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2021-12-31-accounts

Annual report and accounts

cipfa.org

Contents

1
3
5
7
9
11
President’s introduction
and CEO overview
4
Our purpose and strategy
14
Staff and environment
30
Opportunities and risks
46
Our future plans
59
Financial report
64		 2
4
6
8
10
About CIPFA
12
Performance and
achievements
18
How we are governed
34
Financial summary
50
Administrative information 62

CIPFA Annual Report and Accounts 2021 3

resi ents introduction and CEO overview

2021 was, in many ways, a transition year. It was a year when ‘living with covid’ became the new norm for people across the country.

While the pandemic continued, life as we once knew it began to make a hesitant return. Lockdowns were lifted and gatherings green-lighted, but life didn’t completely go back to how it was in 2019. The NHS remained under huge pressure, working from home continued to fundamentally change how organisations operate and the wide economic effects of the disruption still lingered.

Despite ongoing challenges, 2021 was a busy year for CIPFA, with some huge milestones. As climate change dominates government priorities around the world, we released our major report Evolving climate accountability: sustainability reporting in the public sector . The public sector has a huge role to play in tackling the climate crisis, and this report found that the public sector still has room for improvement when it comes to reporting on its environmental impact.

In light of this research, we have decided to reframe our own annual report to incorporate sustainability reporting. Our activities and performance are now structured around two of the UN’s Sustainable Development Goals, and we aim to continue incorporating a sustainability dimension into all that we do.

In 2021 CIPFA was awarded a ‘Good provider’ rating by Ofsted, after our first ever inspection. This was a remarkable achievement and is a testament to the skill, expertise and passion of our staff who deliver our student program. We also launched our refreshed flagship qualification, the Professional Accountancy Qualification, which will modernise the curriculum and will prepare future finance leaders for a successful career in the public sector.

Towards the end of the year, we announced the potential of closer working with the Institute of Chartered Accountants of England and Wales (ICAEW). This will make CIPFA’s leading voice in public financial management even stronger by combining the resources of both institutes to reach new audiences and help deliver even better public services.

Although uncertainty is not kind to any business, the public sector has a unique responsibility to continue to deliver, come what may. It is not there to make profit, but to support and improve the lives of citizens both in the UK and internationally. As we look ahead, the future may seem unclear and challenging, but I am certain that organisations across the public sector will continue to deliver essential services, and CIPFA will be there to support them.

Mike Driver CB President

CIPFA Annual Report and Accounts 2021 5

(In 2021) we launched our refreshed flagship qualification, the Professional Accountancy Qualification, which will modernise the curriculum and will prepare future finance leaders for a successful career in the public sector.

Mike Driver CB President

6 CIPFA Annual Report and Accounts 2021

Rob Whiteman CBE CEO

I wrote in last year’s annual report that the COVID-19 pandemic was a transformative event for CIPFA. But rather than let it slow us down, we emerged stronger, fitter and with a five-year plan to grow our membership, tap into new markets and invest in current systems and products.

We are still in a time of global uncertainty, and saw successive pandemic waves throughout 2021 even as the vaccination programme made incredible strides to boost immunity against COVID-19. As we have emerged from this shadow, the focus has shifted onto economic concerns, with soaring inflation and a cost of living crisis causing a great deal of worry for governments and citizens alike. The war in Ukraine has also been a significant and terrible event in recent months, and we hope for a resolution soon.

Within this challenging context, 2021 was a good year for CIPFA. It was the first year of our five-year plan and we made good progress toward our goals. It was also an excellent year for us financially and we delivered a £3.5m trading surplus, our best-ever performance. This sets us up to strengthen our balance sheet and continue with our planned programme of investment.

As the pandemic continued throughout 2021, we continued to pursue a hybrid working approach, formalising this with our employees through changes to employment contracts and continuing with exclusively digital delivery of our training and events. While there was a return to some face-

to-face events, teaching and office working in the autumn, we adjusted according to fluctuations in the pattern of the pandemic and were always mindful of government guidance.

In terms of our transformation programme, work got underway to replace our online exam system and virtual learning environment. Due for roll out in 2022, these will greatly enhance the experience we offer our students and will complement our refreshed and updated Professional Accountancy Qualification syllabus, which we launched in December.

We also made great progress in transforming and digitising our continuing professional development training materials and introduced a programme of bitesize learning for members, which is proving extremely successful.

Of particular significance for our education and training provision was the approval we received from regulators. Following application, we were recognised by Ofqual as an end-point assessment of Level 7 apprenticeships. Being both an apprentice training provider and an EPAO makes us an unusual organisation and we needed to demonstrate our separation of responsibilities to the regulator satisfactorily. It was testament to the hard work of the Qualifications and Membership team that we were granted recognition without conditions.

Later in the year our apprenticeship provision was subject to an Ofsted inspection and we were delighted to be rated ‘Good’, a very significant achievement given this was our first full inspection. Inspectors noted our effective relationships with employers, our sector-focused approach and “very strong commitment towards responsible stewardship of public money”.

We also aimed to deliver a step change in our thought leadership and started a new programme of internationally focused research. The first output from this was our analysis of public sector sustainability reporting, which we published at our annual conference in July. The research attracted, and continues to attract, significant interest and we

8 CIPFA Annual Report and Accounts 2021

were pleased to be invited to present it in more detail at a session of the Commons Environmental Audit Committee in October.

There were significant and important updates to our Prudential Code and Treasury Management Code for local government, which we published towards the end of the year following two consultations with the sector. We also actively participated in conversations emanating from the Redmond Review of local audit, continued to direct members, other finance practitioners and leaders to helpful resources via our weekly CFO bulletins and maintained a rich programme of content via our podcasts and webinars. Our annual conference took place online for the second year running but we enjoyed a return to a face-to-face celebration in late September with the annual Public Finance Awards.

Our advisory practice was involved in a significant piece of work for MHCLG, now DLUHC, carrying out independent financial reviews at eight councils and supporting them to improve. We continued to work with the police sector, refreshing and extending our Achieving Finance Excellence in Policing programme. Our practitioner-focused Networks continued to be active and successful, and our international advisory activity went from strength to strength. We made significant progress with two major international projects: the APEX project, a large training programme for the UN agency the International Fund for Agricultural Development, and the IFR4NPO project, which is developing common global financial reporting standards for non-profits.

In the light of the growing need for higher levels of assurance in public sector accounting, CIPFA Council established the Practice Oversight Panel to consider possible developing areas of concern in current practice, raising awareness of potential risks to both the Institute and the sector. The panel will also provide governance oversight of our professional regulation function, and began its work by undertaking an independent review of CIPFA’s Disciplinary Scheme. The review’s recommendations are now being implemented.

Internally, we invested in employee wellbeing, training staff across our departments as mental health first aiders, while all staff participated in a diversity and inclusion training programme. As part of ongoing internal systems improvements, a new intranet was built to host corporate resources and keep employees informed of changes at CIPFA.

In 2021 CIPFA and ICAEW announced that we were in discussions about forming a closer working relationship. Talks are continuing over the shape and form that such a closer relationship might take. It is hoped that we will be able to announce the results of those discussions during 2022.

Finally, readers will note a change to this report. We want to change the way we give the whole picture of CIPFA’s operations and bring our corporate reporting more in line with international best practice, taking an approach that better supports sustainability. Our value is not just in our financial activities but in our impact on our members, stakeholders, customers and the world around us. So this annual report sees us shift our narrative into a new structure aligned to two of the UN’s Sustainable Development Goals: Quality Education, and Peace, Justice and Strong Institutions. These objectives are at the heart of CIPFA’s mission.

Delivering our mission and the successes outlined in this report would not be possible without the hard work of our employees and I once again commend their efforts to members.

Rob Whiteman, CBE CEO

CIPFA Annual Report and Accounts 2021 9

“

2021 was the first year of our fiveyear plan and we made good progress toward our goals. It was also an excellent year for us financially.

Rob Whiteman CBE CEO

10 CIPFA Annual Report and Accounts 2021

CIPFA Annuol Report ond Accounts 2020 li

02

CIPFA, the Chartered Institute of Public Finance and Accountancy , is the professional body for finance experts in the public sector.

Our members work across all public services. They manage the largest budgets under the greatest scrutiny – that’s why the CPFA designation is widely recognised as the benchmark qualification for public service finance.

Founded in Manchester in 1885 as the Corporate Treasurers and Accountants Institute, CIPFA has helped shape public financial management in the UK, and increasingly globally.

CIPFA is the world’s only professional accountancy body to specialise in public services. Our suite of training and qualifications is sought after and highly respected around the world.

We champion high performance with information and guidance, courses and conferences, property and asset management solutions, advisory and recruitment services for a range of public sector clients.

CIPFA Annual Report and Accounts 2021 13

and.slra

Making it count

CIPFA is committed to changing lives for the better.

As a global leader in public financial management and governance, our aim is to make a difference to the world we live in. Our work enables people to prosper, protects the vulnerable and helps sustain the environment for future generations.

As a professional institute, we support our members and students to act with integrity and deliver excellence in public financial management throughout their careers.

Our thought leadership puts us at the heart of the policy debate, while our education and training offerings and range of advisory services support our members, students and other public finance professionals, helping them add value to their teams and the organisations for which they work.

CIPFA is a global body, operating at local, national and international level. Wherever we find ourselves and whoever we are supporting, our goal is to always make it count.

By setting standards and advising public bodies and governments, we help ensure the money and resources used on behalf of citizens are raised and spent fairly, transparently, efficiently and are free from fraud and corruption.

To be a strong advocate for sound public financial management, having a positive influence and impact on practice.

To support and advise organisations, strengthening their public financial management.

To be the membership, education and lifelong learning provider of choice for public finance professionals. CIPFA’s strategic objectives

To deliver exceptional business support, with the customer as our focus.

CIPFA Annual Report and Accounts 2021 15

CIPFAS values 16 CIPFAAnnuol Report and Accounts 2021

CIPFA is res onsive p and customer oriented

CIPFA is committed to innovation and digital delivery

CIPFA provides unique specialist ex ertise p

CIPFA is people-focused, supportive and collaborative

CIPFA is trusted as independent and ethically driven

CIPFA Annual Report and Accounts 202 10 17

ce and ts

Sustainability reporting for 2021

The practice of sustainability reporting, which draws together not only environmental but also social and economic measures, is now becoming more widespread. This is an incredibly positive trend. Knowing and understanding the impact of our actions is essential if we are to mitigate climate change effectively and support more sustainable societies. Public interest in climate change is growing and sustainability reporting enables organisations to demonstrate how they are addressing the most pressing challenge of our generation. It also holds them accountable for their environmental performance.

Following CIPFA research into sustainability

reporting in the public sector, and given the importance of protecting the environment and holding ourselves accountable, we have chosen to reframe our 2021 annual report to focus on sustainability. We are working towards a more integrated report that also tracks CIPFA’s activities against relevant targets and in line with best practice disclosure standards.

We have chosen to use the UN Sustainable Development Goals (SDGs) as a framework for the report. These internationally recognised targets for sustainable growth align with CIPFA’s Charter and charitable objectives in two key areas: SDG 4: Quality Education, and SDG 16: Peace, Justice and Strong Institutions.

Looking at these two goals provides a starting point for CIPFA to think further about what we do through a sustainable development lens, and to build in systems for evaluation as we look towards the future. We believe that this approach also demonstrates our commitment to discharging our charitable objectives to support public benefit, something we have woven through the narrative of the report.

Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all.

Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels.

CIPFA Annual Report and Accounts 2021 19

CIPFA's charitable objectives

Advancing public finance and promoting best practice

Advancing and promoting co-operation between accountancy bodies in any way

The decision to use these two SDGs, while linked to our charitable objectives, is nevertheless a subjective one and represents a new way of presenting the annual report. Other SDGs that could be considered include SDG 5 Gender Equality, SDG 8 Decent Work and Economic Growth, SDG 10 Reduced Inequalities and SDG 13 Climate Action.

Regulating and supporting members

Educating and training student members.

As such, we are keen to receive any feedback on this framing of CIPFA’s activities, both in this report and in practice. This will then feed into our strategic planning helping us incorporate sustainable development considerations into our decision making.

20 CIPFA Annual Report and Accounts 2021

SDG 4: Quality education

CIPFA provides world-class education and training for our student members, and supports lifelong learning for all CIPFA members as they progress in their careers. The topic of sustainability is embedded in our new qualification, outlined below, to give our students the best preparation for the future.

CETC

CIPFA Education and Training Centre teaches the next generation of public sector finance professionals and leaders best practice in key areas, including commercial skills, governance and audit, leadership and management, technical accounting and financial reporting. 2021 was a busy year with most training/ tuition continuing to take place online due to the ongoing COVID-19 pandemic but there was some return to face-to-face teaching in response to client and student demand.

CETC saw growth in apprentice numbers across Levels 3, 4 and 7 and the launch of a new Level 4 Counter Fraud Investigator Apprenticeship, with two new cohorts starting in 2021. At year-end there were 572 apprentices on the programme.

236 new apprentices were enrolled:

----- Start of picture text -----
No. of
Level apprentices
----- End of picture text -----

Level 7 Accountancy/ 183
Taxation Professional
Level 4 Professional Accounting 10
Taxation Technician
Level 3 Assistant Accountant 24
Counter Fraud Investigator 19

CIPFA Annual Report and Accounts 2021 21

Ofsted inspection November 2021 November 2021 saw the first full inspection by Ofsted of CETC’s apprenticeship provision. Following a robust and intensive inspection process, during which inspectors spoke to a large number of students, employers and staff, the grading of CETC’s overall effectiveness was confirmed as GOOD. This was an outstanding outcome that reflects years of hard work and huge commitment to all our students.

The report confirmed:

at the heart of their apprenticeships. Leaders and managers work highly effectively with employers. They design the curriculum for each apprentice to reflect precisely the needs of the sectors in which they work. As a result, apprentices gain detailed knowledge of public sector accounting and finance.

Earlier in the year we secured recognition from Ofqual as an end-point assessor and both these judgements confirm regulators’ confidence in CIPFA’s provision and helps secure the continued funding for apprenticeship training.

Leaders and board members have a very strong commitment towards responsible stewardship of public money. They ensure that this principle lies

Training

Take-up of continuing professional development (CPD) training has remained high, particularly in relation to open courses and e-learning. There has been strong demand for accredited programmes such as Better Business Cases™ and CIPFA’s Diplomas in Contract Management, Finance Business Partnering and Corporate Governance. Increasing numbers of delegates are achieving the Diploma in School Operational and Financial Leadership, offered in collaboration with the Institute of School Business Leadership.

Ongoing travel restrictions curtailed the delivery of some planned international programmes but there have also been some notable successes with programmes delivered to international clients. The Fraud Investigator Training programme was delivered on behalf of the German Agency for International Cooperation (GIZ) to delegates from three government ministries in Uganda and was extremely well received.

Demand for accredited counter fraud training grew, with increased numbers achieving the Accredited Counter Fraud Technician (ACFTech) or Accredited Counter Fraud Specialist (ACFS) qualification via CIPFA.

