing cost has increased and is forecast to remain static. Now that revenue has increased following the reversal of the voids experienced during the Covid pandemic, the Governors are content to budget for higher expenditure, and have decided to put all staff onto a living wage, which has resulted in a significant increase on payroll costs.

6 - Operating margin % 20.7% 19.2% 19.2% 25.7% Commentary - Operating margin is forecast to increase following completion of the latest cycle of refurbishment works in both properties.

7 - Return on capital employed % 4.2% 3.9% 3.2% 4.2% Commentary - expenditure is forecast to decrease resulting in the increase in operating margin with the consequential effect on return on capital employed.

The Governors consider that the facilities offered by the charitable company to be atypical in the North East and there are no meaningful comparisons by way of benchmarking available.

Page 3

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED (A Company Limited by Guarantee)

GOVERNORS' REPORT (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2024

Achievements and performance (continued)

Review of activities

The Charity operates from two properties with the purpose of providing safe, modern, affordable accommodation to those in need.

Jesmond House is a purpose-built facility that provides modern furnished single occupancy bedrooms with breakfast, laundry services and evening meals. Predominantly used for individuals who have previously been homeless, it is located in the leafy suburbs 2 miles from the city centre, with spacious grounds, with a large communal dining area and living room.

Clapham House is a purpose-built facility that provides single and multiple occupancy self catering flats in the heart of the city It is used predominantly for individuals, single-parent families or couples as social housing. The facilities include its own modern kitchen, furnished living room and bathroom.

Jesmond House provided a surplus in the year of £118,072 (2023 - surplus £11,928) before allocation of central overheads.

Clapham House provided a surplus in the year of £32,132 (2023 - surplus £4,267) before allocation of central overheads.

Net central overhead costs after miscellaneous income amounted to £102,319 (2023 - £60,304).

There was therefore an overall operating surplus in the year amounting to £47,885 (2023 deficit - £44,109).

The financial position of the Charity at 31 March 2024 shows considerable liquid resources available to the Governors to allow them to continue in the provision of affordable social housing.

Investment policy and performance

The Governors continue to place surplus funds in an investment portfolio managed by Cazenove Capital to improve on the returns generated for the benefit of the charitable purpose. The portfolio shows an unrealised valuation surplus as at 31 March 2024 of £87,213 (2023 - deficit £48,935) which reflects the performance of stockmarkets over the year. The Governors are pleased to note that the portfolio shows a continuing surplus on valuations since then.

Financial review

Going concern

After making appropriate enquiries the Governors have a reasonable expectation that the Charity has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements. Further details regarding the adoption of the going concern basis can be found in the accounting policies.

Page 4

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

GOVERNORS' REPORT (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2024

Reserves policy

The Governors consider the needs of its residents as requiring a long-term commitment from the Charity. The reserve policy is to hold funds to allow the Charity to continue for a period of at least 12 months even if its income decreases. At 31 March 2024, the Charity had total funds of £6,991,194, of which £2,020,514 was unrestricted and £4,970,680 is restricted (relating to the freehold properties held for the charitable purpose). At the year end, the Charity had a defined benefit pension deficit liability of £118,000. The free reserves (which currently equates to around 15 months of planned expenditure) will continue to accumulate expected surpluses in future years for the benefit of the charitable purpose.

Principal risks and uncertainties

The Governors have assessed the major risks to which the Charity is exposed, in particular those related to the operational aspects of providing social accommodation that is safe and clean. They are satisfied that systems and procedures are in place to mitigate exposure to all significant risks. Considerable effort and expenditure is incurred to ensure that the properties are properly maintained appropriate to the proper provision of social housing.

Financial risk management objectives and policies

All activities are subjected to budgetary control and monitored regularly by the Governors. Anticipated variances are authorised in advance of expenditure being committed.

Structure, governance and management

Constitution

North East Housing Association Limited is registered as a charitable company limited by guarantee and was set up by a Memorandum of Association.

The principal object of the charitable company is to provide the relief of need, hardship and distress by the provision of good, clean, safe and affordable accommodation and other facilities for young people of either sex.

Methods of appointment or election of Governors

The management of the Charity is the responsibility of the Governors who are elected and co-opted under the terms of the Memorandum of Association.

The management of the charitable company is the responsibility of the Board of Governors (The Board). Any current Governor is entitled to nominate a prospective Governor, appointments being made by a simple majority of current Governors at a Governors' meeting.

Page 5

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED (A Company Limited by Guarantee)

GOVERNORS' REPORT (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2024

Structure, governance and management (continued)

Organisational structure and decision-making policies

The Board has an established governance framework, which encourages all members to bring an independent judgement to bear on issues of strategy, performance, resources (including key appointments) and standards of conduct.

The Board is supplied with timely and relevant information to enable it to discharge its duties. Board papers are normally distributed at least a week in advance of the relevant meeting, and the papers are sufficiently detailed to enable the members to obtain a thorough grasp of the company’s management and financial performance. The Board’s terms of reference make provision for it to receive independent professional advice to enable it to carry out its duties.

The Board met 6 times during 2023/24.

Policies adopted for the induction and training of Governors

Governors' attention is brought to support material and guidance provided by Charity Commission, to which they are continuously encouraged to refer.

The Board of Governors

At 31 March 2024, the Board consisted of 8 members, led by the Chair, Caroline Mortlock. The Board controls the Charity's strategic direction and continuously reviews its operational and financial position.

The Board recognises that good governance is integral to the delivery of quality services and considers that the Charity complies with the National Housing Federation Code of Governance 2020 in all material aspects.

Risk management

The Governors have reviewed the major risks to which the Charity is exposed and continue to monitor the arrangements and systems in place to mitigate those risks.

The termination of contractual relationships with the universities in Newcastle has meant that the charity now has to manage lettings directly with occupants. The market place is very competitive as additional space has become available, which has had an impact on pricing. The Governors manage this by ensuring that their offering is attractive and cost effective to maximise takeup.

The Charity is exposed to regulatory risks non-compliance of which may affect its ability to operate. These are mitigated by constant monitoring by the Governors through their regular meetings and reports by the Senior Management Team.

The Charity is also exposed to investment risk. This is mitigated by the employment of Cazenove Capital as investment manager on a full discretionary management basis.

Page 6

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

GOVERNORS' REPORT (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2024

Structure, governance and management (continued)

Internal controls

The Governors have established internal controls designed to safeguard assets, manage the risk of fraud or misstatement and generally to assist with proper governance. They review these controls on an annual basis to satisfy that they are complete and effective.

Compliance with the governance and financial viability standard

The Governors undertake an annual assessment of their compliance with the Governance and Financial Viability Standard and confirm the Charity’s compliance with the Standard during the course of the year and up to the signing of the financial statements.

The Governors have adopted the National Housing Federation Code of Governance 2020.

Plans for future periods

The Governors continue to monitor the provision of social accommodation at both houses, and in particular Clapham House. At present there are no plans to change any of the services provided for the charitable purpose.

Members' liability

The Members of the Charity (who are the Governors) guarantee to contribute an amount not exceeding £1 to the assets of the Charity in the event of winding up while he/she is a member or within one year after he/she ceases to be a member for the debts and liabilities contracted before he/she ceases to be a member.

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Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED (A Company Limited by Guarantee)

GOVERNORS' REPORT (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2024

Statement of Governors' responsibilities

The Governors (who are also the directors of the Charity for the purposes of company law) are responsible for preparing the Governors' Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the Governors to prepare financial statements for each financial year. Under company law, the Governors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Charity and of its incoming resources and application of resources, including its income and expenditure, for that period. In preparing these financial statements, the Governors are required to:

The Governors are responsible for keeping adequate accounting records that are sufficient to show and explain the Charity's transactions and disclose with reasonable accuracy at any time the financial position of the Charity and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Disclosure of information to auditors

Each of the persons who are Governors at the time when this Governors' Report is approved has confirmed that:

Auditors

The auditors, Kinnair Associates Limited, have indicated their willingness to continue in office. The designated Governors will propose a motion reappointing the auditors at a meeting of the Governors.

Approved by order of the members of the board of Governors on 27 September 2024 and signed on their behalf by:

Miss C Mortlock (Chair of Trustees)

Page 8

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED (A Company Limited by Guarantee)

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NORTH EAST HOUSING ASSOCIATION LIMITED

Opinion

We have audited the financial statements of North East Housing Association Limited (the 'charitable company') for the year ended 31 March 2024 which comprise the Statement of Financial Activities, the Balance Sheet, the Statement of Cash Flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Governors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charitable company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the Governors with respect to going concern are described in the relevant sections of this report.

