Chester Diocesan Board of Finance Annual Report and Financial Statements 2022 Company limited by guarantee registered in England Ino 000078261 Registered charity Ino 2489681 •ACC128E3' 2110912023 COMPANIES HOUSE #14 Bankers National Westminster Bank plc. 33 Eastgate Street, Chester, CH1 1 LG Charity Bank, 182 High srreet, Tonbridge. Kent. TN9 1 BE. Investment managers CCLA Investment Management Limited. One Angel Lane, London. EC4R 3AB. Solicitors Aaron & Partners, Grosvenor Court. Foregate Street, Chester. CHI 1 HG HMD Registry Services Ltd, 53 Park Mount Drive, Macclesfield. SK11 8NS Auditors haysmacintyre LLP. 10 Queen Street Place, London EC4R IAG Chester Diocesan Board of Finance Annual Report and Financial Statements 2022 Registered Office: Church House. 5500 Daresbury Park, Daresbury. Warrington WA4 4GE. Telephone.'101928) 718 834 Chester Diocesan Board of Finance is the financial executive of the Church of England in the Diocese of Chester. It is a company limiied by guarantee registered in England (no 00007826) and is a registered charity (no 248968). Throughout this document,"DBF" refers to Chester Diocesan Board of Finance. Index Trustee5 Report Membership of the Board Key Management Personnel Chairman's Statement Who we are. what we do. and whywe do it Strategic report Clergy Assisting Parochial Church Councils Outreach Education Ministry Development Grants Retreats and Christian conferences 12 Safeguarding Financial Review Going concern 2024 and beyond 14 Risk Management Structure, governance, and management Trustees. Responsibilitie5 Independent auditors. report Financial Statements 28 30 Statement of Financial Activities 35 Balance Sheet 36 Statement of Cash Flows 37 Notes to the accounts 38 Chester Diocesan Board of Finance Year ended 31 December 2022 Membership of the Board The trustees of the registered charity and the directors of the charitable company are the same. Trusteesldirectors served for the full year, except where shown. President: Chairman: Rt Revd Mark S A Tanner Bishop of Chester Mr lan N Scott-Dunn TrusteeslDirector5: Rt Revdjulie A Conalty Rt Revd Samuel J C Corley Ven Dr Michael R Gilbertson Ven lan G Bishop Very Revd Timothy R Stratford Revd Simon Drew Msjulie H Withers Revd Joshua C Askwith Mr Peter S 8all-Foster Drj Graham Campbell Or Alan Dowen Revd Canon Elaine Chegwin Hall Revd George T Crowder Revd Lesley S Currie (from 6 October 2022) Mr John J C Freeman Revd Simon R Gales Revd Andrew Quentin Greenhough Mrs Esme A Hammer John S Haslam Mr David A Hermitt Ifrom 28 November 2022) Revd Gary Kennaugh (from 18 May 2023) Mr David G Lowcock Dr Peterj Marshall Canon Drjohn P Mason Revd Dr Robert S Munro luntil 2 February 2023) Mrs Julie Okundaye {from 28 November 2022) Revd Richard L Pennystan Revd M ichael L Ridley Revd Michael l A Smith Revd Christina P Upton Revd David A Vestergaard Dr Christine E Wetherell Bishop of Birkenhead Bishop of Stockport Archdeacon of Chester Archdeacon of Maccle5field Dean of Chester Cathedral Chair. House of Clergy. Diocesan Synod Chair. House of Laity. Diocesan Synod Chester Diocesan Board of Flnance Year ended 31 December 2022 Key Management Personnel Mr George B Colville Mrs Elizabeth A Geddes Diocesan Secretary Director of Human Resources and Deputy Diocesan Secretary Director of Ministry Diocesan Safeguarding Adviser until 10 November 2022 Diocesan Safeguarding Adviser from 8 February 2023 Director of Communications until 31 July 2023 Director of Outreach Head of Finance Director of Development (Vision and Strategy) from 6June 2022 Revd Simon Chesters Ms Pauline Butterfield Mr Sean Augustin Mrjames M Butterworth Revd Peter M Froggatt Mr Nigel Strange Mrs Harriet M Roberts Chester Diocesan Board of Finance Year ended 31 December 2022 Chairman's Statement l am pleased to present the Chairman's Statement for Chesier Diocesan Board of Finance. The organisation continued to pursue its core purpose,"to maintain and promote the Spiritual teaching of the Church of England in the Diocese of Chesteff. The DBF continued to provide a financial and support function to allow the parishes of the Diocese to continue to operate effectively, by collecting contributions from the parishes. paying and housing the clergy. and through providing a number of support services. In addition to its ongoing core functions, other events and processes involved the DBF and will influence its future. Spring 2022 saw the final lifting of all remaining COVID restrictions, freeing parishes to siart to return to more normal ways of operating. Other uncertainties continue. notably the issues around the c05t of living. which affects clergy, parishes and parishioners alike. The Church of England published its National Safeguarding Report Past Cases Review 2, IPCR21 and a5 part of this the Diocese published an extensive Summary Report detailing the findings of its own review of diocesan files that was undertaken as part of the national PCR2 process. In response, the bishops of the Diocese said."This report touches upon much that is evil, sinful or inadequate. We rightly feel a deep sense of shame, but above all, we are determined to lead the change that is neede(J and that has already begun. Safeguarding really is at the heart of what it means to be church and at the heart of our mission." Looking to the future. "Casting the net wide", a process of developing a shared vision for the Diocese. has been consulting with individuals and parishes as widely as possible. Facilitated by Harriet Roberts, the process has included surveys. one to one interviews and approximately 30 Vision Café events in the autumn of 2022, with a further 50 or so planned for the spring of 2023. Responses provided by parishes to Living in Love and Faith. a process of discernment and decision-making on questions of identity. sexLJality. relationships and marriage. were collected in the national report "Listening with Love and Faith". The Diocesan Routemap to Net Zero 2030 was introduced to the November Diocesan Synod and discussed ways forward following the challenge set by General Synod. Chester Diocesan Board of Finance Year ended 31 December 2022 In Church House at Dare5bury, the Human Resources Committee agreed to a continuation of hybrid working following experience gained during the pandemic. I thank George Colville. Diocesan Secrelary, and the staff of the DBF, who provide quality support to our parishes. l also thank all those who have left the DBF'S employment for the work they have done and welcome all the new members to the team at Daresbury and Foxhill. Finally, I thank Bishop's Council and all sub-committee members for their work throughout the year. The DBF'S day-to-day financial performance showed a deficit. However, in challenging circumstances. parish share collection has been maintained, with some parishes taking steps to clear arrears that arose during the period of the pandemic. We continue to be very grateful to parishes who are the bedrock of the Diocese's mission. Investments declined in value, effectively reversing the gains of the previous year. Most of these investments are endowment funds whose primary function is to generate income for stipends. so maintenance of dividends continues to be of higher importance than end of year valuations. Economic circumstances for parishes and their parishioners remain challenging. We were glad to be able to make grants ro parishes to assisrwith the high cost of energy bills. with funding provided by Archbishop's Council. Plans for the future will be continuously kept under review. Our priority is to use our resources wisely in the pursuit of growing God's kingdom throughout the Chester Diocese and beyond. We pray that God's Holy Spirit may guide and inspire us all. lan N Scott-Dunn Chairman Chester Diocesan Board of Finance Year ended 31 December 2022 Trustees Report Who we are. what we do and why we do it Who we are The parish is the core unit of Church of England actlvlty,. Chester Diocesan Board of Finance provides a financial executive and support function to enable parishes to operate effectively. What we do God has given us a Christian framework for living which benefits the members of the churches in the Diocese and the wider public generally. We provide facilities for public worship, pastoral care. and spiritual, moral and intellectual development: we promote Christian values and service by members of the Church in and to their communities, to the benefit of individuals and society. In practice, this means collecting contributions from parishes, paying and housing the clergy, and delivering Diocese-wide services and projects. Why we do it The DBF'S core purpose is'ro maintain and promote the spiritual teaching of the Church of England in the Diocese of Chestert. The directors all believe that the Christian message is relevanE and that the DBF'S role is to support parishes in living it and telling people about it. Staff working for the DBF also believe this or are in sympathy with it. How our activities deliver public benefit With further details provided below, our main activities aim to deliver public benefit in the following ways.. Clergy - providing parish and other clergy to offer Christian services and spiritual oversight Parochial - Church Councils assisting PCCS to provide churches, sacred spaces and worshipservices Outreach- assisting parishes as they live our God's love for the world, as expressed in the Anglican Communion's Five Marks of Mission. Education contributing to the spiritual and moral education of children and young people Training- providing training and assistance in orderthat parishes have clergy and volunteers who are competenL in providing Christian services, such as visiting the sick. and comforting the bereaved Grants - making grants to enable the national church institutions to function and have a positive wider influence Chester Diocesan Board of Finance Year ended 31 December 2022 Trustees Report Provision of retreats and Christian conferences education, spiritual and physical refreshment at Foxhill House and Woodlands The majority of the DBF'S activity takes place in the Diocese of Chester, which comprises Cheshire, the Wirral, and parts of Greater Manchester. Who benefits from our services? The DBF is a public benefit entity. The trustees confirm thai they have complied with the duty of the Charities Act 2011 to have due regard to the public benefit guidance published by the Charity Commission in determining the activities undertaken by the charity. We also take account of the Charity Governance Code Isee page 271 in ensuring that the charity is effective. We aim to make our services open to as wide a section of the public as Possible. For example.. Everywhere in the Diocese is part of a Church of England parish that ha5 a member of clergy who has concern for the spiritual welfare of the individuals who reside in it. Parishes in wealthier areas generally contribute somewhat more than the cost of their clergy in order that clergy can also be provided in less wealthyareas. Training courses and retreats are offered at reduced or no cost where appropriate in order that ability to pay is not a bar. Chester Diocesan Board of Finante Year ended 31 December 2022 Tru5tee5 Report Strategic Report Clergy Provision of clergy Although the DBF does not employ the parish clergy, it is responsible for training them. paying them, and paying into their pension fund. With approximately 213 trained