2024-07-31-accounts

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The Audit Committee Annual Report to the Board of Governors 2023/24

Purpose of the Report

1.1. This report summarises the activities of the Audit Committee for the financial year 1 August 2023 to 31 July 2024, and up to the point of signing of the financial statements for 2023/24.
1.2. It is a requirement of the Education and Skills Funding Agency that the Audit Committee present an Annual Report to the Board of Governors and to the Principal as the accounting officer for the College. The report must be submitted to the Corporation for consideration prior to the statement of corporate governance and internal control in the annual accounts being signed

1.3. The report must include:

1.3.1. a summary of the work undertaken by the committee during the year (Section D);
1.3.2. the number of the meetings held in the year, and attendance records for each audit committee member (Section C);
1.3.3. any significant issues arising up to the date of preparation of the report (Section G).
1.3.4. any significant matters of internal control included in the reports of audit and assurance providers (Sections E and F);
1.3.5. the committee’s view of its own effectiveness and how it has fulfilled its terms of reference (Section C);
1.3.6. details of the date of appointment of the external auditors and the remaining term of the contract (Sections E and F);
1.3.7. the committee’s opinion on the adequacy and effectiveness of the college corporation’s audit arrangements, its framework of governance, risk management and control, and its processes for securing economy, efficiency and effectiveness (Section A).

Section A - Audit Committee Opinion 2023/24

Based on the work undertaken by the committee during the year it is the Audit Committee’s opinion that the Board of Governors can be satisfied with the adequacy and effectiveness of the College Corporation’s assurance arrangements, framework of governance, risk management and control processes for the effective and efficient use of resources, solvency of the institution and the safeguarding of its assets.

Significant issues or matters of internal control raised during the period are outlined in Section G.

Section B - Introduction and Context

1.4. It is a condition of funding that college corporations establish an audit committee which has clear terms of reference which reflect accepted good practice for audit committees of publicly funded organisations. The responsibilities resting on the audit committee are set out in the Post 16 Audit Code of Practice (ACOP) which sets out the specific requirements for the assurance, accountability and audit arrangements for providers of post-16 education and training and the broad framework in which they should operate.

Section C - The Audit Committee in 2023/24

1. Terms of Reference

1.1. The committee’s terms of reference attached at Appendix A are based on the requirements as set out in the Audit Code of Practice.
1.2. The terms of reference were reviewed by the committee at its meeting on 4 December 2023 and 4 December 2024 and no changes were proposed.

2. Meetings and Membership

2.1. The committee met on 4 December 2023, 25 March 2024, 10 June 2024. The committee also met additionally on 4 December 2024 and 3 March 2025 in order to consider the financial statements for 2023/24.
2.2. All meetings were held virtually.
2.3. All the meetings were quorate.
2.4. The cycle of audit committee business for 2023/24 is attached at Appendix C.
2.5. There were a number of changes to the membership of the committee during 2023/24:
Liz Stanley’s term of office as a governor ended on 31 December 2023 and therefore also ended her term on the committee;
Ray Low was appointed to the committee on 31 January 2024.
Matt Stephens was appointed to the committee on 29 November 2023.
2.6. Membership and attendance therefore comprised:

Member	Category	Attendance
Liz Stanley (chair – to 31 December 2023)	Member of the Board	100%
Seb Schmoller	Member of the Board	100%
Ann Corrigan (chair from 1 January 2024)	Member of the Board	100%
RayLow(from 31 January2024)	Member of the Board	100%
Matt Stephens(from 29 November 2023)	Member of the Board	50%

2.7. The terms of reference currently state that the committee should consist of at least five members. The committee has four Board members but was not able to recruit an independent member of the committee in 2023/24. Despite this the Board can be assured that the committee remained compliant with the requirements of the Post 16 ACOP which states that an audit committee should have a minimum of three members, the majority of which should be members of the Board.
2.8. The chair of the committee, Liz Stanley, stepped down from her role as a governor on 31 December 2023. Ann Corrigan took up the role on 1 January 2024. Ann has extensive experience serving as a member of audit committees, along with her previous experience as the chief finance officer for a large trade union and relevant professional qualifications.
2.9. The Clerk to the Governors (Sarah Johnson) serviced the meetings. All meetings were attended by the Principal and the Deputy Principal – Chief Finance Officer, together with representatives of the internal audit service and the financial statements auditor as appropriate. Other members of the College’s executive leadership team attended by invitation as required.