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Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED (A Company Limited by Guarantee)

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NORTH EAST HOUSING ASSOCIATION LIMITED (CONTINUED)

Other information

The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The Governors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

Matters on which we are required to report by exception

In the light of our knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees' Report including the Strategic Report.

We have nothing to report in respect of the following matters in relation to which Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of governors

As explained more fully in the Governors' Responsibilities Statement, the Governors (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Governors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Governors are responsible for assessing the charitable company's ability to continue as a going concern, disclosing, as applicable, matters related to going

Page 10

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED (A Company Limited by Guarantee)

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NORTH EAST HOUSING ASSOCIATION LIMITED (CONTINUED)

concern and using the going concern basis of accounting unless the Governors either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We assessed the susceptibility of the Charity’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

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Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED (A Company Limited by Guarantee)

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NORTH EAST HOUSING ASSOCIATION LIMITED (CONTINUED)

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify noncompliance with laws and regulations to enquiry of the governors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.

Use of our report

This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and its members, as a body, for our audit work, for this report, or for the opinions we have formed.

Detlev Anderson (Senior Statutory Auditor)

For and on behalf of

Kinnair Associates Limited

Chartered Accountants Statutory Auditor Aston House Redburn Road Newcastle upon Tyne NE5 1NB

27 September 2024

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Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

STATEMENT OF FINANCIAL ACTIVITIES (INCORPORATING INCOME AND EXPENDITURE ACCOUNT) FOR THE PERIOD ENDED 31 MARCH 2024

Note
Income from:
Charitable activities
4
Investments
5
Other income
6
Total income
Expenditure on:
Raising funds
7
Charitable activities
8
Total expenditure
Net income/(expenditure) before net
gains/(losses) on investments
Net gains/(losses) on investments
Net income/(expenditure)
Transfers between funds
18
Net movement in funds before other
recognised gains/(losses)
Other recognised gains/(losses):
Actuarial losses on defined benefit
pension schemes
25
Net movement in funds
Reconciliation of funds:
Total funds brought forward
Net movement in funds
Total funds carried forward		 Restricted
funds
2024
£
-
-
-
-
-
-
-
-
-
-
(112,970)
(112,970)
-
(112,970)
5,083,650
(112,970)
4,970,680		 Unrestricted
funds
2024
£
1,557,911
24,499
10,859
1,593,269
11,847
1,533,537
1,545,384
47,885
87,213
135,098
112,970
248,068
(42,000)
206,068
1,814,446
206,068
2,020,514		 Total
funds
2024
£
1,557,911
24,499
10,859
1,593,269
11,847
1,533,537
1,545,384
47,885
87,213
135,098
-
135,098
(42,000)
93,098
6,898,096
93,098
6,991,194		 Total
funds
2023
£
1,417,858
15,326
11,088
1,444,272
11,817
1,476,564
1,488,381
(44,109)
(48,935)
(93,044)
-
(93,044)
(20,000)
(113,044)
7,011,140
(113,044)
6,898,096

The Statement of Financial Activities includes all gains and losses recognised in the year.

The notes on pages 17 to 41 form part of these financial statements.

Page 13

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED (A Company Limited by Guarantee) REGISTERED NUMBER: 00702712

BALANCE SHEET AS AT 31 MARCH 2024

Note
Fixed assets
Tangible assets
13
Investments
14
Current assets
Debtors
15
Cash at bank and in hand
Creditors: amounts falling due within one
year
16
Net current assets
Total assets less current liabilities
Net assets excluding pension liability
Defined benefit pension scheme liability
25
Total net assets
Charity funds
Restricted funds
18
Unrestricted funds
18
Total funds		 30,923
431,774
462,697
(163,036)		 2024
£
5,089,524
1,720,009
6,809,533
299,661
7,109,194
7,109,194
(118,000)
6,991,194
4,970,680
2,020,514
6,991,194		 28,434
756,324
784,758
(120,942)		 2023
£
5,220,536
1,121,744
6,342,280
663,816
7,006,096
7,006,096
(108,000)
6,898,096
5,083,650
1,814,446
6,898,096

Page 14

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee) REGISTERED NUMBER: 00702712

BALANCE SHEET (CONTINUED) AS AT 31 MARCH 2024

The Governors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and preparation of financial statements.

The financial statements have been prepared in accordance with the provisions applicable to entities subject to the small companies regime.

The financial statements were approved and authorised for issue by the Governors on 27 September 2024 and signed on their behalf by:

Miss C Mortlock

The notes on pages 17 to 41 form part of these financial statements.

Page 15

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED 31 MARCH 2024

Note
Cash flows from operating activities
Net cash used in operating activities
21
Cash flows from investing activities
Dividends, interests and rents from investments
Purchase of tangible fixed assets
Proceeds from sale of investments
Purchase of investments
Net cash (used in)/provided by investing activities
Change in cash and cash equivalents in the year
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
22
The notes on pages 17 to 41 form part of these financial statements		 2024
£
162,003
24,499
-
352,171
(863,223)
(486,553)
(324,550)
756,324
431,774		 2023
£
2,960
15,326
(4,112)
425,553
(427,735)
9,032
11,992
744,332
756,324

Page 16

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

1. General information

The company is a company limited by guarantee. The company is registered in England & Wales and its company registration number is 00702712. The charity is registered with the Charity Commission and its registered number is 201653.

It is also registered under the Housing and Regeneration Act 2008 and its registered number is H2168.

Its registered office address is Jesmond House, Clayton Road, Newcastle upon Tyne, NE2 1UJ.

2. Accounting policies

2.1 Basis of preparation of financial statements

The financial statements have been prepared in accordance with the Charities SORP (FRS 102) - Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

North East Housing Association Limited meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy.

The charitable company is also a registered social housing provider. Where applicable additional information is provided in accordance with the Housing SORP 2018: Statement of Recommended Practice (SORP) for Registered Social Housing Providers, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2022. So far as the additional disclosures are concerned the financial statements have been prepared in accordance with the Accounting Direction 2022.

2.2 Going concern

The Governors have considered the resources available to the Charity and have satisfied themselves that it has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to prepare these financial statements on the basis that the Charitable Company is a going concern.

2.3 Income

All income is recognised once the Charity has entitlement to the income, it is probable that the income will be received and the amount of income receivable can be measured reliably.

Income tax recoverable in relation to investment income is recognised at the time the investment income is receivable.

Other income is recognised in the period in which it is receivable and to the extent the goods have been provided or on completion of the service.

Page 17

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

2. Accounting policies (continued)

2.4 Expenditure

Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity.

Expenditure on raising funds includes all expenditure incurred by the Charity to raise funds for its charitable purposes and includes costs of all fundraising activities events and non-charitable trading.

Expenditure on charitable activities is incurred on directly undertaking the activities which further the Charity's objectives, as well as any associated support costs.

All expenditure is inclusive of irrecoverable VAT.

2.5 Government grants

Government grants relating to tangible fixed assets are treated as deferred income and released to the Statement of Financial Activities over the expected useful lives of the assets concerned. Other grants are credited to the Statement of Financial Activities as the related expenditure is incurred.

2.6 Interest receivable

Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the Charity; this is normally upon notification of the interest paid or payable by the institution with whom the funds are deposited.

2.7 Tangible fixed assets and depreciation

Tangible fixed assets are initially recognised at cost. After recognition, under the cost model, tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses. All costs incurred to bring a tangible fixed asset into its intended working condition should be included in the measurement of cost.

As permitted by the Housing Association SORP 2014 the Charity elected to measure properties at their value on the date of transition to the SORP and use that fair value as "Deemed cost" at that date.

A review for impairment of a fixed asset is carried out if events or changes in circumstances indicate that the carrying value of any fixed asset may not be recoverable. Shortfalls between the carrying value of fixed assets and their recoverable amounts are recognised as impairments. Impairment losses are recognised in the statement of financial activities incorporating income and expenditure account.

Page 18

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

2. Accounting policies (continued)

2.7 Tangible fixed assets and depreciation (continued)

Depreciation is charged so as to allocate the cost of tangible fixed assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following bases:

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

2.8 Investments

Fixed asset investments are a form of financial instrument and are initially recognised at their transaction cost and subsequently measured at fair value at the Balance Sheet date, unless the value cannot be measured reliably in which case it is measured at cost less impairment. Investment gains and losses, whether realised or unrealised, are combined and presented as ‘Gains/(Losses) on investments’ in the Statement of Financial Activities.

