Charlty number: 212575 THE NUFFIELD OXFORD HOSPITALS FUND TRUSTEES. REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 THE NUFFIELD OXFORD HOSPITALS FUND CONTENTS Page Refe'.en*e 24d admlnistratlve dtstails 91 Ihe eharfty. It9 Tvust¢b•S and advisers TTUStees' report Independent auditors. report on the financial slatements S18tement of financial actlvlties 3-10 14 Balance sheel Statement ol cash flows Notes to the financial slalements 17-33 THE NUFFIELD OXFORD HOSPITALS FUND REFERENCE AND AOMINISTRATIVE DETAILS OFTHE CHARITY. ITS TRUSTEES AND ADVISERS FOR THE YEAR ENDED 31 DECEMBER 2023 Trustees Ms S Barratt Professor A Catt, Chair SIT Andrew Dilnol Mr J Ford Mr J Ramsden Dr T Lancaster Charlty reglstered numbor 212575 Prfnclpal oftlco clo Bolnar Institute. NLK)RMS. Univewly ol Oxlord, Windmill Fload. Oxford. OX3 7LD Secretary A Truesdale Independent audltor8 Crowe U.K. LLP. Aquis House, 49 - 51 81agrave st￿1. R8￿lIng. FIG1 1 PL Bankers 8arc&ys Bank PE. 54 Corrrfnarket Streth. OXI￿d. OX1 3PIS Sollcltor$ Stone K*ig LLP, 12 aueen Square. Balh, BAI 2frU Solldtors lor Wlntrlngham Estate Maclarlanes LLP. 20 Cursitor Streei. Lon(k)n, EC4A 1LT IA8slor DgveloperlJolni Vonture Partn•r urt)an & PLC, 50 New Bond Str￿, LoTrJon, WIS 1 Propèrty Consultanls Glanville Consultants Ltd. 3 Groveknjs Buswtt$ Certre. BourKlary Way, Hemel Hempsiead, HP2 7TE Invè¥tm•nt Managers Saraskn & Partners LLP. Juxon How, I￿ Si. pa￿.$ C￿rChYa(t1, Lonth)n. EC4M 8BU Page 1 THE NUFFIELD OXFORD HOSPITALS FUND TRUSTEE5' REPORT FOR THE YEAR ENDED 31 DECEMBER 2023 The Tiusleeg present their annual repon iogethei with ihe audited th￿an￿al stalements ol The Nuff le￿ Oxford Hospitals Fund IDr the year erKJed 31 December 2023 Obleclives and aclivilles Policles and objeclive$ The Dbiect ol Ihe Chanly. which is laid down in the Trusi Deed. is lo raise the standard ol service ol local hospitals. In order 10 assist Ihe developmeni and carrying on ol the Oxford University Medical School. The Iruslees believe thai the purfN)se of the Charily. which is'lo raise Ihe standard ol seivice ol local hospitals. in order to assisl the developmenl and carrying on ol the Oxloid Univer51ty Medical School 5aiislies the public benelil requirements. The difecl benefit wh￿h flows from ihis wrpose is suppothng the Oxlord University Medical School In the training ol dwlors in Oxlordshire by providing grants which_ lor example.. Support leaching by replacing old Pyojectors vnth AV sc.'eens IncFease the availabiliiy ol advanced manikins lor final year ffledical students training Imnrrjvp wpllhFJinn £narp_4 ai Rnrllpian Hp.21ih P.2rp l ihraripq Support the crealion ol educational lilms. commun￿allOn skills conversation5. In addition. an annual budgci is provided lo the Oxlordshire Health Servicès Research Commillee enabling doclors in Iraining lo have research experience. These benefits are evidenced through the Tequirement ol all grant hoTders ID prov1de on completion ol their proiecis a (eport lo trustees. published on Ihe website. on the benefits thai have been achjeved in supporting the training ol doctors in their areas. In addilion. Iruslee visits are sometimes arraThJed lo meet with grant holders It should also be noled that The Nulfiekl Oxlord Hospitals Fund INOHFI monies provide added valLJe and benefits over and above any NHS gr Universrty funding. The beneficiaries are ullimately the palients receiving trealmenl Irom the Irained medical doctors. principally wrthin the National Health Service In seiiing objeclives ar￿ ￿anTr1￿g lor aclivilies. Ihe trustees have given due consideration to general guidance published by the charity cornmission relaiing 10 public benefit. including the guidance 'Public benelil.. running a ehaiity IP821'. and have CoM￿led wrth section 4 01 rhe Charities Act 2011. Page 2 THE NUFFIELD OXFORD HOSPITALS FUND TRUSTEES. REPOAT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023 ObJectl¥es and a￿1¥11193 (contlnu8d} b. Strateglos for achlevlng obl8Ctlves The strategy of the Charty is to C•)ntinue to ensure that the Charity's investments prov&Je a Sust￿nable distributable income over the long ierm to supp)rt the 0￿-ects ol Il* Charity. That irtome is distributed in grants, which are selected based on rnedical pr￿ritIeS and maximisation ol the benelit lo the standard of service in line with the Charty's e4¥e¢tives. The Charity's investment manager 1$ Sarasin. FuThts wrth Sarasin are invested in in a pooled managecl fund, the Sarasin Endowments Fund. In most recent years, suilable grant appli¢aiK)ns to the Charity have been18ss than the ¢harilat4e funds availabl8, resulting in an accvmulalion ol i￿Orne reserves. The Trustees have for some time been considering how lo resolve this either by attracting further grant ap￿￿￿on5 QT IcM)king lor larger. longer-term projects lo fund from the accumulated income reserves. Followng corLsullalion wlh the SchorA on ils funding needs, the Trustees have discussed how the Chariiy's future approach lo grants might evolve to meet these needs and lo ensure that the Charity's avadable fuThJs are used to generaie as much benefit as possible. Particular consideration is being given to= Extending grants for more than 1 year. wlenlidty LQ to 3 years. thus increasing Ihe range and scope ol applications, anLI Larger one-off contribul￿nS towards eapild projects •med at improviThJ medical educaiion. Page 3 THE NUFFIELD OXFORD HOSPITALS FUND TRUSTEES. REPORT {CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023 Oblectlves and acllvllles Iconlinuedl c. Activities undertaken to achleve oblecllves The aclivilies ol the Charity over the year comprise both Invesimeni activities and Ihe grant Maki￿ activities set oul in Ihe nexi seclion ol this report. The Charily's invesiment activiiies have the Obje￿Ne ot coniinuing io ensure ihai the Investments provide an increasing and sustainable distiibutable income over ihe long ierm to SUSVirt ihe obiecis ol the Charity The Cufreni Investment portfolio. overseen by Ihe Inveslmenl COmm￿¢e. provides the Income lo fund the grants awarded each year The Chariiy adopis a iotal reiurn approach to the endowment Invested in managed funds. resulting In Income DI £589.658 12022" £671.2121 being recognised in the year There Is also a small amounl ol investment Income generated by the investment ol I[￿oMe reserves In manage(1 funds and cash Dufing the year under review. the Ch&ity commitied to 10 grants totalling £246 715 12022.. 8 granis totalling £2615661. As explained above. the Trusiees afe auively considering ways in which accumulaied income reserves might be used to provide largei grants in luiure years Parl ol the Charity s endowment Is invested dbrectly In land Ihrough a Iolnl veniure with Nutt￿Id Dominions Trusi parlnership was granted planniThJ permission lor up to 2.800 homes on the Wintringham site at the end 012018 and. In spite ol the COVID pandemic. work has procee(led throughout the year5 from 2020 onwards. Cor)struction cornmenced with two housebuilclers. Cala ancl Moriis Homes. and a numbef ol olher housebuilders staried work or signed contracts in 2021 arKI 2022. Rewrts shared al a Winlfjngham meeting in December 2023 show Gomplelio 01450 unils. In 2023. the Charity received Gill AKJ Income ol £1.124.85012022.. £1.535.2501 fiom thÈ joint venture parlnership and Tecognisecj interest i￿ome 01 £107.961 12022". -£6.2271 on loans made to the partnership lo fund WIP. Cash flow forecasts lor the partnershy show that no lurlher WIP loans from the Charity will be required. Monitoring of the project conlinues to take place through Ihe Wintringham Partners Boarcl Icomprisino representaiives from U&C arKJ NDTI and I Wintringham LLP (where the Charity is represented by one Trustee). Paga 4 THE NUFFIELD OXFORO HosprrALS FUND TrLMEes' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2tr23 Obiectlve8 and acthrltles (c(•ntknu d. Grant-maklng polkleg The Charity requires thai grant a￿￿￿tiOnS, together wilh suFp)rting inlormalion, are submitted onllne 10 the Medical Sciences Department by the end ol January each year. The aP￿*¢a￿OnS are first rew8W8d by ihe Director ol Clinical Studies (wh) seeks fUrtTr￿r inlormatK)n as necessary) and then by the medtsl Iruslees ol the Charity. The me(Jical Iruslees lake into consideration the advice on priorities provided by the Medical Sciences Board Ilhe Board of the UniveNty'$ Med￿￿ Sciences DNision whi¢h ￿ reSwnsil￿e for organisation, development and delivery ol the Medical Sciences currr¢ulal. The twslees will, if a￿ropriate. make further enquiries themselves and prepare their own recommeThaalions. All grant apFAicaltons. iogelher with the recomThendalions of th8 Charity's medt¢al Iruslees. are considered by the lull Board ol irustees al Ihe Annual Meeting in May. Each akwlication is reviewed lo Consider the benefit il can generate and 10 ensure that rt clearly folows the objects ol the Charriy. The accwable applications are then prioritised and awarde(J in priority order to match the funds avatlalje for distribLtts"on. 11 the grant applicaliolls approved al the Annual Meeting are sigrNfi¢anlty less than the funds avaiLth¢. a Se￿nd tranche ol grants may be Considered later in the year. Grants awarded by the Charity's Irustees requir8 8￿rSe￿*￿ by the NLJflield M¢dtal Trustees. appointed to have oversight ol the Nuffiekd Benefact￿n. The payment of appwoved granls is C(￿ll10nal upon the rdevant aut￿)riSed expenditure being in¢urred and relevant evidence provided. Grant holders are advised that. rf Televanl aulhorised expenditure is not incurred wiihin 18 months of the letter ol awoval. then ihe grant can LE witthwn unless a reasonable explanation is provid8d. Grant holders are required lo submit a 250 word re￿rt M compleiion of the project SO that trustees understand the benefits gained from the funding and receive assura￿ that the funds have been sjxnt in line with the application approved. Further delails are avalable al= h sJIv￿w.medsCi.oX.a .L*ttor- fflresour medi in nd-biom -scienc ffledicin ourceslnuHiel&oxl rd-IK)S e. Maln acllvltks undertak•n to lurther the ¢hOri￿S purposes lor Ihe publ1¢ ben￿11 The main public benefit activily in 2023 ha5 been lo award a lolal 01 £246,715 01 grant suky)rt lo the Oxlord Medical School through 9 indNidual grant holders in a variety of elin￿al and academic departments. In 2023 there were over 4.000 registered stLKlenis in the Oxford med￿ SclM)01: 2,310 graduale studenis and 1.827 undergraduate students. Achlevements and performance a. Maln achlevwnents of thfr charlty The main aehievemenls have been lo fu￿1 a rarye of training arKI eduCat￿)nal a¢tiviti8s and equipment. Important areas swJJ)rted by grant funds during the year un¢*r awarth mad8 in 2023 and prev￿US years were.. The devdopmenl ol cliThcal con5uttation: virtual training arKI feethack lor medical stud8nts Increasing advanced manikins for final year Med￿al students training Improving welbeirmj spaces ￿ Bo(Aeian Health Care Lilxaries Upgrade of Rob Smith Cenlre. Churchill Hospit￿, for Undergraiknale Medi¢al Students Clinical leaching AV upgrades Creation of eduCat￿nal films.. C￿nMunut10n s￿11$ cOnVer￿10r The develcyment of clini¢al consultation." Virt￿ Ira1Th￿ arKI lee(l)ack lor me(kal students Creation of NDORMS High Spec Teaching R(N)m Hub. Page 5 THE NUFFIELD OXFORD HOSPITALS FUND TRUSTEES. REPORT ICONTINUEDI FOR THE YEAR ENDED 31 DECEMBER 2023 A¢hle¥emenls and performance Icontlnued) b. Investmenl policy and pertormance The investments held by the Charity comprise a porttolio ol direct and pooled investments together with ils 15°/0 inleresl in the Winlringham development at St Neot s. The pertormance and monitoring ol the Winlringham Investment is discussed above. This is a long.lerm inveslfflenl an(J returns Irom il are exFected 10 fluctuate ovei Ihe next lew years. Projections show that the developmeni will oeneraie signif￿An1 relurns lor the Charrty over the next len lo lilleen years. The Chariiy s invesimeni portfolio is managed by Sarasin and Invested In one pooled fund. The Sarasin Enéowmenls Investment Fund. The investmefjl policy in place during 2023 (last reviewed in October 20201 stales Ihal the primary Iinancial objective is tg Ènsuie that the Chaniy Is Invesied to provKJe an Increasing and sustainable dislribuiable income lo support Ihe objeclives ol the Gharity. while maintainhng the real value ol the lund over Ihe longer tertn. Li also sets a target drawéown rale ol not less than 3.$9¢l per annuffl. The inveslmenl commfftee. which comprises Iniee trustees met with the Charity s new Investn￿nI maiiagers twice ouiing Ine TInar￿la1 year 10 oversee Ine peiTUlliiril￿e ui i1￿ FJUILIVIILP. During the yeaf ended 31 December 2023 Ihe Sarasin E￿wments Investment Fund generated inveslmenl returns 9.1 WoQi¢ compated 10 a benchmark return ol 11.PA. The oullook lor investments remains uncertain given currenl geo-polrtical events. although inllalion Is likely io reduce in 2024 The Iiustees continue to believe Ihai a dNersilied aclNely-managed multi.assei fund remains the besi approach lo long term capilal growih a￿1 a sustainable bncome slream 11 should be noted that in managing Ihe wrllolio. the Reslncled Endowment Fund and the Pre 63 Accumulated Income fund are managed as one tund. known as the General Fund. Financial revlew Going concem The Iruslees have considerecl the impact of conlinung u￿e￿aInty in finanoal and property markeis on Ihe Charity's abilily lo continue lo fund granls. Taking into account the Charity's cash resources and the liquidity ol its investment wrtlcdio. the Iruslees have a reasonable expeclalion that the Charity has adequate resources lo continue 10 supwort existing grants and commitrnenls ar￿ to continue In operalional existence lor the loreseeable future. 11 the expected reiurn lo be geneiated by lunds were to decline. th8 Charity has the abilily lo adjust future granls accordingly For Ihese reasons. the trustees contsnue to adopt the going concern basis in preparing the financial sialemenls Further deiails regarding Ihe aéoption ol the going concern basis can be found in the Accounting Pcdicies. Page 6 THE NUFFIELD OXFORO HOSprrALS FUND TFIUSTEES. REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023 b. Reserwès pollcy 11 is the policy of the Iwslees lo maintain Suff￿"ent reseNes in Ihe Chartys Post 1963 Accumulated Income Fund. lo provide for a minimum of one year's ¢harilable expeTrJiture, towards the Charity's object. The capital of the General FuThY Capilal Account cannol be reah.sed for use as income. However, il required, the Pre 1963 Accumulated Income Fund could be used to enaL￿e the Iruslees to Continue appropriate levels ol expenditure in the coming years, even il there were lo be decreases in the Charity's inveslmerrt income. In the opinion of the Irustees. the Charity's assets are adewate lo meet its oL4igations. c. Surplus In the year The Balanc8 S￿1 al 31 DKember 2023 sh(xs that the Charity's net assets ithal rJo,565.310. an increase of £2,523,99) on lo the n8t assets at 31 December 2022. There was a surplu5 for the year before nel investm8nl gains of £1,546.01912022= £1,780.284)- The net gain on disposal and revaluation ol asseis in the Inv&simenl Portfolio of the Charity during the year was £977.971 {2022: Loss of £2,432,389). . Endowment Fund At 310ecember 20￿, the balan￿ of the En(￿)￿￿￿nI FuTrJs amounled to £25,220,583, an increase of £914,958 during the year. This Ine￿aSe arose mainty from gains on the valualion of investmenls. ii. Accumulated Income Fund Post 1963 The Statement ol Financial Activities foy ihis furKI sPk)ws a net increase of £1.609.032 lor the year. Incoming resources amounted to E1,879.2CQ12022= £2.213,6031, I￿ludIng receiDI of gift aid 01 £1,124.85012022.' £1.535,2501 arKI inleresl income of £107.961 12022.. £16,227I1 from the charity's Wintringham investment. Resources eXpe￿jedaM0￿nIed lo £289.90612022". £298.38n. Exp8Ththlure irtluded costs ot ￿￿1[2022.. £15,750) relating lo contractual ot4igalions and other costs arisiw on Ihe Wlnlri￿haM development. There were gains on the fund assets of £19.738. The balarKe on the Accumulated Income Fund Post 1963 at 31 Oecember 2023 was £5.344,727 corry>ared lo £3,735.695 at 31 December 2022. Strudure. governance and Ma￿gement Constltutlon The governing ¢knumeni 15 a Trust Deed. dated 4 Decemtr*r 1¥37, as amended by schemes 011 July 1952, 22 De¢ember 1953. 19 May 1976 and 6 March 1998. Pagg 7 THE NUFFIELD OXFORD HOSPITALS FUND TRUSTEES. REPORT Ic0￿￿NUED) FOR THE YEAR ENDED 31 DECEMBER 2023 Slrueture, govemance and maTragemenl (contlnuedl b. Methods of appointment or eleclion of Tru$iees New Irusiees are appointed by the existing iruslees and serve lor live years_ They may Ihen pul themselves lorward lor re appoinimeni which is considered at Ihe Annual General Meeting The existing trustees carry out an appropriate selectton Pr￿esS arbd cor￿UC1 backgiound checks before offering posis lo new trustees. When ￿nsIdering new trustee5. Ihe eXlSl1ng trustees look for specrfic areas ol expertise to help rneel the objectives ol Charity. . Policies adopted for the induction and training of Trustees The induction and training ol new iwstees and the inlormation with which fhey are provided are tailored depending on the Trusieès background. Inleresls and ioles A copy ol the Trust Deed is provided along wilh annual accounts. risk assessrnenls. invesimeni reports and coniacl deiails of fellow Irustees Additional information Is provided to any medical trusie&s who will be involved irh assessing grants ap￿1¢allonS and fflaking recommendalTrons lor awards. All 1rii41g.p£ rpr.p.ivp. rp.niilHr ijnrlalp.8 nn C,hanfv Commission 0ubli￿tiOnS a￿j allerKI aoDfoDriate cnarilv seminars where relevani. d. Oryanisalional slruclure and decision making poll¢les Under the ierffls ol a Special Resolution passed on 15 Juty 2020. the maximum number ol Irustees is ien. A lolal ol six tfiislees served durirnJ the year. Thr8e Iruslees served on the Investmeni Committee which fftel IwKe during the year_ Following the CFeation ol Ihe i(ynl venture with Urban & civ￿. matters relating to Winlringham are dealt with by 1 'nlnngham LLP. which has 2 Jireclors representing the Charily and 2 represeniing NDT. Meelings ale held twice a yeai and information is shared wilh other truslees as appropriate. The Charily has no membership ol Wniringham Parlners Board. but the Chair has been an observer at most ol thè board meetings. The day'to.day admiThsiration ol the Chanty 15 undertaken by Ihe Chaiity Secretary. in consultation with the Chaii and olher Iruslees as requiied. Finarbcial rlsk management The trustees have assessed the ma4or risks to which the charTty is exposed_ in particular. Ihose related to Ihe operations and linances ol the charily. The Irustees also continue to monitor closely the risks associated with the developmenl ol the Wintringham la￿. The trusiees are salisfied that sysleffls and procedures are in place lo mitigate the exposure to the major risks. Pag8 8 THE NUFFIELD OXFORD HOSPITALS FUND TrusrEES' REpofff (CONTINUED) FOR THE YEAR ENDED 310ECEMBER 2023 an8 foi luture perlods The trustees are expecting to continue to WOVKle lurthef giants in the future lo m8el the Charity'5 Oty'ecl. The trustees are aware of the need to make lull use of availaLle income and. as considered und8r strategies lor achieving objectNes, are lookiNJ al ways ol erbhancing a￿j extending the types of grants oflered. The development of the Winlringham land is exFXted to provKl8 Sign[f￿arn ad¢*tional lunds to ￿nha￿e lulure grant giving. arthough cashlh)ws from Ihe developmenl are likely io be limited in the short term. As set out in slralegies lor achieving 0tr4'ectives. detaiW thsoJssh)ns wll continue to consKl¢r whether the funds that the Charity may receive ariwng from Wintringham coukl be used for a more signif￿an1 one.ofl project such as the enhancement of fatslities for the MedKal Sch)Dl throughwl the Oxlord Ho4)itals. Statement of Trustees. responslbmhies The Trusiees are respon&ble for preparing the Trustees. rep)rt and the financial statements in accordance Mth applicable law aThJ Unii¢d Kingth)m Accwnling Slarthrds (United Kingdom Generally A￿epted Accounting Practicel- The law appli¢aUe lo charilies in England & Wales requires TTUSlee5 to prepare financial statements lor each financial year which gNe a true a￿1 fair vwi of the slate of affairs ol the charity arKJ ol ils incoming resources and application ol resources. ir￿lUding ils irtome aThJ eX￿n￿lUre, lor thai period. In preparing Ihese finanual Slalemenls, the Trustees are required lo= sdecl suitable accounting Folicies andlhen ath them consistently.. observe the methods and principles ol the Charities SORP (FRS 1021.. make judgments and accounting eslimates Ihal a￿ reasonable and pNdenl' stale whether applicable UK Accountiw Sta￿rds IFRS 1021 have been foNowed, subject lo any material departures disclos￿ ar￿ exFIar￿d in the financkgl slalements", prepare the linanclal siaiements on the going concern basis unless It is inappropriate to presume that the charity witl continue in business. The Truslees are responsible for keeping adewale acc(NJniing records that are sufficient to show and explain t charity's Iransauions and dIsc￿se wrth reasonat4e a¢¢uracy al any lime the financial position of the charity and enable them 10 8nsure that ihe finar￿la1 slalemenls CoM￿Y with the Chari118s Act 2011, the Charity IAccounls and Reports) Regulations 2008 arml the Fwovisions of the Trust deed. They are also responsible lor saleguar(Ing the ass¢is ol the charity and hence for taking reasonatle steps for the prevention and deleclh)n of Iraud and other irregularities. Dlsclosure ol Informatlon to audllors Each of lh8 persons who are Truslees at the lime when thi8 Trustees. rewrt is approved has confirmed Ihal.. so lar as Ihal Trust¢e is aware. there is no ￿levant aLwJrt infomialion ol which the chariws audilors a unaware, and that Trustee has taken all Ihe steps that ought lo have been taken as a Trustee in order to be aware of any relevant audil infomiatim arKI lo 8Statthsh thai the charity's a￿lIOrS are aware of thai intomiation. Page 9 THE NUFFIELO OXFORD HOSPITALS FUND TFIUSTEES, REPORT ICONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023 Approved by order ol the members ol the b0￿d ol Trustees and signed on their behalf by.. Pmfessor Acarr (Chair ol Trusieesl Dale.. 17 May 2024 Ms S 8arr8tt Dale- 17 May 2024 Page 10 THE NUFFIELD OXFORD HosprrALS FUND INDEPENDENT AUDITORS. REPORT TO ThE TrUSTEES OF THE NUFFIELD OXFORD HOSPITALS FUND Oplnlon We have audited the firHnual slalements ol Nuffield Oxlord Hospitals Fund I'lhe charity'l for the year ended 31 0¢￿mber 2023 which comprise the statement ol linanial activit¢es. the balance sheet, the cash flow slalement and the related notes to the financial statements, i￿1￿j s*Jnilicant accounting policies. The finanual rewfling framework that has been applied in I￿1r kweparaTr"on is atwicable law and Untted KIn￿10M Accounting Standards, including Financial Reporting Sta￿lard 102 The Financual Reporting sta￿rd applica￿e in the UK and Republic ol Ireland (Unrted King(*Jm Generaly Accepted Accountiw PraCt￿e). In our ¢Jpinion the financial statements.. give a true and fair view ol Ihe state of the charity's affairs as al 31 December 2023 and of its in¢omirrfJ and application ol resour¢es, tor the year then ended- have been property prepared in acCOrda￿e wrth unl1￿1 Kingdom Generdly Accepted Accounting Pracbce." and have been prepared in accordance ￿th the requirernents of the charrt￿ Aot 2011. B•sls lor oplnlon We conducted our audit in accordance with Intemaikmd Standards on Auditing (UK) IISAS IUKII and applicable law. Our responsibiif(ies under those starKlards are lurther descfthd in the Audilorfs responsibilili8s lor the audll ol the financial slalemenls Wtion ol our rep(xt- W8 are independem of the charity in accordance with the ethical requiremenls that are relgvanl to OUT audit ol the financial statements ir¢ the UK, includiThJ the FRC'S Ethical Stsndard. and we have lullilled our olher ethical resw)nsiblilies in accordance with these requirements. We believe Ihal the audil evidence we have ￿t￿ned is sufkienl aThJ 8wcpnale lo provKlo a basis for our opinion. Con¢luslons relatlng to golng concem In auditlng ihe financial statements, we have conduded that the Iruslees. use of the gThng concem basis ol accounting in the preparation of the linarKial slalemenls is appropriate. Basecl on the wotk we have perff%ffed. we have Th)1 thnirfEd any materi41 uncertainties relating lo events or coThYitions thai. Indiv￿vallY or colectP18ty. may casi swJnrf￿nI doubt on the charity's ability to continue as a going co￿&r￿ a perN)d of at least ￿e1Ve months from when the financ￿ statements ar8 aulhorised lor issue. Other Inforn)atlon The trustees are responsible for the olher inforMa￿n contained within the annual rekK)rt. The other information comprises the inlormalion Induded in the annual rer*)rt. other than the financial slalemenls and our auditor's report Ihereon. (ljr opinion on the finarKial slalements does rN)t cover the other inlormalion and. except to the exlenl oiheThvise expliLItty staled in cNJr report. we th) not express any form ot assurance conclusion Ihereon. Our responsibilty is lo read the other inforMat￿n and. in ￿Ing so. consthr whether the other information is materially K)consislenl w-rth Ihe financial staiemenls or our knowledge obtained in the audil or olherwls¢ atpears to be malerrally misstaied. If we Klenlfy such material inconsisiena8s or apparent material misslalemenls, we are reryjired to determine whether this gives rise lo a material rnisslalement in the financial slalements themselves. If. based on the work we have performed, we cor￿U￿e ihai there is a material misstatement of ihis other infomation, we are Tequired lo rewrt that lacl. We have nolhing to report ￿ this regard. Page11 THE NUFFIELD OXFORD HOSPITALS FUND INDEPENDENT AUOITORS. REPORTTO THE TRUSTEES OF THE NUFFIELD OXFORD HOSPITALS FUNO ICONTINUED) Matters on which we are required to report by exceplion le la'e nolhi*g rt ifj respect (>t lollo¥ng mattcbrs in relation to which tho Cfjaritios IAccounis ar)d Aeportsl Regulations 2008 requires us to retK)rt to yOLt rf. In our opinion". the inforrnal￿n given In the financial statements is inconsislenl in any material ¥espect with the irJsiees ieport". or suff icieni and proper accounting records have not been kepl by Ihe charily- or Ihe financial statetnents are noi in agreemeni wilh the accounting records and returns" oi we have rn)t received all the information and expLAnalions we require loi our a￿111 Responslbllllles of trustees As explained ffiore tully in the Irusiees responsibilitie5 Staleineni sei oui on page 10. the iiusiees are responsible lor the preparation ol the financial statements lor being sat151ied Ihal they give a tfue and lair view. and lor such internal control as the truslee5 determine is necessary lo enable the weparation ol financial statements thal are Iree from material misslaiemenl. whether due 10 fraud or error. In prepanllg the lillanoal slalements the Irustees are responsible for assessing Ihe charity's ability lo continue as a nrtina rnrw.