3. Skills and Experience

3.1. Audit committees must include individuals with an appropriate mix of skills and experience to allow the committee to discharge its duties effectively. Collectively, members of the committee should have recent, relevant experience in risk management, finance and assurance.
3.2. Until 31 December 2023 the committee was chaired by a qualified chartered accountant with more than 25 years’ experience as an internal auditor and risk manager. The chair from 1 January 2024 has extensive experience as a member of audit committees and professional experience as a chief finance officer. Other skills and experience amongst members include strategic financial management and extensive experience of audit and governance from other sectors and organisations, the committee therefore continued to include the skills and experience to enable it to discharge its duties appropriately.
3.3. Members of the committee have also participated in training and development for audit committee chairs and members provided by the AoC during the year.

4. Effectiveness

4.1. Performance Indicators (PIs) are set for the committee annually. The performance for the Audit Committee against its PIs for 2023/24 is shown at Appendix B. The committee met all its targets for 2023/24. The committee also undertakes an annual self-assessment, and this can be found at Appendix D.

Section D – The work of the Audit Committee in 2023/24

6. Internal Audit

6.1. In July 2022 the Board of Governors approved a recommendation from the Audit Committee that assurance work would be commissioned on a project-by-project basis from suitable specialist providers.
6.2. In March 2024 the Audit Committee approved the appointment of Wylie Bisset to carry out an independent funding review, Wilie Bisset have extensive experience in this area and carry out funding audits on behalf of the ESFA. This work was carried out during April/May and they reported their findings to the audit committee in June 2024.
6.3. On 20 December 2023 the Board of Governors agreed a recommendation by the Audit Committee to appoint an internal audit firm with experience in the sector to carry out a funding assurance review during 2023/24 and that an appropriate procurement process be followed to appoint an internal audit service for 2024/25.
6.4. Following a tender process for internal audit services, the audit committee recommended to the Board the appointment of Wylie Bisset as the Colleges Internal Auditor for a period of 3 years, this was approved by the Board in June 2024.
6.5. Throughout the year the College has prepared an internal assurance mapping document which has been considered at each audit committee meeting, this has provided the committee with assurance in relation to the adequacy and effectiveness of the Colleges assurance arrangements to support reaching its opinion for 2023/24.

7. Appointment and Oversight of the Financial Statement Auditors

7.1. To support them with their work the committee appointed financial statement auditors.
7.2. RSM were appointed in 2022 via a full procurement process. An overview of their work can be found in section E.

8. Monitoring the Implementation of Recommendations

8.1. At every meeting the committee considered a regular report which outlined the status of any previous audit recommendations and enabled it to ensure that they were being appropriately implemented in a timely manner.
8.2. Overall, the committee was satisfied that appropriate progress was made.

9. Risk Management and Assurance

9.1. The Audit Committee is responsible for advising the Board of Governors on the adequacy and effectiveness of the Corporation’s assurance framework.
9.2. The committee considered risk management and assurance at all its meetings in 2023/24.
9.3. The College undertook its annual review of the approach to risk management and assurance at its meeting on 25 March 2024, concluding that that it remained fit for purpose.

10. Fraud, Irregularity and Whistleblowing

10.1. There were no concerns raised under the Whistleblowing Policy during the period.
10.2. There were no instances of fraud reported to the Audit Committee during the period.
10.3. The Whistleblowing Policy is reviewed every three years. It was last reviewed by the committee at its meeting in July 2023 and approved by the Board of Governors at its meeting in July 2023. Changes made were to update references and strengthen assurances regarding support and encouragement for staff to speak out.
10.4. The Anti-Bribery Policy is reviewed every three years. It was last reviewed by the committee at its meeting in July 2023 and was approved by the Board of Governors at its meeting in July 2023. Minor changes were made to update references and aid clarity, the level of gifts and hospitality which required reporting was raised from £30 to £50;
10.5. The Fraud Response Strategy and Procedures were reviewed and approved by the committee at its meeting on 25 March 2024.