2.9 Debtors

Arrears of rent and service charges and other debtors are recognised at the settlement amount after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.

2.10 Cash at bank and in hand

Cash at bank and in hand includes cash and short-term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.

2.11 Liabilities and provisions

Liabilities and provisions are recognised when there is an obligation at the Balance Sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably.

Liabilities are recognised at the amount that the Charity anticipates it will pay to settle the debt or the amount it has received as advanced payments for the goods or services it must provide.

Provisions are measured at the best estimate of the amounts required to settle the obligation. Where the effect of the time value of money is material, the provision is based on the present value of those amounts, discounted at the pre-tax discount rate that reflects the risks specific to the liability. The unwinding of the discount is recognised in the Statement of Financial Activities as a finance cost.

2.12 Financial instruments

The Charity only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value with the exception of bank loans which are subsequently measured at amortised cost using the effective interest method.

Page 19

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

2. Accounting policies (continued)

2.13 Operating leases

Rentals paid under operating leases are charged to the Statement of Financial Activities on a straight line basis over the lease term.

2.14 Pensions

The Charity operates a defined benefits pension scheme and the pension charge is based on a full actuarial valuation dated 30 September 2017.

2.15 Fund accounting

General funds are unrestricted funds which are available for use at the discretion of the Governors in furtherance of the general objectives of the Charity and which have not been designated for other purposes.

Designated funds comprise unrestricted funds that have been set aside by the Governors for particular purposes. The aim and use of each designated fund is set out in the notes to the financial statements.

Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the Charity for particular purposes. The costs of raising and administering such funds are charged against the specific fund. The aim and use of each restricted fund is set out in the notes to the financial statements.

Investment income, gains and losses are allocated to the appropriate fund.

2.16 Works to properties and housing furniture replacement

Costs of works to properties and replacing housing furniture are charged to the statement of financial activities in the year of expenditure unless the expenditure results in an enhancement of the economic benefit in excess of that of the assets improved or replaced.

Page 20

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

3. Critical accounting estimates and areas of judgment

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Critical accounting estimates and assumptions:

The Charity makes estimates and assumptions concerning the future. The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Critical areas of judgment:

Freehold Properties

Freehold properties have been valued by independent valuers on an open market existing use basis. The valuations were undertaken in 2015 and the Governors have assumed that the values have remained unchanged since then.

Depreciation

Tangible fixed assets are depreciated over their useful lives taking into account residual values where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing the asset lives, factors such as maintenance programmes are taken into account. Residual values consider matters such as future market conditions, the remaining estimated life of the asset and the discount required to apply to cash flows on estimated disposal values to calculate their net present values.

Defined Benefit Pension Scheme

The company has obligations to pay pension benefits to certain employees. The cost of those benefits and the present value of the obligations depend on a number of factors, including life expectancy, salary increases, asset valuations, and the discount rate used on certain investments. Estimates are required in determining the net pension obligation in the balance sheet. The assumptions reflect historical experience and current trends.

Page 21

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

4. Income from charitable activities

Unrestricted
funds
2024
£
Rental income and service charges
1,557,911
Unrestricted
funds
2023
£
Rental income and service charges
1,417,858
Income as reported includes
2024		 Unrestricted
funds
2024
£
Rental income and service charges
1,557,911
Unrestricted
funds
2023
£
Rental income and service charges
1,417,858
Income as reported includes
2024		 Total
funds
2024
£
1,557,911
Total
funds
2023
£
1,417,858
2023
£ £
Maximum rent receivable 1,630,625 1,512,088
Less: Voids (72,714) (94,230)
1,557,911 1,417,858

The units of general needs housing provided at affordable rent levels are:

2024 2023
Number Number
Studios 18 18
Cluster flats 124 124
Single rooms 84 84
226 226

Page 22

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

5. Investment income

Unrestricted
funds
2024
£
Income from local listed investments
23,952
Investment income - interest received
547
24,499
Unrestricted
funds
2023
£
Income from local listed investments
15,164
Investment income - interest received
162
15,326		 Total
funds
2024
£
23,952
547
24,499
Total
funds
2023
£
15,164
162
15,326

Page 23

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

6. Other incoming resources

Rent received from third parties
Rent received from third parties
Investment management costs

Investment management fees
Investment management fees		 Unrestricted
funds
2024
£
10,859
Unrestricted
funds
2023
£
11,088
Unrestricted
funds
2024
£
11,847
Unrestricted
funds
2023
£
11,817		 Total
funds
2024
£
10,859
Total
funds
2023
£
11,088
Total
funds
2024
£
11,847
Total
funds
2023
£
11,817

7. Investment management costs

Page 24

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

8. Analysis of expenditure on charitable activities

Summary by fund type

Unrestricted
funds
2024
£
Charitable activities
1,533,537
Unrestricted
funds
2023
£
Charitable activities
1,476,564		 Total
2024
£
1,533,537
Total
2023
£
1,476,564

9. Analysis of expenditure by activities

Charitable activities
Charitable activities		 Activities
undertaken
directly
2024
£
1,161,064
Activities
undertaken
directly
2023
£
1,134,348		 Support
costs
2024
£
372,473
Support
costs
2023
£
342,216		 Total
funds
2024
£
1,533,537
Total
funds
2023
£
1,476,564

Page 25

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

9. Analysis of expenditure by activities (continued)

Analysis of direct costs

Pension finance costs
Staff costs
Depreciation
Catering
Water rates
Utilities
Repairs and maintenance
Insurance
Cleaning and security
Refurbishment and furniture replacement
Other estate costs
Bad debts
Managed internet
Pension finance costs
Staff costs
Depreciation
Catering
Water rates
Utilities
Repairs and maintenance
Insurance
Cleaning and security
Refurbishment and furniture replacement
Other estate costs
Bad debts
Managed internet		 Activities
2024
£
5,000
393,830
115,000
60,760
35,734
230,094
149,509
40,022
33,479
72,284
9,637
7,700
8,015
1,161,064
Activities
2023
£
3,000
380,657
115,000
65,948
28,973
189,659
156,759
36,585
35,143
79,441
8,040
6,913
28,230
1,134,348		 Total
funds
2024
£
5,000
393,830
115,000
60,760
35,734
230,094
149,509
40,022
33,479
72,284
9,637
7,700
8,015
1,161,064
Total
funds
2023
£
3,000
380,657
115,000
65,948
28,973
189,659
156,759
36,585
35,143
79,441
8,040
6,913
28,230
1,134,348

Page 26

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

9. Analysis of expenditure by activities (continued)

Analysis of support costs

Staff costs
Depreciation
Equipment leasing
Telephone and postage
Publicity, printing and stationery
Travel expenses
Office expenses
Bank charges
Auditors remuneration
Legal and professional fees
Staff costs
Depreciation
Equipment leasing
Telephone and postage
Publicity, printing and stationery
Travel expenses
Office expenses
Auditors remuneration
Legal and professional fees		 Activities
2024
£
265,106
16,012
1,459
3,013
16,888
839
35,188
1,983
12,540
19,445
372,473
Activities
2023
£
251,668
22,392
2,907
2,670
13,082
956
23,483
11,435
13,623
342,216		 Total
funds
2024
£
265,106
16,012
1,459
3,013
16,888
839
35,188
1,983
12,540
19,445
372,473
Total
funds
2023
£
251,668
22,392
2,907
2,670
13,082
956
23,483
11,435
13,623
342,216

Page 27

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

10. Auditors' remuneration

2024 2023
£ £
Fees payable to the Charity's auditor for the audit of the Charity's annual
accounts 11,330 10,335
Fees payable to the Charity's auditor in respect of:
All non-audit services not included above 1,210 1,100

11. Staff costs

Wages and salaries
Social security costs
Contribution to defined contribution pension schemes		 2024
£
593,752
47,740
17,444
658,936		 2023
£
566,627
46,112
19,586
632,325

The average number of persons employed by the Charity during the year was as follows:

Maintenance and domestic
Management		 2024
No.
14
14
28		 2023
No.
8
20
28

The average headcount expressed as full-time equivalents was:

Maintenance and domestic
Management		 2024
No.
10
12
22		 2023
No.
4
19
23

No employee received remuneration amounting to more than £60,000 in either year.

The total employee benefits of key management personnel of the Charity was £101,784 (2023: £94,726).

Page 28

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

12. Governors' remuneration and expenses

During the year, no Governors received any remuneration or other benefits (2023 - £NIL) .

During the year ended 31 March 2024, expenses totalling £ 55 were reimbursed to 2 Governors (2023 - £77 ).