*.rn di*A.n.Rinn A2 Amlirahlp. mattprs rplalpd tn aninn rnncp.rn And ii%ino thp ODino concern basis ol accoLJnting unle55 the tiustees either inte￿1 lo liquidate Ihe chairty or 10 cease operaiions. or have no realistic allernalive bui lo do so. Auditor's rèsponsibililies for the audit of the flnancial stalemenls We have been apwinled as aLKlilor under seclion 144 01 the Charil*S Acl 2011. and retXTrrl in accordance with the Act and relevant regulalions made or having eftect thereunder. Our objectives are 10 obtain reasonablè assuraice atx)ul whethei the financial slalemenls as a whole are free from maierial misstatement: whelher due io fraud or error. and lo Issue an auditor s report that incIL￿eS our opinion. Reasonable assurance is a h￿h level ol assurance. but is not a guarantee that an audit conducted in accordance with ISAS IUKI will always detect a malena misstatement when Il exists. Misslatemenls can aiise from fraud or error alld are considered material if. indivKlually or in the aggregale they could rea50rhably be expected lo influence the economic decisions ol user5 laken on (he basis ol Ihese financial statements. Delails ol the exient to which the audii was conS￿ered capable ol detecting irregularities. including fraud and non- compliance wilh laws and regulations are set out below. Extent to whlch the audil wa$ considered capable ol detecting Irregularilles, including fraud Irregularities. including fraud. are instan¢es ol non-compliance with laws and regulations. We idenlilied and assessed the risks ol maiwial misslalemenl ol Ihe linanoal slatements Irom irregularities. whether due lo fraud or error. and discussed these bptween our audit ieam members We then designed and performed audii procedures responsivg lo Ihose iisks. includirrfJ obtaining audii evidence sulh'cienl and approyiate to provide a basis loi our opinion We obtained an ￿￿lerStandIng ol the legal and regulaiory frameworks ￿thIn which the charity operates. focusing on those laws anij regulations that have a direct effect on the delerminalion ol malerial amounts and disclosuies in the financial slalemenls. Page 12 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **INDEPENDENT AUDITORS' REPORT TO THE TRUSTEES OF THE NUFFIELD OXFORD HOSPITALS FUND (CONTINUED)** ## **Extent to which the audit was considered capable of detecting Irregularities, including fraud (continued)** The laws and regulations we considered in this context were the Charities Act 2011 together with the Charities SOAP (FAS 102). We assessed the required compliance with these laws and regulations as part of our audit procedures on the related financial statement items. In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which might be fundamental to the charity's ability to operate _or_ to avoid a material penalty. We also considered the opportunities and incentives that may exist within the charity for fraud. The laws and regulations we considered in this context were General Data Protection Regulation and taxation legislation. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Trustees and other management and inspection of regulatory and legal correspondence, if any. We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be within the timing of recognition of specific income streams, and the override of controls by management. Our audit procedures to respond to these risks included enquiries of management about their own identification and assessment of the risks of irregularities, sample testing on the posting _of_ journals, reviewing accounting estimates for biases, reviewing income transactions close to the end of the period and reading minutes of meetings of those charged with governance. Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations. 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.orq.uk/auditorsresponsibilities. This description forms part of our auditor's report. ## **Use of our report** This report is made solely to the charity's trustees, as a body, in accordance with Part 4 of the Charities (Accounts and Reports) Regulations 2008. Our audit work has been undertaken so that we might state to the charity's trustees those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity and the charity's trustees as a body, for our audit work, for this report, or for the opinions we have formed. ## **Crowe U.K. LLP** ## Statutory Auditor ## Reading ## Date: 17 May 2024 Crowe U.K LLP are eligible for appointment as auditor of the charity by virtue of its eligibility for appointment as auditor of a company under section 1212 of the Companies Act 2006. Page 13 THE NUFFIELD OXFORD HOSPITALS FUND STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 DECEMBER 2023 Endowment Funds 2023 Accumulated Income Fund Post 1963 2023 2023 Total 2022 Toial Notes Income and endowmenis from.. Donations and legacies Invesimenis Allocation ol Tc)ial Return 1,OlXS 1,268,542 1,OIKI 1,913,827 625,285 2. 167,678 Tolal Income 1914 827 2. 167.678 Expendlture on.. Raising funds Charilable activities 78.902 1,626 80.528 288.280 81655 296. 739 Total expendllure 289 906 378 394 Net gains Ilossesl on Investments 977 971 2 432 389 Nel movement In funds 914,958 1.609,032 2,523,990 (643. 105) Tolal funds brought fO￿ard 24 305 625 735 Total funds carrled forward The Stalemenl ol financial activities Incl￿e$ all gains aFKI losses recognTrsed in the yeai The notes on paoes 19 to 35 lorm pari ol Ihese financial slaiemenis Page 14 THE NUFFIELD OXFORD HOSPITALS FUND BALANCE SHEET AS AT 31 DECEMBER 2023 2022 Notes Flxed assets Investments 10 24 24509,588 23.481.170 Current assets Short-lerm Inve*ments Deblors Cash at bank and in hand 3W),IXXI 1089,692 12 2,616.645 6,434,138 5,149,914 Credilors.. amounls lalling du& within one ye 13 416 764 N81 C￿rent assot? Tot81 assets le8$ currenl Ilablllties Total nel assets Chwlty funds Endowment Funds Restricted endowmeni funds Ac￿my1a1ed i￿orne furkl pre 1963 15 15 23,566,740 22,754,220 25.220￿83 24.305.625 Ge￿ra1 Funds AccLmulated in￿rne fund post 1963 15 5 344 727 The financial statements were awr0v￿1 and aUl￿ri2￿￿ for sssue by the Trustees and slgned on their behalf by.. Professor A Carr (Chair ol Trustees) Date.. IAS S Barr•lt Date 17 ffl. i} The notes on pages 19 10 35 form part ol these h'nanclal statements. Page 15 THE NUFFIELD OXFORD HOSPITALS FUND STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2023 2023 2022 Noles Cash flows from operating activities Nel ttash used ln operating aclivilies 18 Cash Ilows from investing activities Dividends. ifflleresls and ients from ,nvestments Proceeds from sale ol Invesiments I'.ors'.i 'Lla'io'.i -.L) Itives'.iig acli-.Ii'.ie> 1,913.827 2. 167.678 337.500 10 175.1281 150,4471 3 000 000 Purchase ol Invesimenis Treasury depos11 10 (75,963) Nel cash provided by.'lused inl invesling activllies 1211 747 2.429.215 Cash Ilows from financing activilies Nei casn proviaea Dy iinancing aciivives Change in cash and cash equivalents in the year 1,188,823 410780 Cash and cash equivalents ai the beginnin9 01 the year 2 533 269 2 122489 Cash and cash equivalents al Ihe end of the year Note numbers 18 to 20 form part ol ihe siaiement ol cash flows Page 16 THE NUFFIELD OXFORD HOSPITALS FUND NOTES TO THE RNANCIAL STATEMEKrs FOR THE YEAR ENDED 31 DECEMBER 2023 Accountlng pollcle$ 1.1 B•sl8 of preparallon ol Iln•ndal slatemgnts The tinar￿la1 statements have been prepar8J n aCCordar￿e with 'Accounting and Reporting by Charities". Slalement of Recommeth practi￿ applrable to chariiies preparing Ih8ir accounts in aCcOrda￿e with the Fir￿la1 Rewrting Slandard appl¢ab￿ rn the UK and Republic of Ireland {FRS 1021 (Second Edilionl. and the F￿anCIal Reportfftg SiaThJard applicable in the United Kingdom and Republr ol Ireland IFRS 1021 and the charit￿ Act 2011 aThJ UK Genwally Ac£epted Pra￿l¢e as il applies Irom 1 January 201 S. The financial slalemenls have been prepared to give a Irue and fairf viw and have departed from ihe Charities IAccounls and Reports) Regulalions 21x18 onty lo the exlenl required lo provi(Je a Irue and fair. view. This departu￿ has nvdved fcAlowiry 'Accounling and Reports"ng by Charities.. Slalement of Recommended Practice ap[Ar￿)￿ to chariles wepariry their a¢coun15 in accordance wrth the Finaficial ReportirrfJ Siandard ap￿icab￿ in the UK and Republic of Ireland IFRS 102) (Second Ediliornl. rather than the AccountirNJ and RetxJrtirKJ by Charrties.. Sialemenl of Recommended Praclice effective Irom 1 Awl 2005 which has ￿nce been Wit￿[￿awn. The Nulfiekl Oxford Hoslyt￿S Fund meets delnit*Jn of a pthl'c be￿fi.1 entity under FRS 102. Assets and Ikablities a￿ inrtwlty recogntsed ai h￿or￿al cost or transaction value unless otherwise 51alecl in the ￿levant a¢¢ount¥ig w)Iw. 1.2 Golng ¢on¢em The financial slalements have been prepared on a going concern basis, as rhe Iruslees believe that no material uncertainties exist in resF*ct ol the Charity's atmlity to meet its obligations as t￿Y lal due in the foreseeable future. In reaCh1r￿ this condusion, the trustees have considered the level of funds held. the liquidity of those funds and the expe¢ted levels of income aThJ exp8nditure for 12 months from the dale on which these financial statements were signed. 1 J InvestM￿ts Fixed asset investments are a form ol financial inslrurnenl and are initially recognised al their Iransacli)n cosi and subsequenlty measured al lair value al the Balance sheet date. unless the value cannot be measured reliatAy in which ease il measured ai ¢osl less impairment. Investrnent gajns and bsses are ir￿lude[l as 'G￿n￿(LOSSeS) on investmerbls, in th8 Slalemenl ol financial aciivilies. Investment in Subsidiary urKJertakings s vaw at histWiC C05t18ss provision lor impairment. Investments in the joint venture represents the charrty's inler8St in the development ofihe Winiringham Estate. The investment is carried al cost which is ewal to the fair vahje of the larKI al the date ol its transfer lo Winiringham Partngrs LLP together wlh later additional loans less iepaymenls. The inve51menl forrns part ol the charty's restricted eNknvmeni lund5. sled investments W as fixed assets are shown at mathet value. Short-lemi nveslments are represented by cash held on derosil with a Maturity ot18ss then one year lyJl great than 3 months. Page 17 THE NUFFIELDOXFORD HOSPITALS FUND NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDEO 310ECEMBER 2023 Accounllng pollcies Icontinu8dl 1.4 Flnancial instruments The charity only has financial assets and financial liabilities ol a kind that qualify as basic financial inslrumenls. Basic financial Instruments are Inilially ¥ecognised al tiansactlDn vaSue and subsequently measLJied at their settlement value wlh the exception ol bank loans which are Subsequently measured al amortised cost using the effectwe Interest method 1.5 Fund accounling General funds are unrestricted lurhls which are available lor use ai the discreiiDn ol the Trustees in furtherance ol the general obJ"eGlives ol the charity and which have not been designated lor other rposes. Restricted ILJnds ale funds wh￿h to be used in accordance Wlih specific reslriclions imposed by t*)nors or which have been raised by Ihe charity lor particula¥ puTrose5. The costs ol raising arKI adminisiering such lunds are charged against the specific lund. The aim and use ol each reslricled lu[￿ 15 sel out in the notes lo the linancial statements Invesiiiieni Income. gaiiis losses are wio¢aieo io iiie appropriaie iuno. 1.6 Income All Income is recognised once the charily has enltilemeni to the income. it is probable that the income 11 be recewed and the amount ol i￿ome ieceivable can be measured reliably. The incoming resources rewesent all the I￿l)Me received Irom quoted inveslmen15. bank deposils and income from properties. All incoming resouices are iaken lo Ihe Post 1963 Accumulated Income Fvnd 1.7 Expendliure Ex￿dit￿le Is recognised there is a legal or constructive thjligation lo Iransler economic benefit 10 a third pariy. il is probable Ihat a iransler ol economic tenelits will be required in settlement and the amounl ot the obligatiofj can be measuied reliably. Expendiluce on charitable act￿111￿$ is incurred on directly undenaking the aciivities which lurther ihe charity's obieciives. as well as any associated support costs. Granls payable are included where the grant has been agfeed during the year and there are no concllions lo be mei ielaling to the grani wh￿h remain in ihe conlrol ol the chariiy. Govemance cosis are I1￿se i￿Vrred in Connection Wilh administration of ihe charity and complianee with constitutional and statLrtory requirefflents. 1.8 Interest recelvable Inleresl on funds held on dep￿11 is included when receivable and the amount can be measured reliably by the charity.. this is normally upon notth-cation ol the inleresl paid or payable by the inslilulionwilh whom the lunds are deposiled. Page 18 THE NUFFIELD OXFORD HOSPITALS FUND NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 Accountlng pollcles {contlnued) 1J Debtors Trade and other debtors are recogni￿ at the settlement amount after any trade dLs¢ounl offered. Prepayments are valued al amount prepaKI nei of any trade disccMJnt5 ijue. 1.IOCa$h at bankand In hand Cash al bank and in hand Ir￿￿￿eS cash arKI short-lemi highly IKiuid inve51menls with a S￿)rt matufily of Ihiee months or less from date ol aewisikn.on or 0[￿Ing ol the deposii or similar acccwnl. 1.11 Ll•bllltleg and provlslons abilities are r¢cognised when there 15 an obl¥Jalion at the Balan¢e shed dale as a result of a past event, il is prctjable that a transler ol ecOr￿M￿ benefft will be requirod in selllemenl. and the amount ol the settlement can be esiinaied relably. Liatrl'lities are recognised at the arTr)unl that the charity an1￿1paleS it will pay lo sellle the debi or the amount it has received as advanced payments for the goc*Js or sorvtes il must provide. Provisions are measured at the besi estim*e of the amounts re(wired lo settle the obligation. Where the effect ol the lirne value ol money vs material, the provi%H)n is based on the present value of those amounts, discounted al the pre-tax dscounl rate that reflects the risks specific lo the liability. The unwinding ot the dixount is recDJni8e(l in the Stalemenl of linanciaj activities as a finance cost. 1.12 Crfllcal accountlng estimates and areas ol ludgnxnl Estimates and judgments are conb"nually evdualed and are based on historical experien¢e and other factors, including expectations of future events that are believed lo be reasonable under the rcumstances. Crili¢al accounting eslimales assumotor￿. The charity makes esbmales and assuffptions corKeming the lulure. The resultiThJ accounting estimates and assumptions will. by definrtion. 58hJom equal the related actual results. The estimales and assumptions that have a signiffi¢ani risk ol causing a material adjuslmenl lo the carrying amounls of assets arKI liabilities within the n8Xt financkal year are thscussed below. Ciihcal areas of judgment." The critical areas of ju(h3em8nl rdate lo the ValU￿￿n of Wintringham related inveslments and the recoverability of WintriTrJham IDar￿. Page 19 THE NUFFIELD OXFOHD HOSPITALS FUND NOTES TO THE FINANCIAL ST ATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 Ac¢ountlng pollcles Icontinuedl 1.13 Gain$ & Los$es on Invesimènts Gains and losses on quoted inveslments held In the General Fund ol the Capital Account and on the Pre 1963 Accumulaied Fund are treaied as caprfal arKI added lo the relevant lund. Gains and losses on quoted investments held in the Post 1963 AcGutnUlaiedl￿Ome Fund are added lo this fund 1.14 Total Retum Investment Accounllng The charity ha5 adopted a 'Total Relurn basis loi the inveslmenl ol ils endowment. The carrying value ol the preseryed permanent capiial. the Irusi loi invesimeni. and ihe amoJni ol any unapplied tolal ieturn available lor eXpe￿IllUre wère taken as the lair value ol these fund5 as ai 31 Decemkr 2010. as adjusted lor inllaiion. as being aller the financial crash and before a period ol growlh. In choosing this dale. the Trusiees also considered Ihe change ol investment managers close to that date and the slarl ol a new investrrbent fegime. The charity invests ihese funds without Tegard lo the capiial income disiinctions ol slandafd Irusl law an¢J with &screiion to apply any parl 01 the accumuiatea ioiai reiurn Dn ine Invesimeni as Income For spending each year. Unlil this power is exeicised. the ioial relurn is accumulated as a compoiiei)t ol the endowment known as the unaptAied ioial return that can be either relained lor investrnent or released 10 income at the discretion ol the Trusiees. Page 20 THE NUFFIELD OXFORD HOSPITALS FUND NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 Inveslmenl Income T¢)tsl Funds 2023 Tolal iunds 2022 Income from quoted investments Income from inve$tmenis in WinlrirwJham Interest on Wintringham loans 8ank inlerest 631165 1,124,850 107,961 638,655 1,535.250 (6.22 Investmont management costs Total Funds 2023 Tolal lunds 2022 Investment management lees Anatyslg ol èxp8ndilur• on charltable actlvhles Summary of lund typ8 Total Funds 2023 Total funds 2022 Award of Grants lrnte 6) Grants written o Development ol Winiringham (Thxe 51 Support costs Inole 5} 246.715 (4,681) 261.566 f17,225) 15, 750 All expenthture relates lo the Accumulated Income Post 1963 Fund. Page 21 THE NUFFIELD OXFORD HOSPITALS FUND NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 Support Costs Total Funds 2023 Tofal lunds 2022 Siall cosls Insurance Trustee meeling exF*nses Bank charges Sundry expenses Legal and pfole5S10nal costs Goveraance cos15 11,818 1,302 23 315 334 14,802 15.324 1.089 156 175 16.071 2. 748 76.835 Devdorynenl ol Winiltngham cosis are irtludecl in sU￿1ry Expenses. During the year they amounted to £nil (2022.. £15.750J Grants Institutlons 2023 2022 Annual budgei loi ￿$earth- Oxlordshiie Heallh serv￿ Research Commrtieè Darn￿}n Young Pop-up Assessment Space Syslern Igranl 22-UO-11 Owers Coxall BHCL HybrKI meeting and leaching space Igrant 22- UO-21 8HCI lm￿0¥1ng IT Ashok Handa Pali2nt-cenlnc hybr￿1 e￿L￿tron in Oxlor(I Igrant 22- UO-31 80,000 50.000 13.687 12.586 11.263 49.875 Daminic Furniss 12-monlh pilol ol PloKi￿e io enhartè surgieal ieachng Igiani 22-UO-41 Ku Shah Simulation training wgramrne lor Geriairic Medrine Etjucatson Igiani 22-OUH-21 Mary Miller Enhancing Online Seminars Igrani 22-OUH-31 Supporling iÈa¢hiry by repla￿9 okj proieciors wlh TV screens. Mary Miller Igfani 23-OUH-21 Increasing a￿va￿d mand4ins lor final year medtal st￿ents training. C*riona Flemino Igrani 23 OUH.31 lfflproving wellbei[￿ 5p¥e5 al 80(Awan Healih Care Libr3rie5. Coxall Igrani 23-OUH-41 Medical Sludeni reading list lilles Upgrade ol Rob Srnith Cenlre. ChurclN"Il Hoswtsl. lor Ufidergraduale Medical Sludenls. MonNue A￿ler$SOn Igrant 23 OUH.51 Clinical leachin9 AV upgr•Jes. Oamion YotywJ (grant 23-OU-11 Creaiion ol educaiional 111ffl5-. CoMffl￿￿￿K)n skdls conversaiior6_ Ruth Wilson (grant 23-OU.21 The developmenl ol clinical t￿suMa1￿*n.' vimjal training aTh leeolback lor medal Slullenis. Rachel AIL3n Igranl 23-OU-31 reaih)n ol NDORMS High Srrt Tèaching FIc￿rn Hub. Osman Aslam (Grant 23-OU-41 72.408 45.536 6.211 8.307 21,834 13,891 23.458 7.210 27.087 10.688 Total Page 22 THE NUFFIELD OXFORD HOSPITALS FUND NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR EIIDED 31 DECEMBER 2023 Audltors. romuneratlon 2023 2022 Fees payatrAe lo the charity's au(fitor for the a￿t ot Ihe charity's annual accounts exduding VAT 11,160 10,404 Fees payable to the charity's aLKffiior excludiThJ VAT in resi￿ of". Preparation ol annual accounts Slafl costs 2023 2022 Wage5 and Salaries Employer NIC 11,835 15,565 negative charge lor enwbyers. NIC relales to enwbyer's allowance not fully accounted lor in pmr years. The average number of persons empioyed by the charity ￿ring the year was as follow.. 2022 Secretary No empfoyee re¢eivoJ remuneratDn amountYvJ to I￿re than £60.000 in either year. The key managemert personnel ot the Charty i￿￿de all TnK%tees supported by the s￿retary, A Truesdale. The total remuneraticn paid lo Ihg key management personnel amount8d to £11.835 (2022.. £14,690). Trustees. YemunerJtl¢)n and expen During the year no Trustees receiv￿ any remuneral￿n or other beneffts (2022. ￿11). Ouring Ihe year ended 31 December 2023. expenses totallry £23 were reimbursed or paid directly to one Trustee f2022- £176). Th8 expenses reinthrsed are in relahjn lo the travel expense5 for Trustees to atten¢J Trustee meetings. Page 23 o £ THE NUFFIELD OXFORD frK)SPITALS FUND NOTES TO THE FINANCIAL sTATEME1￿s FOA THE YEAR ENDED 31 DECEMBER 2023 10. Flx•d asjel Investments (conllnued) Hlstorlcal Cost Loan Investment The charity through its membershtp 011 WintriNJham LLP has a cornmitfftrt lo issue partner loans to Winlringham Partners LLP as reryired to lurMJ rts share ol developmenl costs. The loan investment comprises an amount due from WinlrirKJham Partners LLP arisiThJ from the transfer of the Chartty's land in 2017 along wth an additional loan lo lurKI working catilal. Loans lolalling £nil were made during in the year (2022.. £ni4. A repaymgnl of £nil 12022.. £337,50Q was rec8rv8d in the year. The carrying v￿ue ol Ihg investment continues to be its cost which is equal to Ihe fair value ol the larxl al dale ol ils transfer lo Wintringham Partners LLP together with later acklitional kjans less repaymnls. Investrneni type An analysis ol the investments has been a5 al 31 Decefflber 2023 to disiinguish between Direct Invesimenls, Pooled Inveslmenls a￿1 Subsidiary Investments. The splil is as iNJicated below.. 