stipendiary clergy including Archdeacons and clergy who occupy a house and receive a reduced stipend, 43 of whom are curates, chis responsi bility is by far its largest financial commitment. It can only be met if the parishes pay their Parish Share. Stipend and pension levels are set nationally with some slight regional flexibility. Some clergy are not paid stipends. These include self-supporting ministers. ministers in secular employmeni. and retired clergy. They give excellent service, but generally have less time to offer and in m05t cases are not asked to take charge of a parish. Almost all clergy in the Diocese are paid under the terms of Common Tenure, with only a few retaining their freehold. All new posts are now appointed under Common Tenure. In recent years the DBF has expanded the number of training curates, to respond to the needs of maintaining clergy levels into the future. Good clergy, well trained and with high morale. are at the heart of the DBF'S purpose. We must ensure that we can continue to raise the money to keep as many as possible in post, for the sake of the Church, the Gospel, and the people and communities of the Diocese. We are pleased that God has continued to call people to serve in the Diocese and we continue to be able to appoint good clergy to benefirps to fill vacancies as they arise. Provision of clergy housing The DBF is responsible for maintaining and insuring clergy houses. This includes carrying out repairs and maintenance works as they arise. and as highlighted in S-yearly inspections. Major renovation works are usually carried out during vacancies. There is also a phased program of irnproving Chester Diocesan Board of Flnance Year ended 31 December 2022 Trustee5 Report the overall standard of housing within the constraints of available funding. Improvement projects including the replacement of a number of kitchens. bathrooms and boilers continued. A number of window replacemenis were also completed. Some of the improvement work has been funded by a grant received from Benefacr TrusL the owner of Ecclesiastical Insurance. The former vicarages at Wybunbury and Daresbury were sold during the year. A replacement for the vicarage at Daresbury is due to be bought on a new development nearby. The vicarage at Burton was also replaced with a new build. A new vicarage was built on part of the existing site at Prestbury, with the other part of the sile being transferred to the developer. Chaplains The DBF also SUPPOrts chaplains who provide a strong Christian influence in hospitals, hospices, schools. farming. prisons. local industry, Manchester Airport and Chester University. Bishops Bishops are the chief pastors of the Diocese. They provide overall focus and lead the mission of the Diocese. Now that the new team of Bishops is complete, they have taken the lead on "Casting the Net Wide" a process of consulting and discerning the future direction of the Diocese. The consultation phase started in 2022. with online surveys, one-to-one interviews, and about 30 Vision Café events, with a further 50 planned for spring 2023. Archdeacons There are two Archdeacons in the Diocese - The Ven Dr Michael Gilbertson, Archdeacon of Chester, and the Ven lan Bishop. Archdeacon of Macclesfield. Archdeacons have the role of pastoral care of the clergy and their families. and oversight of church buildings and vicarages, togetherwith supportingthe bishops. Assisting Parochial Church Councils The DBF has continued to provide support (o parishes in care and development of their church buildings through the work of the Diocesan Advisory Committee IDACI. Chester Diocesan Board of Finance Year ended 31 December 2022 Trustees Report As a result of changes to the Faculty Jurisdirtion Rules. parishes are now required to demonstrate they have given due regard to Net Zero in their proposals particularly for replacement heating. Prof Bob Munn retired as chair of the DAC, a role he had occupied since 2008. Outreach The DBF aims to inspire and serve churches seeking spiritual and numerical growth. Its work involve5 parishes in the Diocese. and links with the Anglican church in Melanesia and the Democratic Republic of Congo. The DBF has been guided by the Anglican Communion's"Five Marks of Mission" in its approach: 1. To proclaim the Good News of the Kingdom 2. To teach. baptise and nurture new believers 3. To respond to human need by loving service 4. To transform unjust structures of society. to.challenge violence of every kind and pursue peace and reconciliation 5. To strive to safeguard the integrity of creation, and sustain and renew the life of the earth The DBF continued work in a wide range of areas, including.. - Ran the Talkingjesus course to a5515t with building confidence in evangelism. Agreed an environmental policy at Diocesan Synod. and assisted churches with exploring green changes to their buildings. Continued the programme of visiting individual clergy, listening to theirstories, and offering advice, where appropriate. Appointed Sheena Wilson. new Buildings for Mission Adviser who has assisted with procuring grant funding for churches. Supported the Living in Love and Faith process in parishes. Provided training including on mental health and wellbeing training to families and youth leaders, and assisted with paid youth leader recruitment., Assisted with the roll out of digital giving in parishes. 10 Chester Diotesan Board of Finance Year ended 31 December 2022 Trustees Report Expanded counselling services using newly trained volunteer counsellors. Education The DBF works closely with and provides financial and other support to Chester Diocesan Board of Education IDBEI in its work. Together with the DBE the Board seeks to ensure that schools have high standards. are distinctively Christian, and support the Church's mission to Ihe Diocese. as well as reflecting the Church of England Education Office's Vision for Education. More details can be found in the DBE annual report. The DBF also provides Chester Diocesan Academies Trust with office accommodation and IT seNices. Ministry Development The DBF administers vocational discernment. selection. initial training, and in- service training for lay and ordained licensed ministries. In 2022, 12 deacons and 12 priests were ordained. In addition. 9 Readers and 7 Pastoral Workers were licensed. Ordinands train with Emmanuel Theological College, alongside residential training at other colleges around the country. Numbers in training for licenced lay ministry - readers and pastoral workers - remain heallhy, as does participation in the Foundations for Ministry course. 2022 saw a pilot project of training people to offer structured pastoral supervision for those new to incumbency as well as to clergy more widely. A wide range of events have taken place. including training days for licensed lay workers. another Women's Voces conference, 24 hours with a theologian, the Lay Conference. a course on leading public worship, together with individually guided retreats. Support for lay and ordained minister5 continues. Grants The DBF makes certain grants 10 support clergy and parishes in their work. A focus in recent years has been a concentration on projects which promote mission and development. The Diocese of Chester is also a part of the wider Church of England. In this 11 Chester Diocesan Board of Finance Year ended 31 December 2022 Trustees Report capacity the D8F contributes funds to the national church to enable it to provide functions that are better carried out at a national level. Examples include funding for theological training colleges, promoting the Church of England's place and views in wider society. and the provision of specialist advice and support. Retreats and Christian conferences Foxhill is a centre of prayer and works to furtherthe mission of the Diocese while being a blessing to the wider church and world. Following the lifting of pandemic restrictions. the retreat and conference centre is once again taking day and residential bookings from parishes and individuals. The management of Foxhill House and Woodlands is in a state of handover. Jonathan Green's time as director is drawing to a conclusion and he is in the process of passing the management to Revd Lucy Brewster, with her husband, David as chaplain. As well a5 parish weekends and events, a number of guided events have taken place. These have included Encounter Days. led by diocesan and other clergy, a nd guided individual retreats. Sadly, the woodlands behind Foxhill remain closed for the time being. following storm damage. Safeguarding Safeguarding advice and expertise continued to be vital element of support offered to parishes. and central to the functioning of the Diocese. The Church of England published its National Safeguarding Report Past Cases Review 2 IPCR2), and as part of this the Diocese published an extensive Summary Report detailing the findings of its own review of diocesan files that was undertaken as part of the national PCR2 process. In the foreword to the summary report, the bishops said, "Conducting a Past Cases Review during a global pandemic was never going to be straightforward and we are hugely grateful to our Independent Reviewers for working in such challenging circumstances and for being so diligent. Our thanks also go out to all our parishes who provided inforrnation, our Diocesan 3nd 12 Chester Diocesan Board of Finance Year ended 31 December 2022 Trustees Report Cathedral staff who facilitated access to files for the reviewers. the members of the Reference Group who steered the review process and to those victims and survivor5 who conrributed to the review. The full PCR2 report provides extensive evidence of safeguarding failings in the Diocese of Chester and of a very poor safeguarding culture over several decades. It is a robust report, and although it focusses on past cases and recognises the positive changes being made in the Diocese, il also sets out some very helpful recommendations for further improvements as we move forward. We are appalled and angry regarding some of the past safeguarding practice in Chester Diocese. We also recognise that despite our shared commitment 10 changing the culture and practice in our Diocese, we fflay still make mistakes or fall short of the expected standards. None of this is good enough and we are committed to learning from survivors and vicrims, from past cases and from independent reviews. We are intent upon establishing a healthier culture and a safer church and most of all. upon being more Christ-like in how we respond ro victims and survivors and ro those who are vulnerable. This report touches upon much that is evil, sinful or inadequate. We rightly feel a deep sense of shame. but above all. we are determined to lead the change that is needed and that has already begun. Safeguarding really is at the heart of what it means to be church and at the heart of our mission.