13. Tangible fixed assets

Cost or valuation
At 1 April 2023
At 31 March 2024
Depreciation
At 1 April 2023
Charge for the year
At 31 March 2024
Net book value
At 31 March 2024
At 31 March 2023		 Freehold
property
£
5,750,000
5,750,000
575,000
115,000
690,000
5,060,000
5,175,000		 Plant and
machinery
£
7,348
7,348
5,884
606
6,490
858
1,464		 Office
equipment
£
248,054
248,054
203,982
15,406
219,388
28,666
44,072		 Total
£
6,005,402
6,005,402
784,866
131,012
915,878
5,089,524
5,220,536

The freehold properties were valued in March 2015 to establish a deemed cost on transition to FRS102 and the Statement of Recommended Practice for Social Housing Providers 2014, as follows: Clapham House was valued at £3,750,000 and Jesmond House at £2,000,000. The valuations were performed by Johnson Tucker, Chartered Surveyors on an existing use open market basis.

Had the properties been accounted for at cost and depreciated, the net book value at 31 March 2024 would have been £2,242,236 (2023: £2,312,364).

Page 29

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

14. Fixed asset investments

Cost or valuation
At 1 April 2023
Additions
Disposals
Revaluations
At 31 March 2024
Net book value
At 31 March 2024
At 31 March 2023		 Listed
investments
£
1,090,993
336,795
(352,171)
87,213
1,162,830
1,162,830
1,090,993		 Cash held
for
reinvestmen
t
£
30,751
526,428
-
-
557,179
557,179
30,751		 Total
£
1,121,744
863,223
(352,171)
87,213
1,720,009
1,720,009
1,121,744

Material investments are those of a value greater than 5% of the total investment portfolio.

2024 2023
£ £
SPDR S&P 500 UCITS ETF 55,968 -
Vanguard S&P 500 UCITS 90,963 56,241
JP Morgan America Equity Fund C USD 95,238 62,211
Robeco BP Global Premium Equities - 59,560
242,169 178,012

15. Debtors

Due within one year
Trade debtors
Prepayments and accrued income		 2024
£
21,193
9,730
30,923		 2023
£
19,320
9,114
28,434

Trade debtors include housing rent arrears of £1,004.

Page 30

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

16. Creditors: Amounts falling due within one year

Trade creditors
Other taxation and social security
Other creditors
Accruals and deferred income		 2024
£
44,815
19,374
50,846
48,001
163,036		 2023
£
12,087
20,052
48,817
39,986
120,942

17. Financial instruments

2024 2023
£ £
Financial assets
Financial assets measured at fair value through income and expenditure 1,720,009 1,121,744

Financial assets measured at fair value through income and expenditure comprise listed investments.

Page 31

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

18. Statement of funds

Statement of funds - current year

Unrestricted
funds
General Funds -
all funds
Extraordinary
repairs
Pension reserve
Restricted
funds
Revaluation
reserve
Housing
Association
Grant
Total of funds		 Balance at 1
April 2023
£
1,733,610
188,836
(108,000)
1,814,446
2,338,988
2,744,662
5,083,650
6,898,096		 Income
£
1,593,269
-
-
1,593,269
-
-
-
1,593,269		 Expenditure
£
(1,466,691)
(62,693)
(16,000)
(1,545,384)
-
-
-
(1,545,384)		 Transfers
in/out
£
64,970
-
48,000
112,970
(51,977)
(60,993)
(112,970)
-		 Gains/
(Losses)
£
87,213
-
(42,000)
45,213
-
-
-
45,213		 Balance at
31 March
2024
£
2,012,371
126,143
(118,000)
2,020,514
2,287,011
2,683,669
4,970,680
6,991,194

Page 32

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

18. Statement of funds (continued)

Statement of funds - prior year

Unrestricted
funds
General Funds
Extraordinary
repairs
Pension reserve
Restricted
funds
Revaluation
reserve
Housing
Association
Grant
Total of funds		 Balance at
1 April 2022
£
1,619,604
310,916
(116,000)
1,814,520
2,390,965
2,805,655
5,196,620
7,011,140		 Income
£
1,444,272
-
-
1,444,272
-
-
-
1,444,272		 Expenditure
£
(1,349,301)
(122,080)
(17,000)
(1,488,381)
-
-
-
(1,488,381)		 Transfers
in/out
£
67,970
-
45,000
112,970
(51,977)
(60,993)
(112,970)
-		 Gains/
(Losses)
£
(48,935)
-
(20,000)
(68,935)
-
-
-
(68,935)		 Balance at
31 March
2023
£
1,733,610
188,836
(108,000)
1,814,446
2,338,988
2,744,662
5,083,650
6,898,096

Page 33

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

18. Statement of funds (continued)

Unrestricted funds:

Extraordinary repair fund:

These are funds set aside for expenditure on the properties. The Governors have agreed that the reserve may be used for either or both of the properties in relation to future major repairs.

General funds:

These are 'free reserves' after allowing for the extraordinary repair fund and pension reserve.

Restricted funds:

(a) Revaluation reserve - representing the surplus on revaluation of the two properties owned by the Charity as reduced by the revaluation element of the accumulated depreciation charge on the properties.

(b) Housing Association Grant - this represents monies received in relation to the build and development of Clapham House. Under the revised Housing SORP, such grants under the performance model are recognised as income.

19. Summary of funds

Summary of funds - current year

General funds
Restricted funds		 Balance at 1
April 2023
£
1,814,446
5,083,650
6,898,096		 Income
£
1,593,269
-
1,593,269
Income
£
1,444,272
-
1,444,272		 Expenditure
£
(1,545,384)
-
(1,545,384)
Expenditure
£
(1,488,381)
-
(1,488,381)		 Transfers
in/out
£
112,970
(112,970)
-
Transfers
in/out
£
112,970
(112,970)
-		 Gains/
(Losses)
£
45,213
-
45,213
Gains/
(Losses)
£
(68,935)
-
(68,935)		 Balance at
31 March
2024
£
2,020,514
4,970,680
6,991,194
Balance at
31 March
2023
£
1,814,446
5,083,650
Summary of funds - prior year
General funds
Restricted funds		 Balance at
1 April 2022
£
1,814,520
5,196,620
7,011,140
6,898,096

Page 34

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

20. Analysis of net assets between funds

Analysis of net assets between funds - current period

Tangible fixed assets
Fixed asset investments
Current assets
Creditors due within one year
Provisions for liabilities and charges
Total
Analysis of net assets between funds - prior period
Tangible fixed assets
Fixed asset investments
Current assets
Creditors due within one year
Provisions for liabilities and charges
Total		 Restricted
funds
2024
Unrestricted
funds
2024
£
£
4,970,680
118,844
-
1,720,009
-
462,697
-
(163,036)
-
(118,000)
4,970,680
2,020,514
Restricted
funds
2023
Unrestricted
funds
2023
£
£
5,083,650
136,886
-
1,121,744
-
784,758
-
(120,942)
-
(108,000)
5,083,650
1,814,446		 Total
funds
2024
£
5,089,524
1,720,009
462,697
(163,036)
(118,000)
6,991,194
Total
funds
2023
£
5,220,536
1,121,744
784,758
(120,942)
(108,000)
6,898,096

Page 35

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

21. Reconciliation of net movement in funds to net cash flow from operating activities

Net income/expenditure for the period (as per Statement of
Financial Activities)
Adjustments for:
Depreciation charges
(Gains)/losses on investments
Dividends, interests and rents from investments
(Increase)/decrease in debtors
Increase/(decrease) in creditors
Defined benefit pension scheme finance cost
Defined benefit pension scheme cost less contributions payable
Net cash provided by operating activities
22.
Analysis of cash and cash equivalents
Cash in hand
Total cash and cash equivalents
23.
Analysis of changes in net debt
At 1 April
2023
£
Cash at bank and in hand
756,324
756,324		 2024
£
135,098
131,012
(87,213)
(24,499)
(2,489)
42,094
8,000
(40,000)
162,003
2024
£
431,774
431,774
Cash flows
£
(324,550)
(324,550)		 2023
£
(93,044)
137,392
48,935
(15,326)
131
(47,128)
(3,000)
(25,000)
2,960
2023
£
756,324
756,324
At 31 March
2024
£
431,774
431,774

24. Contingent liabilities

There is a contingent liability to repay the Housing Association Grant of £3,049,627 in certain circumstances including the disposal of the properties in respect of which the grant was received.

There were no other material contingent liabilities at 31 March 2024 (2023: £nil).

Page 36

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED (A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

25. Pension commitments

The Charity operates a defined benefit pension scheme.