E-learning

E-learning in development and/or launched in 2021 includes: Introduction to Local Government Finance, Introduction to Treasury Management, Introduction to Sustainability in Procurement, Diploma in IPSAS, and an International Anti-Corruption Qualification. Through partnerships, we now offer accredited e-learning on Change Management and AgilePM.

As part of CIPFA’s commitment to supporting our members, students and the wider public finance profession on ethics, a short accessible e-learning module specifically focused on ethics was made available free of charge to all members and students. This module offers a practical insight into how ethics

22 CIPFA Annual Report and Accounts 2021

can impact public finance professionals and includes essential reference materials, giving participants the confidence to behave ethically and in alignment with the CIPFA Statement of Professional Practice on Ethics.

Membership CPD

The AccountingCPD platform was introduced in the middle of 2021 to help our members actively engage in their continuing professional development (CPD). Every member registered with our CPD Bites service receives a weekly email containing a 15-minute CPD session, as well as access to the back catalogue of CPD Bites content and a 10% discount on their range of online training courses. This allows our members to build their technical skills, keep up to date on legislative and regulatory changes, and develop management and leadership skills. The uptake on this service was 1,648 registrations with 6,789 bites logged as at October 2021, and the feedback we have received has been excellent.

Association Excellence Awards

We were very pleased that CIPFA was recognised with a bronze award at the annual Association Excellence Awards on 7 October 2021 for our work supporting members during COVID-19.

PF Live 2021

Our annual conference, PF Live, took place in July as planned, but for the second year running was a digital event. The extension to the government’s roadmap out of the COVID-19 pandemic meant face-to-face events on the scale of the conference could not take place, so the decision was taken during the planning phase to pivot to digital delivery.

The online conference attracted 872 delegates, with 639 attending live across the two days. Speakers included Lord Deben, chair of the Climate Change Committee, Torsten Bell, chief executive of the Resolution Foundation, Ben Page of Ipsos MORI and George Parker of the FT. Delegate feedback was broadly positive with delegates praising the content as informative and professional.

Total members

14,436

5 544 ,

Total students

CIPFA Annual Report and Accounts 2021 23

The Professional Accountancy Qualification (PAQ) and CIPFA Futures

In looking to the future following the challenge of the COVID-19 pandemic, CIPFA wanted to ensure that our qualification offers the necessary skills and support needed to operate in a changed world. Following a review of our PQ and consultations with students, members, employers, partners and other stakeholders, we launched our new PAQ in December 2021.

renewed focus on developing transferable skills for our students. However, we are changing not just the qualification itself, but the experience of learning with CIPFA for all our students. This has meant introducing a new e-assessment platform and a new virtual learning environment for all of our students, which will be rolled out in 2022. The new digital learning platform will introduce greater flexibility for studying, while the e-assessment platform will support the development of technical competencies, enhanced by new exam questions to test the soft skills acquired by our students.

The PAQ has an updated syllabus and a refined structure; the units have a greater emphasis on sustainability, ethics and data. There is also a

24 CIPFA Annual Report and Accounts 2021

SDG 16: Peace, justice and strong institutions

CIPFA works to strengthen institutions in the UK and around the world through our role as a standard-setter. Through a wide range of consultancy, research and training projects, we are a respected partner and a voice that speaks to and for the public sector.

Sustainability reporting

In June 2021 we published Evolving Climate Accountability: A Global Review of Public Sector Environmental Reporting. The report is intended to provide a baseline from which the evolution of public sector sustainability reporting can be measured.

Evolving Climate Accountability is part of CIPFA’s commitment to further developing the public financial management profession in our ever-changing modern context. CIPFA recognises that the public sector represents the largest economic sector of most nations, and that the planet does not discriminate when it comes to who is responsible for emitting carbon and other greenhouse gases.

Sustainability reporting in the public sector is in its infancy, and there is an evolutionary journey to be embarked upon – sooner rather than later. The report provides insights into sustainability reporting practices in the public sector across the globe.

The report was published in our new refreshed brand, and publication included using a new digital storytelling tool for the first time to give a synopsis of the research . The campaign around the report generated press coverage in new publications and

established relationships with new stakeholders across continents and disciplines; CIPFA representatives presented the report’s findings in front of parliamentarians and laid the foundation for future policy and technical work in a new field.

IFAD – APEX project

The APEX project is a large training programme for the International Fund for Agricultural Development (IFAD), a UN Agency, that launched in 2021, following development of the course and e-learning in 2020. The training aims to strengthen financial management practices in agricultural development projects funded by IFAD. CIPFA has developed the e-learning and delivers the trainer-led workshops in English, French, Spanish and Arabic. Seven cohorts were started in 2021 and three have completed.

Prudential and Treasury Management Codes

In late 2021 we published updated versions of the Prudential Code for Capital Finance in

Local Authorities (Prudential Code) and Treasury Management in the Public Services Code of Practice and Cross-Sectoral Guidance Notes (the Treasury

CIPFA Annual Report and Accounts 2021 25

Management Code) following a consultation period. These two statutory and professional codes are important regulatory elements of the capital finance framework within which local authorities operate.

The updated Prudential Code includes several substantive changes. The provisions in the Prudential Code, which present the approach to borrowing in advance of need in order to profit from additional sums borrowed, have been strengthened. The relevant parts of the code have augmented to be clear that borrowing for debt-for-yield investment is not permissible under the Prudential Code. Proportionality has been included as an objective in the Prudential Code, and new provisions have been added so that an authority incorporates an assessment of risk to levels of resources used for capital purposes.

The changes to the Treasury Management Code included investment management practices and other recommendations relating to non-treasury investments, and an update to how environmental, social and governance (ESG) risks are considered.

of the proposals for a new training diploma in local government audit and financial reporting for auditors. This would be accompanied by a new technical advisory service to provide support to firms, and in particular new entrants.

CIPFA Solutions

CIPFA Solutions advisory practice combines financial management, property and fraud consultancy and has continued to grow both its client base and revenue during 2021. Revenues have grown from £2.226m in 2020 to £2.841m in 2021, an increase of 27%.

An analysis of clients and revenues shows that the team delivered 145 projects in 2021, compared to 96 in 2020, and worked with 67 different clients. 27% of our clients collectively delivered in excess of £1.89m of income, with eight of these delivering in excess of £100,000. This indicates that the plan to achieve higher-value contracts and repeat business is being delivered.

Practice Oversight Panel

The Redmond Review and the Local Audit Framework

Following the Redmond Review, the Oversight of Local Audit and Transparency of Local Authority Financial Reporting in September 2020, CIPFA has maintained a small co-ordinating team that leads on our responses to government proposals.

CIPFA has been a key player in the sector’s response to the review’s recommendations in addressing the significant and increasing issues in local audit timeliness. We are a member of the influential (interim) Liaison Committee, the key forum for ensuring co-ordination across different parties, and play a central role in a number of the groups that have been established by government.

We have led the work on local audit functions and governance, and are updating our guidance on audit committees. The various initiatives have also called on our expertise as a standard setter and in education and training to lead on the development

A new Practice Oversight Panel was established in late 2021 to consider possibly developing areas of concern in current practice, raising awareness of potential risks to both the Institute and the sector. It will identify and advise on any prevailing practice or professional conduct concerns and so support CIPFA’s role as a standard-setter. By identifying potential risks at an early stage, CIPFA aims to provide improved support and advice to its members and the wider public sector

The panel, comprising up to eight members with sufficient expertise and experience to advise on decisions about professional conduct and best practice, is chaired by Aileen Murphie, recently retired director at the National Audit Office.

Supporting the public sector’s COVID-19 response

The world public bodies operate in changed in March 2020 with the outbreak of the COVID-19 pandemic. Public bodies continue to find a way to deliver their

26 CIPFA Annual Report and Accounts 2021

International Financial Reporting for Non-Profit Organisations (IFR4NPO) The International Financial Reporting for NonThe project anticipates issuing three exposure Profit Organisations ( IFR4NPO ) project is a drafts of the guidance, starting with tranche 1, ground-breaking initiative to develop the first which will set out the context, pervasive principles international financial reporting guidance for nonand key statements. The guidance, to be called profit organisations (NPOs). This project is being INPAG, will be issued in 2025. delivered jointly by CIPFA and Humentum and is funded primarily through philanthropic donations; There were significant efforts during the year to an additional £1.2m was raised in 2021. grow awareness and understanding of the project.

The project anticipates issuing three exposure drafts of the guidance, starting with tranche 1, which will set out the context, pervasive principles and key statements. The guidance, to be called INPAG, will be issued in 2025.

There were significant efforts during the year to grow awareness and understanding of the project. CIPFA continued to engage with national standard setters from around the world to better inform efforts through the Technical Advisory Group (TAG). Nineteen country-level awareness raising meetings were held in four languages, attended by 2,247 people from 79 countries.

In January 2021 the project launched a consultation paper to engage with non-profit organisations globally. The consultation paper was accompanied by a launch video and additional content developed by CIPFA.

To support the consultation there were:

The project is supported by individuals who kindly gave their time, and we would like to extend our thanks to all those who have volunteered their time or participated in the project consultation and events. Further details can be found in the 2020/21 project report .

The consultation paper received 205 responses from 33 countries around the world.

core services and ensure good financial management continues, while adapting and responding to the impacts of lockdown and processing additional government grants and reliefs.

CIPFA’s work in 2021 was integral to these efforts. Expert CIPFA staff continued to work closely with DLUHC to provide advice on business rates collection fund and accounting, all of which enabled the department to shape its planned funding package to local government.

Building public sector capacity

CIPFA’s team of Network advisors delivered over 100 events through webinar delivery. Through these events, our advisors supported public sector organisations to build capacity, supporting customers in finance, governance, procurement, revenues, police and fire, social care, insurance, and treasury management to over 4,000 practitioners across the events.

CIPFA Annual Report and Accounts 2021 27

Achieving Finance Excellence in Policing (AFEP)

With over 85% of police forces signed up to the AFEP II programme, we continue to be at the forefront of police finance. Working closely with National Police Chiefs' Council (NPCC), Association of Police and Crime Commissioners (APCC) and Police and Crime Commissioners Treasurers' Society (PACCTS), CIPFA progressed into AFEP II in 2021 to deliver the best possible financial management within the police sector.

The AFEP programme provides the platform for forces and PCCs to compare and learn from others while CIPFA continually develops and shapes its offer to specifically support the police sector. This helps us to maintain the collective vision of AFEP: “for police, by police.”

Achievements include:

We look forward to developing the next iteration of the programme, both individually and collectively, to best support forces and PCCs in meeting the vision of achieving financial excellence in policing.

Institute of Certified Public Accountants Rwanda (ICPAR)

In November, we commenced our new two-year project that will support the development of ICPAR’s public sector accounting. We are working with internal staff and external associates to develop an entrylevel technician qualification to be delivered through e-learning and examined online, aimed at Rwandan public sector finance staff. This is the first step in a longer-term relationship with ICPAR to support the improvement of public financial management in Rwanda.

Development of professional accounting skills in Albania

In October, members of the International team attended the first face-to-face training event organised under this World Bank-funded project. The project involves assisting the Albanian Ministry of Finance and Economy in developing and delivering a comprehensive capacity development programme to improve technical accounting capability and capacity across all tiers of government. The project commenced in January 2021 but due to COVID-19, all training sessions were initially held online.

Events

A total of 817 events were delivered in 2021, across conferences, webinars, workshops and training sessions. 13,490 delegates attended, with an average of 91% rating CIPFA events as either “Good” or “Excellent”.

CIPFA Property

Fifty-one Property Network events were delivered during 2021, attracting 1,532 delegates from a range of public and private sector organisations. The two qualification programmes, the Diploma in Public Sector Asset Management and the Certificate in Valuation, had 632 participants. CIPFA Property also completed 203 property condition surveys and 48 fire risk assessments for various local authorities, other public sector and third sector organisations and educational establishments.

28 CIPFA Annual Report and Accounts 2021

MHCLG-commissioned reviews

In reviewing 2021 performance it is important to recognise the impact of CIPFA’s advisory reputation to deliver high-quality independent reviews. A particular highlight was the commission by the then Ministry of Housing, Communities and Local Government (MHCLG, now DLUHC) to undertake eight financial reviews as part of capitalisation requests.

MHCLG formally appointed CIPFA to undertake a series of local government independent assurance reviews.

In October 2021, Property worked with the International team to deliver a pilot project of the Diploma in Public Sector Asset Management with AFROSAI-E, the English-speaking subgroup of the African branch of the International Organization of Supreme Audit Institutions (AFROSAI).

PF Awards 2021

These began in July and concluded in August, and were conducted at Redcar and Cleveland, Peterborough, Luton, Slough, Wirral, Bexley, Copeland and Eastbourne.

The reviews provided a detailed assessment of each council’s financial position and management, making recommendations where necessary of how each council can take action to improve. The positive response from the department to the work undertaken has led to further requests for support by them and indeed growth in revenue from the market in general. Each of the reports has also generated significant publicity and is a clear demonstration of the public benefit of CIPFA’s consultancy work.

Public Finance magazine

We were delighted that Public Finance magazine was named best magazine in its category at two separate award ceremonies in October – the memcom awards and the Association Excellence Awards. It was deserved recognition for the hard work and creativity from colleagues at CIPFA and Redactive that goes into the magazine and the wider PF portfolio.

There was a return to a major face-to-face event with the PF Awards ceremony and gala dinner at The Brewery in London on 28 September 2021. A total of 377 guests attended the evening, which was hosted by Aasmah Miah of Times Radio. A short keynote address was given by Comptroller and Auditor General Gareth Davies.

Awards were given across 16 categories with the Grand Prix Award going to winners of the outstanding procurement initiative award, the Procurement Department at Wrightington, Wigan and Leigh Teaching Hospitals NHS Foundation Trust.

CIPFA Annual Report and Accounts 2021 29

05 Staff and

Facilities/environment

The impact of the pandemic continues to skew the health, safety and environmental data and targets, and therefore detailed figures are not available. Wherever possible CIPFA continues to recycle paper, and all other appropriate materials such as food waste and unwanted furniture, in order to reduce our use of resources and lessen the impact on the environment.

The continuing COVID-19 pandemic meant that for most of the year the Birmingham and Edinburgh locations remained mothballed and there was only limited use of the Chester and London offices, each being supported by a small group of volunteer staff.

In the weeks leading up to Christmas, the CIPFA Birmingham office at 154 Great Charles Street was closed. The Apprenticeships team have now taken up residence in a managed office suite at Victoria Square, conveniently located close to Birmingham New Street station and the city’s main shopping and cultural district.

ISO accreditation

CIPFA’s ISO level certified management systems covering Quality and Health, Safety & the Environment remain in place and received their annual external audit with no non-conformances.

The Health, Safety and Environmental Management System (HS&EMS) outlines how we aspire to continually review our services in line with client needs, relevant environmental legislation and best practice, thereby maximising the efficiency of our resources. Our vision is to be widely known and respected for delivering safe, reliable services that cause minimal environmental impact. Our current system is certified under the ISO 45001:2018 Standard.

The HS&EMS also assists CIPFA in ensuring we operate in a professional manner to meet our clients’ requirements while taking due care and attention to provide a safe, healthy and secure working environment in which handling of personal information and general data is properly conducted.