- Following the resignation of the previous Diocesan Safeguarding Adviser, Sean Augustin wa5 appointed to take over following the year end. A further expansion of the Safeguarding Team will follow. Financial Review Net expendirure after investment losses amounted to £1,788k 12021 net income after investment gains £2.173k). Snvestments declined in value. losin8 £1.455k (2021 gain £1,633kl, largely reversing the gains of the prior year. However, rhe dividend income on which the DBF relies to supplement parish share income. rose. Contributions received from parishes rose to £11.3m12021 £10.8m). The parish share collection rate was approximately 90%. with a further 2% relating to recovery of arrear5 built up during the pandemic years, which had previously been provided for. There were a few further sales of former parsonage houses during the year, together with some corresponding purchases. As a result, cash rose slightly during the period. The Board has a policy of recycling funds raised from the sale of parsonage houses to fund new parsonage houses and improvements to exisring houses, though on occasions surpluses on the sale and replacement of parsonages are also being used to support day to day activities. 13 Chester Diocesan Board of Finance Year ended 31 December 2022 Trustees Report The DBF received a grant from Benefact Trust, which has been applied to costs of the 2022 Clergy Conference, continued supportto parishes in respect of using church buildings for mission. and the provision of improved clergy housing. The most significant item of expenditure remained parochial clergy and archdeacons, stipends, national insurance. pension contributions. housing maintenance and ordination training. amounting to £10.6m (2021 £10.4ml. Since 2007, parochial contributions have been requested under a parish share system based on number of allocated clergy and a socio-economic factor,. this approach is intended to foster mission and growth. Following earlier changes to accounting policy, and the inclusion of benefice property on the balance sheet. all property has been subJect to at least a desktop review of valuation on at least a five-year rolling basis. and more frequently where appropriate. Holdings in the CBF Church of England Investment Fund showed a decline of 11.7% in capital value. The dividend yield rose slightly to 2.99%. The return on invested cash rose from 0.2% ai the start of the year 10 3.2% at the end. The majority of the DBF'S investment assets are held by endowment funds and are therefore not available for current expenditure. In the short term at least, this makes the income from those investments more important than their current capital value. This has limited the effect of the fluctuations in capital value on day-to-day operations. However. the DBF is conscious that continuing adverse economic conditions may have an impact on parochial contributions, parochial fees, rates of return on cash. and the abilityto buy and sell parsonages and other property. The balance on the plan to fund the deficit on the Church of England Funded Pensions Scheme for 5tipendiary clergy was cleared in the year. Going concern The trustees consider that there is a reasonable expectation that the DBF has adequate resources to continue in operational existence for the foreseeable future, and as a result. the trustees continue to adopt the going concern basi5 in preparing the accounis. The tru5tee5 did not considerthere to be any material uncertainty relating to events or conditions that individually or collectively may cast significant doubt on the DBF'S ability to continue as a going concern. 14 Chester Diocesan Board of Finance Year ended 31 Decernber 2022 Trustees Report The basis of this approach includes budgets and forecasts for the following year together with keeping other potential sources of funds under review. 2023 and beyond The purpose of Chester DBF is Yo maintain and promote the spiritual teaching of the Church of England" not least by continuing to facilitate the healthy funccioning of the parishes of the Diocese. Challenges for the next few years include.. - The discernment and implementation phases of the diocesan vision process'casting the Net Wide" continuing to cooperate with the Church of England National Safeguarding Team, particularly following the publication of Past Cases Review 2 nationally and the Diocesan Summary absorbing the cost of additional curates to maintain the supply of future clergy. operating in the context of the cost-of-living crisis and also the continuing economic. social and spiritual consequences of the coronavirus pandemic. While the DBF faces challenges. it continues to be helped by many positives, not least including historically high parish share contribution rates, together with good relationships with parishes in the Diocese. Risk Management The Board reviews a register of risks on an ongoing basis, reviewing the combination of likelihood and likely impact of perceived risks. The Board considers thai its principal risks at present are:. Safeguarding.. issues regarding current and historical cases that could result in reputational problems, legal action. financial impact. together with impact on staff and parishes. Mitigated by policies in place, safeguarding staff employed. clergy and lay appointees in parishes being trained. 15 Chester Diocesan Board of Finanre Year ended 31 December 2022 Trustees Report The impact of ongoing societal. economic and political upheaval. The direct effects of the COVID-19 pandemic continue to recede. but the indirect effects remain. The cost of living and other economic issues are 50urce5 of coniinuing uncertainty. While rhe evolving nature of the situation ffleans it 15 not P055ible ro accurately quantify the financial impact. the Charity is in a good financial posltion to help manage this risk. Steps are being taken on an ongoing basis, to minimise the impact on activities and the effect this may have on the stakeholders. The key priority is to ensure, as far as possible, that the DBF'S service5 to parishes continue as effectively as possible. Loss of relevance and failure to adapt to changes in society.. Falling electoral rolls. ageing congregations in parishes. In addition, cha nges in society as a result of Brexit. the coronavirus pandemic, and the cost- of-living crisis. Mitigated by national church task groups and Renewal and Reform agenda. and in Chester Diocese. the DBF Outreach team and others are working with parishes locally. There continuesto be some risk relating to the DBPS abilityto continue tofund increasing stipends, housing. salary and pensions costs if voluntary contributions from parishes fail to come in. The DBF'S largest source of funding is contributions of Parish Share made by parishes. Asa re￿ affea￿ of parish share are reviewed regulaty. The Finance and Scrutiny Cornmittee meet5 five times a year and oversees and di5cusse5 these reviews at each meeting. In addition. it keeps a watch on stipend costs, the c05t of clergy housing repair, and staffing costs, these beingthe chief items of expenditure. At the current time. and in the current societal and economic circumstances, parish share collection rates continue to be healthy. Other risks are in the areas of key staff, reputation, and exposure to the consequences of decisions undertaken by separate but related church entities. 16 Chester Diocesan Board of Finance Year ended 31 December 2022 Trustees Report Structure. governance, and management The sections that follow describe the local and national structure of the Church of England and explain the role of Chester Diocesan Board of Finance in it. Pastoral structure of the Church of England The smallest pastoral area in the Church of England is the parish. Each parish usually has one parish church (although it may have more) and may also have one or more chapels of ease (often called daughter churches}. A benefice is a parish or group of parishes served by an incumbent, and by carrying out the spiritual duties in the parishes of a benefice the incumbent is entitled to a stipend (like a salary) and parsonage house. A deanery is a group of parishes over which a rural dean has oversight. and an archdeaconry is a group of deaneries for which an archdeacon is responsible. A Diocese is the main administrative and pastoral area of the Church of England and contains two or more archdeaconries under the leadership of the Diocesan Bishop. A province covers the area of several Dioceses under the oversight of its Archbishop. Parochial Church Councils The parochial church council IPCCI is the elected governing body of a parish. li is made up of the incumbent (who is the chairman) plus any Dther clergy licensed to the Benefice. the churchwardens, and several elecied members plus members of Deanery, Diocesan and General Synods. All parishes have. Deanery Synod representatives, and a smaller number have Diocesan or General Synod representatives. PCCS are independent charities. though all but the largest are currently excepted from registration with the Charity Commission. Their accounts can be obtained by contacting the relevant PCC treasurer and do not form part of these accounts. The Charities Act 2011 requires Ihat PCCS with income of over £100,OQO register with the Charity Commission. Deanery Synods Deanery Synods have two hou5e5: laity. mainly people elected by their parishes, and clergy, mainly the beneficed and licensed clergy of the deanery. The role of a Deanery Synod is to consider matters concerning the Church of 17 Chester Diocesan Board of Finance Year ended 31 December 2022 Trustees Report England,. to bring together the views of the parishes of the deanery.- to effect decisions made by the Diocesan Synod.. to act as a channel of communication to express the views of the parish to Diocesan Synod,- to respond to requests from General Synod,. to raise with Diocesan Synod such matters as it considers appropriate.. and to elect representatives of the deanery to the Diocesan Synod. Deanery Synods generally do not have significant financial transactions. Diocesan Synod The Diocesan Synod is the statutorygoverning body of a Diocese. It is elected with representation from all parts of the Diocese and roughly equal numbers of clergy and lay people. who meet in Synod with the Bishops and Archdeacons. The role of Diocesan Synod is to consider matters concerning the Church of England and make provision for Such fflatters in relation to its Diocese,. to act as a forum for discussion of Christian opinion on any matter of religious or public interesL to advise the Bishop on any matter on which he may consult it- to deal with matters referred by General Synod, and to refer matters to General Synod,- and to make provision for the financing of the Diocese. in its capacity as the Diocesan Board of Finance. Chester Diocesan Synod met twice in 2022, in March and November. The usual business was completed at both meetings, including the receipt of the Annual Report and Financial Statements for the year ended 31 December 2021, approval of the 2022 budget. and receipt of General Synod reports. The March Synod considered stipend levels in the context of cost of living pressures and received a further update on "Living in Love and Faith", a process of discernment and decision-making on questions of identity, sexuality, relationships. and marriage. In addition, it received reports from the Committee for Outreach. the Committee for Ministry, the Diocesan Board of Education, Foxhill House and Woodlands, and Chester Cathedral. The November Synod received a report on the Vision and Strategy feedback process, and approved candidates for the membership of the Diocesan Board of Education. li received a report following the completion of the safeguarding Past Cases Review 2 (PCR2). Environmental issues including the Church of England Net Zero 2030 route map were discussed. The meeting closed with a presidential address from Bishop Mark Tanner. who spoke about discerning vision together and being collaborative in mission. 