The company participates in the Social Housing Pension Scheme (the Scheme), a multi-employer scheme which provides benefits to some 500 non-associated employers. The Scheme is a defined benefit scheme in the UK.

The Scheme is subject to the funding legislation outlined in the Pension Act 2004 which came into force on 30 December 2005. This, together with documents issued by the Pensions Regulator and Technical Actuarial Standards issued by the Financial Reporting Council, set out the framework for funding defined benefit occupational pension schemes in the UK.

The last triennial valuation of the Scheme for funding purposes was carried out as at 30 September 2023. This valuation revealed a deficit of £700 million on a Technical Provisions or "scheme funding" basis. A recovery plan has been put in place with the aim of removing this deficit by 31 March 2028.

The Scheme is classified as a "last man standing arrangement". Therefore the company is potentially liable for other participating employers' obligations if those employers are unable to meet their share of the Scheme deficit following withdrawal from the Scheme. Participating employers are legally required to meet their share of the Scheme deficit on an annuity purchase basis on withdrawal from the Scheme.

For financial years ending on or before 28 February 2019, it has not been possible for the company to obtain sufficient information to enable it to account for the Scheme as a defined benefit scheme; therefore the company has accounted for the Scheme as a defined contribution scheme.

For financial years ending on or after 31 March 2019, it is possible to obtain sufficient information to enable the company to account for the Scheme as a defined benefit scheme.

For accounting purposes, two actuarial valuations for the scheme were carried out with effective dates of 31 March 2018 and 30 September 2018. The liability figures from each valuation are rolled forward to the relevant accounting dates, if applicable, and are used in conjunction with the company's fair share of the Scheme's total assets to calculate the company's net deficit or surplus at the accounting period start and end dates.

Page 37

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

25. Pension commitments (continued)

The following information is provided for a comprehensive understanding of the position of the company with regard to its defined benefit obligations.

Principal actuarial assumptions at the Balance Sheet date (expressed as weighted averages):

At 31 March At 31 March
2024 2023
% %
Discount rate 4.87 4.89
Inflation (RPI) 3.19 3.2
Inflation (CPI) 2.76 2.72
Salary Growth 3.76 3.72
At 31 March At 31 March
2024 2023
Years Years
Mortality rates (in years)
- for a male aged 65 now 20.5 21.0
- at 65 for a male aged 45 now 23.0 22.2
- for a female aged 65 now 21.8 23.4
- at 65 for a female aged 45 now 24.4 24.9

Page 38

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

25. Pension commitments (continued)

The Charity's share of the assets in the scheme was:

Global equity
Absolute return
Distressed opportunities
Credit Relative Value
Alternative Risk Premia
Emerging Markets Debt
Risk Sharing
Insurance-Linked Securities
Property
Infrastructure
Private debt
Opportunistic Illiquid Credit
High Yield
Cash
Long Lease Property
Secured Income
Liability Driven Investment
Currency Hedging
Net Current Assets
Total fair value of assets		 At 31 March
2024
£
50,000
19,000
18,000
16,000
16,000
6,000
29,000
3,000
20,000
50,000
20,000
20,000
-
10,000
3,000
15,000
203,000
-
1,000
499,000		 At 31 March
2023
£
9,000
5,000
14,000
17,000
1,000
2,000
34,000
12,000
20,000
52,000
20,000
20,000
2,000
3,000
14,000
21,000
211,000
1,000
1,000
459,000

The actual return on scheme assets was £21,000 (2023 - £268,000) .

The amounts recognised in the Statement of Financial Activities are as follows:

Current service cost
Interest income
Interest cost
Expenses
Total amount recognised in the Statement of Financial Activities		 2024
£
8,000
(23,000)
28,000
3,000
16,000		 2023
£
12,000
(20,000)
23,000
2,000
17,000

Page 39

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

25. Pension commitments (continued)

Movements in the present value of the defined benefit obligation were as follows:

Opening defined benefit obligation
Interest cost
Member contributions
Actuarial loss
Benefits paid
Expenses
Current service costs
Closing defined benefit obligation		 2024
£
567,000
28,000
7,000
21,000
(17,000)
3,000
8,000
617,000

Movements in the fair value of the Charity's share of scheme assets were as follows:

Opening fair value of scheme assets
Expected return on assets
Experience on plan assets (excluding interest income) - loss
Contributions by employer
Contributions by scheme participants
Benefits paid and expenses
Closing fair value of scheme assets		 2024
£
459,000
23,000
(21,000)
48,000
7,000
(17,000)
499,000

26. Operating lease commitments

At 31 March 2024 the Charity had commitments to make future minimum lease payments under non-cancellable operating leases as follows:

2024 2023
£ £
Not later than 1 year - 791

The following lease payments have been recognised as an expense in the Statement of Financial Activities:

2024 2023
£ £
Operating lease rentals 791 791

Page 40

Docusign Envelope ID: A211CB0C-DBF6-469D-BFCD-7873BD1C8087

NORTH EAST HOUSING ASSOCIATION LIMITED

(A Company Limited by Guarantee)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2024

27. Members' liability

Each member of the charitable company undertakes to contribute to the assets of the company in the event of it being wound up while he/she is a member, or within one year after he/she ceases to be a member, such amount as may be required, not exceeding £1 for the debts and liabilities contracted before he/she ceases to be a member.

28. Related party transactions

The Charity has not entered into any related party transaction during the year, nor are there any outstanding balances owing between related parties and the Charity at 31 March 2024.

Page 41

Audit Findings Report to the Board of

North East Housing Association Limited

In respect of the audit of the financial statements for the year ended 31 March 2024. Presented to the Trustees on 27 September 2024.

www.kinnair.co.uk

North East Housing Association Limited │ Audit Findings Report │ Year ended 31 March 2024

Contents

Introduction

Introduction

Our work for the audit of the financial statements for the year ended 31 March 2024 is approaching completion and we anticipate being able to provide an unmodified audit opinion on the financial statements subject to receipt of the following:

Audit objectives

Key audit matters

Key observations

Adjusted and unadjusted items

Representations requested from you

Auditor Independence

Appendix one: Communications, Independence and Fraud

The purpose of this Audit Findings Report (“the report”) is to summarise our principal audit findings relating to judgements and estimates made by management in preparing the financial statements and to highlight the impact of accounting areas on the results of the Charity. This report is designed to meet the threats to auditor independence from the perspective of an Objective Reasonable and Informed Third Party and to ensure that such a person is informed about the respective roles and responsibilities of an auditor, those charged with governance and management of an entity.

We are required by ISA (UK) 260 “Communication of audit matters with those charged with governance” to make some specific communications to the Board. Where necessary these are included within this report and a summary of the requirements can be seen in the Appendix one.

Auditing Standards require us to discuss with the Board known misstatements and to consider qualitative and quantitative factors when assessing materiality for each of these items.

Adjustments that have been already processed were approved by Peter Neilson and are set out in this document.

Unadjusted misstatements, other than those that are clearly trivial, are set out in this document. You are asked to review these and inform us whether there are any further adjustments to be made to the financial statements and provide us with the reasons why you wish the remaining unadjusted misstatements to remain unadjusted.

We would like to take this opportunity of thanking the trustees and staff for their assistance during our audit.

This report is strictly confidential and although it has been made available to you to facilitate discussions it may not be taken as altering our responsibilities to you arising from our audit engagement letter. The contents of this report should not be disclosed to third parties without our prior written consent.