The ISO 9001 Quality Management System (QMS) outlines CIPFA’s approach to implementing clear, efficient and repeatable processes that ensure that we provide a consistent quality service to both internal and external customers. CIPFA is committed to a continuous improvement culture and the QMS is essential in our considerations on how we can do things better, more efficiently and effectively.

Both systems are overseen by management review teams that are responsible for the overall content, process integrity and day-to-day running of the system. Regular review team meetings are held twice a year.

Our ISO 27001 accreditation – the international standard that sets out best practice for information security – lapsed in 2019. 2021 saw work towards reaccreditation, following significant investment and improvements in our infrastructure, adopting a riskbased approach to information security and actively identifying information security risks and appropriate controls to tackle them. Achieving reaccreditation in 2022 will ensure we are in the best possible preventative position to defend our information and organisation from cyber threats.

CIPFA employees

We recognise the importance of our employees in helping make CIPFA a stand-out organisation in the way we behave and the quality of the work we deliver for the public, members, customers, each other and everyone with a stake in our work. We want our people to share our commitment to CIPFA’s values and have fulfilling and challenging careers where they contribute to our success.

Our shared behaviours form part of our online employee performance process and are designed to foster and grow how we work. We have enabled employees to play a key role in the development of CIPFA’s vision, strategy and direction. This has included opportunities for communication and feedback at open forum engagement sessions that all staff attend, and through our leadership development programme,

CIPFA Annual Report and Accounts 2021 31

Pay gap reporting

Each year CIPFA publishes a gender pay gap report, identifying differences in both hourly salary and bonus payments between men and women working for the Institute. Due to our size, we are not legally required to publish our gender pay gap. Doing so is in keeping with our commitment to diversity, equality and inclusion, and helps hold us to account.

The 2021 report accounted for 196 employees, of whom 105 were men and 91 were women. We found an improvement on the 2020 position, with a 21% mean gender pay gap, and 8% median, based on hourly salary.

We have a higher proportion of men at the upper quartile of pay, which has an impact on the overall figures. As a relatively small organisation,

which is creating a cohesive senior management team for the organisation.

Our employee forum, a representative group of employees from across the organisation, provides a mechanism for employees to meet with senior management, discuss important business issues and provide feedback on matters that concern or interest our people. The forum was re-established in 2021 and new elections were held for representatives from each directorate across the organisation.

Our Diversity and Inclusion employee representative group provides input and feedback on our plans to implement our diversity and inclusion strategy, which along with employee development and wellbeing forms an important part of our people plans. In 2021 all employees attended workshops to raise awareness of equality, diversity and inclusion matters. Our employees also have access to the Mental Health and

any changes to headcount will also affect these numbers.

We recognise the need to improve on our current gender pay gap, as well as encouraging more women to apply for senior positions. We are confident that we have a fair and consistent approach to paying individuals, and are committed to being an equal opportunities employer, appointing the best candidate for each role – regardless of their gender or other personal characteristics.

We have voluntarily reported our gender pay gap annually since 2017, an ongoing activity linked to the pay review process. We have also undertaken analysis of our ethnicity pay gap and will publish the results soon.

Wellbeing hub we provide to members and students, and we have trained a group of employees as mental health first aiders, offering further means of support and information to people when needed.

During the last year we engaged with employees about potential changes to the way we work and – based on our experience of remote working during the global pandemic – we have been able to shift to a new hybrid working model. This new, flexible approach to the way we work is an important part of our employment offer and we believe it will help us to attract and retain talented people.

Our employees remain committed and engaged with our mission and have performed admirably during what has been another exceptional year. As we emerge from the pandemic and its consequences we will push on with our ambition to ensure CIPFA remains a great place to work.

32 CIPFA Annual Report and Accounts 2021

CIPFA’s year in numbers

----- Start of picture text -----
Location of
CIPFA students
UK [2,061]
33
Republic
of Ireland
465
Europe
748
382
Asia
Americas 479
1,376 Other
Africa
----- End of picture text -----

Student demographic

49% female (2,715 students)

51% male (2,827 students)

CIPFA Annual Report and Accounts 2021 33

06 v v ".

Name and nature of the charity

The full name of the charity is the Chartered Institute of Public Finance and Accountancy (CIPFA). It is governed by Royal Charter granted in 1959, most recently amended in 2018, and is registered with the Charity Commission for England and Wales, number 231060.

CIPFA is also registered with the Office of the Scottish Charity Regulator. The registration number is SC037963.

CIPFA is managed and regulated in accordance with its Charter and bye-laws.

To advance the To advance and science of public promote any finance and of scheme or schemes Charitable accountancy and (howsoever objectives cognate subjects constituted), having as applied to all or as one or more of any of the duties their objects the imposed upon review or regulation and functions in the public interest undertaken by of the establishment To promote and To advance and public service of standards by, to publish the promote co- bodies, and to and the training, results of studies operation between promote public regulatory and and research work accountancy education therein. disciplinary activities therein and in bodies in any way. and procedures of, related subjects. any one or more accountancy bodies.

Within the charity is a network of branches and regions. They work alongside CIPFA helping to deliver the charitable objects, principally through the provision of support and information to members and students locally.

Public benefit

CIPFA’s work building trust and delivering excellence in public financial management, accountancy and related disciplines aims to ensure public money and services are managed effectively, efficiently and securely for the benefit of all.

We seek to preserve at all times the professional independence of qualified accountant members of the Institute in whatever capacities they may be serving, promoting excellence in governance and ethical standards.

Through our activities as a standard setter and educator, and our advisory and consultancy services, we support our members, students and finance professionals in a wide range of public sector settings. As such, our work benefits the public through excellence in the management of the public finances.

The Council confirms that it has complied with the duty under the Charities Act 2011 to have due regard to the Charity Commission’s guidance on public benefit.

Membership of CIPFA is open to all who can demonstrate the required academic achievement. Fees are kept to a minimum through subsidy supplied by profits generated through the subsidiary company.

CIPFA Annual Report and Accounts 2021 35

The governance structure

----- Start of picture text -----
CIPFA Council
Holds Royal Charter
Sets governance structures
Sets direction
CIPFA Board CMB
Nominations
Day-to-day oversight Day-to-day management
Committee
of CIPFA of CIPFA
SMB PFMB Portfolio Board
Education QA and Sets accounting Programme
membership standards management of CIPFA
Commercial Board
SMB Audit CommitteePFMB
Provides busin ess
Education QA and Provides assuranceSets accounting
membershipexpertise standards
Remuneration
Committee
----- End of picture text -----

Key: Regional and advisory boards and panels

36 CIPFA Annual Report and Accounts 2021

Subsidiaries

CIPFA has a wholly owned subsidiary company: CIPFA Business Limited, Companies House registration number 2376684, and a majority holding in CIPFA C.Co Ltd, registration number 10212053.

CIPFA Business Ltd is the management support services company of CIPFA and has a separately constituted board of directors. It specialises in providing financial advice and governance, property and asset management solutions, and the supply of information and expertise.

The CIPFA Business Ltd Board comprises the president, vice president, three non-executive directors, the chief executive, director of finance and the chief operating officer.

The charity (including regional groups) and the subsidiary company are reported on a consolidated basis.

Governance structure

The Institute’s overarching governing body is the Council. The membership of Council is specified in the bye-laws and consists of no more than 41 individuals with three groupings:

Biographies for all current Council members are publicly available on CIPFA’s website .

The membership of Council is refreshed on a twoyear cycle, with individuals serving a maximum of six consecutive years before being required to have a twoyear break. Honorary officers serve one year in post. The president, an elected member, chairs Council.

A programme of induction is provided for new Council members and mentors are arranged from the cohort of more experienced Council members.

Council is responsible for the strategic direction of CIPFA and approving major developments. It also

approves the terms of reference and delegated powers of its committees and boards. Through delegation to the CIPFA Board, it is responsible for the effective oversight of the operations of CIPFA and its subsidiary company. The Council normally meets four times a year.

The Institute’s bye-laws, as approved by the Privy Council, give Council the power to appoint “trustees” who act as Council’s representatives on CIPFA Board. In 2021, these individuals were provided with additional training on the Charities Act 2011.

However, CIPFA recognises that Council remains the Institute’s sovereign body and reserves decisionmaking powers on matters such as strategic direction, approval of the annual report and accounts and appointing the chief executive. These responsibilities are inherent to the role of a charity trustee. Therefore, Council and CIPFA Board have decided that in the interest of transparency and to improve clarity of responsibilities all Council members will be registered as trustees with the Charity Commission.

These individuals are fully appraised of their trustee duties and have declared themselves fit to act. The induction for new Council members and Council Handbook have been amended to emphasise the trustee responsibilities. There is no change to the delegations or CIPFA’s governance framework.

We are committed to continuous improvement and recognise that good governance is as much about behaviour and culture as it is structure. All governance groups participate in an annual self-assessment exercise and we annually assess ourselves against the Charity Governance Code. In 2021, CIPFA Board participated in two facilitated development sessions and initiated annual one to one reviews of all board members, conducted by the chair.

In December 2021, Council received a report from Martin Sinclair, who had been invited to review progress against the recommendations in his review of the actions taken and lessons learned from the failure of the London Counter Fraud Hub project. One year on his assessment was that:

“Governance within CIPFA has improved significantly; there has been investment in developing governance structures; embedding better processes; improving understanding of roles and necessary skills; and working to create a shared culture and positive behaviours.”

CIPFA Annual Report and Accounts 2021 37

“All of the LCFH Review recommendations on governance processes have been implemented together with other actions identified subsequently.”

Council accepted in principle Martin Sinclair’s recommendation to strengthen governance through greater continuity for the chairing of CIPFA Board. Currently the president chairs both Council and CIPFA Board with annual rotation. Separating the chairing allows for an appointment of longer tenure on CIPFA Board, supporting better continuity and sustainability of approach. A Task and Finish Group is overseeing the plans for implementing this change.

Delegations

Having set the strategy for the organisation, Council delegates oversight of CIPFA’s business to the CIPFA Board, which implements the approach through other boards and committees.

The CIPFA Board comprises six Council members (which include the four honorary officers of the Institute), two non-executive directors, the chief executive and the director of finance.

All boards and committees are formally constituted with terms of reference. The Council acts on advice and information provided by the executive. Members of Council are able, where appropriate, to take independent professional advice at no personal expense so that they are able to fulfil their role.

Statement of Council responsibilities

The trustees must ensure that the annual report and financial statements are made in accordance with applicable law and regulations. They are also responsible for the integrity of the corporate and financial information included on the charity’s website.

Charity law requires the trustees to prepare financial statements for each financial year. Statements must give a true and fair view of the charity and the group and their financial activities in accordance with UK Generally Accepted Accounting Practice (UK Accounting Standards).

In preparing these financial statements, the trustees are required to:

The trustees must disclose with reasonable accuracy at any time the financial position of the charity and the group, and ensure that the financial statements comply with the Charities Act 2011.

Trustees are also responsible for safeguarding the assets of the charity and the group and ensuring their proper application in accordance with charity law. This includes taking reasonable steps for the prevention and detection of fraud and other irregularities.

The trustees have adopted the Charity Governance Code. While CIPFA complies with the seven principles of the code, the trustees acknowledge the need to apply the code and to strive for excellence. Therefore, we continuously review our application of the code and take actions where necessary. Over the coming year we will focus on improving our practice in relation to Principle 6: Equality, diversity and inclusion, and our safeguarding responsibilities as highlighted under Principle 3: Integrity.

Conflicts of interest are reviewed annually and at the beginning of each meeting.

Trustees

The gender balance of Council is currently 15 women and 26 men.

On completion of this term of office a small number of trustees will have served more than the nine years maximum recommended in the Charity Governance Code. These individuals were Council members when governance changes were introduced in 2014; at this point the decision was taken to ‘reset the clock’.

38 CIPFA Annual Report and Accounts 2021

Council members and attendance chart

Council
20/21		 Council
21/22		 Council Audit
Committee		 Co-opted
member		 CIPFA
member
Naeem Ahmed 3/3
Caroline Al-Beyerty 2/3
David Aldous 2/2
Deirdre Bane 3/3
DannyBatten 2/2
John Bloomer 4/4
Michael Brodie 3/4
James Charlton 2/2
AmyCrowson 2/3
Carol Culley 4/4
Jane Cuthbertson 2/4
Nadeem Dean 3/3
Stephanie Donaldson 3/3
Mike Driver 3/4
TonyEra 4/4
Pete Gillett 2/3
Kathryn Goodall 2/2
Will Goodchild 3/3
Claire Gravil 3/3
Shaer Halewood 1/2
Richard Harbord 1/2
Andrew Hardy 4/4
Elizabeth Honer 3/4
Vanessa Howlison 2/4
Milt Isaacs 1/2
Toshihiko Ishihara 1/2
Hari Iyer 4/4
Peter Kane 2/2
Catherine Little 2/4
Muhammad Maqbool 2/2

CIPFA Annual Report and Accounts 2021 39

Council
20/21		 Council
21/22		 Council Audit
Committee		 Co-opted
member		 CIPFA
member
Mark McBride 4/4
Lynda McMullan* 1/3
Leslie Milne 2/2
Umesh Naicker 3/3
Mike Newbury 1/3
Rosanne Nulty 1/2
Lee Outhwaite 4/4
Colin Owen 3/3
Jayne Owen 4/4
Suresh Patel 2/2
Caroline Rassell 4/4
Marcus Richards 3/3
Angela Ridgwell 2/3
Chris Roberts 3/3
Mohammed Sajid 2/2
Renaud Seligmann 2/2
Geoffrey Simpson 3/3
Luke Smith 3/3
Jason Vaughan 3/3
Hardev Virdee 2/3
Maria Wanland 3/3
Kelly Watson 3/4
Peter Welch 3/3
Mark White 3/4
Ian Williams 3/3
Jon Williams 1/2
Carolyn Williamson 2/2
Lee Yale-Helms 2/2
Derek Yule 4/4

40 CIPFA Annual Report and Accounts 2021

Key individuals and sub-committees

Audit CIPFA Students Public Financial Remuneration Commercial Nominations
Committee Board and Members Management Committee Board Committee
Board Board
Chair Lyn Mike Caroline Carol Joe Joe Andy
Davies Driver Rassell Culley Sealy Sealy Hardy
Vice Jason Joe Mark Caroline Jane Roger Jane
Chair Vaughan Sealy McBride Al-Beyerty Cuthbertson Alderson Cuthbertson
Female 2 Female 4 Female 7 Female 4 Female 4 Female 3 Female 6
Male 6 Male 6 Male 6 Male 8 Male 4 Male 7 Male 4

Audit Committee

Maintains oversight of corporate governance throughout the CIPFA Group and management of external and internal audit.

CIPFA Board

Provides oversight of operational matters and delivery of the business plan, including management of impact on the environment and people. Guides, monitors and challenges development and operations in line with the strategy set by Council. Ensures an effective risk management strategy is maintained across the CIPFA Group.