18 Chester Diocesan Board of Finance Year ended 31 December 2022 Trustees Report National Church institutions The General Synod is the legislative and decision-making body of the Church of England at national level. It makes decisions on doctrinal formulae, services and relations with other Churches. It passes Measures which, if accepted by Parliament, have the force of Acts of Parliament. The Synod contains three groups. or houses. of members.. the Houses of Bishops, Clergy and Laity. The Houses of Bishops and Clergy together form the two Convocation5 of the Province of Canterbury and the Province of York. The Convocations are older than Parliament and before their powers were vested in the General Synod, they were responsible for making decisions on doctrine. services, and relations wilh other churches. Elections to General Synod took place during the year. Archbi5hops' Council is the Church of England's policy discussion forum. It reports to General Synod. Cooperating closely with Archbishops. Council. rhe Church Commissioners manage the historic assets of the Church of England. spending a significant part of their income on pensions for the parochial clergy, and providing selective financial support to Dioceses Ithis currently does not include Chester Diocese). The financial transactions of General Synod. the Church Commissioners. and theArchbishops'Council do not form part of these accounts. Chester Cathedral Chesier Cathedral is a separate charity. Copies of its accounts can be obtained from Chester Cathedral Office, 9 Abbey Square, Chester, CH1 2HU. Bishop5 The costs of Episcopal administration (Diocesan and Suffragan Bishop51 are mei by the Church Commissioners. The Diocese of Chester The Diocese of Chester was created in 1541. following the dissolution of the Abbeys under Henry Vlll, and assumed roughly its present dimensions in 1880. It covers an area of 1025 square miles, approximately the old Victorian County of Chester, including par(swhich subsequentlybecame ab%orbed into Merseyside and Greater Manchester. The rivers Mersey and Tame 19 Chester Diocesan Board of Finance Year ended 31 Oecember 2022 Trustees Report approximately delineate the boundary with Liverpool and Manchester. There are areas of dense urban population, mainly in the north, stretching from Birkenhead to East Manchester. There are prosperous suburban regions of West and South Wirral. Chester and south of Manchester, with a mainly rural heartland. bounded by the Derbyshire Pennines and the Welsh Border. The overall population is approximately 1.6 million. The Diocese is divided into two archdeaconries- Chester covering the western half and Macclesfield the eastern, each with nine deaneries. There are 265 parishes, about 100 ofwhich can be described as rural. Compared with many Dioceses. there are few teams. and few multj-parish benefices. There are approximately 213 stipendiary clergy. The ministry of Readers and Pastoral Workers is important, with over 400 licensed. The role of self-supporting ministers is substantial. with over 80 in post at present. The Archdeaconry of Macclesfield approximately covers the part of the Diocese ro the east of the M6, plus the area around Crewe and Nantwich. The Archdeaconry of Chester approximately cover5 the rest of the Diocese to the wesi of Ihe M6. Each archdeaconry has a broad mix of urban and rural parishes. The Archdeacon of Chester lives in Chester, and the Archdeacon of Macclesfielol lives in Congleton. The financial affairs of the Diocese are conducted through two regisiered charities'.- Chester Diocesan Board of Finance (Registered charity number 2489681, and Chesier Diocesan Board of Education (Registered charity number 525790). Chester Diocesan Board of Finance Chester Diocesan Board of Finance IDBF), founded in 1873. is constituted in accordance with the provisions of the Diocesan Boards of Finance Measure 1925. l( is a charitable company limited by guarantee. registered in England and Wales. and governed by memorandum and articles of association. Its principal activity is io maintain and promote the spiritual teaching of the Church of England in the Diocese of Chester. It acts as the financial executive of the Diocesan Synod and as custodian trustee for parochial trusts, and other related organisations. There have been no significant changes in Chester Diocesan Board of Financ Year ended 31 December 2022 Trustee5 Report activity during the year. As a registered charity. the DBF is not liable to Corporation Tax on its charitable activities. The DBF has the following statutory responsibililies: . the management of glebe property and investments to generate income to support the cost of stipends arising from the Endowment and Glebe Measure 1976; the repair of benefice houses as the Diocesan Parsonage Board under the Repair of Benefice Buildings Measure 1972- the custodian of permanent endowment and real property asset5 relating to trusts held by Incumbents and Archdeacons and by Parochial Church Councils as Diocesan Authority under the Incumbents and Churchwardens (Trusts) Measure 1964 and the Parochial Church Councils (Povversl Measure 1956. Charitable donations have been made a5 part of the normal expenditure of the DBF in the exercise of Its objectives. No political donations have been made. The DBF continues to undertake significant financial transactions with the Archbishops. Council of the Church of England. the Church Commissioners. the Church of England Pensions Board and Parochial Church Councils (Pccsl in the Diocese of Chester. None of these is a connected charity in the sense defined by charity law. Bishop's Council Bishop's Council has the following functions- to plan the business of Diocesan Synod, to prepare the agenda for its sessions, and to circulate to members informaiion about matters for discussion; to initiate proposals for action by Diocesan Synod- to advise Diocesan Synod on matters of policy- to advise the President on any matters which he may refer to Bishop's Council.- 21 Chester Diocesan Board of Finance Year ended 31 December 2022 Trustees Report subject to the directions of Diocesan Synod, to transact the business of the Synod when it is not in session.. to appoint members of committees or nominate members for election to committees. subject to the direction5 of the Synod,. to carry out such other functions as Diocesan Synod may delegate to it. In practice, Bishop's Council undertakes actions in all the above areas. details of which are reported to Diocesan Synod on a regular basis. The members of Bishop's Council are also the Irustees and the members of the Board of Directors of Chesier Diocesan Board of Finance and are therefore responsible for ensuring that the activities of the DBF are conducted in accordance with Charity and Company Law. The Finance and Scrutiny Commiiree deals with all financial transactions of the DBF excepi for the.. approval of the annual report and accounts- approval of new policyand material changes in policy,. approval of significant non-budgeted expenditure. Major capital expenditure Staff remuneration The Human Resources Committee oversees matters relating to clergy and lay conditions of service, staffing levels, and other matters. Bishop's Council receives detailed and regular reports on the activities of the various committees on the discharge of its responsibilities. As employer of the staff responsible for the administrative work of the Diocese, the Board of the DBF records its sincere appreciation of the commitment and hard work of everyone concerned. Subject to financial limits certain day-to-day decisions have been delegated to senior employees. Bishop's Council is appointed as follows.. - Ex-officio members". the Bishop of the Diocese," other members of the House of Bishops, the Dean.. the chairs of the House of Clergy and Laity; the 22 Chester Diocesan Board of Finance Year ended 31 December 2022 Trustees Report Archdeacons,. and the Chair of the Diocesan Board of Finance who is elected by the members. Appointed members: one member appointed by each of: the members of the DBF, the committee responsible for housing matters, and the Diocesan Advisory Committee for the Care of Churches. Elected members.. 5 clergy and 5 lay persons from each Archdeaconry elected by and from among the members of the appropriate House of that Archdeaconry. Nominated members: not more than 2 persons nominated by the Bishop. Co-opted members: not more than 2 persons co-opted by the Council. A new Bishop's Council is constituted every 3 years. most recently in December 2021. The first meeting of the new council is a full day meeting and includes a training session on the duties and responsibilities of trustees and company directors, together with a description of the main activities of the charity. In addition. new members were made aware of the Charity Governance Code. Diocesan Mission and Pastoral Committee Each Diocese has a statutory Diocesan Mission and Pastoral Committee {DMPC) appointed under section 2 of the Mission and Pastoral Measure 2011. The functions of the DMPC are as set out in section 3 of the Measure. The DMPC is also consulted abGUt proposals for making a Bishop's Mission Order. DMPC5 were originally appointed under the Dioceses, Pastoral and Mission Measure 2007 to replace former diocesan pastoral committees and diocesan redundant churches uses committees. In the Diocese of Chester. the Bishop's Council is the DMPC. The day-to-day work of the DMPC is undertaken by two archidiaconal mission and pastoral committees to which the majority of the DMPC'S powers have been delegated. The membership of the archidiaconal committees consists of the Suffragan Bishop.Archdeacon. Rural Deans and Lay Chairs lor other deanery synod nominees) of each archdeaconry plus three members appointed by Bishop's Council {of which one is an eletted member of the Council). 