1

Audit objectives

North East Housing Association Limited │ Audit Findings Report │ Year ended 31 March 2024

Contents

Introduction

Audit objectives

Key audit matters

Key observations

Adjusted and unadjusted items

Audit objectives

The audit of the financial statements has been carried out in accordance with International Standards on Auditing (UK) (“ISAs”) and as set out in our Audit Planning Report. Any changes to our planned audit approach are explained in the following sections. The aims of the audit were to provide an audit report covering a number of matters by: -

Representations requested from you

Auditor Independence

Appendix one: Communications, Independence and Fraud

3

y audit matters

North East Housing Association Limited │ Audit Findings Report │ Year ended 31 March 2024

Contents

Key audit matters

Introduction

Audit objectives

Key audit matters

Key observations

Adjusted and unadjusted items

Representations requested from you

Auditor Independence

Appendix one: Communications, Independence and Fraud

Audit area and key risks Potential implication for audit approach How we addressed the key audit matter
1. Revenue recognition
In accordance with International Standards
on Auditing (ISAs), there is a presumption that
a significant risk exists in respect of errors
arising on the recognition of revenues due to
the Charity, in particular that income may be
over or understated.		 The financial statements may contain material
errors arising from inappropriate recognition of
income or where income has been understated
because it has not been recorded. This often
arises because of the lack of controls over
invoicing for goods and services delivered, or an
error in accounting for work done not being
recognised, or errors in cut-off or fraud.		 We have satisfied ourselves that rental
income for both Jesmond House and
Clapham House is complete and not
materially misstated and that voids have
been correctly accounted for.
2. Management override
In accordance with ISAs there is a presumed
specific risk relating to the possibility of
management override through intervention at
prime entry or subsequent journal entry.		 Accounts comprise entries from books of prime
entry including the cash book, nominal, sales and
purchase ledgers. Management is in a position to
override entries arising from the books of prime
entry and/or by processing journals to mask the
transactions taking place or the state of affairs of
the Charity.		 As a result of our tests on transactions
arising from prime entry and our review of
a sample of journals posted during the
year, for the preparation of the financial
statements and in the post balance sheet
period, we have satisfied ourselves that
there is no significant misstatement of the
financial statements arising from
management override.
Our review of journal entries also included
those posted by Ryecroft Glenton whilst
preparing the year-end financial
statements which we understand have
been discussed and agreed with Peter
Nielsen.
3. Going concern risk
The term going concern assumption is the
defining assumption about the condition of an
entity for which adoption of the going
concern basis of accounting is appropriate:
that the Charity is, and will be able to
continue as, a going concern. Accordingly
the term "going concern" applies to any entity
unless its management intends to liquidate the
entity or to cease activities or has no realistic		 The Board is required to assess whether the going
concern basis of accounting is appropriate when
causing the financial statements to be
prepared. The assessment should cover a period
at least twelve months beyond the date upon
which you expect to approve the financial
statements. If you are unable to apply the going
concern basis, the financial statements should be
prepared on a different basis to that normally		 We have examined the financial
position at the balance sheet date,
results since then as well as the budgets
for 2024/25 and have satisfied ourselves
that these financial statements have
been properly prepared using the going
concern concept. We have also
satisfied ourselves that there are no
plans that would have an adverse

5

North East Housing Association Limited │ Audit Findings Report │ Year ended 31 March 2024

Contents

Introduction

Audit objectives

Key audit matters

Key observations

Adjusted and unadjusted items

Representations requested from you

Auditor Independence

Appendix one: Communications, Independence and Fraud

Key audit matters

Audit area and key risks Potential implication for audit approach How we addressed the key audit matter
alternative to liquidation or cessation of
operations; and the term "ability to continue
as a going concern" is equivalent to the term
"ability to continue to adopt the going
concern basis of accounting" in the future.		 adopted. Where there is some concern, if
financial statements have been prepared on the
going concern basis, disclosure should be made
explaining your reasons why this basis has been
adopted and we will require evidence from you
to support this going concern assertion. For further
details, please see the Financial Reporting
Council’s Guidance on the Going Concern Basis
of Accounting and Reporting on solvency and
Liquidity Risks here		 effect on the Charitable Company’s
cash resources in the twelve months
from the date of the approval of the
financial statements.
4. Related Party Transactions
The suppression of information relating to any
related parties, whether it be the existence or
disclosure of transactions with them, may lead
to significant misstatement in the financial
statements or failures in the governance of
your entity.		 Auditors cannot perform their work on information
that is not known to them. It is therefore
incumbent upon management to bring to the
attention of the auditors the details of all related
parties and of the transactions taking place with
those parties. There is a statutory duty to do so
and a statement to that effect in the annual
report encompassing all those who have a duty
of governance.		 We are satisfied that we have been
informed of the identify of all related
parties and the transactions taking place
with them and there is no significant
misstatement in the financial statements.
5. Accounting Estimates
Accounting estimates are by their nature
imprecise and subjective but may have a
significant effect on the results disclosed in the
financial statements. As such there is the
potential for a high degree of uncertainty
concerning accounting estimates and
therefore a risk that significant misstatement
exists in the financial statements.		 You have to provide us with the details of
accounting estimates contained in the financial
statements, including how these have been
calculated and detail the relevant controls, use of
experts, the underlying assumptions, any changes
from previous periods and your assessment of the
reasonability and level of uncertainty. You are
also required to consider alternative assumptions
or outcomes and why these have been rejected
in favour of those used.		 We have examined the significant
accounting estimates including: -

Depreciation provision (residual
value and estimated life of the
asset); and

Pension provisions on multi-
employer defined benefit
scheme.
Accounting policies in respect of these
accounting estimates are reasonable,
consistently applied and in accordance
with appropriate accounting standards.

6

North East Housing Association Limited │ Audit Findings Report │ Year ended 31 March 2024

Contents

Introduction

Audit objectives

Key audit matters

The extent to which the audit was considered capable of detecting irregularities including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: -

Key audit matters

Key observations

Adjusted and unadjusted items

Representations requested from you

We assessed the susceptibility of the Charitable company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: -

Auditor Independence

To address the risk of fraud through management bias and override of controls, we: -

Appendix one: Communications, Independence and Fraud

7

North East Housing Association Limited │ Audit Findings Report │ Year ended 31 March 2024

Contents

Introduction

Key audit matters

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: -

Audit objectives

Key audit matters

Key observations

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the trustees and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

Adjusted and unadjusted items

Representations requested from you

Auditor Independence

Appendix one: Communications, Independence and Fraud

8

North East Housing Association Limited │ Audit Findings Report │ Year ended 31 March 2024

Contents

Key audit matters

Introduction

Audit objectives

Key audit matters

Key observations

Adjusted and unadjusted items

Representations requested from you

Auditor Independence

Appendix one: Communications, Independence and Fraud

Key observations

9

North East Housing Association Limited │ Audit Findings Report │ Year ended 31 March 2024

Contents

Key observations

Introduction

Accounting and Internal Control Systems

Audit objectives

Key audit matters

Key observations

Adjusted and unadjusted items

Representations requested from you

Auditor Independence

Appendix one: Communications, Independence and Fraud

During our audit work we considered the Charity’s systems and internal controls and have identified the following matters where we believe that improvements could be made.

We classify these matters according to importance as follows: -

Fundamental Matters which require the consideration of those charged with governance.
Significant Issues which should be addressed by management.
Advisory Findings which require attention withinan agreed timescale.
Control weakness and
implication(s)		 Classification
of issue		 Recommendation(s) Year-end
first
identified		 Management response and
indication of timescale
Bank reconciliation review
As noted in last year’s report, we are
pleased to note that the monthly bank
reconciliations are reviewed and
signed by one of the Trustees and also
that DocuSign is now being used for
this process. However we did note that
this is sometimes done in bulk, e.g.,
August, September and October
reconciliations were all signed off in
November.		 Advisory We recommend that monthly
reconciliations are signed off on
a timely basis, i.e. in the following
month, wherever feasible to do
so,		 2023
Property title deeds
As part of our work on fixed assets we
reviewed the Land Registry documents
filed with HM Land Registry. It was
noted that the properties are shown as
being registered to North Eastern
YWCA Trustees Limited i.e. the old
name of the charity. We recommend
that this is updated to show the new
name of the charity, i.e. North East
Housing Association.		 Advisory We recommend that the Land
Registry is updated to show the
new name of the charity.		 2024

10

North East Housing Association Limited │ Audit Findings Report │ Year ended 31 March 2024

Contents

Introduction

Audit objectives

Key observations

Capitalisation policy

Advisory What we believe would be 2024 helpful is a policy of when not to capitalise e.g. a de-minimis amount below which items are not capitalised. This would then provide better clarity on when items should be capitalised.

While nothing has been included in fixed asset additions a review of the repairs section of the accounting records shows that there were some items which perhaps should have been capitalised as fixed assets e.g. a new dishwasher and the cycle shed.

Key audit matters

Significant Difficulties Encountered during the Audit

Key observations

We are pleased to report that there were no significant difficulties encountered during our audit.

Reliance on a service organisation – Schroders

Adjusted and unadjusted items

The Trustees utilise the services of an Investment Manager. We obtain and review the control reports of Schroders and report on our findings.