2023 2022 Post 1963 Income Fund Cash Direct Investments Pooled Investments 367,7n 347,021 Aestrfcted Endowment Fund & Prn 1963 Income Fund Cash Direct Investments Pooled Investments 17,854,847 16.847. 185 Loan to ￿nIrIngh￿rn Partners LLP Subsidiary Investment 6,286,941 6,286,941 Invesiment In 1 Wlntrlngham Partr￿$ LLP Investment in joini ventUTe Total Pag8 26 THE NUFFIELD OXFORO HOSPITALS FUND NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 Statement of Investment Total Return From 1 January 2021. Ihe Trustees have decided 10 adopi ioial return accountsng lor the restricted endowment lund and the Accumulated Income Fund pre-1963. both ol which are Irealed as permanent catytal ol Ihe Charily. The Fund loi Investmeni ai 1 January 2021 was calculated by laking the peimanenl cap'lal ol the Charily al 31 December 2010 and calculaling Its real value at 31 December 2020. using CPI. The investment return to be applied as Income Is calculated initplly as 3.5W.12022.' 3.5.61 ol the endowment funds held as managed investments arKI capital accounts held by the Inveslment Managers al l January 2023. The income allocation from the Total Return earned will be reviewed each yeaf Trusl for Investment Restricted Accumulaled Unapplied endowment Incorne fund Tolal Return fund pre 1963 Total 2023 Al 1 January 2023 Gill Cortyoneol Unapplied Tolal Return 16,059,992 1,254,436 17,314,428 6991 197 6 991 197 Total Endowments 16059992 6 991 197 24 305 625 Movement in the year Inveslmenl Fleturn D,VKJends and Interest Gains and Losses Less Invesimenl Managers Fees 625,285 958.233 625,285 958,233 Total 1,504,61fj 1,504,616 Unapplied total reiurn allocaied 10 Income In the reporting period Net movements in the reporting pericxj 914,958 914,958 Al 31 December 2023 Gilt Corllponeni Unapplied TDtal Retum 16.059,992 1.254.436 17,314,428 7,906.155 7,906,155 Total Page 27 THE NUFFIELD OXFORD HOSPITALS FUND NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 2022 comparalwe Tn￿1 ts Investment Restli￿ed Accumulated Unappli8d endowment income fund Tolal Relum p￿ 1963 Total 2022 At l January2022 Gift Component Unapp1￿ Tolal Rewm 16.059.992 1.254,436 17,314.428 Tolal Endownyents 16059992 ￿ ￿￿00431 26814859 Movement in iheyear Invesiment Relurn DwKlends Interest G&ns and Loss8S Less Inveslmenl Managers Fees 625,287 (2,383,302} 625.287 f2,383,3Q2) Total (1.838,022) (1,838.022J Unapplied irtal relum allcrated to income in the reportry per￿1 671212 Nei movements in the reportingperi {2,509,234) (2,509.234) At 31 Decemb8r2022 Gift Cornponent Unapplied Total Retum 16,059,992 1.254,436 17.314,428 6,991. 197 &991.197 Toial Page THE NUFFIELD OXFORD HOSPITALS FUND NOTÉS TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 310ECEMBER 2023 12. Debtors 2023 2022 Due wlthln one year Amounls owed by undertakings in wh￿h the charily has a parbcipating inieresl Other deblors Piepaymenis and acciued Income 2,036.840 13,523 2.603.879 12.766 Amounls owed by undertakings in which Ihe charity has a participaknng Inleiest comprise. a corporaie loan L8sued to Winlringham Partners LLP of £1.908.23512022. £2.511.07a. IIII¥ ¥>L VII III¥ III¥VJLIII¥IIL 11 I V¥llllfbllylldill rdiiii¥i > LLf ub L l £U.VVJ ILVLL. 13. Creditors.. Amounts falling due within one yeaf 2023 2022 Other laxalion and social security Grants payable Oiher creditors Accruals and deferred mcome 52 408.240 164.967 360,499 805 17 Grants payable 2023 2022 Grants payable 1 January 2023 New Grants Awarded Old grants wfillen off Grants paid 408.240 246,715 14,6811 289 775 507. 192 261.566 117.225) Grants payable 31 December 2023 Page 29 THE NUFFIELD OXFORD HOSPITALS FUND NOTES TO THE FWINCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 14. Comparatlve Statement of Fbnancl81 Actlvllles Atxumulafed Income Fund Posl 1963 2022 2022 Total Funds 2022 Income and en(IowAr￿nts Irom.. Donalions 8nd lega￿eS Inveslments Allocation of Total Retum 625.287 1.542.391 671212 2, 167.678 Total Mcome Expendilurn on.. Raising funds Charitable acliviiies 80.007 1.648 81,655 Total exwdilure NeIga1￿(loss8s) on investments N81 movement in lunds (2.509,234) f.866129 (643. 105) Total lunds brought lorward 26.814.859 1.869,566 28.684.425 Toial fijnds Carr￿ lorward Page 30 THE NUFFIELD OXFORD HOSPITALS FUND NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OECEMBER 2023 Analysis of net assets beiween funds Analysis of net assets between funds. current period Restricted endowment fund 2023 Accumulated Accumulated income lund in¢ome fund pre 1963 posl 1963 2023 2023 Total funds 2023 Fixed assel investmenls Current assets Creditors due within one year 22,533,089 1,053,651 1.608,722 25,121 367,777 5,355,366 378416 24,509,588 6,434,138 37 416 Total Analysls of nel assets belween funds- prior period Resiricled endowment lund 2022 Accumulaled Accumulaied income lund ftrjcorne Ivnd pre 1963 sl 1963 2022 2022 Tolal funds 2022 Fixedassel investments Current assels Credilors due wilhAn one year 21.616.218 1.138002 1.517.931 33.474 347.021 3.978.438 589.764 23.481.170 5.149 914 589. 764 Toral Page 31 THE NUFHELD OXFORD HOSp￿ALs FUND NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDEO 31 DECEMBER 2023 16. Funds ENDOWED FUNDS Restrlcted Endowmont Fund The capital ol ihis lund has been ￿1111 up by the investment aThJ ￿-inVest￿￿nI ol the donation. Incom8 from this lund is used lo lurther the otry'ect ot the Charity. lyjt the capital cannot be realised lor use a5 income. Pro 1963 Ac¢umulated Incon* Fund In¢ome accvnwlaled prior lo the donor. Lord Nuffiekl's death in 1963 was caprtalised and income from the investments is used lo further the object of the Charrty. Counsel's opinion obtained after the donorfs death conlirmed that Trustees may treat income accumuL41ed prior lo Lord Nuftield's d&alh as il it were permanent capital of the fund. If considered essenliaj by the Truslees. lo the lurthgrance of thai objecl. some or all of this capiial could be realised lo suwfement in¢ome. UNRESTRICTED FUNDS Post 1963 Accumul•ied Incom• Fund This is income accumulated after the donor. Lord NL￿eld's death In 1963. The counsel's opinion Obl￿ned. confirmed that Trustees may accUM￿ale this i￿ome M Ihere musl ￿ an intent to use thi5 fund lo the furthera￿e ot the Charity's object. 17. Relaled Part108 Winlringham Partners LLP was irwrporaled on 5 ￿11 2C117 and acquiTed the land al Winlringham Park, Si. Neots. Cambridgeshire. This partnershw) is owned by Winlringham Newco 1 Limited 166.67%> and Uthn&Civic St Neots Limifed133.33%1. Nulfield Oxford Hosmals FurMI INOHFI owns a ¥2.5% share of 1 Winlringham LLP who have 100Y. ownership of Winlringham Newco 1 Limited and Vlintriroham Newco 2 knmiled. This results in NOHF having an effective 15°A ownership ol Wintringham Partners LLP. Loans totalling £8,195,176 (2022.. £8.798.073J wer8 held by NOHF. To 1 WintrirKJham LLP £6,286,941 (2022.. £6.286.941), I Wmlringham LLP ￿mIl2022.. £nffj. VlrntrirvJham Newco 1 Ltd. Enil (2022.. £nilJ and Wintringham Partners LLP £1,908.235 (2022.. £2.511,072J. Three Irusl8es ol the charty are also rfireclors ol Winlringham Newco 1 Ltd and Mentrrs 011 Wintringham LLP. Sir Andrew Di1￿1 and Protessor Andrew Carr held those roles throughout the financial year. John Ford was appointed lo both roles with effect from 15 December 2023. &r Andrew Dilnot L8 also on the board ol Winlringham Partners LLP. Page 32 THE NVFFIELD OXFORD HOSPITALS FUND NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 18. Flecon¢iliatlon ol nel movement in funds to net cash flow from operating acti¥itie8 2023 2022 Net lexpeNJiturel'income lor ihe ￿[1￿￿ las per Stalemeni ol Financial Activiliesl 643. 105 Adjuslmenls for: (Lossesl gainB on invesiments Dividends. interests and rents from investments Ilnereasel decrease in debtors (Decrease) Increase in creditors {977,9711 11,913,827) 602,080 211 348 2.432.389 12. 167.678) (1.485.263) 154. 778 Net cash provided by operating aclivilies Analysis ol cash and cash equlvaknts 2023 2022 Cash in hand Cash with Invesimenl marbagers 1,344.446 2.533 269 Tolal cash and cash equivalents 20. Analy$ls ol changes in net debl At31 December 2023 January 2023 Cashllows Cash al bank and in ha￿1 LiquKI investments- cash he￿j by Investment managers 2.533.269 (1,188,823> 1,344.446 Page 33 **Charity number: 212575** ## **THE NUFFIELD OXFORD HOSPITALS FUND** **TRUSTEES' REPORT AND FINANCIAL STATEMENTS** **FOR THE YEAR ENDED 31 DECEMBER 2023** ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **CONTENTS** ||Page| |---|---| |**Reference and administrative details of the charity, its Trustees and advisers**|1 - 2| |**Trustees' report**|3 - 10| |**Independent auditors' report on the financial statements**|11 - 13| |**Statement of financial activities**|14| |**Balance sheet**|15| |**Statement of cash flows**|16| |**Notes to the financial statements**|17 - 33| ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **REFERENCE AND ADMINISTRATIVE DETAILS OF THE CHARITY, ITS TRUSTEES AND ADVISERS FOR THE YEAR ENDED 31 DECEMBER 2023** ## **Trustees** Ms S Barratt Professor A Carr, Chair Sir Andrew Dilnot Mr J Ford Mr J Ramsden Dr T Lancaster ## **Charity registered number** 212575 ## **Principal office** c/o Botnar Institute, NDORMS, University of Oxford, Windmill Road, Oxford, OX3 7LD ## **Secretary** A Truesdale ## **Independent auditors** Crowe U.K. LLP, Aquis House, 49 – 51 Blagrave Street, Reading, RG1 1PL ## **Bankers** Barclays Bank Plc, 54 Cornmarket Street, Oxford, OX1 3HS ## **Solicitors** Stone King LLP, 12 Queen Square, Bath, BA1 2HJ ## **Solicitors for Wintringham Estate** Macfarlanes LLP, 20 Cursitor Street, London, EC4A 1LT ## **Master Developer/Joint Venture Partner** Urban & Civic PLC, 50 New Bond Street, London, W1S 1BJ ## **Property Consultants** Glanville Consultants Ltd, 3 Grovelands Business Centre, Boundary Way, Hemel Hempstead, HP2 7TE ## **Investment Managers** Sarasin & Partners LLP, Juxon House, 100 St. Paul's Churchyard, London, EC4M 8BU Page 1 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **TRUSTEES' REPORT FOR THE YEAR ENDED 31 DECEMBER 2023** The Trustees present their annual report together with the audited financial statements of The Nuffield Oxford Hospitals Fund for the year ended 31 December 2023. ## **Objectives and activities** ## **a. Policies and objectives** The object of the Charity, which is laid down in the Trust Deed, is to raise the standard of service of local hospitals, in order to assist the development and carrying on of the Oxford University Medical School. The trustees believe that the purpose of the Charity, which is “to raise the standard of service of local hospitals, in order to assist the development and carrying on of the Oxford University Medical School”, satisfies the public benefit requirements. The direct benefit which flows from this purpose is supporting the Oxford University Medical School in the training of doctors in Oxfordshire, by providing grants which, for example: - Support teaching by replacing old projectors with AV screens - Increase the availability of advanced manikins for final year medical students training - Improve wellbeing spaces at Bodleian Health Care Libraries - Support the creation of educational films: Communication skills conversations. In addition, an annual budget is provided to the Oxfordshire Health Services Research Committee enabling doctors in training to have research experience. These benefits are evidenced through the requirement of all grant holders to provide on completion of their projects a report to trustees, published on the website, on the benefits that have been achieved in supporting the training of doctors in their areas. In addition, trustee visits are sometimes arranged to meet with grant holders. It should also be noted that The Nuffield Oxford Hospitals Fund (NOHF) monies provide added value and benefits over and above any NHS or University funding. The beneficiaries are ultimately the patients receiving treatment from the trained medical doctors, principally within the National Health Service. In setting objectives and planning for activities, the trustees have given due consideration to general guidance published by the charity commission relating to public benefit, including the guidance 'Public benefit: running a charity (PB2)'. and have complied with section 4 of the Charities Act 2011. Page 2 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023** ## **Objectives and activities (continued)** ## **b. Strategies for achieving objectives** The strategy of the Charity is to continue to ensure that the Charity’s investments provide a sustainable distributable income over the long term to support the objects of the Charity. That income is distributed in grants, which are selected based on medical priorities and maximisation of the benefit to the standard of service in line with the Charity’s objectives. The Charity’s investment manager is Sarasin. Funds with Sarasin are invested in units in a pooled managed fund, the Sarasin Endowments Fund. In most recent years, suitable grant applications to the Charity have been less than the charitable funds available, resulting in an accumulation of income reserves. The Trustees have for some time been considering how to resolve this either by attracting further grant applications or looking for larger, longer-term projects to fund from the accumulated income reserves. Following consultation with the Medical School on its funding needs, the Trustees have discussed how the Charity’s future approach to grants might evolve to meet these needs and to ensure that the Charity’s available funds are used to generate as much benefit as possible. Particular consideration is being given to: - Extending grants for more than 1 year, potentially up to 3 years, thus increasing the range and scope of applications, and - Larger one-off contributions towards capital projects aimed at improving medical education. Page 3 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023** ## **Objectives and activities (continued)** ## **c. Activities undertaken to achieve objectives** The activities of the Charity over the year comprise both investment activities and the grant making activities set out in the next section of this report. The Charity’s investment activities have the objective of continuing to ensure that the investments provide an increasing and sustainable distributable income over the long term to support the objects of the Charity. The current investment portfolio, overseen by the investment committee, provides the income to fund the grants awarded each year. The Charity adopts a total return approach to the endowment invested in managed funds, resulting in income of £589,658 (2022: £671,212) being recognised in the year. There is also a small amount of investment income generated by the investment of income reserves in managed funds and cash. During the year under review, the Charity committed to 10 grants totalling £246,715 (2022: 8 grants totalling £261,566). As explained above, the Trustees are actively considering ways in which accumulated income reserves might be used to provide larger grants in future years. Part of the Charity’s endowment is invested directly in land through a joint venture with Nuffield Dominions Trust (NDT) and Urban & Civic PLC (U&C). The Charity’s share of the joint venture partnership is 15%. The joint venture partnership was granted planning permission for up to 2,800 homes on the Wintringham site at the end of 2018 and, in spite of the COVID pandemic, work has proceeded throughout the years from 2020 onwards. Construction commenced with two housebuilders, Cala and Morris Homes, and a number of other housebuilders started work or signed contracts in 2021 and 2022. Reports shared at a Wintringham meeting in December 2023 show completion of 450 units. In 2023, the Charity received Gift Aid income of £1,124,850 (2022: £1,535,250) from the joint venture partnership and recognised interest income of £107,961 (2022: -£6,227) on loans made to the partnership to fund WIP. Cash flow forecasts for the partnership show that no further WIP loans from the Charity will be required. Monitoring of the project continues to take place through the Wintringham Partners Board (comprising representatives from U&C and NDT) and 1 Wintringham LLP (where the Charity is represented by one Trustee). Page 4 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023** ## **Objectives and activities (continued)** ## **d. Grant-making policies** The Charity requires that grant applications, together with supporting information, are submitted online to the Medical Sciences Department by the end of January each year. The applications are first reviewed by the Director of Clinical Studies (who seeks further information as necessary) and then by the medical trustees of the Charity. The medical trustees take into consideration the advice on priorities provided by the Medical Sciences Board (the Board of the University’s Medical Sciences Division which is responsible for organisation, development and delivery of the Medical Sciences curricula). The trustees will, if appropriate, make further enquiries themselves and prepare their own recommendations. All grant applications, together with the recommendations of the Charity’s medical trustees, are considered by the full Board of trustees at the Annual Meeting in May. Each application is reviewed to consider the benefit it can generate and to ensure that it clearly follows the objects of the Charity. The acceptable applications are then prioritised and awarded in priority order to match the funds available for distribution. If the grant applications approved at the Annual Meeting are significantly less than the funds available, a second tranche of grants may be considered later in the year. Grants awarded by the Charity’s trustees require endorsement by the Nuffield Medical Trustees, appointed to have oversight of the Nuffield Benefaction. The payment of approved grants is conditional upon the relevant authorised expenditure being incurred and relevant evidence provided. Grant holders are advised that, if relevant authorised expenditure is not incurred within 18 months of the letter of approval, then the grant can be withdrawn unless a reasonable explanation is provided. Grant holders are required to submit a 250 word report on completion of the project so that trustees understand the benefits gained from the funding and receive assurance that the funds have been spent in line with the application approved. Further details are available at: https://www.medsci.ox.ac.uk/for-staff/resources/school-ofmedicine-and-biomedical-sciences/medicine/resources/nuffield-oxford-hospitals-fund. ## **e. Main activities undertaken to further the charity's purposes for the public benefit** The main public benefit activity in 2023 has been to award a total of £246,715 of grant support to the Oxford Medical School through 9 individual grant holders in a variety of clinical and academic departments. In 2023 there were over 4,000 registered medical students in the Oxford Medical School **:** 2,310 graduate students and 1,827 undergraduate students. ## **Achievements and performance** ## **a. Main achievements of the charity** The main achievements have been to fund a wide range of training and educational activities and equipment. Important areas supported by grant funds provided during the year under awards made in 2023 and previous years were: - The development of clinical consultation: virtual training and feedback for medical students - Increasing advanced manikins for final year medical students training - Improving wellbeing spaces at Bodleian Health Care Libraries - Upgrade of Rob Smith Centre, Churchill Hospital, for Undergraduate Medical Students - Clinical teaching AV upgrades - Creation of educational films: Communication skills conversations - The development of clinical consultation: virtual training and feedback for medical students - Creation of NDORMS High Spec Teaching Room Hub. Page 5 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023** ## **Achievements and performance (continued)** ## **b. Investment policy and performance** The investments held by the Charity comprise a portfolio of direct and pooled investments together with its 15% interest in the Wintringham development at St Neot’s. The performance and monitoring of the Wintringham investment is discussed above. This is a long-term investment and returns from it are expected to fluctuate over the next few years. Projections show that the development will generate significant returns for the Charity over the next ten to fifteen years. The Charity’s investment portfolio is managed by Sarasin and invested in one pooled fund, The Sarasin Endowments Investment Fund. The investment policy in place during 2023 (last reviewed in October 2020) states that the primary financial objective is to ensure that the Charity is invested to provide an increasing and sustainable distributable income to support the objectives of the Charity, while maintaining the real value of the fund over the longer term. It also sets a target drawdown rate of not less than 3.5% per annum. The investment committee, which comprises three trustees, met with the Charity’s new investment managers twice during the financial year to oversee the performance of the portfolio. During the year ended 31 December 2023 the Sarasin Endowments Investment Fund generated investment returns 9.1%% compared to a benchmark return of 11.7%. The outlook for investments remains uncertain given current geo-political events, although inflation is likely to reduce in 2024. The trustees continue to believe that a diversified, actively-managed multi-asset fund remains the best approach to long term capital growth and a sustainable income stream. It should be noted that in managing the portfolio, the Restricted Endowment Fund and the Pre 63 Accumulated income fund are managed as one fund, known as the General Fund. ## **Financial review** ## **a. Going concern** The trustees have considered the impact of continuing uncertainty in financial and property markets on the Charity's ability to continue to fund grants. Taking into account the Charity’s cash resources and the liquidity of its investment portfolio, the trustees have a reasonable expectation that the Charity has adequate resources to continue to support existing grants and commitments and to continue in operational existence for the foreseeable future. If the expected return to be generated by funds were to decline, the Charity has the ability to adjust future grants accordingly. For these reasons, the trustees 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 6 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023** ## **b. Reserves policy** It is the policy of the trustees to maintain sufficient reserves in the Charity's Post 1963 Accumulated Income Fund, to provide for a minimum of one year’s charitable expenditure, towards the Charity's object. The capital of the General Fund Capital Account cannot be realised for use as income. However, if required, the Pre 1963 Accumulated Income Fund could be used to enable the trustees to continue appropriate levels of expenditure in the coming years, even if there were to be decreases in the Charity's investment income. In the opinion of the trustees, the Charity's assets are adequate to meet its obligations. ## **c. Surplus in the year** The Balance Sheet at 31 December 2023 shows that the Charity’s net assets total £30,565,310, an increase of £2,523,990 on to the net assets at 31 December 2022. There was a surplus for the