23 Chester Diocesan Board of Finance Year ended 31 December 2022 Trustees Report The Chester archidiaconal committee agreed proposals for ihe exercise of the patron's right of presentation to the benefice of St Andrew, West Kirby. The archidiaconal committees agreed proposals for che suspension lor resuspensionl of the patron's right of presentation to the benefices of St Berteline and St Christopher Norton. Barnton Christ Church. Holy Trinity Norchwich, St Luke Northwich, Birkenhead Christ Church, Liscard the Resurrection and AntrobLJS. The archidiaconal committees agreed proposals that the suspension ofthe patron's right of presentation to the benefices of Newton with Flowery Field, Baddiley and Wrenbury vvith Burleydam, and Offerton St Alban should be allowed to lapse. The archidiaconal committees also discussed various matters including approaches to pastoral reorganisation. the Wirral Waters development. the diocesan vision process, and a report from the Director of Outreach, together wilh proposals for pasioral reorganisations. Diocesan Closed Churches Uses Committee The Diocesan Closed Churches Uses Committee IDCCUC) established in accordancewith the Pastoral Measure 1983. has had as its sole duty the task of finding suitable alternative uses for redundant church buildings in the Diocese. The responsibiliiies of the DCCUC were subsumed within those of the Mission and Pastoral Committee, though the closed churches work has been undertaken by a sub-committee. Discussions regarding Christ Church. Crewe continue with Cheshire East Council about possible uses and as part of the Crew Town Centre Regeneration Programme. Discussions continued on the future of St Johns Godley, and St Pauls Boughton. The Sale of St John Altrincham is progressing. Planning permission prior to sale was due to be submitted after the year end for St Luke Dukinfield. All Saints Balterley was closed and due to be sold in 2023. Custodian Trusteeship The Board is Custodian Trustee for trust assets with a market value of approximately £5.1 m at 31 December 20221£6.4m at 31 December 2021 }. Most of these irusts are held on behalf of Parishes whose charitable 24 Chester Diocesan Board of Finance Year ended 31 December 2022 Trustees Report purposes in the advancement of religion are parallel to those of the DBF. The assets of the trusts are held separately from those of the Board. The DBF 15 responsible for their safe custody but has no right of acce55 to such holdings for its own purposes. The funds are invested in accordance with the wishes of the managing trustees of the trusts and are mainly invested in charity deposits and investment funds. The Board also acts as custodian trustee for land and property trusts for parishes,. in the rnain these are PCC (Parochial Church Council) properties such as church halls and curates, houses. Deeds for these are held and recorded io ensure segregaiion of the assets from those directly belonging to the DBF. When founded in the 1831Ys, the Universityof Chester had close ties with the Anglican Church and was situated on land donated byihe Dean and Chapter of Chester Cathedral. Though the Universitys aims have widened. it still provides training in theology and religious studies The DBF remains custodian trustee for the University of Chester, holding property on its behalf. Investment Policy The Board's investment policy is to hold investments of relatively low risk nd in accordance with the Church of England's ethical investment policy. Subject to this. funds are invested as follows: Income funds are invested to achieve the highest possible total return whilst maintaining short term liquidity. Endowment funds are invested to produce the highest possible reliable income, whilst maintaining capital growth of the endowment over the longer term. In carrying out this policy the Board has decided primarily to invesi in the funds of the Central Board of Finance of the Church of England. Unrestricted funds For manyyears considerable attention has been given by Chester DBF to the preparation of long-term financial estimates though this has become harder in the current environment where levels of uncertainty are increased. To 25 Chester Diocesan Board of Finance Year ended 31 December 2022 Trustees Report Cushion the blow that would otherwise have fallen on parishes, the Board has on occasions used accumulated reserves. Free unrestricted reserves (excluding fixed assets) represent approximately 3 months expenditure 1£3.4m). Taking account of the voluntary nature of the bulk of the Board's income. the Board believes this level of reserves is adequate to maintain cash flow. The Board intends to keep under close review the level of reserves reqLJired for cash flow purposes. particularly if there is any change in the timing or amount of expected parochial contributions. Restricted funds The DBF'S res(ricied funds iotalling £9.Om (2021 £9.3ml are shown in note 20, together with an explanation of the purpose of those funds. The restatement of the prior year balance is as a result of ihe effect of changes in accounting policies on the PastoralAccount. The Board uses the pastoral account mainly to reinvest funds it receives from the sale of surplus parsonage houses for the improvement of other parsonage houses. Where not required for this purpose, it can be used to meet the DBF'S wider objects. Endowment funds Following a change in accounting policy. benefice property is now included on the balance sheet as an expendable endowment fund. The DBF'S endowment funds totalling £125m 12021 £126m) are shown in note 19 together with an explanation of the purpose of those funds. The majority of the Ioss in the year is due to a fall in investment valuations over the year. The major endowmeni funds generate income for stipends, and to make grants to retired clergy, widowslwidowers and dependants. Grant making policy The charity makes a variety of grants to clergy, their dependants. parishes and organisations as need arises and in furtherance of ils charitable objects. Applications are invited from those eligible under the terms of the various grant making funds. Applications are considered on their merits by the trustees. Further details of the funds can be found later in Ihese accounts. Details of the amounts and number of granis are given in note 7. Related party Chester Diocesan Board of Educ31ion acis as the educaiion authority for the 26 Chester Diocesan Board of Finance Year ended 31 December 2022 Trustees Report Church of England in the Diocese of Chester, and as such has objects that are closely aligned with those of the charity. Staff working for Chester Diocesan Board of Education are employed on Joint contracis of employment and are processed through the DBF'S payroll, with costs recharged. Key Management Personnel The trustees have delegaled much of the day to day running of the DBF to several key management personnel. As with all staff employed by the DBF. their remuneration is set by reference to the Croner Job Evaluation Scheme for the Church of England. Charity Governance Code The DBF takes account of the Charity Governance Code in its approach to governance and effectiveness as follows- _ Organisational purpose - Bishop's Council the board of trustees - is clear about the DBF'S purpose -'to maintain and promote the spiritual teaching of the Church of England in the Diocese of Chesterf. and that in practical terms this means assisting parishes to function effectively. Leadership - the Bishops and Archdeacons of the diocese who are all trustees -provide direction that the wider board of trustees can unite around. Integrity The board of trustees is particularly aware of the need for the parishes and clergy of the Diocese to have confidence in the charity and works to that end. It is also aware of the need for the wider public to have confidence in the charity and the sector. Decision making risk and control - the board of trustees understands that its role is to set medium term direction, and delegates much day-to-day decision making within that direction to senior employee5. The board retains responsibility for, and oversight of those decisions. Board effectiveness because of the requirement of adequate representation of the various parts of the Diocese, the board of trustees is somewhat larger than the size recommended by the code. Where specific Issue5 arise, these are often considered by ad hoc subgroups of trustees, reporting back to full trustee meetings. 27 Chester Diocesan Board of Finance Year ended 31 December 2022 Trustee5 Report Diversity - as with other religious charities, the trustees are drawn from a specific group in society - in this case Anglican Christians with experience and time availability to take part in the management of the charity. Within this. the board aims to be as diverse as it can and is assisted by the requirement that the various parts of the Diocese are represented. Openness and accountability - the trustees and senior staff seek to foster open relationships, particularly with the parishes and clergy of the Diocese. Auditors In respect of each director at the date the directors. report is signed: So far as they are aware. there is no information needed by the charitys auditors in connection with preparing their report (relevant audit information) of which they are unaware. and The directors of the charity have taken all the steps that ought to have been taken in order to make themselves aware of any relevant audit information and to establish that the companys auditors are aware of that information. Trustee5' Responsibilities The Trustees are responsible for preparing the Trustees Report, incorporating the strategic report and the financial statements in accordance with applicable law and regulations_ Company law requires theTrustees to preparefinancial statements for each financial year in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law}. Under company law the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources, including the income and expenditure. of the charity for that period. In preparing these financial statements the Trustees are required to.. 28 Chester Diocesan 8oard of Finance Year ended 31 December 2022 Trustee5 Report select suitable accounting policies and then apply them consistently.. make Judgements and accounting estimates that are reasonable and prudent,- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements: prepare the financial statements on the going concern basis unless it Is inappropriate to presume that the chariry will continue in business. The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charitys transactions and disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The trustees. report, incorporating the strategic report, wa5 approved by the Board on 7 September 2023 and signed by order of the Board. Ven Dr M R Gilbertson Archdeacon of Chester Chester Diocesan Board of Finance Year ended 31 December 2022 Independent Au•Jitor's Report Independent Auditors Report to the Members of the Chester Diocesan Board of Finance Opinion We have audited the financial staiements of the Chester Diocesan Board of Finance for the year ended 31 December 2022 which comprise the Statement of Financial Activities. Balance Sheet, Statement of Cash Flow and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards. including Financial Reporting Standard 102 The Financial Reporting Stondard applicable in the UK and Republic of Irelond (United Kingdom Generally Accepted Accounting Practice). In our opinion. the financial statements- give a true and fair view of the state of the charitable companYs affairs as at 31 Decernber 2022 and of the charitable companys net movement in funds, including the income and expenditure, for the year then ended.. have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice.. and have been prepared in accordance with the requirements of the Companies Act 2006. Basis for opinion We conducted our audit in accordance with International Standards on Auditing IU KI IISAS IUKI) and applicable law. Our responsibilities under those standard5 are further described in the Auditorfs responsibilities for the audit of the financial statements section of OLJr report.'We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK. including the FRC'S Eihical StanLlard, 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 conclu(fjed that the trustees, use of the going concern basi5 of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed. we have not identified any material uncertainties relating to events or conditions that. individually or collectively, may cast significant doubt on the charitable company's ability to continue as a going concern for a period of at least ￿e1ve months from when the financial Chester Diocesan Board of Finance Year ended 31 December 2022 Independent Auditor's Report 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. Other information The trustees are responsible for the other information. The other information comprises the information included in the Chairman's Statement arsd the Trustee's Report. Our opinion on the financial statements does not cover the other informaiion and. except to the extent otherwise explicitly stated in our report. we do not express any form of assurance conclusion thereon. In connection with our audit of the financial sraiements, our responsibility IS to read the other information and. in doing so. consider whether Ihe other information is materially inconsisient 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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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 rhis regard. Opinions on other matters prescribed by the Companies Act 2006 In our opinion, based on the work undertaken in the course of the audit: the information given in the Trustees. Report (which includes the strategic report and the directors. report prepared for the purposes of company lawl for the financial year for which Ihe financial statements are prepared is consistent with the financial statements,. and the strategic report and the directors. report included within the Trustees, Report have been prepared in accordance with applicable legal requirements. Matters on which we are required to report by exception In the light of the knowledge and uiiderstanding of the charitable company and its environment obtained in the course of the audil, we have not identified material misstatements in the Trustees, Report{which incorporates the strategic report and the directors. report). 