Students and Members Board

Oversight of activities to develop the membership and professional standards including member services, education and training. This includes advising and supporting the CIPFA Regions and supervising the Disciplinary Scheme.

Public Financial Management Board

Oversees the Institute’s work on policy and technical issues including the specialist Forums and therefore plays a key role in CIPFA’s thought leadership and influence on public finance management. Supports the

continuous improvement of standards in public finance, management and governance, particularly in UK local government where the Institute has formal standard setting responsibilities.

The Board holds responsibility for formal approval of all updates to Institute codes of practice, with any new codes approved by Council in the first instance.

Remuneration Committee

Holds full delegated responsibility for decision making in relation to pay and conditions of specified members of staff employed by the CIPFA Group, including the CEO and executive directors.

Commercial Board

Guides commercial operations in line with the overall strategic direction set by Council. Oversees the wholly owned subsidiary, CIPFA Business Ltd.

Nominations Committee

Supports Council by overseeing the elections and appointment processes and advising on nominations. Ensures that all appointments and nominations support the Institute’s diversity and inclusion objectives.

CIPFA Annual Report and Accounts 2021 41

Directors of CIPFA Business Limited

The directors of CIPFA Business Ltd are all experienced in business or the markets that it serves. Brief details of their background and experience are included below.

Roger Alderson

Roger has spent a significant portion of his career working internationally, as a consultant (with the McKenna Group), a strategist (with Perot Systems) and a marketing director (with EDS, HP and Logica). Roger has proven experience working with a range of organisations from start-ups to multi-nationals and has operated from both headquarters and the field.

Mary Bishop

Mary is a fellow of the Association of Chartered Certified Accountants (ACCA), and a former Director of Learning for ACCA Global. Her experience of learner needs spans both SMEs and listed companies across circa 200 countries as well as academic institutions. With industry experience herself as a leader in education, technology, manufacturing and utility businesses, she is an author of over 15 books including the first edition of the Oxford Dictionary of Accounting.

Mike Driver CB (President)

Mike’s career in public service started when

he joined the Department of Health and Social Security. He worked in operational delivery before moving into regional management and then into a series of policy roles. He transitioned into government finance in 1999, where he held several CFO and senior finance posts, including CFO at the Department for Work and Pensions from 2012, and in 2016 Mike was appointed as CFO for the Ministry of Justice. In 2017 Mike was appointed Head of the Government Finance Function for HM Treasury. As Head of the GFF, Mike was focused on driving the agenda to substantially strengthen the Finance Function’s critical role at the heart of government.

In August 2020 Mike spent six months as the Interim Permanent Secretary at the MoJ, before being appointed the Senior Responsible Officer for the Borders and Managed Quarantine Service. In September 2021, after 42 years, Mike retired from the Civil Service and now has a portfolio career.

Gareth Moss

A CIPFA-qualified accountant, Gareth is a former Director of Resources of two local authorities. Before becoming Finance Director he worked in CIPFA’s Consultancy arm, advising public sector bodies on issues as wide as financial management, governance and senior staff recruitment.

Gareth’s past employment includes roles at Serco, where he was responsible for their local government contracts, Price Waterhouse and several local authorities.

Gareth is a non-executive director at Worcestershire Children First and chairs the John Taylor Multi Academy Trust (based in Staffordshire and Derbyshire).

Jayne Owen

Jayne is Finance and Resources Director of North Wales Housing Association, a successful social enterprise providing homes and delivering services across North Wales

She is a CIPFA-qualified accountant with 30 years’ public sector experience, including five years as Treasurer/Director of Finance. Prior to taking up this role, Jayne undertook the role of Director of Finance (Police and Crime) for the Greater Manchester Combined Authority. This and previous roles involved significant complexity, with accountability for multi-million pound budgets and advising on the deployment of these resources. Areas of expertise include treasury management, financial planning, audit, procurement, commissioning, value for money, organisational transformation and effective governance.

42 CIPFA Annual Report and Accounts 2021

Joe Sealy

Founding Partner at Greater Pacific Capital, Joe was previously a managing director in the investment banking division at Goldman Sachs. Joe has been a specialist in providing strategic advice to clients covering communications, media, entertainment, advertising and security. He is an experienced strategic advisor to corporations, investors and government institutions across multiple regions and industries.

He was Partner at KPMG in strategy consulting and implementation and has also held positions as an advisor in the public sector, specialising in privatisation and outsourcing.

Mark Thomson

Mark Thomson is an experienced business leader, having held high-profile senior positions in both the private and public sector. As Director General for UK Visas and Immigration and Her Majesty’s Passport Office, Mark led teams responsible for managing around 10 million visa and passport applications a year and advised the Home Secretary on immigration strategy and policy.

Rob Whiteman CBE

Rob is CIPFA’s Chief Executive. He formerly held a senior civil servant role as the Chief Executive of the UK Border Agency and led the Improvement & Development Agency. Rob has also worked in local government as Chief Executive of the London Borough of Barking and Dagenham and Director of Resources at the London Borough of Lewisham.

Key management personnel remuneration

The trustees consider the CIPFA management board, which includes the chief executive, as comprising the key management personnel of the charity.

The CIPFA management board is made up of the executive directors of CIPFA and CIPFA Business Ltd. It is responsible for directing and controlling, running and operating the charity on a day-to-day basis.

All trustees give of their time freely and no trustee remuneration was paid in the year.

The remuneration committee has full delegated responsibility for decision making in relation to the pay and conditions of senior management including the chief executive in relation to remuneration, including:

The pay of the CIPFA management board is reviewed annually and is informed by any general pay award within the Institute. In the case of the chief executive, any changes to current salary, terms and conditions, bonus awards, etc are considered on advice from the honorary officers, and on receipt of recommendations from the chair of the remuneration committee.

Key: Non-executive director Member of the CIPFA Group Remuneration Committee CIPFA Trustee

CIPFA Annual Report and Accounts 2021 43

The Institute provides a single discretionary group bonus scheme, applicable to all eligible employees including the CIPFA management board, which has clear trigger points and also allows for investment in the organisation’s future growth.

The trigger point and target surplus are reviewed and agreed as part of the annual business planning process by the trustees. The trigger and the split between bonus scheme pot and investment may vary. The bonus scheme is triggered when CIPFA generates a trading surplus above the approved business plan. All bonus awards are subject to the overall value of the bonus pot and based on assessment of individual inyear performance.

In the case of the CIPFA management board, the chief executive recommends any bonus awards to the remuneration committee. In the case of the chief executive, any bonus award is considered on advice from the honorary officers, and on receipt of recommendations from the chair of the remuneration committee.

The committee obtains independent professional advice as required including to compare and benchmark CIPFA’s practices against those of other organisations. Executive remuneration is also benchmarked periodically with organisations of a similar size within the sector and activity to ensure that the remuneration set is fair and not out of line with that generally paid for similar roles. Such advisors may attend meetings as necessary.

Equal opportunities, diversity and inclusion

CIPFA is committed to the principle and practice of equal opportunities and aims to be an equal opportunities employer. We aim to go beyond legislative requirements to improve diversity of representation and inclusivity in our role as an employer and as a membership body.

Our employment policy seeks to ensure that no job applicant or employee receives less favourable treatment on the grounds of sex, marital status, pregnancy and maternity, sexual orientation, race, religion or belief, age, disability, gender reassignment or any other grounds that are unjustifiable in terms of equality of opportunities for all.

We have introduced mandatory diversity and inclusion training for all employees and have embarked on a wider programme of activity to improve mental health and wellbeing, equality, diversity and inclusion.

The Nominations Committee embraces CIPFA’s commitment to equal opportunities and to improving diversity of backgrounds and viewpoints. Its role includes identifying candidates to stand for CIPFA Council; it also recommends to Council candidates for co-option as well as chair and vice chair roles on major boards and committees. The criteria on which the committee’s decisions are based include diversity considerations.

44 CIPFA Annual Report and Accounts 2021

CIPFA’s year in numbers

Number of students based in each sector

----- Start of picture text -----
601
1,734 1,069 287
Central
International Local government Health
government
211 215
75
3 Private Third sector
Education
Housing
----- End of picture text -----

Total number of students: 5,544*

*1,349 other sectors

CIPFA subscribing organisations

----- Start of picture text -----
52
12
Private
499 Education
2
Local Housing
government
23 23
9
Central
Third sector 1
government Health
Other
----- End of picture text -----

Total number of organisations : 621

CIPFA Annual Report and Accounts 2021 45

ities and risks

Opportunities

As the world learns to adapt to operating in a post-COVID-19 world, with continued reductions in spending across the public sector in the UK and internationally, and an increasingly fragile world economy, our customers are faced with many challenges. However, this also presents opportunities for CIPFA, through training, consultancy activity, leadership and support.

The Institute’s reputation has been established over years of promoting best practice in public finance and guiding public bodies through the toughest challenges. 2021 was no exception to that and saw CIPFA’s internal operations continue to respond well to the global pandemic, but it also provided opportunities for our services to support customers and members during difficult times. CIPFA continues to see these as its central roles, which makes it the first choice for public sector finance professionals looking for advice and help when the pressure is on. We are dedicated to public service, we understand how public sector organisations work and we provide bespoke support. Our UK and international advisory work continues to support organisations deal with funding, economic and COVID-19 related challenges.

As the world’s only public sector accountancy body there is strong demand for our expertise around the globe. Internationally, demand for public services is growing. By investing in our overseas capability, CIPFA is able to help governments across the world establish sound financial management and train the professionals needed to deliver high-quality services. Our strategy reflects these opportunities.

CIPFA invests significant time and resources into ensuring new finance professionals are fully prepared for their future careers and will operate to the highest standards. During 2021, CIPFA’s Education and Training Centre has continued to focus efforts on ensuring its professional qualification and its apprenticeship offers are cutting edge, engaging and fit for purpose, to encourage new and talented individuals choose a career in public finance.

Fraud is a recognised and growing problem for the public sector, which is why CIPFA’s Counter Fraud Centre (CCFC) works to ensure public bodies have the training and support to stamp out the crime wherever it appears.

Risk management and internal control

Risks are monitored and reported on a quarterly basis at all levels of the Institute including the CIPFA management board, CIPFA Board and the Audit Committee. Risks are addressed as part of the business planning process and placed under the management of a senior member of staff and the appropriate board or committee. The Council and its Audit Committee are satisfied that all reasonable steps are being taken to manage exposure to major risks.

Our risk management strategy was reviewed in 2021 and our processes refreshed. We rolled out training for all staff and undertook a bottom-up refresh of risk identification. This process enabled us to ensure we are aligning risk management to the level of risk mandated by CIPFA Council.

We operate a comprehensive business planning process, with an annual business plan and budget set by the CIPFA Board and approved by the Council. We have introduced a performance dashboard that is reviewed by the CIPFA management board monthly, and forecasts are revised on a quarterly basis as a minimum. The performance dashboard is used as a single information source to streamline performance reporting at all levels of governance including every CIPFA Board meeting.

CIPFA maintains a comprehensive set of delegations of authority and financial regulations. The financial controls and procedures are reviewed regularly and compliance with them verified by the work of the internal and external auditors.

We maintain a comprehensive set of policies and procedures, including whistleblowing, data protection, health and safety, complaints handling, code of conduct and register of interests for Council members,

CIPFA Annual Report and Accounts 2021 47

non-executive directors and senior staff. The Audit Committee reviews CIPFA’s accounting and financial reporting practices on behalf of the Council. Internal audit reviews are prioritised using a risk-based approach. Recommendations are followed up.

Risks

We are increasingly vigilant to the shifting geopolitical context and its potential impact on our international growth and UK public bodies.

CIPFA is investing in significant change with our transformation programme and wider strategic plans; we have rigorous governance in place to oversee the change management.

We continue to respond to the changing market for our qualifications and training, taking strategic measures to ensure we meet the needs of a student-led market and respond to changing demographics.

We have taken steps to improve the connection between the development of our products and services and customer feedback to maintain relevance and diversify our offer.

48 CIPFA Annual Report and Accounts 2021

----- Start of picture text -----
Principal risks for CIPFA What the risks mean How we manage the risks
We need to be more responsive Our products and solutions risk losing Introduction of Forums and
and agile to keep pace with value. This is exacerbated by scarcity increased integration of market and
market and customer challenges, in customer funding and resources. customer insight. Diversification
issues and risks. There would be an impact on the of products, services, markets
delivery of our objectives, including and sectors to maintain our
our charitable aims. income base.
The market for professional Reduced student numbers lead to a Redeveloped PAQ launched with
qualifications is increasingly reduction in members and a smaller brand and messaging to counter
driven by student choice. The Institute, which in turn impacts our portability perception. Working
perceived lack of portability ability to support existing members closely with employers.
of our qualification makes us and customers.
less attractive to trainees in
government bodies and firms.
CIPFA is viewed as a local Acts as a barrier to developing in Developing CIPFA Connect as a
government organisation. other markets; diversification could new subscription offer along with
undermine our brand. new products and services for
other markets.
Loss of the right to deliver Significant financial and reputational Ofqual application process has
apprenticeship training or end- impact on CIPFA. enabled us to mitigate many of
point assessments. the risks identified. Programme
of continuous monitoring
and improvement.
CIPFA is not seen as a Failure to compete in the employment ‘CIPFA and me’ programme being
progressive and ambitious place market to attract and retain the rolled out. Initial stages including
to work and lacks a performance best staff. leadership and management
culture. We lack differentiation in training are complete.
the employment market.
Lack of structured approach to Failure to improve efficiency and Incorporated into business
change management leads to evolve in order to achieve growth. planning and culture change
benefits not being realised. programme initiated.
Time and capacity are required Impact on performance and delivery This is being factored into
to enable us to scale safely and of objectives. business planning and under
respond to new developments. continuous review.
Pension deficits and historic run Insufficient to fund us to grow out Operating surplus used to
down of reserves has left our of trouble and invest in ambitious strengthen the balance sheet and
balance sheet weak. future plans. in negotiation with the pension
fund to explore closure of the fund.
----- End of picture text -----

CIPFA Annual Report and Accounts 2021 49

08 Fina fyA

CIPFA ended the year with a negative balance sheet of £3.7m and the statement of financial activities shows a positive net movement of £12.2m for the year.

The improvement in the CIPFA balance sheet is due to movements in the FRS 102 pension valuation. CIPFA operates two pension schemes: a funded defined benefit pension scheme and a defined contribution group personal pension plan that has been offered to new members of staff since 1 January 2007.

The assets and liabilities of the Wiltshire Pension Fund of the Local Government Pension Scheme are subject to a full actuarial valuation every three years in accordance with the requirements of the Local Government Pension Scheme (Administration) Regulations 2008. The latest valuation of the scheme was carried out as at 31 March 2019.

With effect from 1 April 2017 the “employer’s” contributions are made up of two elements – a fixed sum annual payment for past service and an employer’s contribution rate of 26.0% of pensionable earnings for future service until the next triennial valuation. At the March 2019 valuation CIPFA had a pension deficit of £4,567,000.