11. Closed Session with Auditors

11.1. A closed session was held with the financial statements auditors at the meeting in December 2023.
11.2. The financial statement auditors:
11.2.1. confirmed that their audit was almost complete and that whilst the timescales were very tight they were confident that the planned timeline to sign the statements at the December meeting of the Board would be achieved;
11.2.2. confirmed the inclusion of material uncertainty in their audit report;
11.2.3. reported good working relationships with the College’s executive team and the receipt of informed and articulate responses to queries;
11.2.4. requested and received assurance that the committee was not aware of any fraud risks.

12. Health and Safety

12.1. The committee undertakes an oversight role in relation to health and safety. This is designed to provide an appropriate level of scrutiny of health and safety in the College in relation to the effectiveness of management structures and risk controls, monitoring of health and safety performance and the appropriateness of the health and safety policy, and includes:
12.1.1. explicitly considering health and safety when developing the internal audit plan and ensure assurance requirements are integrated as appropriate;
12.1.2. overseeing health and safety risks in the risk register, considering the assurance in place and identifying where additional assurance is required;
12.1.3. reviewing the health and safety policy and making recommendations to the Board of Governors regarding approval;
12.1.4. receiving reports from the College’s Health and Safety Committee;
12.1.5. considering the health and safety annual report and making recommendations to the Board of Governors;
12.1.6. raising any areas of concern with the Board of Governors.
12.2. During 2023/24 the committee:
12.2.1. considered the Health and Safety Annual Report for 2022/23 and agreed that the report provided appropriate assurance regarding health and safety management and compliance at the College and recommended it to the Board of Governors for consideration;
12.2.2. considered a mid-year Report for 2023/24 and was satisfied that appropriate health and safety assurance had been provided, and that there were no significant issues of concern.

13. Further Education Commissioner (FEC) Intervention and Supervised Status

13.1. The committee maintained oversight as appropriate to its remit in relation to the intervention work undertaken by the FEC and the College’s supervised status.

Section E – Internal Audit

17. The Internal Audit 2022/23

17.1. The purpose of internal audit is to undertake on behalf of the Board of Governors a process for independent checking of key defined internal control processes as agreed in an annual audit plan. The plan is designed to inform the Audit Committee’s opinion on the adequacy and effectiveness of the Corporation’s assurance arrangements, framework of governance, risk management and control processes for the effective and efficient use of resources, solvency of the institution and the safeguarding of its assets.
17.2. The revised ACOP published in March 2014 removed the requirement for colleges to appoint internal auditors. In light of this the Corporation periodically reviews how appropriate assurance can best be gained and whether this should include the retention of an internal audit service. In July 2022 the Board of Governors approved a recommendation from the Audit Committee that assurance work would be commissioned on a project-by-project basis from suitable specialist providers.
17.3. On 20 December 2023 the Board of Governors agreed a recommendation by the Audit Committee to appoint an internal audit firm with experience in the sector to carry out a funding assurance review during 2023/24 and that an appropriate procurement process be followed to appoint an internal audit service for 2024/25.
17.4. An external funding assurance review was carried out by Wylie Bisset and reported to the Audit Committee on 10 June 2024.
17.5. The appointment of Wylie Bisset to provide an internal audit service from 1 August 2024 was approved by the Board on 28 June 2024.
17.6. At its meeting in December 2024 the Audit Committee also considered a summary assurance map which it was able to draw on in reaching its opinion for 2023/24.

Section F – Financial Statements Audit

18. Overview

18.1. It is a condition of funding that college corporations appoint an external auditor to audit the annual accounts and a reporting accountant to provide an assurance report on regularity each financial year. The reporting accountant must be the same as the external auditor.
18.2. The external auditor must:
18.2.1. audit the annual accounts in accordance with relevant legal and regulatory requirements and international standards on auditing;
18.2.2. provide an opinion on whether the annual accounts, in all material respects, give a true and fair view and have been prepared in accordance with the relevant statement of recommended practice;
18.2.3. report by exception whether, in their opinion, the College Corporation has not kept adequate accounting records, the annual accounts are in agreement with the accounting records and if they have received all the information and explanations required for their audit.
18.3. In line with ACOP requirements and following a robust competitive tender process RSM UK Audit LLP were appointed by the Corporation as the College’s financial statements auditors for a period of 3 years from 1 April 2022, with the option to extend for a further 2 years.