year before net investment gains of £1,546,019 (2022: £1,780,284). The net gain on disposal and revaluation of assets in the Investment Portfolio of the Charity during the year was £977,971 (2022: Loss of £2,432,389). ## i. Endowment Fund At 31 December 2023, the balance of the Endowment Funds amounted to £25,220,583, an increase of £914,958 during the year. This increase arose mainly from net gains on the valuation of investments. ## ii. Accumulated Income Fund Post 1963 The Statement of Financial Activities for this fund shows a net increase of £1,609,032 for the year. Incoming resources amounted to £1,879,200 (2022: £2,213,603), including receipt of gift aid of £1,124,850 (2022: £1,535,250) and interest income of £107,961 (2022: £(6,227)) from the charity’s Wintringham investment. Resources expended amounted to £289,906 (2022: £298,387). Expenditure included costs of £nil (2022: £15,750) relating to contractual obligations and other costs arising on the Wintringham development. There were gains on the fund assets of £19,738. The balance on the Accumulated Income Fund Post 1963 at 31 December 2023 was £5,344,727 compared to £3,735,695 at 31 December 2022. ## **Structure, governance and management** ## **a. Constitution** The governing document is a Trust Deed, dated 4 December 1937, as amended by schemes of 1 July 1952, 22 December 1953, 19 May 1976 and 6 March 1998. Page 7 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023** ## **Structure, governance and management (continued)** ## **b. Methods of appointment or election of Trustees** New trustees are appointed by the existing trustees and serve for five years. They may then put themselves forward for re appointment which is considered at the Annual General Meeting. The existing trustees carry out an appropriate selection process and conduct background checks before offering posts to new trustees. When considering new trustees, the existing trustees look for specific areas of expertise to help meet the objectives of the Charity. ## **c. Policies adopted for the induction and training of Trustees** The induction and training of new trustees and the information with which they are provided are tailored depending on the Trustees’ background, interests and roles. A copy of the Trust Deed is provided along with annual accounts, risk assessments, investment reports and contact details of fellow trustees. Additional information is provided to any medical trustees who will be involved in assessing grants applications and making recommendations for awards. All trustees receive regular updates on Charity Commission publications and attend appropriate charity seminars where relevant. ## **d. Organisational structure and decision making policies** Under the terms of a Special Resolution passed on 15 July 2020, the maximum number of trustees is ten. A total of six trustees served during the year. Three trustees served on the Investment Committee which met twice during the year. Following the creation of the joint venture with Urban & Civic, matters relating to Wintringham are dealt with by 1 Wintringham LLP, which has 2 directors representing the Charity and 2 representing NDT. Meetings are held twice a year and information is shared with other trustees as appropriate. The Charity has no membership of Wintringham Partners Board, but the Chair has been an observer at most of the board meetings. The day-to-day administration of the Charity is undertaken by the Charity Secretary, in consultation with the Chair and other trustees as required. ## **e. Financial risk management** The trustees have assessed the major risks to which the charity is exposed, in particular, those related to the operations and finances of the charity. The trustees also continue to monitor closely the risks associated with the development of the Wintringham land. The trustees are satisfied that systems and procedures are in place to mitigate the exposure to the major risks. Page 8 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023** ## **Plans for future periods** The trustees are expecting to continue to provide further grants in the future to meet the Charity’s object. The trustees are aware of the need to make full use of available income and, as considered under strategies for achieving objectives, are looking at ways of enhancing and extending the types of grants offered. The development of the Wintringham land is expected to provide significant additional funds to enhance future grant giving, although cashflows from the development are likely to be limited in the short term. As set out in strategies for achieving objectives, detailed discussions will continue to consider whether the funds that the Charity may receive arising from Wintringham could be used for a more significant one-off project such as the enhancement of facilities for the Medical School throughout the Oxford Hospitals. ## **Statement of Trustees' responsibilities** The Trustees are responsible for preparing the Trustees' report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). The law applicable to charities in England & Wales requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charity and of its incoming resources and application of resources, including its income and expenditure, for that period. In preparing these financial statements, the Trustees are required to: - select suitable accounting policies and then apply them consistently; - observe the methods and principles of the Charities SORP (FRS 102); - make judgments and accounting estimates that are reasonable and prudent; - state whether applicable UK Accounting Standards (FRS 102) have been followed, subject to any material departures disclosed and explained in the financial statements; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in business. The Trustees 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 Charities Act 2011, the Charity (Accounts and Reports) Regulations 2008 and the provisions of the Trust deed. 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 Trustees at the time when this Trustees' report is approved has confirmed that: - so far as that Trustee is aware, there is no relevant audit information of which the charity's auditors are unaware, and - that Trustee has taken all the steps that ought to have been taken as a Trustee in order to be aware of any relevant audit information and to establish that the charity's auditors are aware of that information. Page 9 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023** Approved by order of the members of the board of Trustees and signed on their behalf by: **Professor A Carr** (Chair of Trustees) Date: 17 May 2024 **Ms S Barratt** Date: 17 May 2024 Page 10 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **INDEPENDENT AUDITORS' REPORT TO THE TRUSTEES OF THE NUFFIELD OXFORD HOSPITALS FUND** ## **Opinion** We have audited the financial statements of Nuffield Oxford Hospitals Fund (‘the charity’) for the year ended 31 December 2023 which comprise the statement of financial activities, the balance sheet, the cash flow statement and the related notes to the financial statements, including 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: - give a true and fair view of the state of the charity’s affairs as at 31 December 2023 and of its incoming and application of resources, for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and - have been prepared in accordance with the requirements of the Charities Act 2011. ## **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 Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. ## **Conclusions relating to going concern** In auditing the financial statements, we have concluded that the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity’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. ## **Other information** The trustees are responsible for the other information contained within the annual report. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Page 11 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **INDEPENDENT AUDITORS' REPORT TO THE TRUSTEES OF THE NUFFIELD OXFORD HOSPITALS FUND (CONTINUED)** ## **Matters on which we are required to report by exception** We have nothing to report in respect of the following matters in relation to which the Charities (Accounts and Reports) Regulations 2008 requires us to report to you if, in our opinion: - the information given in the financial statements is inconsistent in any material respect with the trustees’ report; or - sufficient and proper accounting records have not been kept by the charity; or - the financial statements are not in agreement with the accounting records and returns; or - we have not received all the information and explanations we require for our audit. ## **Responsibilities of trustees** As explained more fully in the trustees’ responsibilities statement set out on page 10, the trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the trustees are responsible for assessing the charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charity or to cease operations, or have no realistic alternative but to do so. ## **Auditor’s responsibilities for the audit of the financial statements** We have been appointed as auditor under section 144 of the Charities Act 2011, and report in accordance with the Act and relevant regulations made or having effect thereunder. 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 auditor’s 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. Details of the extent to which the audit was considered capable of detecting irregularities, including fraud and noncompliance with laws and regulations are set out below. ## **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 identified and assessed the risks of material misstatement of the financial statements from irregularities, whether due to fraud or error, and discussed these between our audit team members. We then designed and performed audit procedures responsive to those risks, including obtaining audit evidence sufficient and appropriate to provide a basis for our opinion. We obtained an understanding of the legal and regulatory frameworks within which the charity operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. Page 12 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **INDEPENDENT AUDITORS' REPORT TO THE TRUSTEES OF THE NUFFIELD OXFORD HOSPITALS FUND (CONTINUED)** ## **Extent to which the audit was considered capable of detecting irregularities, including fraud (continued)** The laws and regulations we considered in this context were the Charities Act 2011 together with the Charities SORP (FRS 102). We assessed the required compliance with these laws and regulations as part of our audit procedures on the related financial statement items. In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which might be fundamental to the charity’s ability to operate or to avoid a material penalty. We also considered the opportunities and incentives that may exist within the charity for fraud. The laws and regulations we considered in this context were General Data Protection Regulation and taxation legislation. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Trustees and other management and inspection of regulatory and legal correspondence, if any. We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be within the timing of recognition of specific income streams, and the override of controls by management. Our audit procedures to respond to these risks included enquiries of management about their own identification and assessment of the risks of irregularities, sample testing on the posting of journals, reviewing accounting estimates for biases, reviewing income transactions close to the end of the period and reading minutes of meetings of those charged with governance. Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations. 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 auditor’s report. ## **Use of our report** This report is made solely to the charity’s trustees, as a body, in accordance with Part 4 of the Charities (Accounts and Reports) Regulations 2008. Our audit work has been undertaken so that we might state to the charity’s trustees those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity and the charity’s trustees as a body, for our audit work, for this report, or for the opinions we have formed. ## **Crowe U.K. LLP** Statutory Auditor Reading ## Date Crowe U.K LLP are eligible for appointment as auditor of the charity by virtue of its eligibility for appointment as auditor of a company under section 1212 of the Companies Act 2006. Page 13 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 DECEMBER 2023** |Notes
**Income and endowments**
**from:**
Donations and legacies
Investments
2
Allocation of Total Return
11
**Total income**
**Expenditure on:**
Raising funds
3
Charitable activities
4
**Total expenditure**
Net gains/(losses) on
investments
10
**Net movement in funds**
**Total funds brought**
**forward**
**Total funds**
**carried forward**|**Endowment**
**Funds**
**2023**
**£**
**-**
**625,285**
**(589,658)**
**35,627**
**78,902**
**-**
**78,902**
**958,233**
**914,958**
**24,305,625**
**25,220,583**|**Accumulated**
**Income Fund**
**Post 1963**
**2023**
**£**
**1,000**
**1,288,542**
**589,658**
**1,879,200**
**1,626**
**288,280**
**289,906**
**19,738**
**1,609,032**
**3,735,695**
**5,344,727**|**2023**
**Total**
**£**
**1,000**
**1,913,827**
**-**
**1,914,827**
**80,528**
**288,280**
**368,808**
**977,971**
**2,523,990**
**28,041,320**
**30,565,310**|_2022_
_Total_
_£_
_-_
_2,167,678_
_-_
_2,167,678_
_81,655_
_296,739_
_378,394_
_(2,432,389)_| |---|---|---|---|---| |||||_(643,105)_
_28,684,425_
_28,041,320_| The Statement of financial activities includes all gains and losses recognised in the year. The notes on pages 19 to 35 form part of these financial statements. Page 14 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **BALANCE SHEET AS AT 31 DECEMBER 2023** |Notes
**Fixed assets**
Investments
10
**Current assets**
Short-term Investments
Debtors
12
Cash at bank and in hand
19
Creditors: amounts falling due within
one year
13
**Net current assets**
**Total assets less current liabilities**
**Total net assets**
**Charity funds**
**Endowment Funds**
Restricted endowment funds
15
Accumulated income fund pre 1963
15
**General Funds**
Accumulated income fund post 1963
15|**3,000,000**
**2,089,692**
**1,344,446**
**6,434,138**
**(378,416)**|**2023**
**£**
**24,509,588**
**24,509,588**
_-_
_2,616,645_
_2,533,269_
_5,149,914_
_(589,764)_
**6,055,722**
**30,565,310**
**30,565,310**
**23,586,740**
**1,633,843**
**25,220,583**
**5,344,727**
**30,565,310**|_2022_
_£_
_23,481,170_
_23,481,170_
_4,560,150_
_28,041,320_
_28,041,320_
_22,754,220_
_1,551,405_
_24,305,625_
_3,735,695_
_28,041,320_| |---|---|---|---| The financial statements were approved and authorized for issue by the Trustees and signed on their behalf by: ................................................ ................................................ **Professor A Carr Ms S Barratt** (Chair of Trustees) Date **Professor A Carr** (Chair of Trustees) Date: The notes on pages 19 to 35 form part of these financial statements. Page 15 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2023** |Notes
**Cash flows from operating activities**
Net cash used in operating activities
18
**Cash flows from investing activities**
Dividends, interests and rents from investments
2
Proceeds from sale of investments
10
(Increase)/decrease in debtors in relation to investing activities
Purchase of investments
10
Treasury deposit
**Net cash provided by/(used in) investing activities**
**Cash flows from financing activities**
**Net cash provided by financing 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**
Note numbers 18 to 20 form part of the statement of cash flows.|**2023**
**£**
**22,924**
**1,913,827**
**-**
**(75,128)**
**(50,447)**
**(3,000,000)**
**(1,211,747)**
**-**
**-**
**1,188,823**
**2,533,269**
**1,344,446**|_2022_
_£_
_(2,018,435)_| |---|---|---| |||
_2,167,678_
_337,500_
_-_
_(75,963)_
_-_
_2,429,215_
_-_
_-_
_410,780_
_2,122,489_
_2,533,269_| Page 16 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023** ## **1. Accounting policies** ## **1.1 Basis of preparation of financial statements** The financial statements have been prepared in accordance with ‘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) (Second Edition)’ and the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102) and the Charities Act 2011 and UK Generally Accepted Practice as it applies from 1 January 2015. The financial statements have been prepared to give a 'true and fair' view and have departed from the Charities (Accounts and Reports) Regulations 2008 only to the extent required to provide a 'true and fair' view. This departure has involved following ‘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) (Second Edition)’ rather than the Accounting and Reporting by Charities: Statement of Recommended Practice effective from 1 April 2005 which has since been withdrawn. The Nuffield Oxford Hospitals Fund 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. ## **1.2 Going concern** The financial statements have been prepared on a going concern basis, as the trustees believe that no material uncertainties exist in respect of the Charity’s ability to meet its obligations as they fall due in the foreseeable future. In reaching this conclusion, the trustees have considered the level of funds held, the liquidity of those funds and the expected levels of income and expenditure for 12 months from the date on which these financial statements were signed. ## **1.3 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 are included as ‘Gains/(Losses) on investments’ in the Statement of financial activities. Investment in subsidiary undertakings is valued at historic cost less provision for impairment. Investments in the joint venture represents the charity’s interest in the development of the Wintringham Estate. The investment is carried at cost which is equal to the fair value of the land at the date of its transfer to Wintringham Partners LLP together with later additional loans less repayments. The investment forms part of the charity's restricted endowment funds. Listed investments held as fixed assets are shown at market value. Short-term investments are represented by cash held on deposit with a maturity of less then one year but great than 3 months. Page 17 ## **THE NUFFIELD OXFORD HOSPITALS FUND** **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023** ## **1. Accounting policies (continued)** ## **1.4 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. ## **1.5 Fund accounting** General funds are unrestricted funds which are available for use at the discretion of the Trustees in furtherance of the general objectives of the charity and which have not been designated for other purposes. Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the 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. ## **1.6 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. The incoming resources represent all the income received from quoted investments, bank deposits and income from properties. All incoming resources are taken to the Post 1963 Accumulated Income Fund. ## **1.7 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 on charitable activities is incurred on directly undertaking the activities which further the charity's objectives, as well as any associated support costs. Grants payable are included where the grant has been agreed during the year and there are no conditions to be met relating to the grant which remain in the control of the charity. Governance costs are those incurred in connection with administration of the charity and compliance with constitutional and statutory requirements. ## **1.8 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. Page 18 **THE NUFFIELD OXFORD HOSPITALS FUND** **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023** ## **1. Accounting policies (continued)** ## **1.9 Debtors** Trade 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. ## **1.10 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. ## **1.11 Liabilities and provisions** Liabilities 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. ## **1.12 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: The critical areas of judgement relate to the valuation of Wintringham related investments and the recoverability of Wintringham loans. Page 19 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023** ## **1. Accounting policies (continued)** ## **1.13 Gains & Losses on Investments** Gains and losses on quoted investments held in the General Fund of the Capital Account and on the Pre 1963 Accumulated Fund are treated as capital and added to the relevant fund. Gains and losses on quoted investments held in the Post 1963 Accumulated Income Fund are added to this fund. ## **1.14 Total Return Investment Accounting** The charity has adopted a ‘Total Return’ basis for the investment of its endowment. The carrying value of the preserved permanent capital, the trust for investment, and the amount of any unapplied total return available for expenditure were taken as the fair value of these funds as at 31 December 2010, as adjusted for inflation, as being after the financial crash and before a period of growth. In choosing this date, the Trustees also considered the change of investment managers close to that date and the start of a new investment regime. The charity invests these funds without regard to the capital/income distinctions of standard trust law and with discretion to apply any part of the accumulated total return on the investment as income for spending each year. Until this power is exercised, the total return is accumulated as a component of the endowment known as the unapplied total return that can be either retained for investment or released to income at the discretion of the Trustees. Page 20 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023** ## **2. Investment income** |Income from quoted investments
Income from investments in Wintringham
Interest on Wintringham loans
Bank interest|**Total Funds**
**2023**
**£**
**638,165**
**1,124,850**
**107,961**
**42,851**
**1,913,827**|_Total funds_
_2022_
_£_
_638,655_
_1,535,250_
_(6,227)_
_-_
_2,167,678_| |---|---|---| ## **3. Investment management costs** |Investment management fees|**Total Funds**
**2023**
**£**
**80,528**|_Total funds_
_2022_
_£_
_81,655_| |---|---|---| ## **4. Analysis of expenditure on charitable activities** |**Summary of fund type**
Award of Grants (note 6)
Grants written off
Development of Wintringham (note 5)
Support costs (note 5)|**Total Funds**
**2023**
**£**
**246,715**
**(4,681)**
**-**
**46,246**
**288,280**|_Total funds_
_2022_
_£_
_261,566_
_(17,225)_
_15,750_
_36,648_
_296,739_| |---|---|---| All expenditure relates to the Accumulated Income Post 1963 Fund. Page 21 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023** ## **5. Support Costs** |Staff costs
Insurance
Trustee meeting expenses
Bank charges
Sundry expenses
Legal and professional costs
Governance costs|**Total Funds**
**2023**
_Total funds_
_2022_
**£**
_£_
**11,818**
_15,324_
**1,302**
_1,089_
**23**
_156_
**315**
_175_
**334**
_16,071_
**14,802**
_2,748_
**17,652**
_16,835_
**46,246**
_52,398_| |---|---| Development of Wintringham costs are included in Sundry Expenses. During the year they amounted to £nil _(2022: £15,750)_ ## **6. Grants** |**Institutions**
Annual budget for research – Oxfordshire Health Services Research
Committee
Damion Young Pop-up Assessment Space System (grant 22-UO-1)
Owen Coxall BHCL Hybrid meeting and teaching space (grant 22-
UO-2)
BHCL Improving IT
Ashok Handa Patient-centric hybrid education in Oxford (grant 22-
UO-3)
Dominic Furniss 12-month pilot of Proximie to enhance surgical
teaching (grant 22-UO-4)
Ku Shah Simulation training programme for Geriatric Medicine
Education (grant 22-OUH-2)
Mary Miller Enhancing Online Seminars (grant 22-OUH-3)
Supporting teaching by replacing old projectors with TV screens.