The assumptions used in the actuarial valuation as at 31 March 2019, together with the market value of assets and funding level were:

Rate of return on investments

3.3%

Rate of increase in salaries

2.7%

Retail price inflation

2.3%

Funding level for CIPFA staff

95%

Deficit for CIPFA staff £4.567m

CIPFA Annual Report and Accounts 2021 51

However, FRS 102 rules require inclusion of the year-end valuation calculated on the basis defined in that standard. The scheme actuary has valued the pension scheme in accordance with FRS 102 for the purpose of the statutory financial statements. FRS 102 methodology differs from that used in the triennial funding valuation, particularly in the determination of the discount rate.

The valuation uses the projected unit credit method of valuation, projecting the valuation results of the latest formal valuation date (31.03.19). This allows for changes in financial assumption, among other factors. Similarly liabilities are rolled forward and any changes in pensionable payroll and asset values are also taken onto account, but it is important to stress that FRS 102 is not a formal valuation and that the pensions reserve valuation under FRS 102 is only a snapshot in time and will fluctuate.

The costs of a pension arrangement require estimates regarding future experience. These assumptions are largely prescribed at any point and reflect market conditions at the reporting date. Changes in market conditions that result in changes in the net discount rate (essentially the difference between the discount rate and the assumed rates of increase of salaries, deferred pension revaluation or pensions in payment), can have a significant effect on the value of the liabilities reported. The assumptions used have been discussed with the scheme’s actuary.

The variability inherent in FRS 102 valuations can be demonstrated by CIPFA’s recent history:

Year-end balance Actuarial gain/(loss)
Year Year-end pension valuation (£000) sheet position (£000) (£000)
TRIENNIAL FRS 102
(@ 31.03.XX) (@ 31.12.XX)
2016 (13,000) (34,471) (11,389) (16,500)
2017 (28,825) (4,492) 8,603
2018 (21,477) 981 3,868
2019 (4,567) (27,152) (7,498) (6,190)
2020 (38,567) (15,905) (11,266)
2021 (30,523) (3,673) 8,092

52 CIPFA Annual Report and Accounts 2021

2021 2020
CIPFA group operating statement £000 £000
Income 26,603 26,417
Costs (excluding restructuring costs) (22,881) (22,948)
3,722 3,469
Restructuring costs (137) (404)
Operating proft/(loss) 3,585 3,065
Intangible impairment (63) (74)
FRS 102 pension credit (48) (149)
Net income/(expenditure) 3,474 2,842
Gain on property valuations 666 17
Actuarial gain on pension scheme 8,092 (11,266)
Net movement in funds 12,232 (8,407)

Although the pension fund deficit poses a long-term issue for CIPFA, our governing Council recognises that FRS 102 does not, of itself, affect cash flows. This is because CIPFA makes employer contributions to the pension fund on the basis of advice from the scheme actuary as part of their report on the triennial valuation. Following the 2019 triennial revaluation, the primary employer contribution rate (costs of new benefits accruing) will increase over the three-year valuation period from April 2020 by 3.2%, and the secondary employer rate (deficit repayment) decreased by 30.0% over the same period.

The objective is to fund the deficit over a total of 14 years. We acknowledge our pension fund obligations and have a clear strategy to manage the deficit, which includes a deficit reduction plan that is designed to get the scheme to self-sufficiency by 2033 subject to continued discussion and agreement with the pension scheme trustee board. The scheme is not open to new members of staff and the cost implications have been

built into our business plans. The Council will continue to closely monitor any further upward pressure on the contribution rate and it is included in the CIPFA risk register. The resulting defined benefit pension scheme liability is presented separately after other net assets on the face of the balance sheet.

CIPFA has entered into dialogue with the administrators of the scheme (Wiltshire Pension Fund) to close the scheme to future accrual. At the time of signing these accounts those negotiations had not concluded.

For the third successive year, CIPFA returned an operating profit. It was £3.474m for the year (before non-cash FRS 102 pension and property adjustments), as a consequence of the improvement in areas of our business.

CIPFA Annual Report and Accounts 2021 53

This retained surplus will enable CIPFA to invest in our strategic priorities:

In addition, the Board has indicated a desire to ensure our finances are resilient to future economic challenges.

Financial review and related policies

To be a strong advocate for sound public financial management, having a positive influence and impact on practice.

To be the membership, education and lifelong learning provider of choice for public finance professionals.

To support and advise organisations, strengthening their public financial management.

The total income for the CIPFA Group was £26.6m (2020: £26.4m) a small increase of £0.2m (0.75%).

The net movement in funds shows an improvement of £12.2m (2020: £8.4m deterioration), the actuarial gain on the defined benefit pension scheme, a modest gain in property assets and a substantial operating profit.

Detailed analysis of group operating income and expenditure shows some variations between 2020 and 2021. Our Advisory, Networks and Education and Training teams delivered a strong performance, continuing to respond well to the requirements caused by the pandemic uncertainties during the year.

The business continues to respond to the needs of the changing market, as the impact of the government’s policies, most notably the reduction in public services spending, continue. At the tail end of 2021 we saw some small impact as the result of economic and inflationary headwinds, and we expect those to continue into 2022. Despite these challenges, and the continued highly competitive trading conditions that our services operate within, we had a strong underlying performance in 2021.

This result, allied with the continued development of our portfolio and keeping the cost base under review, will enable us to continue to respond effectively to the demand for performance improvement and transformation support in public services.

To deliver exceptional business support, with the customer as our focus.

54 CIPFA Annual Report and Accounts 2021

----- Start of picture text -----
Income by source
0.9%
(0.9%)
11.3%
(11.3%)
15.0%
(15.0%)
53.3% Analysis of group
(53.3%) operating income
2021 (2020)
19.4%
(19.4%)
0.1%
(0.0%)
Membership subscriptions Educating and training Other trading activities
student members
Advancing public finance Regulation and Other income
and promoting best practice supporting members
Expediture by source
0.3%
(0.3%)
24.4%
(22.5%)
41.1% Analysis of group
(47.0%) operating expediture
2021 (2020)
28%
(23.9%)
6.2%
(6.2%)
Advancing public finance Regulation and Impairment
and promoting best practice supporting members
Educating and training Other trading expenses
student members
----- End of picture text -----

CIPFA Annual Report and Accounts 2021 55

CIPFA Business Ltd (CBL) is the professional services business of CIPFA. As part of the CIPFA Group, CBL governance arrangements are integrated with CIPFA. The CIPFA Commercial Board, which meets at least five times a year, also acts as the CIPFA Business Board and is responsible for taking decisions and monitoring the business and performance. The majority of the directors are independent non-executives.

CIPFA C.Co Ltd commenced trading in July 2016 when former directors and senior managers from local government, who had successfully supported the transformation of public services, formed a partnership CIPFA. CIPFA C.Co Ltd has been established to support public sector organisations deliver the levels of transformation required to deliver public services against the backdrop of budget reductions. The aim of the company is to work with organisations that deliver public services to help them improve the advancement and wellbeing of society.

Reserves policy

At 31 December 2021 CIPFA had total funds excluding the pension liability of £26.9m (2020: £22.7m). Overall CIPFA had negative total funds, including the pension liability, of £3.7m with total negative unrestricted funds of £3.7m.

At 31 December 2021 there were total designated funds of £16.5m (2020: £15.4m) and a revaluation reserve of £5.2m (2020: £4.7m). The designated funds are represented by the property fund showing the cost of the freehold buildings and investment properties as at 31 December 2015 and the designated fund for other fixed assets. The revaluation reserve relates to the revaluation of freehold and investment property.

At 31 December 2021 there were restricted funds of £62,000 (2020: £97,000) comprising trust funds and regional funds that have been established either by way of donations in memory of eminent accountants within public finance or from various organisations.

----- Start of picture text -----
Total income for the CIPFA GroupTotal income for the CIPFA Group
20212020
£26. 64 m
20202018
£26. 49 m
----- End of picture text -----

56 CIPFA Annual Report and Accounts 2021

The CIPFA Board, on behalf of Council, reviews its reserves annually. The CIPFA Board view of CIPFA’s overall position remains cautious despite the improved performance in recent years. It recognises that CIPFA remains vulnerable to economic downturns given its heavy dependence on commercial income and the public sector market.

It considers that CIPFA needs to hold reserves to protect core activities in the event of income shortfall and to enable balanced long-term strategic planning. This means being able to fund obligations, including employer pension contributions, but ideally not at the cost of charitable activities. The approved reserves policy recognises that measuring total unrestricted funds is only one indicator and includes fixed assets that could not easily be converted to cash. Hence CIPFA Council focuses much of its effort on monitoring the group cash and current asset/liability position, including management of the pension deficit described above.

In recognition of this focus, the Board defined two key financial targets:

1. The group should have available cash or cash equivalent resources of in excess of £2m, being broadly one month’s cash requirement.

2. The group should hold a level of other charitable funds equivalent to two months of CIPFA Group expenditure. Other charitable funds exclude CIPFA’s property assets, which are treated as designated funds, revaluation and pension reserves.

During 2021, the CIPFA group operated for zero working days with less than its target cash availability, compared to 21 working days in 2020, 74 working days in 2019 and 73 working days in 2018. In relation to its reserves target, while CIPFA’s total funds excluding the pension reserves at the year-end stood at £26.9m, this includes property assets of £21.0m (2020: £20.5m) that could only be realised on the sale of the property. The other charitable funds at the year-

end were £5.1m representing a surplus against the reserves target of £3.8m. Cash balances have held up particularly well relative to previous years as a result of the underlying business performing well and returning an operating profit, of £3.5m for the year, and tighter cash management. Despite that the balance sheet shows a net current liability position at the end of 2021.

The continued emphasis on cash management and improving the current asset position will therefore be a feature for 2022 and beyond.

The CIPFA reserves position is a deficit of £3.673m (2020: £15.905m deficit) complicated by the inclusion of the FRS 102 pensions reserve, which stands at a deficit of £30.523m (2020: £38.567m deficit). Within that our designated funds (principally the Mansell St property) have remained stable at £16.461m (2020: £15.350m). However, our charitable funds (free reserves available for investment) have seen a large increase and now stand at £5.121m surplus (2020: £2.484m) as a result of the operating surplus in 2021. This figure exceeds our target of having reserves of two months’ average expenditure, ie £3.8m (2020: £3.9m). The Board has indicated it wishes to revisit the existing policy during 2022. Our cash flow forecasting across the period of review indicates that sufficient working capital is available for CIPFA to satisfy all of our commitments as they fall due.

Going concern

The CIPFA Board, on behalf of Council, has assessed the ability of CIPFA to continue as a going concern and have considered several factors when forming their conclusion as to whether the use of the going concern basis is appropriate when preparing these financial statements. This has included the revised budget for 2022 and forecast for 2022–26 contained in the business plan, cash flow forecasts to 31 December 2023 and a consideration of the key risks. These include the extended impact of the recovery from COVID-19 on the continued operation of CIPFA’s

CIPFA Annual Report and Accounts 2021 57

activities and our revised methods of working, as well as the impact on our customers. In addition, during the preparation of the budgets we undertook some sensitivity analysis on service areas around income and expenditure assumptions included in the final submission to the Board.

In addition, the Board is aware of the impact of the likely increase in prices during 2022. It is unlikely that CBL will be able to pass on all of its rising costs to customers, increasing pressure on margins and necessitating even tighter control of the cost base. The Board believes that its strategy of diversifying products in existing markets and identifying new markets will manage the inflation risks. In addition, and in order to mitigate the risk, the Board has considered earmarking elements of the 2021 surplus and will explore this, alongside a review of its reserves policy, during 2022.

Since the changes forced on our operations by the pandemic in 2020, our activities have settled into digital by default and that is now considered our preferred mode of activity, but not the only one. We are adapting our services to incorporate a greater use of remote activity than before the pandemic and we have reflected that in our plans. We do not anticipate an adverse impact on our finances – in fact, greater take up of those services and delivery at a reduced cost have been built into the business plan. We continue to anticipate access to broader markets given this mode of delivery and our operational resilience and lower risk will continue.

We maintain our focus on high-quality products and services to our members and customers and continue to seek innovations in the delivery of those services and products.

cash position throughout the year, with average balances exceeding our cash target for every day of the year. Such was the strength of our cash position that in September we took the decision to make an early repayment of the cash flow loan that was taken out in 2019.

CIPFA continues to face a pension fund deficit that remains subject to the future volatility of the pension scheme’s liabilities as a result of changing actuarial variables. Pension scheme considerations and contributions are incorporated into our business plan and considerable work is being undertaken to close the scheme to future accrual. The business plan also considers the terms and conditions of the existing bank facilities.

Having regard to the above, the trustees believe there are no material uncertainties surrounding the decision to adopt the going concern basis of accounting in preparing the financial statements.

Investment policy

Byelaw 59 details the extensive investment powers that are bestowed upon the Council. Given the annual cycle of fluctuation in cash balances held, the current investment policy is limited to depositing surplus funds with a range of approved institutions in tranches with a range of maturity dates. The policy focuses on low risk and readily realisable investment forms. Within these confines, we seek to obtain the best interest rates possible.

Fundraising

CIPFA had no fundraising activities requiring disclosure under section 162A of The Charities Act 2011.

In addition, we have maintained our tight controls over expenditure and investment, only releasing the investment that is included in the business plan when we are comfortable that the underlying business performance warrants that. 2022 anticipates a higher level of investment than we have seen previously, recognising our stronger financial health as well as a need to improve services to remain competitive. 2021 saw a continued improvement in our cash management processes and as a result a far healthier

58 CIPFA Annual Report and Accounts 2021

09 Our future 'plans .

CIPFA is the only professional accounting institute in the world that deals exclusively with public sector finance. No other Institute is able to comment with the breadth and depth that we can, both for and on behalf of the public sector. The challenges in 2022 and beyond for the public sector are as significant as they have ever been, and helping the public sector across the world respond to these challenges is reflected in our growth plans contained in the 2022–2026 business plan.

As an organisation we will be responding to some major global challenges to assist the public sector’s response to them: the emerging economic crisis, climate change, the advent of globalisation and the need for sustainability reporting. With very low inflation levels for a long period of time, many senior public sector finance professionals will not have experienced the anticipated levels of inflation and will need support to deal with them. We will need to help the public sector manage the emergence of disruptive technology and use data in a proactive and predictive way and accommodate their impact on the accountancy, audit and public finance profession. We will continue to lead on preventing and fighting the rising tide of corruption and fraud across the globe. We will complement governments as they seek to professionalise the public sector with tailored training and development.

CIPFA is a membership body that supports our members and students, ensuring we equip them with the tools to deliver best-in-class public financial management across the whole of their career. CIPFA is a charity, promoting best practice in public finance to ensure the money and resources used on behalf of citizens are raised and spent fairly, transparently and effectively. CIPFA sets the standards that UK local government and organisations worldwide adopt. CIPFA is a trainer, delivering accountancy and other qualifications that are relevant to the public sector, and preparing students for the future. We have lifelong

learning materials to support career development in line with a clearly defined competency framework for public finance professionals. In 2022 we will launch our benchmark chartered professional accountancy qualification, grow our capacity to meet rapidly rising demand for accountancy apprenticeships in the UK and extend our accredited training programmes in finance, governance and counter fraud globally.