Financial Statements Audit 2022/23

18.4. RSM attended the meeting of the Audit Committee held on 4 December 2023 to present the draft Financial Statements and Audit Findings covering the period from 1 August 2022 to 31 July 2023.
18.5. The Audit Committee recommended the draft Financial Statements and Audit Findings report to the Board who signed the statement at its meeting on 20 December 2023.

Financial Statements Audit 2023/24

18.6. The fieldwork for the audit of the 2023/24 financial statements took place weeks commencing 21[st] and 28th October 2024.
18.7. Draft financial statements and audit findings were presented to the Audit Committee for consideration at its meeting on 4 December 2024.
18.8. Whist the majority of the audit was complete, the audit could not be concluded due to awaiting a decision from SYMCA on their residential funding methodology for 2025/26.
18.9. The committee met again on 3 March 2025 once the SYMCA residential funding methodology for 2025/26 had been received, the going concern assessment was complete and the financial statements were approved for recommendation to the Board of Governors at its meeting on 12 March 2025.

Improper Revenue Recognition – AEB and Community Learning 2023/24

18.10. In March 2021 the ESFA announced changes to the Audit Code of Practice which resulted in the external auditors no longer being able to place reliance on the funding confirmations. As a result, alternative procedures were required to be performed to conclude the auditors audit opinion on the financial statements.
18.11. Testing was only for the purpose of expressing an opinion on the financial statements and could not be relied on to give the Board assurance over the accuracy and robustness of the College's systems.
18.12. RSM UK, using their funding body income specialists, tested the AEB and Community Learning income recognised in the year and noted that initial assessment had not highlighted any immediate concerns to bring to the committee's attention. They have, however identified some control points.

Regularity Self-Assessment 2023/24

18.13. To support college corporations in drafting their statement on regularity, propriety and compliance in the financial statements the Education and Skills Funding Agency have

developed a self-assessment questionnaire. This aims to provide clarity over the framework, including the funding bodies’ interpretation of the key requirements and the type of evidence that should be considered.

18.14. A completed copy of the questionnaire was considered by the Board of Governors at its meeting in October 2024 and approved for signing.
18.15. In December 2024, the regularity self-assessment for 2023/24 was considered and it was noted that there had been no changes.
18.16. No areas of non-compliance were identified by the College.
18.17. The self-assessment is reviewed by the auditors as part of the regularity audit, who stated in their audit findings report that:

‘’Our review has not identified any issues of non-compliance and as a result we will be issuing an unqualified regularity opinion within the financial statements’.’

Additional Services Provided by the External Auditor

18.18. No additional services were provided by RSM during 2023/24.

Section G –Significant Issues

19. Overview

19.1. The audit code of practice requires this report to summarise any significant issues arising up to the date of preparation of the report.

FEC Intervention

19.2. As a result of financial challenges the College was placed in FEC intervention during 2020/21 and participated in a FEC led structure and prospects appraisal (SPA) which resulted in the College maintaining an independent future. The intervention did not identify any concerns relating to the governance and management of the College. The College remained in intervention throughout 2023/24 and the FEC continues to undertake periodic engagement to take stock of progress and support the College.

Changes to Residential Funding Rules

19.3. In October 2023 the College was notified by the Department for Education of changes to the way national funding will be accessed for the residential element of the College’s provision from 2024/25 onwards. This represents a small part of the College’s funding (roughly 6%) and therefore is not a financially significant decision. It is however an important point of policy.
19.4. Letters regarding the future funding methodology for residential provision have been received from the College’s two main funders (South Yorkshire Combined Mayoral

Authority and West Yorkshire Combined Authority). Whilst there is further clarification of the detail required, they do provide a level of comfort regarding residential funding in the short term.