31 Chester Diocesan Board of Finance Year ended 31 December 2022 Indèpendent Auditor's Report We have nothing to report in respect ofthe following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: adequate accounting records have not been kept by the charitable company", or the charitable company financial statements are not in agreement with the accounting records and returns- or certain disclosures of trustees, rernuneration specified by law are not made,. or we have not received all the information and explanations we require for our audit. Responslbilities of trustees for the financial statement5 As explained more fully in the trustees. responsibilities statement set out on page 28, the trustees (who are also the directors of the charitable cofflparsy for the purposes of company lawl 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 missratement, whether due to fraud or error. In preparing the financial statements. the trustees are responsible for assessing the charitable companys 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 chariiable company or to cease operations. or have no realistic alternative but to do so. Auditorfs responsibilities for the audit of the financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement. whether due to fraud or error, and to issue an auditorfs 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 marerial if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions OF users taken on the basis of these financial statements. Irregularities. including fraud. are instances of non-compliance vvith laws and regulations. We design procedures in line with our responsibilities. outlined above, to detect maierial misstaiements in respect of irregularities. including fraud. Based on our understanding of the charitable company and the environment in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to safeguarding vulnerable beneficiaries. health 32 Chester Diocesan Board of Finance Year ended 31 December 2022 Inde￿ndent Auditors Report and safety, and employment {including taxation), and we considered the exient to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. the Charities Act 2011 and Church of England Measures. We evaluated managemenys incentives and opportunities for fraudulent manipulation of the financial statements {including the risk of override of controls). and determined that the principal risks were related to fund accounting. including transfers between funds, and revenue recognition. Audit procedures performed by the engagement team included: Discussions With management including consideration of known or suspected instances of non-compliance with laws and regulation and fraud- Evaluating managemenys controls designed to prevent and detect irregularities,. Identifying and testing journals.. Challenging assumptions and judgements made by management in their critical accounting estimates,- Testing Iransfers between funds.. and Cut-off testing in respect of revenue. Because of the inherent limitations of an audit. there is a risk that we will not detect all irregularities. including those leading to a maierial misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and tran5action5 reflected in the financial Statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud" rather rhan error, as fraud involves intentional concealment, forgery. collusion. omission or misrepresentation. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.fr .ukl ors ons This description forms part of Our auditor's report. 33 Chester Diocesan Board of Finance Year ended 31 December 2022 Independent Auditor's Report Use of our report This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 ofthe Companies Act 2006. Our auditwork has been undertaken so that we might state to the charitable company's members those matters we are required to state to them in an Auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility 10 anyone other than the charitable company and the charitable company's members, as a body. for our audit work, for this report, or for the opinions we have formed. Lee Stokes (Senior Statutory Auditor) For and on behalf of Haysmacintyre LLP. Statutory Auditor 10 Queen Street Place London EC4R 1AG 18 September 2023 Chester Diocesan Board of Finance Statement of Financial Attivltles for the year ended 31 December 2022 Intome and Expenditure Note Unr•5tricted Re5trirted Funds Funds Endowment Funds Total 2022 £'ooo Total 2021 E'OIJO Income ènd endovrnents from Parochial contribution5 Grants orher donations InvesimenL income Rental Income Incorne from tharitable •¢tlvitles Statulory clergy fees Rerreat and Conferente Centre Oiher income from operating aaNities 11.290 175 79 11.290 10.797 2.239 344 .336 345 424 237 126 363 359 679 679 198 103 710 75 70 198 50 53 Total 12.029 2.S39 14.568 14.594 Expenditure on ralsing fund5 Generaiing voluntary Income Inve51menr and Rental tosts charl￿ble Activities National church responsibility Parochial clergy and archdeacons Parsonage improvements Supporr t(> clergy and parishes Retreat and co￿[erence Cenire CEFPS deficit recovery plan 20 26 20 79 18 53 363 9.273 363 10.641 524 2.969 428 11231 407 10.457 500 2.332 300 1.368 524 956 2.013 428 11231 24 Total 12.C 14.907 14.054 Net income/lexpÈndiiure) before investment gain￿{loSSeS} 29 13621 13331 540 Nei Ilossesll8ains on Investments 14 1851 14831 18871 11.4551 1,633 Net l*xpendiwreVin¢ome {$61 18451 11.7881 1173 Transfers between funds 22 77 1485) Oth¢r r¢tO8nised g•inslllossesl Gains on revaluation of fixed asset5 204 74 6.665 6.943 12.108 Net rnovernent in fund5 13631 5.293 5.155 14.281 R￿￿￿111￿¢10n of funds= Total fund5 brought forward Total lunds carrled fon¥4rd 10.927 11,152 9.363 125.813 131.106 146.103 151.258 131.822 146,103 The notes on pages 38 10 58 forni part ol these financial stat*Trenrs. AJI arni¥itie5 are coniinuing. 35 Chester Dlocesan Boarfl of Finanre Balance $he¢t as at 31 December 2022 2022 £'ooo 2021 £'ooo Note Flxed assets Tangible a5seTS Invesrments 132,611 126.334 13.101 139,435 144.282 Current a55ets Debtors Cash ar bank on deposit and in hand 1.525 7.321 1.153 6.552 7,705 16 Creditors.. amounts falling due ￿th1Th one year Net current assets 11.787) 7.059 19541 6.751 Total assets less current liabilitie5 151.341 146,186 Creditors.. amounts falling due after more than one year [831 1831 Total net assets 151.258 146,103 Enrjowmeni funds Re5tritted irncome furKIs Unresiricied funds Total charity funds 131.106 125.813 9.363 10.927 146.103 20 151.258 The notes on page5 38 to S8 form part olthese fIna￿la1 siaterr*nTS. The financial sratements were au¢horised, Kssued and approved by the Board of Diretrors on 7 September 2023 and signed on its behalf by I N Scott-ounn Chairman Ven Or M R Gilbertson Archdeacon of Chester Chester Diocesan Board of Finance is a CoM￿nY limrted byguarantee rry5tereLI in England and Wales Ino_ IxirA)78261 Chester Diocesan Board of Flnance Staternent Of Cash Flows forthe year endert 31 DÈcember2022 R*¢on¢iliati•n of net incofflellexpenditur*i to net cash flow from operatingactivities Note 2022 20Z1 Net lexpenditurellincome for Ihe reporting period las per the staiemeni of financial activitTesl L05se51lGains1 on investmen Dwidends. Inrerest and royalties from investmen(s Decreaselllncreasel in debtors IncreasellDecrea5el in Cfediior5 Ne¢ castt (used inl operatlns activi¢le5 11.78BI 1.455 14241 13721 833 2,173 11.6331 13441 14 14881 18071 12961 Statement of Cash Flows 2022 £'ooo 12961 2021 £'ooo 18071 Net cash (used inl operatin8 actiwties Ca5hflows from investing activityts DNidends. Interest anrs royalties from Irwe5tments Payinents to acquire fixed assets Paymenrs to acr4uirÈ investments Receipts frorn disposal of tangilAe fixed asseis 424 11.6331 1251 2,299 1241 2,861 3.181 Increase in ¢ash In the y*ar 769 2.374 Reconflllation ol n¢t cash Ilow io movement In n Taxes kt 2010. Financial Instruments Financial asseis and financial liabilities are recognised when the company b￿QMeS a partyto the contractual provisi￿5 of the instrurnent. All Iinancial asseis and liabilities are Initiolty measured arcransèrt￿n price (including transaction costs). The company only has financKal asse(5 and finanitral th.a￿"111￿ of a kind (hat qualify a5 basic financial in5trurnenr5. 8a5K rinancial instruments are initially recognised aE transaction value and subseqtsenuy measured ai their setrlemeni value. Trade and other debtors are recogniseil at Ihe settlement amount due after any trade disr¢)vnt offered. Credrtors and provisions are recogni5ed where the company has a present obligaiion resulting frorn a Pa￿ evEnt that will probably result In the Iransfer of funds io a third paTryand rhe amount due to settle the obligatK)n can be measured or estimated reliably. Crediiors and provi5ion5 are normalty recogni5ed at Iheir selllement amount after alboMng for any trade discounrs due. Pension scherne5 The Board of Finance coniribures ro the Churih Workers Pension Fund (for lay stam and the Church of England FLJnded Pension Scherne (for clergyl. 80th of rhese 51hemes are me (* all of theyear. funded by the DBF".