To support CIPFA’s aims, our business teams work with the organisations that employ our students and members, and other key public finance stakeholders, to ensure – at the organisational level – public finance is working at its strongest, contributing to effective and efficient public services. In 2022 CIPFA will continue to build on its recent strong performance in the advisory field, supporting public sector financial resilience improving organisational capacity and good governance.

In 2022 we will implement ‘CIPFA and me’, our new people strategy, which sets out what we offer staff and what we expect from them. We will create an environment where people want to work and can perform at their best. We will create a culture where our people are supported, engaged and empowered to fulfil their potential and deliver results. We will also initiate the plans set out in our new diversity and inclusion strategy supporting staff, members and the wider profession to improve access and opportunity for progression in their careers regardless of background as well as developing our approach to sustainability and sustainability reporting.

Through our new business plan and strategy CIPFA will focus on our key account sectors – local government, central government, health and social care, international, police and property – while also remaining responsive to the wider market. We will continue to collaborate with other professional accounting organisations, ministries of finance and supreme audit institutions across the globe, growing our student and member base.

60 CIPFA Annual Report and Accounts 2021

2021 was a particularly strong year for CIPFA in terms of our business performance and financial position; we will look to consolidate this success and invest in services, digital delivery and key new capabilities evolving CIPFA’s policy, research and evidence base, investing in product development and digitising our services.

Notwithstanding recent growth, there remains significant uncertainty arising from COVID-19 and a sluggish global economic outlook and these are still challenging times, so we will continue to balance investment with a cautious approach, building a stronger balance sheet and reducing our long-term liabilities. During 2021 we announced plans to explore closer working with the Institute of Chartered Accountants of England and Wales and we will develop those plans during 2022, in consultation with the membership and our stakeholders.

The trustees’ annual report was approved on 27 April and signed on their behalf by Mike Driver CB, CIPFA President.

Mike Driver CB President

Rob Whiteman, CBE CEO

CIPFA Annual Report and Accounts 2021 61

10 ative

The full name of the charity is the Chartered Institute of Public Finance and Accountancy (CIPFA). It is a charity by Royal Charter granted in 1959 and is registered with the Charity Commission for England and Wales, number 231060.

CIPFA is also registered with the Office of the Scottish Charity Regulator. The registration number is SC037963.

Principal Office

77 Mansell Street London E1 8AN

Principal Advisers

Bankers

Lloyds Bank Plc Villiers House 48-49 Villiers Street London WC2N 5LL

CIPFA Management Board

Chief Executive: Rob Whiteman CBE

Director of Finance: Gareth Moss (joined January 2021) Chief Operating Officer: Dan Worsley

Insurers

Bartlett and Company Ltd Broadway Hall Horsforth Leeds LS18 4RS

Director of Policy and Membership: Drew Cullen

Solicitors (disciplinary)

Director of Public Financial Management: Karen Sanderson (resigned March 2022)

Director of International: Khalid Hamid

Interim Director of Transformation: Ravi Dhindsa

Head of HR: Darren Parris (resigned February 2022) Head of HR: Clare Thompson (joined February 2022)

Company Secretary and Chief of Staff: Nicola Hannam

DAC Beachcroft 100 Fetter Lane London EC4A 1BN

Solicitors (corporate)

Ashtons Legal Trafalgar House, Meridian Way, Norwich NR7 0TA

Auditor

Crowe U.K. LLP 55 Ludgate Hill London EC4M 7JW

CIPFA Annual Report and Accounts 2021 63

Financia

Consolidated statement of financial activities for the group

Year ended 31 December 2021

Year ended 31 December 2021
2021 2020
Note £000 £000
Income
Income from charitable activities:
Membership subscriptions 2,956 2,995
Advancing public fnance and promoting best practice 3,800 3,967
Educating and training student members 5,404 5,138
Regulation and supporting members 33 0
12,193 12,100
Other trading activities:
Income from information, advisory
and property services 2 14,189 14,081
Investments:
Interest received 0 9
Other income:
Property sales and rentals 3 221 227
Total income 26,603 26,417
Expenditure
Expenditure on charitable activities:
Advancing public fnance and promoting best practice 5,648 5,314
Educating and training student members 6,475 5,644
Regulation and supporting member 1,433 1,466
13,556 12,423
Other expenditure:
Expenditure from information, advisory
and property services 2 9,510 11,078
Impairment of intangible asset 8 63 74
Total expenditure 4 23,129 23,575
Net income (expenditure) 3,474 2,842
Other recognised gains/losses:
Gain on revaluation of fxed assets 18 666 17
Actuarial gain on defned beneft pension scheme 7 8,092 (11,266)
Net movement in funds 12,232 (8,407)
Reconciliation of funds
Fund balances brought forward at 1 January (15,905) (7,498)
Fund balances carried forward at 31 December (3,673) (15,905)

The results set out in the above Statement of Financial Activities all relate to continuing operations and includes the net restricted expenditure attributable to the non-controlling interest in CIPFA C.Co Ltd of £5k net expenditure (2020: £5k net income). There are no other gains or losses, other than those recognised above and therefore no separate statement of total recognised gains and losses has been presented. Further analysis can be found in note 19.

The notes on pages 68 to 87 form part of these financial statements.

CIPFA Annual Report and Accounts 2021 65

Consolidated balance sheets

as at 31 December 2021

as at 31 December 2021
Group CIPFA
2021 2020 2021 2020
Note £000 £000 £000 £000
Fixed assets
Intangible assets 8 520 552 292 263
Tangible assets 9 13,947 13,710 13,930 13,638
Investment property 10 7,200 6,975 7,200 6,975
Investments 11,12 9 9 409 409
21,676 21,246 21,831 21,285
Current assets
Stocks and work in progress 14 476 299 391 157
Debtors 15 3,369 2,862 2,335 1,962
Cash at bank and in hand 7,031 6,011 4,701 1,244
10,876 9,172 7,427 3,363
Creditors:amounts falling due
within one year 16 (5,702) (7,105) (2,468) (2,090)
Net current (liabilities)/assets 5,174 2,067 4,959 1,273
Total assets less current liabilities 26,850 23,313 26,790 22,558
Long-term liabilities
Creditors:amounts falling due after more than one year:
Loan 17 0 (651) - -
Net assets excluding pension liability 26,850 22,662 26,790 22,558
Defned beneft pension scheme liability 7 (30,523) (38,567) (30,523) (38,567)
Net assets/(liabilities) including pension liability (3,673) (15,905) (3,733) (16,009)
Funds
Restricted funds 19 41 42 41 42
Minority interest 21 55 - -
Unrestricted funds
Designated funds 16,461 15,350 16,461 15,350
Revaluation reserve 5,206 4,731 5,206 4,731
Other charitable funds 5,121 2,484 5,082 2,435
Total funds excluding pension liability 26,850 22,662 26,790 22,558
Pension reserve 7 (30,523) (38,567) (30,523) (38,567)
Total funds including pension liability (3,673) (15,905) (3,733) (16,009)

The financial statements of CIPFA’s branches, regions, and students’ societies are incorporated within the Charity’s financial statements. Before consolidation into the group financial statements, the charity made a surplus of £3,518,000 in 2021 (2020: a surplus of £1,083,000) The surplus for this year is before other recognised gains of £8,758,000 (2020 losses of £11,249,000). Approved and authorised for issue by the Council on 4 May 2022 and signed on its behalf by:

President

Chief Executive

The notes on pages 68 to 87 form part of these financial statements.

66 CIPFA Annual Report and Accounts 2021

Consolidated statement of cash flows

for the year ended 31 December 2021

for the year ended 31 December 2021 for the year ended 31 December 2021
Note
2021
£000
2021
£000
2020
£000
2020
£000
Net cash provided by operating activities
2,451
4,577
Cash fows from investing activities
Interest received
-
8
Purchase of intangible fxed assets
(128)
(381)
Purchase of tangible fxed assets
(113)
(215)
Net cash (used in) investing activities
(241)
(588)
Cash fows from fnancing activities
17
Commercial loan
2
(1,156)
(484)
Interest paid
(34)
(69)
Net cash provided by fnancing activities
(1,190)
(553)
Net increase in cash and cash equivalents
1,020
3,437
b/fwd Cash at bank
6,011
2,574
c/fwd Cash at bank
7,031
6,011
Notes to the cash fow statement
A. Net cash (used in) operating activities
Note
2021
£000
2020
£000
Net income
Current year pension
7
Interest receivable
Interest payable
2
Commercial loan
17
Depreciation and amortisation charges
8 & 9
Impairment of intangible asset
8
(Increase) in stocks and work in progress
(Increase)/decrease in debtors
(Decrease) in creditors		 3,474
2,842
48
149
-
(8)
35
69
1,156
484
410
420
63
74
(177)
(189)
(507)
879
(2,051)
(142)
2,451
4,577
At 1 Cash- At 31
Jan fows Dec
2021 2021
B. Analysis of changes in net debt £000 £000 £000
Cash in hand 6,011 1,020 7,031
Commercial loan (1,156) 1,156 -
Total 4,855 2,176 7,031

CIPFA Annual Report and Accounts 2021 67

Notes to the financial statements

1 Accounting policies

Company information

The full name of the charity is the Chartered Institute of Public Finance and Accountancy (CIPFA). It is a public benefit entity set up by Royal Charter granted in 1959 and is registered with the Charity Commission for England and Wales. The charity registration number is 231060. CIPFA is also registered with the Office of the Scottish Charity Regulator. The registration number is SC037963. CIPFA is a Public Benefit Entity and its registered office is 77 Mansell Street, London, E1 8AN.

Accounting conventions

The consolidated financial statements comprise the financial statements of CIPFA, and its subsidiary undertakings, CIPFA Business Ltd, registration number 2376684 and CIPFA C.Co Ltd, registration Number 10212053 on a line by line basis and adjusted for the elimination of inter-group transactions and balances.

Going concern

The CIPFA Board, on behalf of Council, has assessed the ability of CIPFA to continue as a going concern and have considered several factors when forming their conclusion as to whether the use of the going concern basis is appropriate when preparing these financial statements. This has included the revised budget for 2022 and forecast for 2022–26 contained in the business plan, cash flow forecasts to 31 December 2023 and a consideration of the key risks, including the extended impact of the recovery from COVID-19 on the continued operation of CIPFA’s activities and our revised methods of working as well as the impact on our customers. In addition during the preparation of the budgets we undertook some sensitivity analysis on service areas around income and expenditure assumptions included in the final submission to the Board.

In addition the Board is aware of the impact of the likely increase in prices during 2022. It is unlikely that CBL will be able to pass on all of its rising costs to customers, increasing pressure on margins and necessitating even tighter control of the cost base. The Board believes that its strategy of diversifying products in existing markets and identifying new markets will manage the inflation risks. In addition, and in order to mitigate the risk the Board has considered earmarking elements of the 2021 surplus and will consider this, alongside a review of its reserves policy, during 2022.

Since the changes forced on our operations by the pandemic in 2020, our activities have settled into digital by default and that is now considered our preferred mode of activity, but not the only one. We are adopting our services to reflect a greater use of remote activity than before the pandemic and we have reflected that in our plans. We do not anticipate an adverse impact on our finances – in fact, greater take up of those services and delivery at a reduced cost have been built into the business plan. We continue to anticipate access to broader markets given this mode of delivery and our operational resilience and lower risk will continue.

We maintain our focus on high quality products and services to our members and customers and continue to seek innovations in the delivery of those services and products.

In addition we have maintained our tight controls over expenditure and investment, only releasing the investment that is included in the business plan when we are comfortable that the underlying business performance warrants that. 2022 anticipates a higher level of investment than we have seen previously, recognising our stronger financial health as well as a need to improve services to remain competitive. 2021 saw a continued improvement in our cash management processes and as a result a far healthier cash position throughout the year, with average balances exceeding our cash target for every day of the year. Such was the strength of our cash position in September we took the decision to make an early repayment of the cash flow loan which was taken out in 2019.

68 CIPFA Annual Report and Accounts 2021

CIPFA continues to face a pension fund deficit which remains subject to the future volatility of the pension scheme’s liabilities as a result of changing actuarial variables. Pension scheme considerations and contributions are incorporated into our business plan and considerable work is being undertaken to close the scheme to future accrual. The business plan also considers the terms and conditions of the existing bank facilities.

The CIPFA reserves position is a deficit of £3.673m (2020: £15.905m deficit) complicated by the inclusion of the FRS102 Pensions reserve which stands at a deficit of £30.523m (2020: £38.567m deficit). Within that our designated funds (principally the Mansell St property) have remained stable at £16.461m (2020: £15.350m). However, our charitable funds (free reserves available for investment) have seen a large increase and now stand at £5.121m (2020: £2.484m) surplus as a result of the operating surplus in 2021. This figure exceeds our target of having reserves of two months' average expenditure £3.8m (2021 £3.9m). The Board has indicated it wishes to revisit the existing policy during 2022. Our cash flow forecasting across the period of review indicates that sufficient working capital is available for CIPFA to satisfy all of our commitments as they fall due.

Having regard to the above, the Trustees believe there are no material uncertainties surrounding the decision to adopt the going concern basis of accounting in preparing the financial statements.

Basis of preparation

The financial statements have been prepared under the historical cost convention as modified by the revaluation of freehold land and buildings and investment property and in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) – effective 1 January 2019.

The functional currency of CIPFA and its subsidiary entity is considered to be GBP because that is the currency of the primary economic environment in which the group operates. The consolidated financial statements are also presented in GBP.

Further details of the CIPFA’s active subsidiary undertakings are provided in note 2.

The financial statements of CIPFA’s branches, regions, and students’ societies are incorporated within the charity’s financial statements.

Income recognition

Income is credited to the statement of financial activities in the year to which it relates. Income is deferred only when conditions have to be fulfilled before CIPFA becomes entitled to it or where the donor has specified that the income is to be expended in the future period. In the case of membership subscriptions and subscriptions for journals and electronic services any receipt in respect of future years is shown as deferred income.

Government grants

Government grants are recognised on the performance model, when the charity has complied with any conditions attaching to the grant and the grant will be received.

Investments

Investment properties are measured at fair value annually with any change recognised in the Statement of Financial Activities. The trustees deem market value to be a fair approximation of fair value for the purpose of obtaining annual valuations. A full valuation is undertaken every three years and interim valuations are performed in intermediate years.

CIPFA Annual Report and Accounts 2021 69

Expenditure recognition

Expenditure, including irrecoverable value added tax, is debited to the Statement of Financial Activities on an accruals basis:

Pensions

CIPFA operates two pension schemes for its staff. The first is a funded defined benefit pension scheme under the Superannuation Act 1972, which is subject to the Local Government Pension Scheme (Administration) Regulations 2008 and which, from 1 January 2007, staff are only eligible to join under specific circumstances. The second pension scheme introduced from 1 January 2007 is a defined contribution Group Personal Pension Plan via Aegon.

Defined Benefit Pension Scheme

Pension contributions are paid to a local government defined benefit pension scheme in accordance with the recommendations of actuaries. The scheme is funded, with the assets of the scheme held separately from those of CIPFA, in separate trustee-administered funds.