19.5. Compliance with funding requirements will form part of the College’s internal audit plan for 2024/25.

Appendix A

Terms of Reference - The Audit Committee

1 Membership

1.1. At least five members, the majority of whom should be members of the Board of Governors, at least one of whom must have relevant financial/audit expertise.
1.2. The internal and financial statements auditors shall be entitled to attend and speak at all meetings of the committee where business relevant to them is being discussed, but not vote.
1.3. Senior management shall be invited to attend meetings, particularly when their area of responsibility is under discussion and shall be entitled to speak at such meetings, but not vote.
1.4. The committee may invite third parties to attend their meetings as appropriate. Such persons shall not have a vote, but shall be entitled to speak at the meeting.
1.5. College staff may not be members of the committee.
1.6. In order to maximise the committee’s independence and objectivity, the following people shall not be eligible to be members:
members of the Policy and Finance Committee
the chair of the Board of Governors
governors who have a significant interest in the College.
1.7. The committee shall be entitled, whenever it is satisfied that it is appropriate to do so, to go into confidential session and (subject to the rules as to quoracy set out below) to exclude any, or all, participants and observers, except the Clerk to the Governors.
1.8. The committee is responsible for maintaining its independence in appointing members; the terms of reference shall be approved annually by the Board of Governors.
2.1 The committee shall have the authority to investigate any activity within its terms of reference and be granted rights of access to obtain all the information that it considers necessary from

2 Authority

members of the staff and governors and to consult the IAS, financial statements auditor and the funding auditor directly.

3 Quorum 3.1 The quorum for meetings of the committee shall be three, two of which shall be members of the board.
4 Frequency of Meetings
4.1 The committee will meet at least three times per annum. The internal auditor where appointed, funding auditor and financial statements auditor may request a meeting of the committee if they consider that one is necessary and the committee will endeavour to comply with such requests.
4.2 The committee will meet with the auditors without management present at least annually.
5 Responsibilities 5.1 Assess and provide the Corporation with an opinion on the of the adequacy and effectiveness of the College’s audit arrangements, Committee framework of governance, risk management and control, and processes for the effective and efficient use of resources, the solvency of the institution and the safeguarding of its assets.
5.2 Advise the Corporation on how best it can fulfil its obligations to secure the proper, economic, efficient and effective use of resources and to safeguard the College’s assets.
5.3 Monitor, within agreed timescales, the implementation of recommendations arising from the management letters and reports of the financial statements and regularity auditor, and of any reports submitted by other providers of audit and assurance services to the College.
5.4 Oversee the College’s policies on fraud and irregularity and whistleblowing, and ensure the proper, proportionate and independent investigation of all allegations and instances of fraud and irregularity.
5.5 To consider and recommend the annual financial statements to the Board of Governors for approval.
5.6 Advise the Corporation on the appointment, reappointment, dismissal and remuneration of the financial statements and regularity auditors and other assurance providers, including internal auditors where appropriate, and establish that all such assurance providers adhere to relevant professional standards.
5.7 Inform the Corporation of any additional services provided by the financial statements, regularity and other audit and assurance providers and explain how independence and objectivity were safeguarded.
5.8 To establish, in conjunction with College management, relevant annual performance measures and indicators and to monitor the effectiveness of the financial statements auditors and IAS where appointed through these measures and indicators and decide, based on this review, whether a competition for price and quality of the audit service is appropriate.
5.9 Advise the Corporation on the adequacy and effectiveness of the College’s assurance framework.
5.10 Consider whether there is a need for an internal audit service (IAS) and make a recommendation to the Corporation.
5.11 Where there is no IAS ensure there is sufficient and objective assurance to enable an opinion on the adequacy and effectiveness of the College’s audit arrangements.
5.12 Where an IAS is appointed review and advise the Board on the scope and objectives of its work, ensuring it has necessary resources and access to information to enable it to fulfil its mandate and monitor and review its effectiveness.
5.13 Ensure the effective coordination between the IAS (where appointed), the funding auditor and the financial statements auditor, including whether the work of the funding auditor should be relied upon for internal audit purposes.
5.14 Keep under review the effectiveness of the College’s approach to risk management and assurance and receive reports from management on the effectiveness of the systems.
5.15 Consider any risks allocated to the committee for oversight.
5.16 To consider and advise the Board on relevant reports by the National Audit Office, the Education and Skills Funding Agency and any other funding bodies and where appropriate management’s response to these.
6 Election of 6.1 The chair of the committee will be selected by the Board of Chair Governors from the board members other than those listed at 1.6 above.
7 Clerking the Committee
7.1 The Clerk to the Governors shall act as clerk to the committee.
8 Reporting to the Board of Governors
8.1 A summary of each meeting of the committee will be presented to the next available board Meeting.
8.2 The committee will produce an annual report for the Corporation which will include:
the committee’s view of its own effectiveness and how it has fulfilled its terms of reference;
the committee’s opinion on the adequacy and effectiveness of the College’s audit arrangements, its framework of governance, risk management and control, and its processes for securing economy, efficiency and effectiveness.