Mary Miller (grant 23-OUH-2)
Increasing advanced manikins for final year medical students
training. Catriona Fleming (grant 23-OUH-3)
Improving wellbeing spaces at Bodleian Health Care Libraries. Owen
Coxall (grant 23-OUH-4)
Medical Student reading list titles
Upgrade of Rob Smith Centre, Churchill Hospital, for Undergraduate
Medical Students. Monique Andersson (grant 23-OUH-5)
Clinical teaching AV upgrades. Damion Young (grant 23-OU-1)
Creation of educational films: Communication skills conversations.
Ruth Wilson (grant 23-OU-2)
The development of clinical consultation: virtual training and
feedback for medical students. Rachel Allan (grant 23-OU-3)
Creation of NDORMS High Spec Teaching Room Hub. Osman
Aslam (Grant 23-OU-4)
¤
Total|**2023**
**£**
**80,000**
**8,307**
**21,834**
**13,891**
**23,458**
**7,210**
**27,087**
**4,400**
**10,688**
**49,840**
**246,715**|_2022_
_£_
_50,000_
_13,687_
_12,586_
_11,263_
_49,875_
_72,408_
_45,536_
_6,211_
_-_
_-_
_-_
_-_
_-_
_-_
_-_
_-_
_-_
_261,566_| |---|---|---| Page 22 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023** ## **7. Auditors’ remuneration** |Fees payable to the charity’s auditor for the audit of the charity’s annual
accounts excluding VAT
Fees payable to the charity’s auditor excluding VAT in respect of:
Preparation of annual accounts|**2023**
**£**
**11,160**
**2,950**|_2022_
_£_
**_10,404_**
**_2,750_**| |---|---|---| ## **8. Staff costs** |Wages and Salaries
Employer NIC|**2023**
**£**
**11,835**
**(17)**
**11,818**|_2022_
_£_
**_15,565_**
**_(241)_**| |---|---|---| |||**_15,324_**| The negative charge for employers’ NIC relates to employer’s allowance not fully accounted for in prior years. The average number of persons employed by the charity during the year was as follow: |Secretary|**2023**
**£**
**1**|_2022_
_£_
_1_| |---|---|---| No employee received remuneration amounting to more than £60,000 in either year. The key management personnel of the Charity include all Trustees supported by the Secretary, A Truesdale. The total remuneration paid to the key management personnel amounted to £11,835 _(2022: £14,690)._ ## **9. Trustees’ remuneration and expenses** During the year no Trustees received any remuneration or other benefits _(2022 - £Nil)._ During the year ended 31 December 2023, expenses totalling £23 were reimbursed or paid directly to one Trustee _(2022 - £176)_ . The expenses reimbursed are in relation to the travel expenses for Trustees to attend Trustee meetings. Page 23 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023** ## **10. Fixed asset investments** |**Cost or valuation**
At 1 January 2023
Less cash held by Investment Managers
Additions
Disposals proceeds
Unrealised gains/(losses) on investments
Cash held by Investment Managers
**At 31 December 2023**|**Post 1963**
**income**
**Fund**
**£**
**347,021**
**-**
**1,018**
**-**
**19,738**
**-**
**367,777**|**Pre 1963**
**income fund**
**£**
**1,517,931**
**-**
**4,454**
**-**
**86,337**
**-**
**1,608,722**|**Restricted**
**endowment**
**fund**
**£**
**15,329,254**
**-**
**44,975**
**-**
**871,896**
**-**
**16,246,125**|**Investment**
**in 1**
**Wintringham**
**LLP**
**£**
**23**
**-**
**-**
**-**
**-**
**-**
**23**|**Wintringham**
**Partners LLP**
**loan**
**investment**
**£**
**6,286,941**
**-**
**-**
**-**
**-**
**-**
**6,286,941**|**Total**
**funds**
**2023**
**£**
**23,481,170**
**-**
**50,447**
**-**
**977,971**
**-**
**24,509,588**| |---|---|---|---|---|---|---| Page 25 **THE NUFFIELD OXFORD HOSPITALS FUND** ## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023** ## **10. Fixed asset investments (continued)** ## **Historical Cost** ## Loan Investment The charity through its membership of 1 Wintringham LLP has a commitment to issue partner loans to Wintringham Partners LLP as required to fund its share of development costs. The loan investment comprises an amount due from Wintringham Partners LLP arising from the transfer of the Charity’s land in 2017 along with an additional loan to fund working capital. Loans totalling £nil were made during in the year _(2022: £nil_ ). A repayment of £nil ( _2022: £337,500_ ) was received in the year. The carrying value of the investment continues to be its cost which is equal to the fair value of the land at the date of its transfer to Wintringham Partners LLP together with later additional loans less repayments. ## **Investment type** An analysis of the investments has been done as at 31 December 2023 to distinguish between Direct Investments, Pooled Investments and Subsidiary Investments. The split is as indicated below: |**Post 1963 Income Fund**
Cash
Direct Investments
Pooled Investments
**Restricted Endowment Fund & Pre 1963 Income Fund**
Cash
Direct Investments
Pooled Investments
**Loan to Wintringham Partners LLP**
Subsidiary Investment
**Investment in 1 Wintringham Partners LLP**
Investment in joint venture
**Total**|**2023**
**£**
**-**
**-**
**367,777**
**-**
**-**
**17,854,847**
**6,286,941**
**23**
**24,509,588**|_2022_
_£_
_-_
_-_
_347,021_
_-_
_-_
_16,847,185_
_6,286,941_
_23_| |---|---|---| |||_23,481,170_| Page 26 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023** ## **11. Statement of Investment Total Return** From 1 January 2021, the Trustees have decided to adopt total return accounting for the restricted endowment fund and the Accumulated Income Fund pre-1963, both of which are treated as permanent capital of the Charity. The Fund for Investment at 1 January 2021 was calculated by taking the permanent capital of the Charity at 31 December 2010 and calculating its real value at 31 December 2020, using CPI. The investment return to be applied as income is calculated initially as 3.5% (2022: 3.5%) of the endowment funds held as managed investments and capital accounts held by the Investment Managers at 1 January 2023. The income allocation from the Total Return earned will be reviewed each year. |**At 1 January 2023**
Gift Component
Unapplied Total Return
Total Endowments
**Movement in the year**
Investment Return
Dividends and Interest
Gains and Losses
Less Investment Managers Fees
**Total**
Unapplied total return allocated to
income in the reporting period
Net movements in the reporting period
**At 31 December 2023**
Gift Component
Unapplied Total Return
**Total**|**Trust for Investment**
**Restricted**
**endowment**
**fund**
**Accumulated**
**income fund**
**pre 1963**
**£**
**£**
**16,059,992**
**1,254,436**
**-**
**-**
**16,059,992**
**1,254,436**
**-**
**-**
**-**
**-**
**-**
**-**
**-**
**-**
**-**
**-**
**16,059,992**
**1,254,436**
**-**
**-**
**16,059,992**
**1,254,436**|**Unapplied**
**Total Return**
**£**
**-**
**6,991,197**
**6,991,197**
**625,285**
**958,233**
**(78,902)**
**1,504,616**
**(589,658)**
**914,958**
**-**
**7,906,155**
**7,906,155**|**Total**
**2023**
**£**
**17,314,428**
**6,991,197**
**24,305,625**
**625,285**
**958,233**
**(78,902)**| |---|---|---|---| ||||**1,504,616**
**(589,658)**| ||||**914,958**
**17,314,428**
**7,906,155**
**25,220,583**| Page 27 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023** |.
_2022 comparative_
_At 1 January 2022_
_Gift Component_
_Unapplied Total Return_
_Total Endowments_
_Movement in the year_
_Investment Return_
_Dividends and Interest_
_Gains and Losses_
_Less Investment Managers Fees_
_Total_
_Unapplied total return allocated to_
_income in the reporting period_
_Net movements in the reporting period_
_At 31 December 2022_
_Gift Component_
_Unapplied Total Return_
_Total_|_Trust for Investment_
_Restricted_
_endowment_
_fund_
_Accumulated_
_income fund_
_pre 1963_
_£_
_£_
_16,059,992_
_1,254,436_
_-_
_-_
_16,059,992_
_1,254,436_
_-_
_-_
_-_
_-_
_-_
_-_
_-_
_-_
_-_
_-_
_16,059,992_
_1,254,436_
_-_
_-_
_16,059,992_
_1,254,436_|_Unapplied_
_Total Return_
_£_
_-_
_9,500,431_
_9,500,431_
_625,287_
_(2,383,302)_
_(80,007)_
_(1,838,022)_
_(671,212)_
_(2,509,234)_
_-_
_6,991,197_
_6,991,197_|_Total_
_2022_
_£_
_17,314,428_
_9,500,431_
_26,814,859_
_625,287_
_(2,383,302)_
_(80,007)_| |---|---|---|---| ||||_(1,838,022)_
_(671,212)_| ||||_(2,509,234)_
_17,314,428_
_6,991,197_
_24,305,625_| Page 29 **THE NUFFIELD OXFORD HOSPITALS FUND** ## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023** ## **12. Debtors** |**Due within one year**
Amounts owed by undertakings in which the charity has a participating
interest
Other debtors
Prepayments and accrued income|**2023**
**£**
**2,036,840**
**13,523**
**39,329**
**2,089,692**|_2022_
_£_
_2,603,879_
_12,766_
_-_| |---|---|---| |||_2,616,645_| Amounts owed by undertakings in which the charity has a participating interest comprise: - a corporate loan issued to Wintringham Partners LLP of £1,908,235 ( _2022: £2,511,072_ ). - accrued interest on the investment in Wintringham Partners LLP of £128,605 ( _2022: £92,807)_ . ## **13. Creditors: Amounts falling due within one year** |Other taxation and social security
Grants payable
Other creditors
Accruals and deferred income
**Grants payable**
Grants payable 1 January 2023
New Grants Awarded
Old grants written off
Grants paid
Grants payable 31 December 2023||**2023**
**£**
**-**
**360,499**
**805**
**17,112**
**378,416**
**2023**
**£**
**408,240**
**246,715**
**(4,681)**
**(289,775)**
**360,499**||_2022_
_£_
_52_
_408,240_
_164,967_
_16,505_
_589,764_
_2022_
_£_
_507,192_
_261,566_
_(17,225)_
_(343,293)_| |---|---|---|---|---| |||||_408,240_| Page 29 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023** ## **14. Comparative Statement of Financial Activities** |_Income and endowments from:_
_Donations and legacies_
_Investments_
_Allocation of Total Return_
_Total income_
_Expenditure on:_
_Raising funds_
_Charitable activities_
_Total expenditure_
_Net gains/(losses) on investments_
_Net movement in funds_
_Total funds brought forward_
_Total funds carried forward_|_Endowment_
_Funds_
_2022_
**£**
_-_
_625,287_
_(671,212)_
_(45,925)_
_80,007_
_-_
_80,007_
_(2383,302)_
_(2,509,234)_
_26,814,859_
_24,305,625_|_Accumulated_
_Income Fund_
_Post 1963_
_2022_
**£**
_-_
_1,542,391_
_671,212_
_2,213,603_
_1,648_
_296,739_
_298,387_
_(49,087)_
_1,866129_
_1,869,566_
_3,735,695_|_2022_
_Total_
**£**
_-_
_2,167,678_
_-_
_2,167,678_
_81,655_
_296,739_
_378,394_
_(2,432,389)_| |---|---|---|---| ||||_(643,105)_
_28,684,425_
_28,041,320_| Page 30 ## **THE NUFFIELD OXFORD HOSPITALS FUND** ## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023** ## **15. Analysis of net assets between funds** ## **Analysis of net assets between funds - current period** |Fixed asset investments
Current assets
Creditors due within one year
**Total**|**Restricted**
**endowment**
**fund**
**2023**
**£**
**22,533,089**
**1,053,651**
**-**
**23,586,740**|**Accumulated**
**income fund**
**pre 1963**
**2023**
**£**
**1,608,722**
**25,121**
**-**
**1,633,843**|**Accumulated**
**income fund**
**post 1963**
**2023**
**£**
**367,777**
**5,355,366**
**(378,416)**
**5,344,727**|**Total**
**funds**
**2023**
**£**
**24,509,588**
**6,434,138**
**(378,416)**| |---|---|---|---|---| |||||**30,565,310**| ## **Analysis of net assets between funds - prior period** |_Fixed asset investments_
_Current assets_
_Creditors due within one year_
_Total_|_Restricted_
_endowment_
_fund_
_2022_
_£_
_21,616,218_
_1,138,002_
_22,754,220_|_Accumulated_
_income fund_
_pre 1963_
_2022_
_£_
_1,517,931_
_33,474_
_1,551,405_|_Accumulated_
_income fund_
_post 1963_
_2022_
_£_
_347,021_
_3,978,438_
_(589,764)_
_3,735,695_|_Total_
_funds_
_2022_
_£_
_23,481,170_
_5,149,914_
_(589,764)_| |---|---|---|---|---| |||||_28,041,320_| Page 31 **THE NUFFIELD OXFORD HOSPITALS FUND** ## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023** ## **16. Funds** ## **ENDOWED FUNDS** ## **Restricted Endowment Fund** The capital of this fund has been built up by the investment and re-investment of the donation. Income from this fund is used to further the object of the Charity, but the capital cannot be realised for use as income. ## **Pre 1963 Accumulated Income Fund** Income accumulated prior to the donor, Lord Nuffield's death in 1963 was capitalised and income from the investments is used to further the object of the Charity. Counsel's opinion obtained after the donor's death confirmed that Trustees may treat income accumulated prior to Lord Nuffield's death as if it were permanent capital of the fund. If considered essential by the Trustees, to the furtherance of that object, some or all of this capital could be realised to supplement income. ## **UNRESTRICTED FUNDS** ## **Post 1963 Accumulated Income Fund** This is income accumulated after the donor, Lord Nuffield's death in 1963. The counsel's opinion obtained, confirmed that Trustees may accumulate this income but there must be an intent to use this fund to the furtherance of the Charity's object. ## **17. Related Parties** Wintringham Partners LLP was incorporated on 5 April 2017 and acquired the land at Wintringham Park, St. Neots, Cambridgeshire. This partnership is owned by Wintringham Newco 1 Limited (66.67%) and Urban&Civic St Neots Limited (33.33%). Nuffield Oxford Hospitals Fund (NOHF) owns a 22.5% share of 1 Wintringham LLP who have 100% ownership of Wintringham Newco 1 Limited and Wintringham Newco 2 Limited. This results in NOHF having an effective 15% ownership of Wintringham Partners LLP. Loans totalling £8,195,176 _(2022: £8,798,013)_ were held by NOHF. To 1 Wintringham LLP £6,286,941 _(2022: £6,286,941)_ , 1 Wintringham LLP £nil ( _2022: £nil_ ), Wintringham Newco 1 Ltd, £nil _(2022: £nil)_ and Wintringham Partners LLP £1,908,235 _(2022: £2,511,072)_ . Three trustees of the charity are also directors of Wintringham Newco 1 Ltd and Members of 1 Wintringham LLP. Sir Andrew Dilnot and Professor Andrew Carr held those roles throughout the financial year. John Ford was appointed to both roles with effect from 15 December 2023. Sir Andrew Dilnot is also on the board of Wintringham Partners LLP. Page 32 **THE NUFFIELD OXFORD HOSPITALS FUND** ## **NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023** ## **18. Reconciliation of net movement in funds to net cash flow from operating activities** |Net (expenditure)/income for the period (as per Statement of Financial
Activities)
**Adjustments for:**
(Losses)/gains on investments
Dividends, interests and rents from investments
(Increase)/decrease in debtors
(Decrease)/increase in creditors
**Net cash provided by operating activities**
**nalysis of cash and cash equivalents**
Cash in hand
Cash with Investment managers
**Total cash and cash equivalents**|**2023**
**£**
**2,523,990**
**(977,971)**
**(1,913,827)**
**602,080**
**(211,348)**
**22,924**
**2023**
**£**
**1,344,446**
**-**
**1,344,446**|_2022_
_£_
_(643,105)_| |---|---|---| |||
_2,432,389_
_(2,167,678)_
_(1,485,263)_
_(154,778)_| |||_(2,018,435)_| |||_2022_
_£_
_2,533,269_
_-_
_2,533,269_| ## **19. Analysis of cash and cash equivalents** ## **20. Analysis of changes in net debt** |Cash at bank and in hand
Liquid investments – cash held by Investment managers|_At 1_
_January_
_2023_
_£_
_2,533,269_
_-_
_2,533,269_|**Cashflows**
**£**
**(1,188,823)**
**-**
**(1,188,823)**|**At 31**
**December**
**2023**
**£**
**1,344,446**
**-**
**1,344,446**| |---|---|---|---| Page 33 **Smart decisions. Lasting Value** The Nuffield Oxford Hospitals Fund Report to the Audit and Risk Committee Year ended 31 December 2023 Presented to the Trustees in May 2024 1 ## **Strictly Private and Confidential** The Trustees The Nuffield Oxford Hospitals Fund c/o Botnar Institute, NDORMS, University of Oxford, Windmill Road, Oxford, OX3 7LD ## Dear Members of the Trustees I have pleasure in submitting our audit findings report for the year ended 31 December 2023. The primary purpose of this report is to communicate to the Trustees the significant findings arising from our audit that we believe are relevant to those charged with governance. I look forward to discussing our report with you, as well as any further matters you may wish to raise with us, and a representative of Crowe shall be attending the Trustees meeting on 17 May 2024. I would like to take this opportunity to express our appreciation for the assistance provided to us by the finance team and the other staff at the charity during this year’s audit. Yours sincerely Alastair Lyon Partner © 2023 Crowe U.K. LLP 2 ## Contents |Contents|Contents| |---|---| |1.
Executive summary ......................................................................................................................................................................................................................... 3|| |2.
Significant audit risks ....................................................................................................................................................................................................................... 5|| |3.
Other|audit findings .......................................................................................................................................................................................................................... 7| |4.