CIPFA has fully adopted Financial Reporting Standard FRS 102 for the accounting treatment of retirement benefits.

Current service costs, past service costs, gains and losses on settlements and curtailments, interest on pension scheme liabilities and the expected return on pension scheme assets are charged to resources expended.

Actuarial gains and losses are recognised immediately as other recognised gains and losses, after net incoming/ (outgoing) resources for the year.

As detailed in note 7, pension scheme assets are measured at fair value and liabilities are measured on an actuarial basis and discounted at a rate equivalent to the current rate of return on a high-quality corporate bond of equivalent currency and term to the scheme liabilities. The actuarial valuations are obtained triennially and are updated at each balance sheet date. The resulting defined benefit pension scheme liability is presented separately after other net assets on the face of the balance sheet.

CIPFA has entered into dialogue with the administrators of the Scheme (Wiltshire Pension Fund) to close the Scheme to future accrual. At the time of signing these accounts those negotiations had not concluded.

Defined Contribution Scheme

Defined contributions are paid to the Group Personal Pension Plan via Aegon in accordance with the group policy. The policy allows for minimum employee contributions of 3%, with the employer contributing double the employee contribution up to a maximum of 10%.

CIPFA C.Co Ltd operates a defined contributions Personal Pension Plan via Royal London, with defined contributions paid in accordance with the company policy.

Stocks and work in progress

Stocks and work in progress are stated at the lower of cost and net realisable value. Work in progress comprises the cost of ongoing projects and work performed on contracts not yet billed to clients. Costs include direct labour, contractual costs and attributable overheads.

Leased assets – lessee

Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on such a basis. Benefits received and receivable as an incentive to sign an operating lease are similarly spread on a straight-line basis over the lease term.

70 CIPFA Annual Report and Accounts 2021

Leased assets – lessor

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

Research and development

Research and development is normally written off as incurred, except for specific projects that are deemed to generate future benefit.

Intangible fixed assets – development expenditure

Intangible fixed assets represent development costs capitalised in accordance with FRS 102. These are stated at historical cost and amortised on a straight-line basis over the period which revenue is expected to be generated (three to five years).

Amortisation is recognised in the statement of financial activities under expenditure on charitable activities.

Tangible fixed assets and depreciation

Freehold property is held at valuation and depreciated over 50 years. Revaluations are undertaken by an independent valuation expert annually. A full valuation is undertaken of freehold property every three years and interim valuations in intermediate years. Included in the fixed asset note is the carrying amount that would have been recognised had the assets been carried under the historical cost model.

Other fixed assets are capitalised and depreciated if the value is greater than £1,000 for an individual asset or greater than £5,000 for a capital project.

Tangible fixed assets are depreciated from the month the assets are first used on a straight-line basis over their estimated economic lives as follows:

Years
Computer equipment 3
Furniture, fttings and other equipment 5

Assets under construction relate to refurbishment and information technology development and are not depreciated until brought into use.

Deferred taxation

Deferred tax is provided in full in respect of material timing differences between the treatment of certain items for taxation and accounting purposes. A deferred tax asset is only recognised where the conditions for recognition in FRS 102 are satisfied and such balances may fall due after more than one year.

Fund accounting

Unrestricted funds held by the charity are:

Designated funds – these are unrestricted funds set aside by the trustees for specific future purposes or projects.

Other charitable funds – these are unrestricted general funds that can be used in accordance with the charitable objects at the discretion of trustees.

Restricted funds are those funds that can only be used for particular restricted purposes within the objects of the charity. Restrictions arise when specified by the donor or when funds are raised for particular restricted purposes.

Further explanation of the nature and purpose of each fund is included in the notes to the accounts.

Critical accounting judgements and key sources of estimation uncertainty

The key sources of estimation uncertainty that have a significant effect on the amounts recognised in the financial statements are described in the accounting policies and are summarised below:

Pension liabilities – The charity recognises its liability to its defined benefit pension scheme which involves a number of estimations as disclosed in note 7. These estimates were made having taken advice from the Scheme’s Actuary.

CIPFA Annual Report and Accounts 2021 71

Valuation of land and buildings and investment property – The charity’s land, buildings and investment property are stated at their estimated fair value based on professional valuations as disclosed in note 9 and 10.

Financial instruments

Financial assets and financial liabilities are recognised when CIPFA becomes a party to the contractual provisions of the instrument. Additionally, all financial assets and liabilities are classified according to the substance of the contractual arrangements entered into. Financial assets and liabilities are initially measured at transaction price (including transaction costs) and are subsequently re-measured where applicable at amortised cost. Assets and liabilities held in foreign currency are translated to GBP at the balance sheet date at an appropriate year-end exchange rate.

72 CIPFA Annual Report and Accounts 2021

2 Profits from trading activities of subsidiary

CIPFA has one active wholly-owned trading subsidiary: CIPFA Business Ltd, registration number 2376684. The principal activities of CIPFA Business Ltd are networks, advisory and research. CIPFA Business Ltd remits a proportion of its profits to CIPFA by means of gift aid. Audited accounts are filed with the Registrar of Companies.

CIPFA additionally owns a 88% (2020 75%) interest in the trading subsidiary CIPFA C.Co Ltd, registration number 10212053 that commenced trading in July 2016. The principal activities of CIPFA C.Co Ltd are strategy, transformation and improvement advisory services. A summary of the trading results of both subsidiaries are shown below.

2021 2020
Proft and loss account – CIPFA Business Ltd £000 £000
Turnover 13,385 13,187
External charges (2,464) (1,581)
Staff costs (5,080) (5,884)
Depreciation (116) (89)
Other operating charges (973) (2,545)
Operating proft 4,752 3,088
Interest receivable - 8
Interest payable (34) (71)
Proft on ordinary activities before taxation 4,718 3,025
Tax on proft on ordinary activities - -
Proft after taxation 4,718 3,025
Retained proft (115) (1,878)
Gift aid to CIPFA (4,721) (1,262)
Retained in subsidiary (118) (115)
Net assets 282 285
2021 2020
Proft and loss account – CIPFA C.Co Ltd £000 £000
Turnover 798 904
Staff costs (554) (604)
Other operating charges (284) (320)
Operating proft (40) (20)
Proft on ordinary activities before taxation (40) (20)
Tax on proft on ordinary activities -1 -
Retained in subsidiary (41) (20)
Net assets 178 218

3 Property income

3 Property income
2021 2020
£000 £000
Rent and dilapidations from tenants 221 227
221 227

Property income is the income from tenants occupying parts of the Mansell Street property during the year.

CIPFA Annual Report and Accounts 2021 73

4 Total resources expended

Group Support costs
Activities
direct
costs
£000
Human
resources
£000
ICT
£000
Finance
& admin
support
£000
Marketing
& public
relations
£000
Governance
£000
Defned
beneft
pension
costs
£000
2021
Total
£000
Charitable expenditure:
Advancing public fnance
and promoting best practice
Educating and training
students
Regulation and supporting
members		 4,011
176
414
168
668
182
29
5,648
4,668
255
653
263
411
209
16
6,475
1,079
96
78
35
96
46
3
1,433
Total charitable costs
Other expenditure:
Expenditure from
information, advisory and
property services
Impairment of intangible
asset		 9,758
527 1,145
466
1,175
437
48 13,556
6,465
146
548
723
1,542
86
-
9,510
63
63
16,286
673 1,693
1,189
2,717
523
48 23,129
Total 2020 15,982
511 1,489
1,266
3,746
432
149 23,575
Basis of allocation:
– Charitable costs
Headcount
Work
Income
Estimated
Income Headcount
– Information, advisory and
property services
Actual
cost
Actual
cost
Actual
cost
Actual
cost
Actual
cost
Net income for the year is stated after charging
2021
£000
2020
£000
FRS 102 pension
48
149
Depreciation and amortisation
409
419
Impairment
63
74
Operating lease rentals
168
163
Auditor fees – group
2021
£000
2020
£000
Statutory audit – Crowe
50
49
Statutory audit – Other
6
6
Tax advisory services
10
12
66
67

74 CIPFA Annual Report and Accounts 2021

5 Governance costs

5 Governance costs
2021 2020
Group £000 £000
Audit fees 56 55
Internal audit fees 41 18
Council, committees and boards 82 62
Management and governance support 280 220
Apportionment of costs supporting governance activities 65 77
524 432

6 Employees

6 Employees
2021 2020
Group £000 £000
Salaries and wages (including temporary staff) 9,756 10,065
National insurance 1,061 1,120
Pension costs 1,784 1,650
Other staff costs 874 574
Redundancy and termination costs 137 404
13,612 13,813

Redundancy and termination payments of £137,000 (2020: £404,000) were paid during the period and are recognised in the statement of financial activities. These costs include £0 one off pension costs (2020: £0).

Ex-gratia payments of £Nil (2020: £31,000) were paid during the period and are recognised in the Statement of Financial Activities.

The average number of employees in the Group in 2021 was 214 (2020: 219).

2021 2020
Group No No
Advancing public fnance and promoting best practice 24 22
Educating and training student members 38 34
Regulation and supporting members 4 5
Governance 2 3
Support services 94 90
CIPFA Business Ltd 45 59
CIPFA C.Co Ltd 7 6
214 219

CIPFA Annual Report and Accounts 2021 75

Senior employees received remuneration falling within the following ranges:

CIPFA CIPFA CIPFA CIPFA CIPFA CIPFA
Business C. Co Ltd Business C. Co Ltd
2021 2021 2021 2020 2020 2020
£230,000 – £239,999 - - - 1 - -
£210,000 – £219,999 1 - - 1 - -
£150,000 – £159,999 - 1 - - 1 -
£130,000 – £139,999 1 - - 1 - -
£120,000 – £129,999 1 - - 1 - -
£110,000 – £119,999 - - - 2 - -
£100,000 – £109,999 1 - 1 1 - -
£90,000 – £99,999 4 - - 2 - 1
£80,000 – £89,999 5 1 1 3 3 -
£70,000 – £79,999 5 1 2 7 2 1
£60,000 – £69,999 14 6 - 11 8 4

Of the senior employees 30 CIPFA (2020: 28), 9 CIPFA Business Ltd (2020: 14) and 4 CIPFA C.Co Ltd (2020: 6) are members of the pension schemes. Employer pension contributions made on behalf of senior employees in 2021 was £756,000 (2020: £827,000).

Remuneration of key management personnel

Key management is made up of the chief executive and the executive directors. CIPFA’s total cost, including pension and national insurance, for key management personnel for 2021 was £1,122,000 (2020: £1,215,331). The total cost for the chief executive, including pension and national insurance, was £246,000 (2020: £241,444).

Volunteers

CIPFA is supported by a strong network of volunteers who play a vital role advancing our objectives of advancing public finance, promoting best practice, educating and training student members and regulating and supporting members.

Volunteers sit on our Council, boards, committees and policy panels; they also undertake regional engagement and are involved in organising regional events.

76 CIPFA Annual Report and Accounts 2021

7 Pensions

CIPFA operates two pension schemes for its staff:

The Local Government Pension Scheme – this is a statutory, defined benefit pension scheme. Pension benefits in the scheme are determined by reference to an individual’s pensionable pay at retirement and their length of scheme membership. The Local Government Pension Scheme is administered through 100 funds across the UK. CIPFA is an admitted body in the Wiltshire Pension Fund, which is administered by Wiltshire County Council.

On 1 January 2007, CIPFA took the decision to largely close the scheme to new members, with membership only offered where business need dictates and approved by the Remuneration Committee.

The scheme is contributory for both employer and employees. Total contributions recognised in the statement of financial activities during 2021 were £1,175,138 (2020: £1,072,000). During 2021 dialogue commenced with Wiltshire Pension Fund to close the Scheme to future accrual. At the date of signing these accounts those discussions had not concluded.

The CIPFA Personal Pension Plan – this is a defined contribution, money purchase scheme, operated on behalf of CIPFA by Aegon. Pension benefits payable under the scheme are dependent upon contributions made and fund growth over the life of the scheme.

This scheme replaced the Local Government Pension Scheme as the default scheme for CIPFA employees joining on or after 1 January 2007.

The scheme is contributory for both employer and employees. The scheme allows for minimum employee contributions of 3%, with the employer contributing double the employee contribution up to a maximum of 10%.

The total pension cost to the group for the financial year, in respect of the pension schemes, for 2021 were £1,784,000 (2020: £1,654,000).

The Local Government Pension Scheme

The assets and liabilities of the Wiltshire Pension Fund of the Local Government Pension Scheme are subject to a full actuarial valuation every three years in accordance with the requirements of the Local Government Pension Scheme (Administration) Regulations 2008. The latest valuation of the scheme was carried out as at 31 March 2019.

With effect from 1 April 2017 the “employer’s” contributions are made up of two elements – a fixed sum annual payment for past service and an employer’s contribution rate of 26.0% of pensionable earnings for future service until the next triennial valuation. At the March 2019 valuation CIPFA had a pension deficit of £4,567,000.

The assumptions used in the actuarial valuation as at 31 March 2019, together with the market value of assets and funding level were:

Rate of return on investments 3.3%
Rate of increase in salaries 2.7%
Retail price infation 2.3%
Funding level for CIPFA staff 95.0%
Defcit for CIPFA staff £4.567m

The actuary has valued the pension scheme in accordance with FRS 102 for the purpose of the statutory financial statements. FRS 102 methodology differs from that used in the triennial funding valuation, particularly in the determination of the discount rate.

The FRS 102 disclosures are shown below.