9 Effectiveness 9.1 The committee shall review its effectiveness annually.

Appendix B

Audit Committee Performance against 2023/24 PIs

Performance Indicator	Target	Achieved
All meetings to bequorate.	100%	100%
Individual attendance of members.	66%	90%
Make a recommendation to the Board on the adequacy and effectiveness of the College’s systems of internal control and its arrangements for risk management, control and governance and for securingvalue for moneyannually.	100%	100%
Advise the Board on the appointment of the FSA annually.	100%	100%
Provide an annual audit committee report to the Board of Governors.	100%	100%
Carry out the responsibilities of the committee as outlined in the terms of reference.	100%	100%

Appendix C

Order of Business

Committee	Audit Committee
Year	2023/24
Autumn – Dec 2023		Spring – March 2024	Summer – June 2024
Minutes of Previous Meeting		Minutes of Previous Meeting	Minutes of Previous Meeting
Closed Session with Auditors		Post 16 ACOP	Post 16 ACOP
Internal Audit Plan – updates and reports		Internal Audit Plan – updates and reports	Internal Audit Plan – updates and reports
External Audit reports		External Audit reports	External Audit reports
Audit Recommendations Status Report		Audit Recommendations Status Report	Audit Recommendations Status Report
Risk Register		Risk Register	Risk Register
Compliance Annual Report – Health & Safety		Risk Management Annual Review/Report	Compliance Mid-Year Report – Health & Safety
Compliance Annual Report – Data Protection		Appointment of FSA (including review of performance)	Compliance Mid-Year Report – Data Protection
Internal Audit Plan 2022/23		Policies for Approval (see Policies Framework)	FSA Audit Plan, Schedule and Fee
Draft Financial Statements 2022/23 and Audit Findings Report		Committee Membership, training and Development	FSA Engagement Letter
FSA Representation Letter			Accounts Direction
Review of Internal Audit Arrangements			Register of Gifts and Hospitality
Policies for Approval (see Policies Framework)			Policies for Approval (see Policies Framework)
Committee Membership, training and Development			Committee Membership, training and Development
Annual Audit Committee Report to the Board for 2022/23			Order of Business
Committee self-assessment, KPIs and terms of reference
Draft Financial Statements 2022/23 and Audit Findings Report

Health and Safety Annual Report Compliance Annual Report – Data Protection Internal Audit Plan 2023/24 FSA Representation Letter Regularity Self-Assessment 2022/23

Appendix D

The Audit Committee Self-Assessment Checklist 2023/24

Compliance	Yes	No
Did the Audit Committee have written terms of reference that are in line with the Post 16 ACOP?	
Was there at least one member of the Audit Committee who has significant recent and relevant experience?(Audit,Finance and Risk)	
Did membership exclude the chair of the Board, ELT and members of the policy and finance committee?	
Did the Audit Committee meet regularlyand in-line with the Post 16 ACOP?	
Did the committee advise the Board on the appointment of external auditors?	
Did the committee advise the Board on theprovision of internal audit activities?	
Did the Audit Committee produce an annual report for the Board advising on the adequacy of the internal control systems operatingat the College?
Did the Audit Committee recommend to the Board for approval an internal audit annual plan?	
Did the internal auditors produce an annual report for the Audit Committee that includes an overall assessment of the adequacy and effectiveness of operation of the College’s internal control systems?			No internal audit service was appointed for 2023/24. The committee considered a summary report of sources of assurance at its meeting in December 2024.
Did the Audit Committee meet both the internal and external auditors without the presence of anyof the College’s executive leadershipteam?			No internal audit service was appointed for 2023/24.
Were conflicts of interest appropriatelydeclared and managed?	
Is there a mechanism for internal and external auditors to report directly to the chair of the Audit Committee,should the need arise?	
Did the committee review the regularityself-assessment?	