Fraud|and irregularities and our audit reporting ............................................................................................................................................................................ 10| |Appendix 1|- Reporting audit adjustments ........................................................................................................................................................................................... 12| |Appendix 2|- Systems and controls ..................................................................................................................................................................................................... 13| |Appendix 3|- Materiality ....................................................................................................................................................................................................................... 16| |Appendix 4|- Responsibilities and ethical standards ........................................................................................................................................................................... 17| |Appendix 5|- Fraud risks ...................................................................................................................................................................................................................... 19| |Appendix 6|- External developments ................................................................................................................................................................................................... 21| © 2023 Crowe U.K. LLP 3 ## 1. Executive summary ## **Our report to you** We are pleased to present our Audit Findings Report to the Trustees and we welcome the opportunity to discuss our findings with you at your meeting on 17 May 2024. The primary purpose of this report is to communicate to the Trustees and the Trustees the significant findings arising from our audit that we believe are relevant to those charged with governance. In accordance with International Standards on Auditing (UK) the matters in this report include ## **Conclusions in relation to the areas of significant audit risk** As explained in our Audit Planning Report, in line with ISA (UK) 315 (Revised), we have considered the inherent risks, including the likelihood and magnitude of a potential misstatement. In line with our audit plan we focussed our work on the significant audit risks identified: - Revenue recognition – Wintringham transactions - Management override of controls The results of our audit work in these areas is set out below: - the results of our work on areas of significant audit risk - our views about significant qualitative aspects of the Trust’s accounting practices, including accounting policies, accounting estimates and financial statement disclosures - significant difficulties, if any, encountered during the audit - any significant matters arising during the audit and written representations we are requesting - unadjusted misstatement identified during the audit - circumstances that affect the form and content of our auditor’s report, if any - • any other significant matters arising during the audit that, in our professional judgment, are relevant to the oversight of the financial reporting process We have included comments in relation to the above where relevant in the subsequent sections of this report. We also report to you any significant deficiencies in internal control identified during our audit which, in our professional judgment, are of sufficient importance to merit your attention. |**Significant risk**|**Control**
**deficiency**
**identified**|**Adjustment(s)**
**identified**|**Other**
**reported**
**matters**| |---|---|---|---| |Revenue recognition –
|||�| |Wintringham income
transactions|�|�|| ||||| |Management override of
controls|�|�|�| ## **Other audit findings** Section 3 sets out various comments on other important matters which we have identified from our audit. ## **Fraud and irregularities** Section 4 sets out the Trustees and our responsibilities in respect of fraud and irregularities. ## **Audit materiality** The audit materiality for the financial statements set as part of our audit planning took account of the level of total assets held by the trust and was set at 2% of gross assets. We have reviewed this level of materiality based on the draft © 2023 Crowe U.K. LLP 4 financial statements for the year ended 31 December 2023 and are satisfied that it continues to be appropriate with 2% of investments being £490,000. ## **Unadjusted misstatements** We report to you any unadjusted individual errors other than where we consider the amounts to be trivial, and for this purpose we have determined trivial to be 5% of our audit materiality. We are pleased to report that there are no remaining unadjusted items identified from our audit in excess of the above trivial limit. ## **Audit completion and our Audit Report** We have substantially completed our audit in accordance with our Audit Planning Report which was sent to you and Angela Truesdale on 18 March 2024, subject to the matters below. - Completion of the post-Balance Sheet events reviews. - Review of the final financial statements. - Receipt of the signed letter of representation. We will report to you orally in respect of any modifications to the findings or opinions contained in this report that arise from progressing these outstanding matters. On the satisfactory completion of these matters, we anticipate issuing an unmodified audit opinion on the truth and fairness of the 2023 financial statements. ## **Responsibilities and ethical standards** We have prepared this report taking account of the responsibilities of the Trustees and ourselves set out in Appendix 4 of this report. The matters included in this report have been discussed with the charity’s representatives during our audit and at our closing meeting on 10 April 2024. Susan Barratt and Angela Truesdale have seen a draft of this report and we have incorporated their comments and/or proposed actions where relevant. © 2023 Crowe U.K. LLP 5 ## 2. Significant audit risks As reported in our Audit Planning Report, ISA (UK) 315 (Revised) was applicable this year, and required us to consider a spectrum of inherent risk, considering both the likelihood and magnitude of a possible misstatement, with risks close to the upper end of the spectrum of inherent risk considered to be ‘significant risks’. Risk is considered in the context of how, and the degree to which, inherent and control risk factors affect the likelihood and magnitude of a misstatement occurring. Such factors may be qualitative or quantitative, and include complexity, subjectivity, change, uncertainty or susceptibility to misstatement due to management bias or other fraud risk factors. In addition, the auditing standards also set out a number of areas considered to always be a significant risk. Our audit response in respect of risks not identified as significant is set out in Section 3. We have commented below on the results of our work in these areas as well as on any additional significant risks, judgements or other matters in relation to the financial statements of The Nuffield Oxford Hospitals Fund identified during our audit. ## **2.1 Revenue recognition – Income from Wintringham related companies and entities** Due to the related party nature of this income as part of a joint venture it carries a higher risk level. The income received is often of material one off transactions which are not predictable. Source documents to which revenue can be verified cannot be relied upon to the same degree as other investment income as we are reliant on the Board minute packs for other entities to indicate when and how much income might expect to be received. The risk of materially incomplete income is therefore not insignificant for the fund. ## _**Crowe response**_ Our audit work included the following: - Review of minutes from Trustee board meetings as well as board packs (where available) from other Wintringham group entities - Review of bank statement receipts during the year and post year-end. ## _**Our conclusions and other comments**_ We did not find any reference within minutes or unrecorded bank transactions to suggest that income with respect to activity connected to Wintringham was materially misstated. We note that fully understanding the Wintringham income receipts and what these relate to is very important to enable loan, investment and income transactions to be recorded accurately. This analysis has been completed this year with the assistance of Kathryn Oraee, Financial Controller for the Wintringham companies. We would recommend that trustees continue to be in dialogue with Kathryn Oraee during the year to ensure all receipts are fully understood and accounted for appropriately. ## **2.2 Management override of controls** Auditing standards require us to consider as a significant audit risk areas of potential or actual management override of controls. In completing our audit we have therefore considered the following matters. ## _Controls around journal entries and the financial reporting process_ We reviewed and carried out sample testing on the charity’s controls around the processing of journal adjustments (how journals are initiated, authorised and processed) and the preparation of the annual financial statements. We also considered the risk of potential manipulation by journal entry to mask fraud. _**We note that the charity does not maintain a formal accounting system. A cashbook is maintained during the year along with a list of grants. Dual authorisation is required on bank transactions which is a key control to mitigate against fraudulent activity. The financial statements are drafted by a separate accounts team within Crowe and all**_ © 2023 Crowe U.K. LLP 6 _**adjustments made, taking the figures from cashbook to statutory statements are reviewed and authorised by Susan Barratt, Trustee. Finally, the Trustee Board reviews and challenges where appropriate the final year end statements.**_ _**We did not identify any instances of management override of controls or other issues from our review of transactions within our audit work.**_ However, we note that journal and transaction processing can be an area of potential risk and it is good practice to include consideration of this within the overall Charity risk assessment _Significant transactions outside the normal course of business_ We are required to consider the impact on the financial statements if there are any significant transactions occurring outside of the normal course of the charity’s business. _**No such transactions were notified to us by management, nor did any such transactions come to our attention during the course of our work.**_ © 2023 Crowe U.K. LLP 7 ## 3. Other audit findings In addition to matters relating to the significant audit risks as reported in Section 2, we have also noted the following matters from our audit work which we should bring to your attention. ## **3.1 Going concern** We explained in our Audit Planning Report that in preparing the financial statements to comply with Financial Reporting Standard 102 the Trustees and management are required to assess the charity’s ability to continue as a going concern. In assessing whether the going concern assumption is appropriate, the Trustees and management are required to consider all available information about the future of the charity in the period of at least, but not limited to, twelve months from the date when the financial statements are approved and authorised for issue. The trustees’ going concern assessment is a key area of emphasis and importance for our audit and, in accordance with the requirements of ISAs (UK), our audit report includes a specific reference to going concern. Where trustees identify possible events or scenarios, other than those with a remote probability of occurring, that could lead to failure, then these should be disclosed in the financial statements. Trustees may consider and take account of realistic mitigating responses open to them, considering the likely success of any response. We have discussed this with the trustee and explained that our work on going concern includes the following: - reviewing the period used by Trustees to assess the ability of The Nuffield Oxford Hospitals Fund to continue as a going concern, - examining budgets and forecasts prepared by management covering the period of the going concern assessment to ensure that these appropriately support the trustees’ conclusion, - reviewing any other information or documentation which the Trustees have used in their going concern assessment. ## **Our conclusions and other comments** As at 31 December 2023 The Nuffield Oxford Hospitals Fund is reporting funds totalling £30.5m (2022: £28m). The Fund continues to hold significant investments with Sarasins which continues to provide sufficient income to cover the grants awarded in the year. In addition, we note that there is no indicator for concern in relation to progress of the Wintringham project and £4.3m (2022: £2.5m) is held in cash or short-term investments at the year end. We will be seeking representations that the Board has considered the forecasts and is satisfied that the going concern basis is appropriate. ## _**We therefore have no concerns to bring to your attention at the point of this report being shared.**_ ## **3.2 Estimates and judgements** We identified investment valuation as a non-significant estimate and judgements for specific audit review. ISA (UK) 540 (Revised) Auditing Accounting Estimates and Related Disclosures requires additional audit focus over management’s estimates, including undertaking separate risk assessments for both inherent and control risks. In respect of the former, consideration is given to the estimation uncertainty, the subjectivity and the complexity of the estimate. We are also required to consider whether the disclosures made in the financial statements are reasonable. It is important that you are satisfied that the assumptions used by management are appropriate and we will ask you to provide a written representation to us to confirm this. © 2023 Crowe U.K. LLP 8 ## Investment valuations (Sarasin portfolio) There is a risk of misstatement due to incorrect valuations provided by the investment manager. Due to the reliance on the investment manager and the size of the investments within the financial statements, this valuation is considered an area of audit focus. As part of our audit work we have performed the following tests: - We verified the information provided by the investment manager to external source to confirm valuation. - We verified that the investment valuation provided by the investment manager reconciled to the figures included within the financial statements. - We requested and review internal control reports for the investment managers to assess if there are any known control weaknesses which may suggest that the valuation may be materially misstated. _**It should be noted that when agreeing the valuation of the investments to an external source, this resulted in a difference of approximately £31k undervaluation. Differences such as this are not unusual as the valuation depends on the date and precise price that is used by the investment manager. There is therefore an element of judgement involved. The difference is not material to the financial statements.**_ _**The valuation of the investments within the financial statements did agree to the investment reports.**_ _**The internal control reports did have recommendations which we would recommend the trustees consider. However, we concluded that the weaknesses identified were unlikely to impact the valuation of the investments within the financial statements.**_ ## **Other area of judgement** One new area of judgement within the financial statements is that of the accrued income. The main financial contract for the Wintringham companies has provided an interest figure to be accrued of £80,485. This is the figure within the financial statements. A recalculation of this interest on a monthly basis produces a figure approximately £1k higher. This difference is trivial and likely to be due to the interest figure being calculated on a monthly rather than daily basis. We do not recommend any adjustment in this case. We did also note that the final quarter of interest to 31 December 2023 had not been accrued for. This creates a difference of £48k when taken in isolation with the majority of this relating to the accrual of interest on the previously interest free profit distribution loan. However, this has not been adjusted for in order to maintain consistency with prior year accounts presentation as this would result in 15 months of interest being included in the current year accounts. There was also an over-accrual of interest in the prior year accounts due to an error in calculation by the Wintringham team, this resulted in the release of excess accrued interest this year as part of the release of the larger accrual of £21k (going against the interest received balance). These two differences when taken together result in a difference on the statement of financial position of only £27k which is below our materiality threshold for the SOFA. As such, although we have raised an adjustment for the £48k below, no adjustment is required for this balance in line with the trustee’s request. ## **3.3 Income – from quoted investments** International Standards on Auditing (ISA (UK) 240) presumes there is always a significant risk of material misstatement due to fraud in revenue recognition, unless this is rebutted. Whilst we deem Wintringham transactions and related entities to be significant (see Section 2) we do not consider other income streams to be significant due to the ability to agree the income in total to third party reports and bank receipts. Across all income streams the key risks remain the same: - Completeness (has all income due been appropriately recognised in the period?). - Cut off (has income been recognised in the appropriate period?). - Fund allocation (have donor restrictions on the use of the income been appropriately captured in the financial statements?). - Accuracy (where income is owed at year end, is it likely to be received or should it be provided against?). © 2023 Crowe U.K. LLP 9 ## _Investment income from quoted investments_ A significant income stream for The Nuffield Oxford Hospitals Fund is income from the Sarasin investment portfolio, such income amounted to £639k in 2022. We were able to agree this income to investment management reports and the bank on a sample basis. _**We have no matters to bring to your attention**_ **.** ## **3.4 Grants** This is the largest single expenditure item for the Fund. Our audit work focussed on ensuring that grant awards and payments have been appropriately approved and that liabilities have been captured in the appropriate period. We tested grant expenditure on a sample basis and agreed the payments to award letters and approval within Trustee minutes. We further noted the process undertaken by the secretary to track the spend on these grants and to follow up if there is any underspend and consequently a need to write off costs within the financial statements. In addition, we reviewed the grant spreadsheet alongside the approval of grants in the year and those paid, to agree that the liability was materially correct. ## _**We have no matters to bring to your attention.**_ ## **3.5 Funds** The Nuffield Oxford Hospitals Fund operates a number of different funds subject to various restrictions and designations. You must ensure that all movements on funds are correctly identified and accounted for. This requires careful consideration of the various terms and conditions which may be applied to income. _**We have reviewed the allocation of income, expenditure and gains/ losses between funds and have nothing to bring to your attention.**_ ## **3.6 Related Parties** In line with the ISAs which direct our audit work (ISA (UK) 550) we are obliged to ensure that any related parties are identified and that any transactions involving these parties and the group are appropriately authorised and correctly disclosed in the financial statements. The definition of a “related party” as defined in FRS 102 encompasses, in addition to the Board of Trustees, any other individuals who can directly influence management decisions and close family members of both; the latter being of relevance if individual Trustees and members of management are perceived to be in a position to influence the management decisions of family members or can be influenced by them. We reviewed the Fund’s procedures for identifying potential related parties and ensuring all transactions are complete, including any annual declaration of interests completed by Trustees and other significant individuals such as Angela Truesdale. _**Please see our update in Appendix 2. It was also considered appropriate to include some additional related party description to note the overlap of trustees as directors of some of the Wintringham companies.**_ ## **3.7 Report and Financial Statements** As noted in the Statement of Trustees’ Responsibilities, the Trustees are responsible for preparing the Trustees’ Annual Report and the financial statements in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice. ## _**We have nothing to bring to your attention.**_ © 2023 Crowe U.K. LLP 10 ## 4. Fraud and irregularities and our audit reporting ## **Audit reporting on detecting irregularities, including fraud** In line with ISA (UK) 700 our audit report includes an additional comment to explain to what extent the audit was considered capable of detecting irregularities, including fraud. Irregularities are acts of omission or commission which are contrary to the prevailing laws or regulations. Fraud includes both fraudulent financial reporting and misstatements resulting from misappropriation of assets. Our responsibility is to obtain reasonable assurance that the financial statements taken as a whole are free from material misstatement, whether caused by fraud or error. The additional reporting requirements this year placed increased emphasis on our understanding of the risks to The Nuffield Oxford Hospitals Fund from fraud and irregularities. Our audit included discussions with management and those charged with governance to obtain their assessment of the risk that fraud may cause a significant account balance to be materially misstated as well as other procedures to obtain sufficient appropriate audit evidence. We obtained an understanding of the legal and regulatory frameworks within which the charity operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Charities Act 2011 and The Charities and Trustee Investment (Scotland) Act 2005] together with the Charities SORP (FRS102). We assessed the required compliance with these laws and regulations as part of our audit procedures on the related financial statement items. In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which might be fundamental to the charity’s ability to operate or to avoid a material penalty. We also considered the opportunities and incentives that may exist within the charity for fraud. The laws and regulations we considered in this context for the UK operations were General Data Protection Regulation and health and safety legislation. We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be within the timing of recognition of income and the override of controls by management. Our audit procedures to respond to these risks included enquiries of management, internal audit, and the Trustees about their own identification and assessment of the risks of irregularities, sample testing on the posting of journals, reviewing accounting estimates for biases, reviewing regulatory correspondence with the Charity Commission, and reading minutes of meetings of those charged with governance. In accordance with International Auditing Standards, we planned our audit so that we have a reasonable expectation of detecting material misstatements in the financial statements or accounting records including any material misstatements resulting from fraud, error or non-compliance with law or regulations. However, owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements of the financial statements may not be detected even though the audit is properly planned and performed in accordance with the ISAs (UK). No internal control structure, no matter how effective, can eliminate the possibility that errors or irregularities may occur and remain undetected. In addition, because we use selective testing in our audit, we cannot guarantee that errors or irregularities, if present, will be detected. Accordingly, our audit should not be relied upon to disclose all such misstatements or frauds, errors or instances of non-compliance as may exist. We have also included in Appendix 5 some fraud risks that Trustees and management should be aware of. ## **Trustee responsibilities** The primary responsibility for safeguarding the charity’s assets and for the prevention and detection of both irregularities and fraud rests with the trustees and management of the organisation. It is important that management, with oversight of those charged with governance, place a strong emphasis on fraud prevention and fraud deterrence. This involves a commitment to creating a culture of honest and ethical behaviours which can be reinforced by an active oversight by those charged with governance. As in past years, the following statements will be included in the letter representation which we require from the trustees when the financial statements are approved. © 2023 Crowe U.K. LLP 11 - The trustees acknowledge their responsibility for the design, implementation and maintenance of internal control to prevent and detect fraud and errors, and the trustees believe they have fulfilled those responsibilities. - The trustees have assessed that there is no significant risk that the financial statements are materially misstated as a result of fraud. - The trustees are not aware of any fraud or suspected fraud affecting the charity involving management, those charged with governance or employees who have a significant role in internal control or who could have a material effect on the financial statements. - The trustees are not aware of any allegations by the Fund’s employee, former employees, regulators or others of fraud, or suspected fraud, affecting the charity’s financial statements. We draw your attention to bullet point 2 above which presupposes that an assessment has been made. We have not been made aware of any actual or potential frauds which could affect the 2023 financial statements, or in the period since the previous year end. © 2023 Crowe U.K. LLP 12 ## Appendix 1 - Reporting audit adjustments ## **Unadjusted misstatements** International Standards on Auditing (UK) require that we report to you all misstatements which we identified as a result of the audit process but which were not adjusted by management, unless those matters are clearly trivial in size or nature. There are no unadjusted misstatements noted. ## **Adjusted misstatements** The following misstatements, which have been corrected by management, were also identified during our audit work and up to the date of this report. No further adjustments to the financial statements are required for these items and this information is provided to assist you in understanding the financial statements completion process and to fulfil your governance responsibilities. |process and to fulfil your governance responsibilities.|||| |---|---|---|---| |**Adjustment description**|**Debit/credit**