Representations requested from you

Auditor Independence

Appendix one: Communications, Independence and Fraud

11

North East Housing Association Limited │ Audit Findings Report │ Year ended 31 March 2024

Contents

Introduction

Audit objectives Key audit matters

Key observations

Adjusted and unadjusted items Representations requested from you

Auditor Independence

Key observations

Report type, reporting auditor and conclusion Audit response
Schroders (Sch) Report:AAF01/20 Assurance Report
Period:Period 31stOctober 2022 to 30thSeptember
2023
Auditor:EY
Issued:30thJanuary 2024
Control objectives have been reviewed. All of the
control objectives identified by SCH are relevant to
our client:
1.
Accepting clients
2.
Authorising and processing transactions
3.
Maintaining financial and other records
4.
Safeguarding assets
5.
Managing and monitoring compliance and
outsourcing
6.
Reporting to clients
7.
Restricting access to systems and data
8.
Maintaining integrity of systems
9.
Maintaining and developing systems
hardware and software
10. Recovering from processing interruptions
11. Managing and monitoring compliance and
outsourcing
12. Additional Control Objective – Business
continuity and recovery plans are
documented, approved and maintained.
Conclusion: Unqualified		 While there were a number of exceptions noted by EY
covering the controls listed we have concluded that
we can rely on Sch’s controls in our assessment of risks
and in our sample selections over investments and
investment income.
Lack of a bridging letter
The normal procedure is to request a “Bridging Letter”
from the investment manager/custodian and usually
they do. A bridging letter is a letter confirming that
there have been no changes to the internal control
systems since the end of the period covered by the
internal controls report up to the NEHA year end.
Sometimes we are advised of details of changes.
However. In the case of Schroders these tell us that
they will not provide a bridging letter.

Appendix one: Communications, Independence and Fraud

12

Adjusted and unadjusted items

North East Housing Association Limited │ Audit Findings Report │ Year ended 31 March 2024

Contents

Introduction

Adjusted and unadjusted items

Our final planning materiality for the year to 31 March 2024 was £100,000 for our work on properties, £22,000 for our work on investments and £14,000 for all other areas. The materiality figure(s) identified at the planning stage did not require amendment prior to completion of the audit.

Audit objectives

Key audit matters

Key observations

Adjusted and unadjusted items

Representations requested from you

Auditor Independence

Appendix one: Communications, Independence and Fraud

Set out below are those adjustments and reallocations that we consider necessary to protect or enhance the integrity of the financial statements. These have been processed in consultation and as approved by Peter Neilson, even though these adjustments may individually or collectively fall below the level of materiality.

S f Fiil Balance Sheet
Adjusted items tatement o nanca
Activities
£ £
Net movement in funds at start of audit 93,098
Total funds at start of audit 6,991,194
NO ADJUSTMENTS MADE
Net movement in funds after adjustments 93,098
Total funds after adjustments 6,991,194

14

North East Housing Association Limited │ Audit Findings Report │ Year ended 31 March 2024

Contents

Introduction

Audit objectives

Key audit matters

Key observations

Adjusted and unadjusted items

Adjusted and unadjusted items

Balance Sheet
Unadjusted items – current year Statement of
Financial Activities
£ £
Net movement in funds after adjustments 93,098
Total funds afteradjustments 6,991,194
Unadjusted difference on PAYE/NI creditor -1,452 -1,452
Potential effect on Net movement in funds -1,452
Potential effect on Total funds -1,452

In our proposed letter of representation we ask you to confirm that you do not wish to adjust the financial statements for the unadjusted items set out above and explain why not.

Representations requested from you

Auditor Independence

Appendix one: Communications, Independence and Fraud

Unadjusted items – previous year Statement of
Financial Activities		 Balance Sheet
£ £
Net movement in funds after adjustments -113,044
Total funds afteradjustments 6,898,096
Unadjusted difference on PAYE/NI creditor -1,452 -1,452
Potential effect on Net movement in funds -1,452
Potential effect on Total funds -1,452

While not material to the audit of the financial statements the comparative unadjusted items are presented in order to identify any build-up of differences or other trends worthy of internal investigation.

15

North East Housing Association Limited │ Audit Findings Report │ Year ended 31 March 2024

Contents

Adjusted and unadjusted items

Introduction

Audit objectives

Key audit matters

Key observations

Adjusted and unadjusted items Representations requested from you Representations Auditor Independence requested from you Appendix one: Communications, Independence and Fraud

16

North East Housing Association Limited │ Audit Findings Report │ Year ended 31 March 2024

Contents

Introduction

Audit objectives

Key audit matters

Key observations

Representations requested from you

In this section we set out the representations being requested from you.

We provide this letter in connection with your audit of the financial statements of North East Housing Association Limited for the year ended 31 March 2024 for the purpose of expressing an opinion as to whether the financial statements give a true and fair view of the financial position of the charity as at 31 March 2024 and of the results of its operations for the year then ended in accordance with UK Generally Accepted Accounting Practice (“UK GAAP”).

We confirm that the following representations are made on the basis of sufficient enquiries of management and staff with relevant knowledge and experience and, where appropriate, of inspection of supporting documentation and that, to the best of our knowledge and belief, we can properly make each of these representations to you.

2.We acknowledge as trustees our responsibility for making accurate representations to you.

Adjusted and unadjusted items

Representations requested from you

Auditor Independence

3.We acknowledge our responsibility for the design and implementation of internal control to prevent and detect fraud and errors.

(a) they have taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that you are aware of that information and

(b) that so far as they are aware there is no relevant audit information of which you are unaware. 5.We have provided you with all accounting records and relevant information and granted you unrestricted access to persons within the entity, for the purposes of your audit.

6.All the transactions undertaken by the charity have been properly reflected and recorded in the accounting records or other information provided to you.

Appendix one: Communications, Independence and Fraud

7.The methods, data and significant assumptions used by us in making accounting estimates, and their related disclosures, are appropriate to achieve recognition, measurement and disclosure that is reasonable in the context of the applicable financial reporting framework.

8.We have considered the adjustments set out in the Audit Findings Report proposed by you. We confirm that, in our judgement, these adjustments are appropriate given the information available to us. We further confirm that we have now made these adjustments to the financial statements.

17

North East Housing Association Limited │ Audit Findings Report │ Year ended 31 March 2024

Contents

Introduction

Audit objectives

Key audit matters

Key observations

Adjusted and unadjusted items

Representations requested from you

Representations requested from you

9.We confirm that we do not wish to adjust the financial statements for the actual errors set out in the Audit Findings Report as we believe that the errors are immaterial, both individually and in aggregate, to the financial statements as a whole.

  1. We reaffirm that the written representations previously made with respect to the prior period remain appropriate and in particular they remain appropriate in connection with the restatement made to correct a material misstatement in prior period financial statements that affect the comparative information, and in connection with misstatements arising from the previous year’s audit as set out in Appendix three to the audit management report that may materially affect current year’s results.

  2. We are not aware of any actual or possible litigation or claims against the charity whose effects should be considered when preparing the financial statements.

  3. All grants, donations and other incoming resources, the receipt of which is subject to specific terms and conditions, have been notified to you. There have been no breaches of terms or conditions in the application of such incoming resources.

  4. We are not aware of any breaches of our charitable trusts and that we have advised you of the existence of all endowments and funds maintained by us.

  5. There have been no events since the balance sheet date which require disclosure or which would materially affect the amounts in the financial statements. Should any material events occur which may necessitate revision of the figures in the financial statements, or inclusion in a note thereto, we will advise you accordingly.

  6. We have assessed that there is no significant risk that the financial statements are materially misstated as a result of fraud.

  7. We are not aware of any fraud or suspected fraud affecting the charity involving those charged with governance, management or other employees who have a significant role in internal control or who could have a material effect on the financial statements.

Auditor

Independence

Appendix one: Communications, Independence and Fraud

  1. We are not aware of any allegations by employees, former employees, regulators or others of fraud, or suspected fraud, which would have an impact on the charity’s financial statements.

  2. We are not aware of any known or suspected instances of non-compliance with those laws and regulations which provide a legal framework within which the charity conducts its business.

  3. We confirm that complete information has been provided to you regarding the identification of related parties and that we are not aware of any significant transactions with related parties.

  4. We confirm we have appropriately accounted for and disclosed related party relationships and transactions in accordance with applicable accounting standards and with the recommendations of the applicable charity SORP.

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North East Housing Association Limited │ Audit Findings Report │ Year ended 31 March 2024

Contents

Introduction

Audit objectives

Key audit matters

Key observations

Representations requested from you

  1. We believe that the charity’s financial statements have been correctly prepared on a going concern basis of accounting on the grounds that current and future sources of funding or support will be more than adequate for the charity's needs. We confirm that our plans for future actions required to enable the charity to continue as a going concern are feasible. We also confirm that, having considered our expectations and intentions for at least the next twelve months and the availability of working capital, the charity will continue to be a going concern throughout that period. We are not aware of any events, conditions, or business risks beyond the period of assessment that might cast significant doubt on the charity’s ability to continue as a going concern.