CIPFA Annual Report and Accounts 2021 77

The amounts recognised in the balance sheet are as follows:

2021 2020
£000 £000
Fair value of employer assets 113,290 107,410
Present value of funded obligations (143,778) (145,940)
Present value of unfunded liabilities (35) (37)
Net (underfunding) in funded plans (30,523) (38,567)
Net (liability) (30,523) (38,567)
Amount in balance sheet:
Liabilities (30,523) (38,567)
Assets - -
Net (liability) (30,523) (38,567)
2021 2020
Reconciliation of defned beneft obligation £000 £000
Opening defned beneft obligation 145,977 127,224
Current service cost 638 787
Past service cost - -
Interest cost 2,018 2,524
Contribution by members 125 150
Actuarial (gains)/losses (745) 18,252
Past service losses - -
Losses on curtailments - -
Benefts paid (4,200) (2,960)
Closing defned beneft obligation 143,813 145,977
2021 2020
Reconciliation of fair value of employer assets £000 £000
Opening fair value of employer assets 107,410 100,072
Expected return on assets 1,482 1,985
Contributions by members 125 150
Contributions by the employer 1,126 1,177
Actuarial (loss)/gain 7,347 6,986
Estimated benefts paid (4,200) (2,960)
Closing fair value of employer assets 113,290 107,410
2021 2020
Recognition within the statement of fnancial activities £000 £000
Current service cost (638) (787)
Past service cost - -
Interest cost (2,018) (2,524)
Expected return on employer assets 1,482 1,985
Past service loss - -
Contributions by employer 1,126 1,177
Losses on curtailments and settlements - -
Total amount (charged)/credited within net incoming resources (48) (149)
Actuarial gain/(loss) 8,092 (11,266)
Total amount (debited)/credited to statement of fnancial activities 8,044 (11,415)

78 CIPFA Annual Report and Accounts 2021

The major categories of plan assets as a percentage of total plan assets 2021 2020
Equities 54% 52%
Bonds 34% 37%
Property 12% 11%
Cash 0 0
Principal assumptions at the balance sheet date 2021 2020
Pension increase rate 2.9% 2.4%
Salary increase rate 2.8% 2.0%
Discount rate 1.9% 1.4%
Assumes life expectations on retirement age 65:
Current pensioners – males 21.9 21.7
Current pensioners – females 24.4 24.0
Future pensioners – males 22.9 22.5
Future pensioners – females 26.2 25.5

The amounts for the current and previous periods are as follows:

2021 2020 2019 2018 2017
£000 £000 £000 £000 £000
Defned beneft obligation (143,813) (145,977) (127,224) (110,654) (117,881)
Scheme assets 113,290 107,410 100,072 89,177 92,056
(Defcit) (30,523) (38,567) (27,152) (21,477) (25,825)

CIPFA Annual Report and Accounts 2021 79

8 Intangible assets

8 Intangible assets
Other Assets under Total
£000 construction £000
A Group £000
Development at cost
At 1 January 2021 816 177 993
Additions - 128 128
Transfers 91 (91) -
Impairment - (63) (63)
At 31 December 2021 907 151 1,058
Amortisation
At 1 January 2021 441 - 441
Charge for year 97 - 97
At 31 December 2021 538 - 538
Net Book Value 31 December 2021 369 151 520
Net Book Value 31 December 2020 375 177 552
Other Assets under Total
construction
B CIPFA £000 £000 £000
Development at cost
At 1 January 2021 355 177 532
Aquisition during year - 128 128
Transfers 91 (91) -
Impairment - (63) (63)
At 31 December 2021 446 151 597
Amortisation
At 1 January 2021 269 - 269
Charge for year 36 - 36
At 31 December 2020 305 - 305
Net book value 31 December 2021 141 151 292
Net book value 31 December 2020 86 177 263

Intangible assets relate to product software, delivery and supports software, the costs of learning material to support students training for the professional qualification and migration of our servers to Amazon Web Service. The assets under construction relate to the periodic refresh of the learning materials, and an interface to assist recognition of our apprenticeship income streams.

80 CIPFA Annual Report and Accounts 2021

9 Tangible fixed assets

9 Tangible fxed assets
Freehold land Furniture & Computers Total
& buildings Fittings
A Group £000 £000 £000 £000
Cost or valuation
At 1 January 2021 13,550 1,396 2,615 17,561
Revaluations 250 - - 250
Additions - - 108 108
At 31 December 2021 13,800 1,396 2,723 17,919
Depreciation
At 1 January 2021 - 1,332 2,519 3,851
Charge for year 191 55 66 312
Revaluations (191) - - (191)
At 31 December 2021 - 1,387 2,585 3,972
Net Book Value 31 December 2021 13,800 9 138 13,947
Net Book Value 31 December 2020 13,550 64 96 13,710
Freehold land Furniture & Computers Total
& buildings Fittings
B CIPFA £000 £000 £000 £000
Cost or valuation
At 1 January 2021 13,550 1,172 2,178 16,900
Revaluations 250 - - 250
Additions - - 107 107
At 31 December 2021 13,800 1,172 2,285 17,257
Depreciation
At 1 January 2021 - 1,154 2,108 3,262
Charge for year 191 16 49 256
Revaluations (191) - - (191)
At 31 December 2021 - 1,170 2,157 3,327
Net Book Value 31 December 2021 13,800 2 128 13,930
Net Book Value 31 December 2020 13,550 18 70 13,638

The tangible fixed assets are held for charitable use.

Cushman & Wakefield, Property Consultants, completed a desktop valuation of the Mansell Street property as at 31 December 2021. The basis used for the valuations was open market value. The historical cost of the freehold land and buildings is £13,572,000.

CIPFA Annual Report and Accounts 2021 81

10 Investment property

10 Investment property
2021 2020
Group and CIPFA £000 £000
Cost
At 1 January 6,975 7,100
Revaluation 225 (125)
At 31 December 7,200 6,975

The investment property relates to the third and fifth floors of the Mansell Street property.

11 Investments in subsidiary company

11 Investments in subsidiary company
2021 2020
£000 £000
400,100 £1 ordinary shares in CIPFA Business Ltd 400 400
75 £1 ordinary shares in CIPFA C. Co Ltd - -
400 400

12 Other investments

2021 2020
Group and CIPFA £000 £000
At 1 January 9 9
Movement in year - -
At 31 December 9 9

As one of five major accountancy bodies, the Institute holds 70 £1 shares in CCAB Ltd at a cost of £70 (7% of the issued equity capital). Other investments comprise a number of funds that have been established either by way of donations in memory of eminent accountants within public finance or from various organisations.

13 Deferred tax

A deferred asset of £22,000 (2020: £12,000) exists at 31 December 2020 in respect of timing differences. However, the asset has not been recognised in the balance sheet as it is not deemed likely to crystallise given CIPFA Business Ltd’s policy and practice of remitting all taxable profits to CIPFA under gift aid.

14 Stocks and work in progress

Group CIPFA
2021 2020 2021 2020
£000 £000 £000 £000
Finished goods - 4 - 1
Work in progress 476 295 391 156
476 299 391 157

82 CIPFA Annual Report and Accounts 2021

15 Debtors

15 Debtors
Group CIPFA
2021 2020 2021 2020
£000 £000 £000 £000
Trade Debtors 2,942 2,314 1,200 1,213
Amounts due from subsidiary undertakings - - 822 464
Other debtors 134 225 57 70
Prepayments 293 323 256 215
3,369 2,862 2,335 1,962

16 Creditors: amounts falling due within one year

Group CIPFA
2021 2020 2021 2020
£000 £000 £000 £000
Trade creditors 1,107 1,084 628 574
Amounts due to subsidiary undertakings - - 1 6
Other tax and social security 951 2,107 451 356
Other creditors 141 100 68 47
Receipts in advance 3,502 3,305 1,319 1,103
Property provision 1 4 1 4
Commercial loan - 505 - -
5,702 7,105 2,468 2,090

Receipts in advance of £3,502,000 (2020: £3,305,000) relate to professional membership and commercial services that will be delivered in the next financial year.

17 Commercial loan

2021 2020
£000 £000
Balance at 1 January 1,156 1,640
Repayments (1,156) (484)
Balance at 31 December - 1,156
2021 2020
Analysis of commercial loan £000 £000
Within one year - 505
Within two to fve years - 651
- 1,156

CIPFA Business Limited had a commercial loan of £2,000,000 which was secured on the Mansell Street, London property. The loan was repaid in September 2021.

CIPFA Annual Report and Accounts 2021 83

18 Group funds

Balance at Transfers Income Expenditure Other
Balance
1 Jan recognised
at 31 Dec
2021 gains/losses 2021
£000 £000 £000 £000 £000 £000
Unrestricted funds
Designated (property) 14,638 1,156 - - -
15,794
Designated (other fxed assets) 712 236 - (281) -
667
Revaluation reserve 4,731 - - (191) 666
5,206
Other charitable 2,484 (1,363) 26,507 (22,507) -
5,121
Pension reserve (38,567) - - (48) 8,092 (30,523)
(16,002) 29 26,507 (23,027) 8,758
(3,735)
Restricted funds
Trust funds 9 - - - -
9
Regional funds 33 - - (1) -
32
Minority interest 55 (29) 96 (101) -
21
Total funds (15,905) - 26,603 (23,129) 8,758
(3,673)
Balance at Transfers Income Expenditure
Other
Balance
1 Jan recognised
at 31 Dec
2020 gains/losses 2020
£000 £000 £000 £000
£000		 £000
Unrestricted funds
Designated (property) 14,154 484 - -
-
14,638
Designated (other fxed assets) 611 402 - (301) -
712
Designated (contractual dispute) 500 (500) - -
-
-
Revaluation reserve 4,906 - - (192) 17
4,731
Other charitable (619) (386) 26,191 (22,702) -
2,484
Pension reserve (27,152) - - (149) (11,266) (38,567)
(7,600) - 26,191 (23,344) (11,249) (16,002)
Restricted funds
Trust funds 9 - - -
-
9
Regional funds 33 - - -
-
33
Minority interest 60 - 226 (231) -
55
Total funds (7,498) - 26,417 (23,575) (11,249) (15,905)

Designated fund (property) – The Council has classified as designated funds the element of its reserves which represents the cost of the freehold buildings and investment properties as at 31 December 2015.

Designated fund (other fixed assets) – The Council has classified as designated funds the intangible assets and other non-property fixed assets.

Designated Fund (contractual dispute) – The Council has removed the previously designated £500,000 for future legal costs in relation to the contract dispute relating to the London Counter Fraud Hub contract.

Revaluation reserves (property) – This relates to the revaluation of the freehold and investment properties.

Trust funds – A number of funds have been established either by way of donations in memory of eminent accountants within public finance or from various organisations. The income from the investments is used for prizes in each year’s examinations, either for the best subject or the best student in a particular field. A proportion of the funds (£9,000) are administered through a separate charity, Charity Commission Registration 313981.

84 CIPFA Annual Report and Accounts 2021

Regional funds – A number of funds have been established by way of donations in memory of eminent accountants within public finance. The funds are used to support students or further the work of the region.

Minority interest – This represents CIPFA’s non-controlling interest in CIPFA C.Co Ltd, of which it owns 88% (2020 75%) of issued shares in the company.

19 Analysis of group net assets between funds

Designated Other Pension Revaluation Restricted Total
charitable reserve reserve
£000 £000 £000 £000 £000 £000
Fund balances at 31 December
2021 are represented:
Intangible assets 520 - - - - 520
Tangible fxed assets 8,741 - - 5,206 - 13,947
Investment property 7,200 - - - - 7,200
Investments - - - - 9 9
Current assets - 10,844 - - 32 10,876
Current liabilities - (5,723) - - 21 (5,702)
Long-term liabilities - - - - - -
16,461 5,121 - 5,206 62 26,850
Pension liability - - (30,523) - - (30,523)
Group net assets/(liabilities) 16,461 5,121 (30,523) 5,206 62 (3,673)
Designated Other Pension Revaluation Restricted Total
charitable reserve reserve
£000 £000 £000 £000 £000 £000
Fund balances at 31 December
2020 are represented:
Intangible assets 552 - - - - 552
Tangible fxed assets 8,979 - - 4,731 - 13,710
Investment property 6,975 - - - - 6,975
Investments - - - - 9 9
Current assets - 9,139 - - 33 9,172
Current liabilities (505) (6,655) - - 55 (7,105)
Long-term liabilities (651) - - - - (651)
15,350 2,484 - 4,731 97 22,662
Pension liability - - (38,567) - - (38,567)
Group net assets/(liabilities) 15,350 2,484 (38,567) 4,731 97 (15,905)

CIPFA Annual Report and Accounts 2021 85

20 Leasing commitments

At 31 December 2021 the future minimum lease payments under non-cancellable operating leases were as follows:

Land & Other Land & Other
buildings buildings
2021 2021 2020 2020
A Group £000 £000 £000 £000
Leases that expire:
within one year 145 15 153 19
within 2 to 5 years 314 1 377 18
in over 5 years - - 36 -
459 16 566 37
Land &
buildings		 Other Land &
buildings		 Other
2021 2021 2020 2020
B CIPFA £000 £000 £000 £000
Leases that expire:
within one year 96 15 104 15
within 2 to 5 years 133 1 183 16
in over 5 years - - - -
229 16 287 31

21 Leased assets

At 31 December 2021 the future minimum lease receipts due to CIPFA under non-cancellable operating leases were as follows:

Land & buildings Land & buildings
2021 2020
Group and CIPFA £000 £000
Leases which expire:
within one year 169 175
within 2 to 5 years 138 303
in over 5years - -
307 478

22 Transactions with trustees

The trustees received no remuneration in relation to fulfilling their role as trustees (2020: Nil).

Seven trustees were reimbursed £1,275 for actual travel and subsistence costs necessarily incurred on Institute business (2020: four trustees were reimbursed £2,239). No additional payments were made to trustees.

86 CIPFA Annual Report and Accounts 2021

23 Transactions with related parties

In 2021, the following transactions were incurred between CIPFA and its subsidiaries, CIPFA Business Ltd and CIPFA C.Co Ltd. There are no other related transactions or balances for disclosure in this report.

2021 2020
£000 £000
Management fees/recharges charged by CIPFA to CIPFA Business Ltd 2,079 2,311
Sales to CIPFA from CIPFA Business Ltd - (1)
Sales to CIPFA Business Ltd from CIPFA 3 10
Sales to CIPFA C.Co Ltd from CIPFA Business Ltd 58 1
Amounts due to CIPFA from CIPFA Business Ltd 765 254
Amounts due to CIPFA Business Ltd from CIPFA - 6
Amounts due to CIPFA from CIPFA C.Co Ltd 51 211
Loan interest charged by CIPFA to CIPFA C.Co Ltd 2 6
Gift Aid paid to CIPFA by CIPFA Business Ltd 4,362 1,000

CIPFA Annual Report and Accounts 2021 87

Independent auditor’s report to the trustees of the Chartered Institute of Public Finance and Accountancy

We have audited the financial statements of the Chartered Institute of Public Finance and Accountancy (‘the charity’) and its subsidiaries (‘the group’) for the year ended 31 December 2021 which comprise the Statements of Financial Activities, the Group and charity balance sheets, the Consolidated cash flow statement and 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:

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 group 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 trustee’s 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 or the group’s ability to continue as a going concern for a period of at least 12 months from when the financial statements are authorised for issue.

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

88 CIPFA Annual Report and Accounts 2021

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.

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 and the Charities Accounts (Scotland) Regulations 2006 requires us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement, 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 group and the parent 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 151 of the Charities Act 2011, and section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and report in accordance with the Acts 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.

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.

CIPFA Annual Report and Accounts 2021 89

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 and group 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) 2018. 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 and group’s ability to operate or to avoid a material penalty. We also considered the opportunities and incentives that may exist within the charity and the group for fraud. The laws and regulations we considered in this context for the UK operations were taxation legislation, employment legislation and General Data Protection Regulation (GDPR).

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 surrounding 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 Audit Committee 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.

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 noncompliance and cannot be expected to detect non-compliance with all laws and regulations.

Use of our report

This report is made solely to the charity’s members, as a body, in accordance with Part 4 of the Charities (Accounts and Reports) Regulations 2008 and Regulation 10 of the Charities Accounts (Scotland) Regulations 2006. Our audit work has been undertaken so that we might state to the charity’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity and the charity’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Crowe U.K. LLP Statutory Auditor London

15 June 2022

Crowe U.K. LLP is 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.

90 CIPFA Annual Report and Accounts 2021

CIPFA Annuol Report ond Accounts 2021 91

Registered with the Charity Commissioners of England and Wales No 231060 Registered with the Office of the Scottish Charity Regulator No SC037963.

cipfa.org

92 CIPFA Annual Report and Accounts 2021