**net**
**income**
**£**|**Debit/(credit)**
**net**
**assets**
**£**|**Debit/(credit)**
**opening reserves**
**£**| |Being to accrue for interest for the quarter to 31 December 2023.|(48,120)|48,120|| © 2023 Crowe U.K. LLP 13 ## Appendix 2 - Systems and controls We have set out below certain potential improvements to the charity’s processes and controls which we noted during our audit work and which we believe merit being reported to you. Our evaluation of the systems of control at The Nuffield Oxford Hospitals Fund was carried out for the purposes of our audit and accordingly it is not intended to be a comprehensive review of your business processes. It would not necessarily reveal all weaknesses in accounting practice or internal controls which a special investigation might highlight, nor irregularities or errors not material in relation to the financial statements. ## **We are pleased to note we have no new recommendations to bring to your attention.** © 2023 Crowe U.K. LLP 14 We have set out below the systems and control issues on which we reported after our audit last year together with an update on how the points raised have been addressed including information on the progress made at the time of the audit of the 2023 financial statements. |**Status**||**Priority**| |---|---|---| |Recommendation fully implemented or no longer relevant||These findings merit attention within an agreed timescale.| |Recommendation partially implemented||These findings are of a less urgent nature, but still require reasonably prompt action.| |These findings merit attention within an agreed timescale.||These findings are significant and require urgent action.| ||**Priority**|**Status**|**Update 2023**|**Update 2023**| |---|---|---|---|---| |||Closed|As part of our work, we have received a copy of the|| ||||cashbook to December 2023 which is described as|| ||||(SJB-final). This review includes a spot check of|| ||||transactions by a trustee to the bank statement and|| ||||agreeing that these transactions are in line with the|| ||||trustee’s expectations. No issues from this review were|| ||||noted.|| ## **Observations and recommendations in 2022 or prior periods 1. Formalising and evidencing review of key financial controls** Our audit processes and conversations with the Secretary identified that regular bank reconciliations are being prepared by The Secretary. These are passed periodically to one of the trustees to review, however there is no trail retained to evidence this review process. Sector best practice would be to develop and formalise a system which determines the frequency of these reviews and captures and retains evidence that these reviews have taken place. This could form part of an accounting systems document which would be most useful to the current secretary’s successor following his retirement. ## **Management response 2022:** As all bank transactions require Trustee approval, there is indeed regular review of bank account payments made and the balance. We will consider how best to capture evidence of this review and more formal documentation of the reconciliation between the bank account and the cash book, whilst ensuring that this is proportionate given the low frequency of transactions and the authorisation controls in place. One option may be to document both the reconciliation and sign off in additional columns in the excel cashbook records. ## **Update 2022:** We continue to recommend that the Fund considers a proportionate process for more formally recording the review of key controls within the charity during the year. In particular, the reconciliation/ review of bank transactions. No transactions were identified during our work that gave any cause for concern. © 2023 Crowe U.K. LLP 15 **Observations and recommendations in 2022 or prior periods Priority Status Update 2023 2. System for identifying related party transactions** During our audit process, we identified a strong sense of the need, by those Closed We noted that a related party listing was in place charged with governance to identify and manage the potential threats associated throughout the year and has been utilised to identify any with conflicts of interest, including declarations of potential conflict at Board related party transactions (if any). This point can be meetings, and a register of interests. Other charitable organisations use this closed. information in assisting them with a formal system to identify any related party transactions that would be required to be disclosed in the annual accounts. We recommend that thought be given to developing the existing systems to add this further information. **Management response 2022:** We will consider how best to capture transactions with related parties on a timely basis so that the disclosure information is available and we more formally document our consideration of whether such transactions are made on an arms-length basis. This might be through flagging such transactions in the cash book or grant analysis or by maintaining a separate record. **Update 2022:** From our work conducted, we have reviewed the conflicts of interest register maintained and can see within the minutes that any new conflicts are raised. We would continue to recommend that a related party listing is used throughout the year to note potential related party transactions, enabling disclosure within the financial statements © 2023 Crowe U.K. LLP 16 ## Appendix 3 - Materiality ## **Materiality and identified misstatements** As we explained in our Audit Planning Report, we do not seek to certify that the financial statements are 100% correct; rather we use the concept of “materiality” to plan our sample sizes and also to decide whether any errors or misstatements discovered during the audit (by you or us) require adjustment. The assessment of materiality is a matter of professional judgement but overall a matter is material if its omission or misstatement would reasonably influence the economic decisions of a user of the financial statements. Our overall audit materiality for the financial statements as a whole took account of the level of funds held by The Nuffield Oxford Hospitals Fund and was set at approximately 2% of gross assets. We reassessed materiality based on the draft financial statements, and the following is a summary of the overall materiality levels we applied to the separate entities within the group. |**Entity**|**Materiality calculation**|**Planning Materiality**
**£’000**|**Final Materiality**
**£’000**|**Reporting threshold**
**£’000**| |---|---|---|---|---| |Overall|2% gross assets|£490|£490|£24.5| |Non-investment balances|2% income|£37|£37|£1.8| © 2023 Crowe U.K. LLP 17 ## Appendix 4 - Responsibilities and ethical standards ## **Audit purpose and approach** Our audit work has been undertaken for the purposes of forming our audit opinion on the financial statements of The Nuffield Oxford Hospitals Fund prepared by management with the oversight of the trustees and has been carried out in accordance with International Standards on Auditing (UK) (‘ISAs’). Our work combined substantive procedures (involving the direct verification of transactions and balances on a test basis and including obtaining confirmations from third parties where we considered this to be necessary) with a review of certain of your financial systems and controls where we considered that these were relevant to our audit. ## **Financial statements** The trustees of The Nuffield Oxford Hospitals Fund are responsible for the preparation of the financial statements on a going concern basis (unless this basis is inappropriate). The trustees are also responsible for ensuring that the financial statements give a true and fair view, that the process your management go through to arrive at the necessary estimates or judgements is appropriate, and that any disclosure on going concern is clear, balanced and proportionate. ## **Legal and regulatory disclosure requirements** In undertaking our audit work we considered compliance with the following legal and regulatory disclosure requirements, where relevant. - Companies Act 2006 - Charities Act 2011 - The Charities (Accounts and Reports) Regulations 2008 (or updated Regulations if enacted before completion of the financial statements) - Financial Reporting Standard 102 (FRS 102) - The Charities SORP (FRS 102) ## **Ethical Standard** We are required by the Ethical Standard for auditors issued by the Financial Reporting Council (‘FRC’) to inform you of all significant facts and matters that may bear upon the integrity, objectivity and independence of our firm. Crowe U.K. LLP has procedures in place to ensure that its partners and professional staff comply with both the relevant Ethical Standard for auditors and the Code of Ethics adopted by The Institute of Chartered Accountants in England and Wales. As explained in our audit planning report, in our professional judgement there are no relationships between Crowe U.K. LLP and The Nuffield Oxford Hospitals Fund or other matters that would compromise the integrity, objectivity and independence of our firm or of the audit partner and audit staff. We are not aware of any further developments which should be brought to your attention. ## **Independence** International Standards on Auditing (UK) require that we keep you informed of our assessment of our independence. We confirm that [we have not provided any non-audit services to the group / we have carried non-audit services as detailed below]. We have not identified any other issues with regards to integrity, objectivity and independence and, accordingly, we remain independent for audit purposes. In communicating with those charged with governance of the parent charity and group we consider those charged with governance of the subsidiary entities to be informed about matters relevant to them. The matters in this report are as understood by us as at 18 April 2024. We will advise you of any changes in our understanding, if any, during our meeting prior to the financial statements being approved. ## **Non-audit services** We have considered the non-audit services we have provided in the period and have concluded that there are no facts or matters that bear upon the integrity, objectivity and independence of our firm or of the audit partner and audit staff © 2023 Crowe U.K. LLP 18 related to the provision of such services which we should bring to your attention. Our fees for non-audit services in the year have been as follows. Preparation of financial statements (VAT Inclusive) £3,540 ## **Use of this report** This report has been provided to the Trustees to consider and ratify on behalf of the Trustees, in line with your governance structure. We accept no duty, responsibility or liability to any other parties, since this report has not been prepared, and is not intended, for any other purpose. It should not be made available to any other parties without our prior written consent. © 2023 Crowe U.K. LLP 19 ## Appendix 5 - Fraud risks As part of our audit procedures we make enquiries of management to obtain their assessment of the risk that fraud may cause a significant account balance to contain a material misstatement. However, we emphasise that the responsibility to make and consider your own assessment rests with yourselves and that the trustees should ensure that these matters are considered and reviewed on a regular basis. Usually fraud in the charity sector is not carried out by falsifying the financial statements. Falsifying statutory financial statements usually provides little financial benefit, as compared to say a plc where showing a higher profit could lead to artificial share prices or unearned bonuses. However, falsifying financial statements can be used to permit a fraud or to avoid detection. As a generality, charities represented by its management and its trustees do not actively try to falsify financial statements as there are not the same incentives to do so. In the charity world fraud is usually carried out through misappropriation or theft. The trustees should be aware that the Charity Commission provides guidance (updated in September 2023) on how to protect your charity from fraud including information about fraud, how to spot it and what you can do to protect against it. The Charity Commission’s first guiding principle recognises that fraud will always happen. It is therefore important that, as part of setting their overall risk appetite, the trustees consider fraud within their tolerance for the risks associated with the management of the organisation’s (and group’s) funds. The development and continued assurance of a robust counter fraud control framework should then contribute to the organisation matching the risk appetite and tolerance agreed by the trustees. We have shared with management our guidance and a framework on conducting fraud risk assessments / A copy of our guidance and a framework on conducting fraud risk assessments can be obtained from our website here: https://www.crowe.com/uk/insights/fraud-risk-assessment-non-profit. A fraud risk assessment is an objective review of the fraud risks facing an organisation to ensure they are fully identified and understood. This includes ensuring: - action plans are in place to deliver an effective and proportionate response when suspected fraud occurs including the recovery of losses and lessons learnt. Good practice suggests that to be most effective the risk assessment should be undertaken at a number of levels within the organisation: - Organisational – to assess the key policy, awareness raising and behavioural (including leadership commitment) requirements that need to be in place to build organisational resilience to counter fraud. - Operational – a detailed analysis of the fraud risk and counter fraud control framework at the operational level – by function (activity) or individual business unit (including programmes and projects). Any fraud risk assessment should not be seen as a standalone exercise but rather an ongoing process that is refreshed on a regular basis. Carrying out the fraud risk assessment may reveal instances of actual or suspected fraud. Should this happen next steps will be determined on circumstances, the existing control framework (including any response plan(s)), and in consultation with the key members of the organisation’s management team. ## **Considering risks of fraud** There is evidence that during times of economic instability there is an increased risk of fraud. This may be because resource constraints can reduce internal controls and over sight and also because individuals facing hardship may be more likely to consider fraudulent practices. The following provides further information on the three kinds of fraud that charities such as The Nuffield Oxford Hospitals Fund should consider. ## _a) Frauds of extraction_ This is where funds or assets in possession of the charity are misappropriated. Such frauds can involve own staff, intermediaries or partner organisations since they require assets that are already in the possession of the entity being extracted fraudulently. This could be by false invoices, overcharging or making unauthorised grant payments. - fit for purpose counter fraud controls are in place to prevent and deter fraud and minimise opportunity, and © 2023 Crowe U.K. LLP 20 Essentially such frauds are carried out due to weaknesses in physical controls over assets and system weaknesses in the purchases, creditors and payments cycle. The cycle can be evaluated by considering questions such as who authorises incurring a liability and making a payment. On what evidence? Who records liabilities and payments? Who pays them and who checks them? The close monitoring of management accounts, ledger entries and strict budgetary controls are also generally seen as an effective way of detecting and deterring frauds in this area. Staff should be made aware of the increasing use of mandate fraud. This is where when the fraudster gets the organisation to change a direct debit, standing order or bank transfer mandate by purporting to be a supplier or organisation to which the charity makes regular payments. Insufficient due diligence around requests to amend supplier or payroll details has led to payments to unauthorised individuals so sufficient checks in these areas is of increasing importance. All employees should exercise real scepticism and not make any payments which are not properly supported and / or outside the normal payment mechanisms. The Fraud Advisory Panel latest research shows the following as the fraud risks on the horizon: - _Staff fraud. As people feel the effects of the cost-of-living crisis on their finances._ - _Ransomware, particularly targeting network-attached storage. There has been a recent increase in these types of attack._ - _E-commerce / online shopping fraud. In the lead-up to Black Friday (25 November), Cyber Monday (28 November), and the busy Christmas shopping period._ - _Supply chain fraud. As some businesses and individuals find themselves in financial difficulty. To boost resilience, government is looking to create standard templates for supply chain contracts._ A new survey has found that 12% of charities had experienced cybercrime in the previous 12 months, prompting the Charity Commission to highlighting this issue to charities recently and warning them against the risk of online fraud. Furthermore, the survey also pointed to a potential lack of awareness of the risks facing charities online and note that just over 24% have a formal policy in place to manage the risk and only around 55% of charities reported that cyber security was a fairly or very high priority in their organisation. The Commission’s discussion of this can be found here: https://www.gov.uk/government/news/charities-at-risk-of-underestimatingonline-fraud-as-one-in-eight-experienced-cybercrime-last-year ## _b) Backhanders and inducements_ There is also an inherent risk that individuals who are able to authorise expenditure or influence the selection of suppliers can receive inducements to select one supplier over the other. This risk can be mitigated by robust supplier selection and tendering procedures. There is also the risk that once a donation of money or aid has been authorised and released in the UK, this could be diverted, probably into the underground economy, as a result of inducements paid in the destination country. Charities should be aware of the requirements and extent of the UK Bribery Act 2010, as this extends their liability to actions beyond the shores of the UK and to cover the actions of their intermediaries and agents. Organisations are required to put in place proportionate measures to prevent backhanders and inducements from being paid, either by their workers, agents or intermediaries or to their workers, agents or intermediaries. ## _c) Frauds of diversion_ This is where income or other assets due to The Nuffield Oxford Hospitals Fund are diverted before they are entered into the accounting records or control data. Essentially, it is easy to check what is there but very difficult to establish that it is all there. Therefore, ensuring the completeness of income provided to a charity becomes difficult. It is important to consider the different income streams and when and how they are received. So income received directly into the charity’s bank account will be a lower risk than income being received by home based fundraisers. © 2023 Crowe U.K. LLP 21 ## Appendix 6 - External developments We have summarised below some of the developments and changes in the charity sector over the recent period which we believe may be of interest and relevant to you. Please note that this information is provided as a summary only and that you should seek further advice if you believe that you have any specific related issues or intend to take or not take action based on any of the comments below. We believe it is important to keep our clients up to date on the issues that affect them and, as a part of our ongoing communication, we regularly hold webinars and therefore encourage you to visit our website (https://www.crowe.com/uk/croweuk/industries/webinars).or register to our mailing list (nonprofits@crowe.co.uk) to stay updated on these. Any webinars which you have missed remain available on demand on our website. © 2023 Crowe U.K. LLP 22 ## Governance ## **The Charities Act 2022: Implementation** The Charities Act 2022 (the Act) received Royal Assent on 24 February 2022 and brings into force a number of key changes to the Charities Act 2011, aimed at simplifying a number of processes. The Charity Commission are currently working through implementing the various changes brought about by the legislation, and have set out an indicative timetable here: https://www.gov.uk/guidance/charities-act-2022implementation-plan _Other provisions of the Act in force from 31 October 2022_ Section 5: Orders under section 73 of the Charities Act 2011 - Section 8: Power of the court and the Commission to make schemes Section 32: Trustee of charitable trust: status as trust corporation Section 36: Costs incurred in relation to Tribunal proceedings etc - Part of Section 37: Public notice as regards Commission orders etc. - Part of Section 40 and Schedule 2: Minor and consequential amendments _Provisions of the Act that came into force on 14 June 2023_ Sections 9-14 and 35a: Permanent endowment Sections 17, 19-22: Charity land - Sections 25-28: Charity names Section 38 and 39: Connected persons - Part of Section 40 and Schedule 2: Minor and consequential amendments _Provisions of the Act expected to come into force in early 2024_ Section 1-3: Charity constitutions Sections 18 and 23: Charity land Section 24 and Schedule 1: Amendments of the Universities and College Estates Act 1925* Section 29: Powers relating to appointments of trustees Section 31: Remuneration etc of charity trustees etc Sections 33, 34 and 35(b): Charity mergers Section 37: For remaining purposes Section 40 and Schedule 2: For remaining purposes *Whilst section 24 and Schedule 1 will be included in the phase 3 commencement regulations, they will come into force in Spring 2025. The key provisions of the Act that have been implemented to date are set out below, and further information can be found here: https://www.gov.uk/guidance/charities-act-2022-guidance-for-charities ## _Failed appeals_ The Act introduces new rules granting the power for trustees to apply cyprès, allowing charities more flexibility in response to a charity appeal that has failed, allowing _donations_ to be applied for another charitable purposes rather than having to be returned to donors under certain conditions: - i) The donation is a single gift of £120 or less; and the Trustees reasonably believe that during the financial year the total amount received from the donor for the specific charitable purpose is £120 or less (unless the donor states in writing that the gift must be returned if the charitable purposes fail); or - ii) The donor, after all agreed actions have been taken, cannot be identified or found; or - iii) The donor cannot be identified (for example cash collections) The Charity Commission published guidance in relation to failed appeals on 31 October 2022, which can be found here: https://www.gov.uk/government/publications/charity-fundraising-appeals-forspecific-purposes The Charity Commission has also updated its guidance CC20 ‘Charity fundraising: a guide to trustee duties’ to reflect these changes. © 2023 Crowe U.K. LLP 23 The Fundraising Regulator has also published guidance, further details of which are provided below. _Payments to Trustees for providing goods to the charity_ The Charities Act 2011 provided a statutory power for charities, in certain circumstances, to pay trustees for providing a service to a charity beyond usual trustee duties. The Act extends this power to allow, in certain circumstances for payments to trustees for providing goods to the charity. Updated guidance can be found here: https://www.gov.uk/guidance/payments-to-charity-trustees-what-the-rulesare The Charity Commission has also updated its guidance CC29 ‘Conflicts of interest: a guide for charity trustees’ and CC11 ‘Trustee expenses and payments’ to reflect these changes. _Power to amend Royal Charters_ Royal Charter charities are able to use a new statutory power to change sections in their Royal Charter which they cannot currently change, if that change is approved by the Privy Council. Updated guidance can be found here: https://www.gov.uk/guidance/royalcharter-charities _Selling, leasing or otherwise disposing of charity land_ Charities must comply with certain legal requirements before they dispose of charity land. Disposal can include selling, transferring or leasing charity land. The Act simplifies some of these legal requirements. The changes include: widening the category of designated advisers who can provide charities with advice on certain disposals - confirming that a trustee, officer or employee can provide advice on a disposal if they meet the relevant requirements - giving trustees discretion to decide how to advertise a proposed disposal of charity land removing the requirement for charities to get Commission authority to grant a residential lease to a charity employee for a short periodic or fixed term tenancy Updated guidance can be found here: https://www.gov.uk/government/publications/sales-leases-transfers-ormortgages-what-trustees-need-to-know-about-disposing-of-charity-landcc28. ## _Using permanent endowment_ The Act introduces new statutory powers to enable: charities to spend, in certain circumstances, from a ‘smaller value’ permanent endowment fund of £25,000 or less without Commission authority certain charities to borrow up to 25% of the value of their permanent endowment fund without Commission authority Charities that cannot use the statutory powers will require Charity Commission authority. In addition, a new statutory power enables charities that have opted into a total return approach to investment to use permanent endowment to make social investments with a negative or uncertain financial return, provided any losses are offset by other gains. Updated guidance can be found here: https://www.gov.uk/guidance/permanent-endowment-rules-for-charities https://www.gov.uk/government/publications/total-return-investment-forpermanently-endowed-charities **Changes to Scottish charity law** The Charities (Regulation and Administration) (Scotland) Bill received Royal Assent on 9 August 2023 (the “2023 Act”). The Act is intended to strengthen and update current law by increasing the powers available to the Office of the Scottish Charity Regulator (‘OSCR’) and provide consistency with certain elements of charity regulation in England, Wales and Ireland. The key changes include: © 2023 Crowe U.K. LLP 24 - OSCR will be required to publish additional information on the public Scottish Charity Register, including: - the names of trustees - unredacted annual accounts - a list of individuals barred from acting as trustees - a widening of OSCR’s inquiry powers, to include organisations which are no longer charities and former trustees - the creation of a register of merged charities (similar in purpose to the register maintained by the Charity Commission for England & Wales) Further details on the changes can be found on the OSCR website here: https://www.oscr.org.uk/news/what-do-the-changes-to-scottish-charity-lawmean-for-you/ ## **Investing Charity Money** CC14 has been updated, it is now called Investing Charity Money, and takes account of the High Court Judgement on the Butler Sloss case. CC14 states that all charities should have a written investment policy if their governing document requires they have one or if the charity is a trust, and where it gives an investment manager powers to make decisions on its behalf. It includes: - Examples of various issues which may be relevant for trustees to consider when making investment decisions, such as the potential for an investment to conflict with the purposes of the charity, or the reputational impact of an investment decision. investment’. It should be noted that whilst the guidance has simplified the terminology, this distinction is still important from a financial reporting perspective, as the Charity SORP requires different accounting treatment for mixed motive and programme related investments. It also provides example approaches to financial returns including avoiding those investments which can reduce support for a charity and harm its reputation, and is more specific on ESG factors: aiming only for the best financial return you can achieve, within the level of risk that you have decided is acceptable for your charity alongside the financial return you are aiming for, avoiding investments that conflict with your charity’s purposes. alongside the financial return you are aiming for, avoiding investments that could reduce support for your charity or harm its reputation, particularly amongst its supporters or beneficiaries. alongside the financial return you are aiming for, avoiding or making investments in companies because of their practice on environmental, social and governance (ESG) factors alongside the financial return you are aiming for, using your shareholder vote, or other opportunities that come with your investment, to influence practice at companies that your charity is invested in. The revised guidance can be found here: Investing charity money: guidance for trustees (CC14) - GOV.UK (www.gov.uk) - Steps trustees ‘must’ take to be compliant with the law and those trustees ‘should’ do as best practice but not legally required. - Explanations on acting in the best interests of a charity, ensuring that above all else any decision furthers its purposes. - Guidance on social investment and no longer uses terminology that could get in the way of trustees’ understanding, such as ‘ethical investment’, ‘mixed motive investment’ and ‘programme related © 2023 Crowe U.K. LLP 25 ## **The Future Charity Chair** Crowe are pleased to be involved in a new research project looking at the essential attributes that charity Chairs of the future will need to embrace. This research will explore the topic through roundtable discussions and in-depth interviews, with a thought leadership report due in Spring/Summer 2024. The research aims to: - Contribute ideas that will help to shape the future development and recruitment of charity Chairs. Enhance the future sustainability of the charity sector by highlighting longer term considerations for Board discussion. Provide fresh thinking to positively influence regulation and best practice guidance for the sector. Emphasise the value of good charity governance and the need for it to continually evolve to remain relevant. The full report can be found here: The future charity chair | Bayes Business School (city.ac.uk) where trustees will be required to articulate their approach and decisions on funding and investments. Trustees must prepare a written statement of strategy which records the FIS and supplementary details, is signed on the trustees’ behalf by their chairperson, and submitted to TPR with each triennial valuation. Under the proposals, TPR sets out a “twin-track” model where trustees will be able to choose either a prescriptive “Fast Track” option or a more flexible “Bespoke” approach to completing and submitting an actuarial valuation for TPRs assessment. The proposed requirements for the fast track route include a number of areas such as suitable long-term objectives for schemes to achieve low dependency by the time a scheme is significantly mature (measured as 12-year duration) and discount rates of gilts plus 0.5% p.a. The fast track does not explicitly take account of covenant strength. TPR plans to consult separately on proposed changes to covenant guidance. The code is now expected to come into force in April 2024, rather than 1 October 2023.Details of the consultation can be accessed via TPRs website: **- https://www.thepensionsregulator.gov.uk/en/document library/consultations/draft-defined-benefit-funding-code-of-practice-andregulatory-approach-consultation** ## **Public trust in charities 2023** The Charity Commission has published the latest annual report into public trust in charities, the report shows that although public trust has risen the increase is small though the situation appears more stable than previous years. There is still a divide in the perception of charities when it comes to size, with smaller charities faring better than larger organisations. The research includes interviews with members of the public from various demographics and reveals that half of the population are aware of the Charity Commission. The full report can be found here Public trust in charities 2023 - GOV.UK (www.gov.uk) ## **Defined Benefit Funding Code of Practice** The Pensions Regulator (TPR) is currently analysing responses to its second consultation on the new Defined Benefit (DB) funding code of practice. The new Code includes a requirement for a ‘funding and investment strategy’ (FIS) ## **Charity Commission: Charity Use of Social Media** On 18 September 2023 the Charity Commission published guidance for charities on their use of social media, following a consultation carried out earlier in 2023. A knowledge gap was identified through the Charity Commission’s casework where trustees were not always aware of the risks that may arise from the use of social media, meaning that some do not have sufficient oversight of their charity’s activity, leaving them and their charity vulnerable. The aim of the guidance is to help trustees improve their understanding in this area, and to encourage charities to adopt a policy on social media as a way to set their charity’s approach. The guidance does not introduce new trustee duties but seeks to make clear how existing duties are relevant to a charity’s use of social media. The guidance sets out that social media use can raise issues and risks for charities, relating to problematic content: © 2023 Crowe U.K. LLP 26 posted or shared by the charity on its own social media channels posted by the public or third parties on a charity’s social media channel - posted on a personal social media account that can be reasonably associated with the charity The new guidance is clear that charities using social media should have a social media policy in place, explaining how it will help deliver the charity’s purpose, include guidelines for expected conduct and should ensure the policy is followed. The guidance contains a checklist to help trustees and senior employees have informed conversations on what the right policy for them looks like. **https://www.gov.uk/government/publications/charities-and-socialmedia/charities-and-social-media** ## **Holiday Entitlement – where are we now?