  2. There are no liabilities or contingent liabilities or guarantees that we have given to third parties other than those disclosed in the financial statements.

  3. We have no plans or intentions that might materially alter the carrying value or classification of assets and liabilities reflected in the financial statements.

  4. We confirm that the value of voids is correctly stated in the financial statements and amounted to £72,714 for the year.

Adjusted and unadjusted items

Representations requested from you

Auditor Independence

Appendix one: Communications, Independence and Fraud

19

Client name │ Audit Findings Report │ Year ended date

Contents

Representations requested from you

Introduction

Audit objectives

Key audit matters

Key observations

Adjusted and unadjusted items

Representations requested from you

Auditor

Auditor Independence

Independence

Developments in financial reporting and other matters

20

North East Housing Association Limited │ Audit Findings Report │ Year ended 31 March 2024

Contents

Introduction

Audit objectives

Key audit matters

Auditor Independence

Independence

We are bound by our internal procedures and the ethical guidelines laid down by the Financial Reporting Council (FRC) to impose safeguards to ensure our objectivity and independence.

In our Audit Planning Report we set out our assessment of our objectivity and independence and brought the perceived and actual threats to our auditor independence to your attention. We also identified the specific safeguards adopted by us to enable us to complete the audit of the Charity and for completeness these are set out below.

Details of the Kinnair Independence policies, safeguards and procedures which we have developed to safeguard against potential threats to our objectivity or independence that may, or be perceived to, exist can be found in the Appendix one.

Key observations

With the exception of our assistance in the preparation of the Value for Money Statement no threats to our independence have been identified during the course of our audit work.

Adjusted and unadjusted items

We do not anticipate there being any difficulties in being able to comply with FRC Revised Ethical Standards and ISA (UK) 260 “Communication of audit matters with those charged with governance” for the period commencing 1 April 2024.

Representations requested from you

 Auditor Independence

Appendix one: Communications, Independence and Fraud

21

Appendix one.

Communications, Independence and Fraud

22

North East Housing Association Limited │ Audit Findings Report │ Year ended 31 March 2024

Contents

Appendix one: Communications, Independence and Fraud

Introduction

Audit communications

The audit process

Key audit matters Audit timetable

Client service team & contact details Auditor independence Appendix one: Communications, Independence and Fraud

ISA 260 requirement Audit
Planning
Report		 Audit
Findings
Report
Agreement to the terms of engagement, including your undertaking to provide
unfettered access to all information required for the purpose of our audit
Communication of auditors’ responsibility to consider material misstatements in the
financialstatements.
Communication of management’s collective responsibility to report any fraudulent
activities to the auditors.
Confirmation of the independence of the firm and audit team members.
Communication of audit scope and approach.
Confirmation by written representations to the auditor by those charged with
governance.
Consideration of significant accounting policies.
Consideration of significant financial estimates.
Consideration of any material risks and exposures.
Consideration of audit materiality.
Consideration of adjusted and unadjusted misstatements, whether factual, judgemental
or projected.
Consideration of uncertainties casting doubt on the ability of the entity to continue as a
going concern.
Consideration of disagreements with management.
Consideration of related parties and associated transactions.
Consideration of post balance sheet events.
Consideration of significant weaknesses in accounting and internal control system.

23

North East Housing Association Limited │ Audit Findings Report │ Year ended 31 March 2024

Contents

Appendix one: Communications, Independence and Fraud

Introduction

Kinnair independence policies, safeguards and procedures

The audit process

Key audit matters

Audit timetable

Client service team & contact details

Auditor independence

Appendix one: Communications, Independence and Fraud

Safeguards and Procedures

 Every audit opinion issued by Kinnair Associates Limited (“the Firm”) is subject to technical review by a director who is registered with the Institute of Chartered Accountants in England and Wales (ICAEW) as a responsible individual (RI).

 Within our Audit Planning Report we report at the beginning of each audit to you on our assessment of our objectivity and independence. This report includes a summary of non-audit services provided over the past year together with fees received in absolute terms and as a proportion of the audit fee. Where these may be perceived to compromise our independence because of the magnitude of fees arising from non-audit services, whether in absolute terms or as a proportion of the audit fee, we bring this to your attention and agree appropriate safeguards to address the perception that our independence and objectivity may be compromised. Where the non-audit fees exceed the audit fee agreed between us, we also must agree appropriate safeguards with our ethics director.

 We are not permitted to charge fees for the audit which are calculated on a contingent basis. Nor are we permitted to undertake non-audit services on a contingent fee basis (whether the fee is material to the firm or not), where the outcome of the non-audit service is dependent on a future or contemporary audit judgement relating to a material matter in the financial statements.

 There is formal consideration and review of the appropriateness of continuing the audit before accepting reappointment.

 Where the audit engagement director has acted for more than 10 years, we subject the audit performed to an Engagement Quality Control Review carried out by an Independent Review Director.

 In accordance with the Ethical Standard issued by the Financial Reporting Council, there is an assessment of the level of threat to objectivity and independence together with potential safeguards to mitigate these threats prior to acceptance of any nonaudit engagement. This would include particular focus on threats arising from self-interest, self-review, management, advocacy, and over-familiarity. Where such threats are identified, if possible, safeguards are put in place such as an Engagement Quality Control Review performed by an Independent Review Director. Alternatively we do not accept the non-audit engagement.

24

North East Housing Association Limited │ Audit Findings Report │ Year ended 31 March 2024

Contents

Introduction

The audit process

Key audit matters

Audit timetable

Appendix one: Communications, Independence and Fraud

 The Firm’s policies and procedures are subject to external monitoring by the ICAEW’s Quality Assurance Directorate (QAD). The QAD is charged with monitoring statutory compliance of audits for all entities that are not “economically significant” e.g. listed companies. QAD reports to the ICAEW’s Audit Registration Committee who is charged with the registration of audit firms and RIs operating within them. Please note, the QAD does not publish individual inspection reports and we are not permitted to disclose details of their findings.

 Where the audited entity qualifies as a small entity, we adopt the Provisions Available for Audits of Small Entities (PAASE) if that entity has a person who is considered to be informed management and it has been agree that we may rely on that person and their knowledge and expertise that allows them to be treated as suitably informed.

Ethical and Independence Policies

 no director or immediate family member is allowed to hold a direct or indirect financial interest in any of our audit clients;

Client service team & contact details

Auditor independence

Appendix one: Communications, Independence and Fraud

 professional staff or any immediate family member may not work on assignments if they have a financial interest in the client or are a party to a transaction or if they have a beneficial interest in a trust holding a financial position in the audit client;

 no person in a position to influence the conduct and outcome of the audit or any immediate family member should enter into business relationships with any of our audit clients or their affiliates;

 directors and professional employees or their immediate family members are prohibited from obtaining gifts or hospitality from an audit client unless the value is clearly insignificant in terms of their frequency, nature and cost; and

 we are required to create safeguards against potential conflicts of interest.

25

North East Housing Association Limited │ Audit Findings Report │ Year ended 31 March 2024

Contents

Appendix one: Communications, Independence and Fraud

Introduction

Key Aspects of potential fraud risk

The audit process

Key audit matters

The following indicates those areas where fraud risk most often occurs.

Fraudulent financial reporting including the provision of misleading information and manipulation or massaging of figures through journal entries and adjustments, accounting estimates, revenue and profit recognition, suspense accounts and reconciliations of balances.

Misappropriation or misuse of assets.

Audit timetable

Incurring of expenditure or committing the entity to liabilities for any improper use.

Client service team & contact details Auditor independence Appendix one: Communications, Independence and Fraud

Obtaining revenue or assets by fraud.

Avoiding costs or expenses by fraud.

Financial misconduct by members of staff or management.

Undisclosed related parties leading to misstatement in the financial statements.

26

Conclusion

We hope that you find the information within this report to be informative and helpful. If you have any comments on how we can improve it to help you, please let me know.

With kind regards,

Detlev Anderson

M 07740 823 679 T 0191 286 7777 E detlev-anderson@kinnair.co.uk

Aston House, Redburn Road, Newcastle upon Tyne, NE5 1NB

Kinnair Associates Limited Aston House, Redburn Road Newcastle upon Tyne NE5 1NB

email@kinnair.co.uk www.kinnair.co.uk

27

Registered to carry on audit work in the UK and Ireland and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales. Details about our audit registration can be viewed at www.auditregister.org.uk, under reference number C009500017.