- Ven Dr Michael R Gilbert50n. Archifjeacon of Chester Ven lan G Bishop. Arthdea¢on of Matclesfield Revdloshua C A5kwith Aevd Canon Elaine Chew"n Hall Revd George T Crowder R@vd Leslie S Currie Revd Simorn Drew, Chair. House of Clergy Revd Simon R G61es Revd Andrew Q Greenhough Revd ChristOKthÈr I P Hobbs Revd Dr Roben S Munro Revd Richard L Pennystan Revil Michael L Ridley Revd Michael l A Srniih Revd Christina P Upion Re¥d Dawd A Vestergaard The Rl RevdlulieA Conalty. Bishop of Birkenhead. wa5 in receipr of a Sripe￿I and lthsing olltyNan￿. Ihe st1per￿1 funded by the Churth Comm￿s1OnerS and the hOU￿ngalloWance lunded by the DBF. The Rt Revd Sarnuel J C Corfey. Bishop of StLW was in receipt ofa stipend and pfowded ¥￿th hLMJyn& the stipend funded by rhe Church Commissioner5 and the h￿SIng prowthd ty the DBF. Thevery Revil Timothy R Str*foriJ. Oean of Chester, was in receipt of a stspend funded ty the Church Commi5soner5 and housin8 funded by Chester Cathedral 45 Chester Diocesan Board of Finance Notes to the accounts for ihe year ended 31 l>ecember 2022 The 51ipend5 of ihe ol￿e$an Bishop and Suffragan Bishops are funded by ihe Church Commissioners and are in Ihe range £37.955- £46.52512021 £37.670- É46.IBOI. The stipend. Fvnded by the DBF. paid to Archdeacons was £37.10612021 £36.8301. The stipend paid ro rhe Dean of Chester wa5 paid £37.76512021 £37.6701. Olher clergywho were Trvsteeswere paid stipends in the range E2?.090- £28,97512021 £26.558- E28.4061. Trustee expenses A total of É13,36512021 £7,672) was rwmbursed to 1212021 51 directors dvring the year. Nearly all expenses reimbJrsed to direciors are in respect of their charitable vnrk for the fhocese. Arnount5 in respea of their dutie5 a5 charity trustEes are sfflall. 11. Remuneration of key m•na8ement personnel The Irustee5 have delegated rnuch of ihe day to day runrmng of the DBF to a number of key managerneni personnel. The remuneration of these personnel, including employers narional insurance. toralled £423.20412021 £399.7841. rogerher with pension contribution5 of E90.42712021 £74.51 S). Of ihese. Ihe highesr paid wa5 George Colville, vtho received £79.663 12021 £78.1011 excluding employer5 nation31 insufance. together ￿[h pert510n contribviion5 of £27.32212021 £19.6D31. The kry rnanagerneni P￿tsonnel are listed on page 3 of iho Annual RepDrt_ 12. Related partytransactions Chesier Diocesan Board of Eduiarion atts a5 (he educarion authority ft>r Ehe Church of England in the Diocese of Chesrer. and as such has objeas ihat are c105ely aligned with those of the charity. 2022 2021 £'ooo Contribution rejoint employment cMtracts and other recharges 10 Chester Diocesan ￿r￿ ol Education 367 347 13. Tanglble Fixed Assets Freehold Land and 8uildings Glebt P•rsonages £'ooo Total 2022 Total 2021 Ooard £wo Co$¢ or Valuatlon Balance at I january Additions Disposals Revaluations Balance at 31 December 9.255 5.563 111.516 1.633 12.299) 6.373 117.223 126.334 117.OB8 IU991 6,943 132.611 12.8611 12.107 126.334 278 9.533 292 5.855 The eoard* woperty cornprise5 Ihe office ai OaresiHJry park. the conference cenrre ar Foxhill to8￿her with a550ciated buildings a small number of dosed chL*rches. iogether a sfflall number of re51dential propeniel some of which are used to house diocesan appointees. Glebe Pfoperty Comprises a srnall number of iesdential pcopemes iogeiher Wilh a range of mainly agricultural hol¢ings. Any Income ansing from Glebe property is ￿$tricted to the funding of stipends. All land and bu¢ldin85 are held atvaluatio(L A full desk top valuaiion was performed by fisher German LLPas at 31 December 2021. 108Èther ￿th site visits ￿ere appropriate. At 31 De￿rnber 2022 and lor follo￿n8years this propertywill be rÈvalued on at least a rolling five year bays. For each class of property. the average percentage change in value of revalued PToperties will be applied to the remaining propErties of that dass not 1ndwidual￿ valued thatyear. The surplu5 on revaluation has been credited to the Statement of Financk41 Artivities forthe year. In part due to the lenglh of iirne ihat many of the buildings have been held. full historic lo￿ informat￿n is not available. Chester Dio¢esan Board of Finan¢¢ Notes to the account5 for the year ended 31 December 2022 14. Investments 2022 2021 £'ooo 11.444 24 arket Value at 1 January Acquisitions ai cost Nei1105se5llgain5 on revaluation IAarket Value at 31 December 13.101 25 11.4551 11,671 1.633 13.101 Investments at 31 Detember comprise 202Z Market Value 2021 arket Value Noof shares Nool shares CBF Church of En8land Invesimen( Fund CBF Church of England Fixed Interest Fund CBF Church of England Property Fund Churches, Mutual Credit Union Deferred £1 534.462 30.414 389.805 10.(KIO 11.034 42 Sol 10 11.587 534.462 30.414 373.670 10.rM)o 12.499 13.101 15. Debtors 2022 É'ooo Z021 Amounts falling dut withiTr one year Loan 10 Liverpool D8F Other debtors Prepaymenis and accrued income Oiher loan5 359 989 101 1371 1.(103 Arnount5 falllng due after more than one yw Loans 10 parishes Loan ro LNerpcx)l DBF Value linked loaths ro parishes (note 181 67 83 150 83 Total debtors 1,525 1.153 Debtor5 are valued at the vndiscoun¢ed amountrecewable. The loan to Lwerpool DBF wa5 arrariged a5 £l￿.OcKj fepayable (Ner 15 years interest ffee. The loan was made to a5￿$t LNerpool D8F with construcriThg prem1se5 for the use of Sr MellitU5. a training in5tirution with similar obJ"eciwÈs to the DBF. and that prowoed trainlng for the D8F. This activity i% now carrieij our ty Emrnanud Theolog￿ College. Value linked loan5 ro parishes have no fixed repayment date and art repayable to the Church Commissioners onty on the disposal of the propery 3￿1n$tWhich 5￿UrIty is held. As a resLIL the majority of these bakinces hre Iikety to be repay4￿@ after more than orte year_ 16. Cash at bank. on deposlt and in hand 2022 £'ooo 2021 £'ooo Balarn￿% held by Church Commissioners Cash in hand. at bank and on bank deposit Chèrity Bank Deposit CBF Church of En¥and Deposit Fund 3.834 3,510 3.489 7321 6.552 47 Chestv Diocesat) Board of Finance Notes to the Jrcounts tor the year ended 31 D*¢ember 2022 17. Creditors= amountsfallin8 d￿t wlthln one y*ar 2022 2021 É'ooo 120 505 Trade creditor5 Accrua15 Other creditors Church of En*and Funded Pension Scherne agreed deficir recovery plan Inoie 261 338 503 946 325 954 1,787 Creditors are valued at the ur*Jixounted amount payable. 18. Creditors= amounts falling due alter more thaTr on¢ yt•r 2022 £'ooo 83 ZDZ1 £'ooo 83 Val¢Je linked loans for parishe5lno(e I Sl Creditors are valued ai the undiscottnted arntyJni payable. Value Linked Loan5 from the Church Commi45ioner5 a￿ loaned on io parishes on the same terms that thty are borrow￿￿. The oulStandin8 loan5 are for the purpose of assisting the Provi￿on of housing for a5sisranr clergy. The loans bKome repayable on disposal of the property or by agreement beiween the parish. the OBF. and the Church Commissioners. Value linked loan interest 15 charged at inierest rates of 6.4-7.5% pa. the same raie aiwhich the funds afe borr¢)wed from the Church Commissioners. Interest payable 15 included in note 6. Chester Diocesan 804td of Fifiance Notes to the accounts for the year end*d 31 December 2022 19. Éndowment Fund5 ThÈ Èndowment funds comprise capiral fund5. income of whith is crediied ro the releyant vnrèstrirted or restricted fvnd:. Ifxpenditurel gain5111055e51 31 December and transfer5 2022 £'ooo 137 1 January 2022 £'ooo Iss Incwne Diocesan Conference Centre Steel & William Fletcher Roger5 Fund Rerired Clergy. Wido4*s and Dependants Fund Clergy Sv5renraLion Fund Birkershead Curacy Fund El Mèssey Twemlow tnjst Glèbe Land & 8uildings Dioctsan Siipend5 F¢Jn¢J Captal Account Benefice property 95 3.17? 201 13721 1241 (221 2.799 177 169 137 155 5.$62 4.$33 111.750 125.813 293 5.855 4.027 117.637 131.106 5.887 5.293 Prior year c0rnparati¥￿... (Expenditure) gainslllo55esl 31 December and transfer5 2021 £'ooo £'ooo 20 155 95 3.171 201 191 155 5.562 4.533 111.750 125.813 ljanuary Income Oiocesan Conference Cenire srèel & William Fletcher Roger5 Fund Retired Cler8y. Widows and Oependanls Fund Clergy Sus¢entarion Fund Birkenhead Curacy Fund El Ma55ey Glebe LanLI & Buildings Oiocesan Stipends Fund Capitsl Account Benefice property 135 1773 176 167 135 5328 3.773 101.512 114.IA2 398 25 24 20 234 760 10.238 Perm¥ment Endowment Diocesan Conference Centre Held ro produce income for the Foxhill conferen￿ Cent Steel & William Fletcher Rogers Fund Making of granis for women and girls in need on rhe Wirral Retired Clergy. Wid¢)ws and Dependants F Making of 8rants for relief in need of reiired dergy. ￿￿OW5. SPOLt5es of rhe dew, and In certain circumstsnces meeting the cost of clergy pension contributions aking ol grants ro members ol the dergy in neeo of assistance. Fund for clerical or lay asystance ai Birkenhead Priory Parish For the maintenance and upkeep of cfvJrih and churchyard at Marton The rrv5t arose to pty grant5 10 Honorary Canons of Cheger Cathe(Iral with a wish that they preach at 8aliedey Memwl Chapel. Clergy Sustentaiicn Fund 8irkenheacl Curacy Fund E l Massey Twemlow trust Expvndable endov*ment Glebe LanLI & Buildings Glebe woperty. the fenial Income from wthich 15 Useil for funding 5tipenas Dioceson Stipends Fund Cawtal Account The aciounts are governed by the Diocesan Stipends Measure 1953 as amended by the Glebe Measure 1976. the Naiional InthtutN)n5 kleasvre 1998. and the Mis(ellèneous proW￿On5 Measure. The main luncrion of the funtl is to provide income for 5ripend5,' it can also be used for other purposes permittell by The Measures. 6eneficÈ houses- wcarageslparsonages. rogeiher with any parsonage building fund5 hekl for 5pecifit benefice Benefice property 49 Chester Diocesan Board of Finanre Notes to the accounts for the yearended 31 De¢ember2022 20. Restricted Fund* The income funds of the Board of Finance include resiriaed funds COrnPriSinB the fdlwn8 unexpended balances of donations and grants held on trust 10 be appliwj for spe(ific wrposes".- 1 January 2022 Inrorne IE¥pendrturel. 31 December Gains. (Losses) 2022 & Transfers Capiral Reserve Siipend5 Clergy Su5tentaiion UPA Projecis Canon White Trusi lane Hannah Graham Trusi Retired Clergy Widow5 and Dependants Steel & William Fletcher Rogers Fund rwernlow tru5r Parssh Mission and Ministry Dioceson Pasroral AccounE Birkenhead Curacy Fund Foxhill Retreai Fund RME block grant Ministry hardship Parish energygrants Harrison legacy Restr1Cted Committee incorne 4.030 14721 3.558 42 13 336 573 339 658 39 121 27 27 3.267 67 11081 182 142 1251 12491 1691 126SI 1241 11.6641 (19021 162 188 295 87 299 34 652 676 1.664 1539 9.363 Prior year rvmparat1t￿S=. 1 January 2021 Income (Exptnditurel. 