** In March 2023 the government opened a consultation exercise to review the legislation governing holiday entitlement and holiday pay, which had over time become complex, and in some cases, difficult for employers to follow. The consultation exercise ended on 7 July 2023, and the government’s response was published on 8 November 2023. The response indicates that the following actions will be taken: - _Introduce an accrual method for calculating holiday_ Entitlement will be calculated as 12.07% of hours worked in a pay period for irregular hours and part year workers. All other workers will accrue leave at 1/12th of their entitlement on the first day of each month during their first year of employment. - _Sanction rolled-up holiday pay (RHP)_ ## **Charity Commission: Internal financial controls for charities (CC8)** In April 2023 the Charity Commission published updated guidance “Internal financial controls for charities (CC8)” The guidance has been updated to reflect changes in legislation and practise across the sector, including new areas such as mobile payment systems (e.g. Apple Pay) and donations of cryptoassets. Existing guidance has also been refreshed in areas such as payments to related parties and operating internationally. An updated checklist is also included in the guidance to allow charities to assess themselves against the new guidance. The guidance can be obtained here: **https://www.gov.uk/government/publications/internal-financial-controlsfor-charities-cc8/internal-financial-controls-for-charities** ## Compliance Legislation will be introduced to allow RHP for irregular hours workers and part-year workers only. - _Introduce a definition of irregular hour workers & part-year workers_ Legislation will be updated to define what is meant by irregular hours workers and part-year workers. The Government has laid out revisions in respect of the above as part of The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023, effective from 1 January 2024. ## _Irregular hours and part-year workers_ To the relief of many employers the revised Working Time Regulations (‘WTR’) will include provisions aimed squarely at addressing the flaws laid bare in the Harper Trust v Brazel case in which it was held part year workers on permanent contracts were entitled to a full year’s holiday entitlement, regardless of the number of weeks worked. For holiday years from 1 April 2024 individuals who work irregular hours or partyear (such as term time or casual workers) will accrue holiday on the last day of each pay period at a rate of 12.07% of the number of hours worked during the pay period. This will ensure that their entitlement will remain in proportion to the hours that have been worked and differs from other employees who receive their full entitlement at the start of a holiday year. It is open to employers © 2023 Crowe U.K. LLP 27 to allow the employee to take more holiday than they have accrued – in such cases its essential that employment contracts reserve the right for the employer to deduct over usage from final salaries. For the same group of workers the revised WTR sees a welcome return of rolled-up holiday pay. Rolled-up holiday pay is where the accrual in a pay period is paid to the employee with their basic salary rather than when they actually take their holiday. The practice was outlawed because in the opinion of the European Court of Justice it discouraged workers from taking time off. However, for many casual work arrangements rolled up holiday pay is the only logical approach and many employers have continued to apply it. From 1 April 2024 rolled up holiday pay will be permitted on condition that: - the individual is a part-year or irregular hours worker - the holiday pay is calculated using 12.07% of all pay for work done - the holiday pay (12.07%) is paid at the same time as the pay for work done - the holiday pay is separately itemised on the payslip. It’s worth noting that the 12.07% formula does not account for the different holiday pots that we covered at the start of this article and therefore in some cases it could result in higher rates of holiday pay. It is also the case that an employer has a legal duty to ensure that an individual takes their 5.6 weeks of holiday per year and this duty applies even when they are paid using rolled-up holiday pay and not when they actually take their holiday – which could make it difficult to monitor. ## _Record Keeping_ Following a 2019 decision by the European Court of Justice employers have been required to record the daily hours worked by their employees. Under the revised WTR employers will be required to keep records that evidence compliance with the 48-hour week, opt-out agreements, length of night work and health assessments for night workers, and therefore an employer is not required to record daily hours if they can evidence compliance by other means. The revisions to the WTR should be welcome news for most employers, although in some areas they lack detail – such as a lack of definition around normal earnings for the calculation of holiday pay. Employers of irregular and part year workers will be eager to adapt their processes to accommodate ‘accrue as you go’ and rolled up holiday pay. For some employers it will be the much-needed spur to start and correctly calculate holiday pay and for others a need to evaluate the true status of their self-employed contractors. However, for almost all employers there will be a need to look at policies and procedures to ensure that they align with the new rules on holiday carry over and ensure that ‘use it or lose it’ prompts are timetabled before the end of the holiday year. The full article can be obtained here: https://www.crowe.com/uk/insights/holiday-entitlements ## **Duty on employers to prevent sexual harassment at work** The Worker Protection (Amendment of Equality Act 2010) Act 2023 received Royal Assent on 26 October 2023, and came into force on 27 October 2023, and introduces a new duty on employers to take reasonable steps to prevent sexual harassment of their employees in the course of their employment. ‘In the course of their employment’ covers activities outside of the workplace, for example work social events. This new duty to prevent sexual harassment will be enforceable by an employment tribunal, where it has first upheld a claim for sexual harassment. A tribunal will have the discretion to award a ‘compensation uplift’ by increasing any compensation it awards for sexual harassment by up to 25% where there has been a breach of the employer’s duty in sexual harassment cases. The Equality and Human Rights Commission’s guidance on sexual harassment and harassment at work contains steps employers should consider taking in order to prevent and deal with harassment at work. These steps include having an effective and well communicated anti-harassment policy in place and maintaining a reporting register of complaints for all forms of harassment. ## _Key Takeways_ © 2023 Crowe U.K. LLP 28 A copy of the guidance can be found here: https://www.equalityhumanrights.com/sites/default/files/sexual_harassment_a nd_harassment_at_work.pdf ## **Increase to National Minimum Wage** The government has announced an increase to the national living wage (‘NLG’) and national minimum wage (‘NMW’) effective from 1 April 2024, as follows: - The NLW rate will rise from £10.42 to £11.44 per hour - this rate currently applies to workers aged 23 and over but it will be extended to also apply to 21 and 22-year-olds from 1st April 2024. - The NMW rate for workers aged 18 to 20 will rise from £7.49 to £8.60 per hour. - The NMW rate for workers aged 16 and 17 will rise from £5.28 to £6.40 per hour. - The NMW rate for apprentices aged under 19, or those aged 19 and over but in the first year of their apprenticeship, will rise from £5.28 to £6.40 per hour. - The daily offset for the provision of living accommodation to a worker will rise from £9.10 to £9.99 per day. ## **Charities and terrorism** The Charity Commission guidance on ‘Charities and Terrorism’, first published in December 2012, has been updated in November 2022. The guidance forms Chapter 1 of the Charity Commissions compliance toolkit, which provides advice and information on key aspects of the UK’s counterterrorism legislation, highlights how particular provisions are likely to affect charities and their work, explains the various ‘terrorism lists’ that exist and advises trustees what to do if they discover their charity may be working with or connected to people or organisations on terrorism lists. The updated toolkit signposts to new guidance from the Crown Prosecution Service on proscription offences and terrorist financing offences and cases involving humanitarian, development and peacebuilding work overseas. ## https://www.gov.uk/government/publications/charities-and-terrorism ## **Fundraising Regulator: Annual complaints report** In November 2023 the Fundraising Regulator has published its latest Annual Complaints Report which covers the period 1 April 2022 to 31 March 2023. The report analyses complaints received by the Fundraising Regulator and complaints reported to 58 of the UK’s largest fundraising charities. • The number of complaints to the sample charities rose proportionally for most methods in line with increased fundraising activity – with 13 of the 23 fundraising methods having increased complaint numbers in 2021/22 compared to 2020/21. The overall number of complaints had increased since 2021/22 which is reflective of increases in fundraising activity since the pandemic. • Over the same period, complaints about fundraising methods including door to door fundraising (60), charity bags (57) and addressed mail (51) accounted for the majority of the 270 complaints within the Fundraising Regulator's scope. A common theme was that of misleading information, highlighting the importance of clarity in fundraising materials. - You can see the full report here. ## **Charities and campaigning** • With the UK due to hold a general election by January 2025 at the latest, there presents an opportunity for charities to raise awareness and shape policy decisions. The majority of charity campaigning does not fall under election law rules, however, care must be taken when campaigning that the charity does not stray into election campaigning and remains independent from party politics. • Various guidance is available from the Charity Commission to charities to assist in assessing the risks to the charity: - Campaigning and political activity guidance for charities (CC9) - Charities, Elections and Referendums guidance - Charities and political donations guidance The updated toolkit can be found here: © 2023 Crowe U.K. LLP 29 The guidance emphasises the need for any campaigning to be carefully considered by the Trustees, particularly in respect to the risks, costs and benefits of any such activity. Charities will be required to register with the Electoral Commission as nonparty campaigners if they spend more than £10,000 on regulated campaign activities and may be required to provide financial returns after the election. The Electoral Commission has produced guidance to support organisations which can be found here. The Charity Commission have urged charities to ensure that they have read and understood the Code of Practice for non-party campaigners which has also been produced and can be found here. ## **Fundraising Regulator: ‘Failed appeals’ guidance** • Following the changes introduced by the Charities Act 2022 (‘the Act’), the Fundraising Regulator has also published guidance ‘What to do if you raise more donations than you need, don’t raise enough, or cannot achieve your purpose’ • The guidance includes practical measures that can be taken to avoid triggering the legal requirements of the Act, such as the inclusion of a secondary purpose in appeals literature. • The guidance should be read in conjunction with the guidance issued by the Charity Commission noted above. • The guidance is available here: https://www.fundraisingregulator.org.uk/more-from-us/news/what-do-if-youraise-more-donations-you-need-dont-raise-enough-or-cannot-achieve ## **Gender pay reporting** • Any employer with 250 or more employees on a specific date each year (the ‘snapshot date’) must report their gender pay gap data. For most entities the snapshot date is the 5 April of each year. • You must report and publish your gender pay gap information within a year of your snapshot date. You must do this for every year that you have 250 or more employees on your snapshot date. • Guidance on what and how to report can be found here: https://www.gov.uk/government/publications/gender-pay-gap-reportingguidance-for-employers ## **Failure to prevent fraud and other economic crimes** • A new failure to prevent fraud offence has been introduced by the Economic Crime and Transparency Act 2023. It will apply to all large corporate entities, including charitable companies and CIOs. • An offence is committed where an employee or agent commits fraud. The penalty is an unlimited fine for the organisation, and no personal liability will be introduced for trustees or management failure to prevent fraud. • The legislation is far reaching, and where an organisation operates or is based overseas, if an employee commits fraud under UK law or affecting UK victims, the company can be prosecuted. • There is a defence to the failure to prevent economic crimes if the organisation can prove that it had reasonable prevention measures in place, or that it was not reasonable in all the circumstances to expect it to have had any procedures in place. • The offence will come into force when the government publishes statutory guidance on the reasonable procedures organisations should consider putting in place. - Full details of the legislation can be found here. ## Financial and other reporting ## **FRC Consultation: Amendments to FRS 102** On 15 December 2022 the Financial Reporting Council issued FRED 82 “Draft amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland and other FRSs – Periodic Review”. FRED 82 proposes a number of changes resulting from the second periodic review of FRS 102 and other Financial Reporting Standards. The proposals include: a new model of revenue recognition in FRS 102 and FRS 105 based on the IFRS 15 five-step model for revenue recognition with appropriate simplifications; a new model of lease accounting in FRS 102 based on IFRS © 2023 Crowe U.K. LLP 30 16 on-balance sheet model (again with appropriate simplifications); and various other incremental improvements and clarifications. The consultation closed on 30 April 2023, and the FRC has since announced that the publication and effective date of the changes has been delayed, with publication expected in the first half of 2024 and the implementation date will be periods commencing on or after 1 January 2026. The consultation documents can be obtained here: https://www.frc.org.uk/consultation-list/2022/fred-82 The Charity Digital Skills annual report has been running since 2017 and tracks the sector during a time of significant change due to the impact of the pandemic. As we continue to navigate the cost of living crisis and the impact on the sector, this report aims to shed some light on how the digital capabilities of charities have evolved and highlighting key trends. The report highlights that: - Three quarters (78%) of charities say that digital is more of a priority for their organisations - 1 in 5 charities say their IT provision is poor ## **Dispelling common myths about charities** ICAEW, with input from Crowe, has published guidance exploring ten myths surrounding charities and their operations, with a view to encourage transparent communication in areas where these misconceptions are prevalent. The ten myths considered are: - Charities spend too much on fundraising. - They should not make a surplus or build up cash reserves. - 8 out of 10 (79%) of charities see improving their website, digital presence or social media as the greatest priority for the next year - Improving data security, privacy and GDPR compliance has become more of a priority since 2022. - Almost half (46%) of charities say they do not have anyone with digital expertise on their board The gaps seen in previous years persist, these include funding and leadership. With the rapid growth in AI development charities must ensure that digital skills remain a priority to avoid being left behind. - Too much is spent on highly paid executives. - They should not undertake commercial activities. Digital Skills Report for the Charity Sector - Introduction (charitydigitalskills.co.uk) - Charities should be run and staffed [for free] by volunteers. - Too much is spent on overheads. - Charities don’t pay taxes, so need less money. - Professional qualifications are needed to become a charity trustee. - Charities are less vulnerable to fraud than other organisations. - Charities should not engage in campaigning and political activity. The guidance includes access to a webinar discussing some of the key myths with voices from the sector. The Guidance can be found here: Dispelling common myths about charities | ICAEW ## **NCSC publishes “Cyber Threat Report: UK Charity Sector”** The National Cyber Security Centre has published a report outlining the cyber threats currently facing charities of all sizes. The 2023 DCMS Cyber Security Breaches Survey, which measures the policies and processes organisations have for cyber security, as well as the impact of breaches and attacks, highlighted 24% of UK charities had identified a cyber-attack in the last 12 months, a decrease from 30% in 2022. The drop is driven by smaller organisations – the results for medium and large businesses, and high-income charities, remain at similar levels to last year. The report notes that the charity sector is particularly vulnerable as they can hold significant amounts of sensitive or valuable data, making them attractive ## **Charity Digital Skills report** © 2023 Crowe U.K. LLP 31 targets, alongside a perception that charities have fewer resources to commit to cyber security. The report provides details of the commonly perpetrated cyber-attacks, as well as a number of recommendations and links to guidance to assist charities strengthen their defences. ## A copy of the report can be obtained here: https://www.gov.uk/government/statistics/cyber-security-breaches-survey2023/cyber-security-breaches-survey-2023#summary ## **FRC publishes "What makes a good Annual Report and Accounts" report** In December 2022, the FRC published its latest report on the attributes of a good Annual Report and Accounts (‘ARA’) from their perspective as an improvement regulator. It draws on previous FRC publications alongside their day to day work. The report states that _‘A high-quality ARA:_ - _complies with relevant accounting standards, laws and regulations, and codes;_ - _is responsive to the needs of stakeholders in an accessible way; and_ - _demonstrates the corporate reporting principles and effective communication characteristics outlined in this publication.’_ Whilst the report is focused on corporate reporting, there are a number of quick tips and pointers, along with examples, which might be of interest when preparing your Trustees’ Annual Report. The full report can be found here: https://www.frc.org.uk/getattachment/d3e86b16-22b6-4aa7-a6fe1dc83657335f/What-Makes-a-Good-Annual-Report-and-Accounts.pdf ## **Guidance on Fundraising Reporting Requirements** The Fundraising Regulator has published new research and updated guidance to support compliance with the fundraising reporting requirements in the Charities (Protection and Social Investment) Act 2016). The Fundraising Regulator has reviewed the annual reports of almost 200 charities with income over £1m to provide a benchmark for the sector and highlight good practice and identify areas for improvement. The research had noted that an increasing number of charities reported on their fundraising approaches and complains compared to previous years, however only a low proportion of the reports reviewed included a statement on how fundraising carried out on their behalf is monitored or a statement of how they protect the public and vulnerable donors. The results of the review can be found here: https://www.fundraisingregulator.org.uk/more-from-us/resources/charities-act2016-analysis-july-2022 and the updated guidance can be found here: https://www.fundraisingregulator.org.uk/more-from-us/resources/charities-act2016-fundraising-reporting-requirements-guidance ## **Charity Commission: Guidance on accepting donations** In March 2024, the Charity Commission published new guidance to help charities when deciding whether to accept, refuse or return a donation. The guidance explains when donations must be refused or returned and when these might likely need to be refused or returned. The guidance makes clear that trustees should start from a position of accepting donations, but from time to time a charity may face a difficult decision as whether to refuse or return a donation. The guidance sets out an approach for trustees to take on these occasions, advising they: - consider the risks involved in refusing or returning the donation, and how likely and serious these are. These include negative financial impact, ability to deliver services and ability to attract donations in future - consider the risks involved in accepting or keeping the donation, and how likely and serious these are. These include the likelihood of reduced support or reputational harm, particularly among supporters or beneficiaries © 2023 Crowe U.K. LLP 32 - determine how any decision aligns with their charity’s purposes - determine what steps they can take to mitigate the risks. These include negotiating the terms of a conditional donation with the donor or developing a public explanation for a decision It explains that if a charity is considering refusing or returning a donation, the charity must have the legal power to refuse or return a donation. In some situations, there are additional legal rules to consider e.g. disposal or land or properties of a special trust. The charity should also consider whether it needs to make a SIR when it refuses or returns a donation. Ultimately, as the guidance states: “Deciding whether to accept, refuse or return a donation is likely to involve a careful balancing exercise. There may be no right or wrong answer, but your decision must be rational and reasonable, and supported by clear evidence.” The full guidance can be obtained here: https://www.gov.uk/guidance/accepting-refusing-and-returning-donations-toyour-charity ## Taxation ## **Consultation: Charity tax compliance** The Government has launched a consultation into several aspects of tax compliance by charities to consider how to reform some of the tax relief rules that are not working as intended. The consultation seeks views on a number of areas, including: - preventing donors from obtaining a financial benefit from their donation - preventing abuse of the charitable investment rules - closing a gap in non-charitable expenditure rules - • sanctioning charities that do not meet their Filing and Payment Obligations It is important that charities have their say and engage with the consultation, to ensure that the relevant considerations can impact decision making. The consultation closed on 20 July 2023, and HMRC are analysing the feedback received. The consultation can be found here: https://www.gov.uk/government/consultations/charities-taxcompliance/consultation-charities-tax-compliance ## **VAT: Changes to Penalty Regime** For VAT accounting periods starting on or after 1 January 2023 there are new penalties for VAT returns that are submitted late and VAT which is paid late, in addition the way interest is charged has also changed. The changes are aimed at simplifying and separating penalties and interest. The system has changed to a penalty points system, where for each return submitted late, a penalty point is issued. The penalty point threshold is determined by the accounting period, with a higher threshold for more frequently submissions. When the threshold is reached, a penalty of £200 will be issued, with a further £200 penalty for each further late submission. Penalty points will have a lifetime of 2 years, after which they will expire. The period is calculated from the month after the month in which the failure occurred, e.g. submission due January 2024, so the penalty point will expire in February 2026. Once a taxpayer reaches the threshold, all points accrued will be reset to zero when the following conditions are met: - A period of compliance; and - The taxpayer has submitted all submission in the previous 2 years (even if late). The new late payment penalty will apply in instances where the return is submitted on time but the payment is not. This penalty considers the length of the delay in making payment and the penalty increases over time. As part of the new penalty regime, HMRC has also updated its Late Payment Interest (‘LPI’) rules to bring these in line with other tax regimes. © 2023 Crowe U.K. LLP 33 Full details of the updated regime can be found here: https://www.gov.uk/guidance/penalty-points-and-penalties-if-you-submit-yourvat-return-late © 2023 Crowe U.K. LLP 34 ## **Follow us on:** @crowe **www.crowe.co.uk** Crowe U.K. LLP is a limited liability partnership registered in England and Wales with registered number OC307043. The registered office is at 2[nd] Floor, 55 Ludgate Hill, London EC4M 7JW. A list of the LLP’s members is available at the registered office. Crowe U.K. LLP is registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales. All insolvency practitioners in the firm are licensed in the UK by the Insolvency Practitioners Association. Crowe U.K. LLP is a member of Crowe Global, a Swiss verein. Each member firm of Crowe Global is a separate and independent legal entity. Crowe U.K. LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Global or any other member of Crowe Global. This material is for informational purposes only and should not be construed as financial or legal advice. Please seek guidance specific to your organisation from qualified advisors in your jurisdiction. © 2023 Crowe U.K. LLP