31 P•cembor Gains. IL055e51 2021 & Transfer5 £'ooo 508 £'ooo 4,030 30 Capital Reserve Stipend5 Clergy Sustentstion UPA Projects Canon Whice Trus1 lane Hannah Graham Trusi Retired ClergyWidow5 and Dependants Steel & Williaffl Fletcher Ro8ers Fund Parish Mission and Ministry Oiocesan Pastoral A(count Birkenhead Curacy Fund Foxhill Retreat Fund RME block grani Harrison legacy Restricred Committee income 3.522 27 336 491 336 573 36 27 3.308 27 1550 733 181 91 182 142 676 301 676 1.617 1719 12501 11.61n 16381 7.282 9.363 *ln èll cases Commit¢ee expendrture exceeds resirifftd income, the balance bein8 funcled from unrestricted fvnd5. Chester Diocesan Board of Finance Notes to the •¢counts lor the year ended 31 De¢ember 2022 Deiails of rhe Restricied fundsare as follow5". Cèpiial Reserve Siipends Fund for paymeni of ￿lpendS Clergy Sustentaiion The charity Is endowed (see noie 201 The in£orne is the making of grants 10 members of Ihe n the Wirral. ThE ch3rity is endow￿￿ Isee note 201. The trust arose to pay granr5 10 Honorary Canons ol Chesier Carhedral wilh a wish ihai they preach at 8alierley Memorial Chapel. Funding from Archbishops Council. Can be Spent on par15h mission and rninisiry aawities. or sbpends. Applied towards ihe paymeni of stipend5 Fund for clerical or lay a5SiStance ai Birkenhea¢J Priory Parish The fund arose from a d(*wion from the former Chester Retreat House and is to be used io fund Retreats. Theaccounr is govemed by the seaion 78 of the Pastoral Measure 1983. It must initially be used In rneering (he costs incurred for ihe purposes of Ihe measure. or in meetiag the cosis of disposing of OT maintaining houses or churchesves(ed in the DBF or Church Commissioners Ir the DBF ts sèiisfied the fund Is not required or likely io be required for rhe above. it May be appliell to ot￿r purp05e5 of the dM)cese or amy bÈneficÈ or parish in (he dK)cese. Archb15hops Council grant funding for the training ofordin6nds. The D8F is due to receNe a legacy for the support of children. young people and families in the Diocese of Chetter UPA Project5 Can0￿ White Trusr jane Hannah Graharll Tru51 Retired aergy Widow and Dependants Twernlow trust Parish Mi%Yon and Ministry Diocesan Stipend5 Income Fund Birkernhead Curacy Fund Foxhill Retreat Fund Diocesan Pastoral Account RME 81ock grani Harr1son le8acy 51 Chester Diocesan Board of Finance Notes tts the accounts for the year ended 31 December 2022 21. Analysis ￿ net amtts betvfftn lund5 2022 Total Net Assets £'ooo 2021 Total Net Assets £'ooD Tangible Fixed In¥es¢ments Net Currtnt Long term Assets Assets Liabilities iJnre5tricted Funds General Funds 4.436 io 2.705 1831 7,068 7.128 Designated CEFPS defitit recovery plan Oflice refurbishment EIG Reselve Lay Trainin8 Fryer Trusr Bishop of Birkenhead Fvnd Diocesan Conference Cenire To¢al Unrestritttd Fund5 13251 544 149 18 147 50J 145 18 130 145 18 130 3.290 7.726 3.290 11.152 3.252 10.927 641 1831 Restricted Funds Capital Reserve Sfipends Clergy Susrentation RMÉ block grant UPA Projecis Canon White Trust lane Hann3h Graham Trust Re¢ired ClergyWido￿S and Dependants Pastoral Account Pa¥ish Mission and Ministry Birkenhead Curaq f und FDxh*ll Retreat Fund Steel & William Fletcher Rogers Ministry Hardship FurKI Parish Energygrènts Harrison Lega(y Total kestricted Funds 3.558 3.558 42 188 14 4,030 142 339 394 1,724 27 339 6S8 3267 27 336 573 3.308 27 264 85 39 78 162 39 182 652 3.558 652 9.000 676 1.107 Endowment Fund5 Diocesan Conferente Cenir Steel & William Fletcher Rogeis El Massey Twemlow trust Reiired Clergy wido￿ and Dependants Clergy Sustentation FL￿d Glebe Land & Buildings Birkenhead Curacy Fund Diocesan Stipend5 Fund Capital Benefice property Total Endowment Funds 137 137 83 137 155 95 Iss 137 2Ary) 3.171 201 5.562 191 4,533 111.150 125,813 5.855 5,855 169 4,027 117.637 131.106 169 219 414 633 117,223 123.on Total Fund5 131611 11,671 1831 151.258 146.103 52 Ch¢$ter Dlocesan Board of Finance Notes to the accounts lor Ih¢year ended 31 De¢¢mber 2022 Prior y•ar compar•tlves:. 2021 Total Net Assets Tan8Trble Fixed Investménts Net Current Long term AssEts Assets Llabilities Unre5tri¢ied Funds General Funds 4.270 10 2.931 1831 7.128 Oesignated CEFPS deficit recovery plan Office ¥efurbishmèni EIG ReseNe Lay Training Fryer Trust Ishop of Birkenhead Fund Diixesèn Conference Centre Total unrestrirted Funds 1325) 13251 149 149 18 147 18 147 14 3,2S2 3,252 10,927 701 1787 1831 Restricted Funds Capitol Reserve Sripends Clergy Sustentaiion RME block grani UPA Projects Canon Whire Trust lane Hannah Graham Trusr Retired Clergy Wido￿5 and Oependants Pastoral Account Parish Mission and Ministry 8irkenhead Curacy Fund Foxhill Retreat Fund Steel & William Fletcher Rogers arrison Legacy Toial Re5tr•cted Fund5 4.030 4.030 30 142 14 336 328 1.819 27 336 573 3.308 27 245 1.489 182 36 676 9.363 676 3.511 4.111 Endo¥m)ent Fwds Diixe53n ConferencE Cenire Sieel & William Aeicher Ro8ers E J Massey Reiired Clergy Widows and Dependan Clergy Sustentaiion Fund Glebe Land & Buildin8$ Birkenhead Curacy Fund Diocesan Stipend5 Fund Capital Benef1te property Tot* Endowment Fuffid$ 1SS 95 155 1171 201 155 9S 155 3.171 201 5,562 5.S62 4,314 219 234 453 4.533 111.750 125.813 111.516 117.078 Total Funds 126.334 13.101 4751 1831 146.103 53 Chester Diocesan Boarfl of Finance Note$ to the accounts for the year ended 31 December 2022 22. Transfers between funds Transfer5 were made to unresrricted fvnds as follows'.- 2022 2021 £'ooo To/(froml Aestrlcted funds In respect of housing allowance51l1 In respect of vicarage COnSLruction costs121 Pastoral Scheme Ideasing parsonage buildin8 fvnd131 In respect of vicara8e purchaseslsale5141 Other rran5fer5 1701 13001 234 sso 161 408 1701 1.066 Tollfroml Endowment funds In respect of vicar3ge consirucrion cos($121 Pastoral scheme releasing parsona8e buildin8 hJnd131 In respect of wicarage purchase￿saleSf4I 12341 14851 11.1411 Total transfers to unrestricted fvnds 75 11}A number of housing ￿lOWanceS are paid to clergy li￿ng in their own accomodation. These are futKled fiom the pa510ral accouni on Ihe basis that there Is no corresponding vion liabilities. Pension Builder 5(heme Both Sections of rhe Penyon Builder Stheme are clawd as defined benefit scheffles. Pension Builder Classic promdes a pension accumvlated from contributions paid antl corvened into a deferreLI annuity tluring employment based on ierms set and r￿leWed bythe Church of England Pensions BoarLI from time to time. Discretionary increase$ may also be added. depending ￿ in¥e5tment returns and other facrors. Pension Builder 2014 15 a rash balance scheme that prowdes a lump sum vknich mernber5 use to provide benefits ai ￿tireMent. Pension coniribvtion5 are retorded in an account for each rnernb￿. Discretionary bonuses May be added before retirement, depending on investment returns and other factors. The account. plus anybMuses detlared is payable. unreduced. from age 65. There is no SU&d￿ls1on of assets between employers in eath section of the Pension Builder Scheme. The scheme is considered to be a mult￿emPloYer scherne asde5cribed in Section 28 of FRS 102. This is because it is not p0S￿bIe ro attribtrte the Pension Buildef kheme's assets and liabilities 10 specific employeis and means that coniributions are aicoLtnted for as if the kheme were a defined contribuiion scheme. The pensions costs charged to the SOFA in Ihe year are the coniributyons payable12022.. £164.875. 2021: £136.8941. Avaluation of the Pension 8uilder StheN* is (arried out (WKe every three ￿ar5. The mosi receni was carried as ar 31 December 2019. The ￿ex[ valuaiion is due as at 31 0ecembÈf 2022. For rhe Pension Builder Classic sertion. the valuation r￿ealed a deficit of £4.8m on ihe ongoingas5umptyons used. At the mosi receni annual Tewew. the 8oard chose to grant a dtscretKJnary bonus of 10.196 foll4Mng improvements in the fvnding posilion over 2022. There is no reouiremeni for deficrt payments ai the current For the Pension Builder 2014 secrion, rhe valuation revealed a Sur￿US of £S.Sm on the ongoingassumptlons used. There Is no requirement for defiiir payments at ihe current time. The legal SErutture of the scheme is such thai if another ern￿o￿r lails Chester DBF could become iesPOn5ible for payinga share of the failed employers pension liabilities. 55 Chest*r Dioce5•n Ooard of Finance Notes to the accounts for ihe year ended 31 December 20ZZ 24. Church af England Funded Pensiofis Scheme Chesrer DBF parciiipates in Ihe Church of England Funded PenS￿n55(heme for51ipendiary IlerBY, a defined benefit pension scherne. This scheme is adrnini￿ered by rhe Church of En¥and Pen￿On5 Board. which hdds the assets of the Scheme separately from those ol Ihe Responsible 8odies. Each participaiing Responsible Body in the Church of England Funded pen￿OnS S(heme pay5 iontTibutions ai a commo contribulion rare applied io pensionable stipends The scheme 15 considered ro be a multi-employer scheme as described in Secrion 28 of FRS 102. It is not possible io aitribuie ihe Scheme's assets and liabilities to each specific Respongble Bo(ty. and this means contributions are accounted for as If the Scheme were a defined contribullOII 5rheme. The pension5 costs charged to the SOFA In the year are contributions payable rowards benefiis ènd expenses accrued in rh3t year12022.. E1,606,271. 2021.. £1.697.8901. plus the figures in relation to ihe scheme's deficit highlighted in ihe iablÈ below as being recognised in ihÈ SOFA giwng a total charge of £1.483,271 for 2022 12021.. £1,631.8901. A valuaiion of Ihe kheme is carried oui once every threeyears. The most recent Scheme valuatyon compleied was carried out as at 31 December 2021. The 2021 valuation revealed a suWu5 of £561kn. based on asseis of E2.720m and a funding target of £2.160m. assessed usin8 the followin8 assumptions.. . An average di5COUAt rate of 2.7% p.a.: . RPI inflation 013.616 p.a. land pension increases cony5tentwith thisl . CPIH Inflarion in line with RPI ￿$$ 0.8% pre 2030 mwn8 tD RPI wilh no adjusiment from 2030 onward5 Increase In per￿1￿￿ble siipend5 in line wilh CPIH.. Mortality in accordance w(rh of the 53NA tables. *ith allowance for imprcrtemenis in mortaliry rates in line wilh the CMI 2020 extended model with a longterm annual rare of improvemeni of 1.54. a smooihing pararn￿er Df 7. an insiial addiDon ro mortality Improvernen￿ of 0.5% p.a. and an albxance lor 2020 data oforyb li.e. w2020= IJIII. Following the 31 December 2018 valuation. a defitit recovery KAan was wt in place unt¢1 31 December 2022 and the deficit recovery coniriburions las a percenra8e of pensionablÈ Stipends) as set out in the tsble below. An interim reduciion to deficii contributions to 3.296 of pensionable s1ipeniJswas madewiih effea frorn 1 April 2022. following finanlisation of the 31 December 2021 valuation. deficit coniriburion5 ceased wth effea fttsm i lawary 2023, since the Scheme was In surplus. As at 31 December 202 and 31 December 2021 the deficit recovery contributions under ihe re(o¥ery plan in fDrce were as set out in the ￿ble below. For senior office holders pensv)naNÈ stipeThJ5 are adjusted in the calculat10115 by a tnultiple. a5 Sei out in the Scheme's rule of pensionable 5(ipends january 2018 1013nuary 2021 to December 2020 December 2022 Deficit repair contributi￿5 11.99h 7.1 Sethon 28.11A ol FR5 102 requires agreed deficit recovery paymenis 10 be reCOgn￿ed a5 a l￿bIlIty. However. as there are no agreed defiiit recovery paymer41s frtsm 1 january 2023 onwards. Ihe balance sheet liability as at 31 December 22 is nil. The movement In the balance sheet liability over 2021 and 2022 is set out in the table bel￿. Chester OiDcesan Board of Finance Notes to the accounts for the year ended 31 Derembtr 2022 Z022 £'ooD 2021 E'ooo Balance 5heeL liability at I lanuary 325 760 DeficiL contribuiion paid Inrerpst COSI Irecognised In SOFA) Remaining chan8e io the balance sheet liabiliv (r￿ogniSed in SOFA) 12021 136BI 11231 1681 Balan￿ sheet liability at 31 December 325 * Comprises thange In a8reed defiiit recovery plan. arKI rhange in discount rare and in11auon assumprions beLween year-ends. Th￿ liability represents the present value of the deficir contnt￿ilons agreed a5 at rhe atcounting date and has been valued using Ihe following assumptions. No assumpiions are needed for December 2022 as rhere are no agreed deficii recovery payrnents goiTrg forward. No price Inflarion assumpiKJn was needed for December 2021 since pensiOna￿e stipends for the remainder of (he recovery plan were alreaty known. Oecember 2022 December 2021 December 2020 Discovnt rate Price inflarion Increase (o toial pensionable payroll nla nl 0.0% pa nla -?.5% pa 0.2% pa 3.l%pa 1.6%pa The le8al struaure of the scheme is such ihat rf another Responsible Boty fail& Chester DBF covld becorne responsible for paying 3 share of that failed Responsible Body4 pension liabilities. 57 Chester Diocesan Boatd of Finance Notes to the a