Committee and Membership Yes No Comments/Actions Required

Was the committee the right size?	
Does the committee have the right mix of skills to fulfil its	There are four Board members who have a good mix of skills to fulfil the
responsibilities?		Committee’s responsibilities however there is no independent member
		who would insight and challenge independent of the College executive
		and Board, preferablywith accountancyand / or audit experience.
Was the Audit Committee able to maintain	
independence from the management of the College?
Meetings and Papers
Did meetings encourage a high quality of debate with	
robust andprobingdiscussions?
Were papers concise, relevant and timely and received	
sufficientlyfar in advance of the meetings?
Was sufficient meeting time available for debate on key	
items and issues?
Were members satisfied that decisions were sound?	

Training and Development
Did members of the committee receive appropriate		There are long serving members on the committee with audit awareness
training?		and experience but updating is always welcomed and networking
		bodies are available.
Risk, Anti-Fraud, Health and Safety, Data Protection
Did the committee effectively monitor and review the	
College’s approach to risk management?
Did the committee receive the information it needed to	
ensure the College had effective whistle blowing
policies andprocedures?
Did the committee receive the information it needed to	
have appropriate oversight of dataprotection?

Did the committee receive the information it needed to	
have appropriate oversight of health and safety?
Did the committee receive the information it needed to	Last year’s annual report identified it would be useful to have a greater
have an appropriate oversight of data quality?		understanding of the measures in place to provide assurance over data
		quality. IIRC provided a presentation a few years ago. This refresher to
		be carried forward and arranged for 24/25
Auditors

Did the committee receive the information it needed to have appropriate oversight of health and safety?	
Did the committee receive the information it needed to have an appropriate oversight of data quality?			Last year’s annual report identified it would be useful to have a greater understanding of the measures in place to provide assurance over data quality. IIRC provided a presentation a few years ago. This refresher to be carried forward and arranged for 24/25
Auditors

Did the Audit Committee effectively monitor the effectiveness of the service provided by both the internal and external audit?			No internal audit function utilised in the last year, but internal processes are monitored.
Was the internal audit strategy appropriate for delivery of reasonable assurance on the whole of risk, control and governance?			Our strategy during 2023/24 was to procure internal audit work as and when needed and review sources of assurance in place rather than have a dedicated internal audit service. A dedicated internal audit service has been appointed for 2024/25.
Was the quality of the internal audit work adequate?			Not applicable.
Was thequalityof the external audit work adequate?	
Assurance

Did the committee receive appropriate assurance to enable it toprovide an annual opinion?	
Did the committee obtain appropriate assurances management had acted to carry out internal and external audit recommendations?	
Did the committee feel confident it had the right to scrutinise any activity within its terms of reference, which mayinvolve engaginga thirdpartyto assist.	
Did the committee receive the information it needed to have appropriate oversight of the College’s compliance with the fundingagency’s fundingagreement?	
Did the committee receive the information it needed to ensure the College had effective anti-fraud and			Though as always it is difficult to be 100% confident that fraud can always be detected.

corruption policies and procedures in place which were operating effectively?

The Northern College for Residential Adult Education Limited

Annual report and financial statements For the year ended 31 July 2024

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Company registration number: 01339524 Charity registration number: 0507245

The Northern College for Residential Adult Education Limited Annual report and financial statements for the year ended 31 July 2024

Company information
Company registration number:	01339524
Charity registration number:	0507245
Principal address and registered office:	Wentworth Castle
	Lowe Lane
	Stainborough
	BARNSLEY
	South Yorkshire
	S75 3ET
KeyManagement Personnel:	E Beal - Principal and Chief
	Executive/Accounting Officer
	S Saunders - Deputy Principal/CFO
	D Lawson -Assistant Principal, Student
	Experience
Company Secretary:	S Johnson (to 16 June 2024)
	K Boulter (from 17 June 2024 to 12 December
	2024)
	S Saunders (from 13 December2024)
Members:	A full listofgovernors is
	on page 18-20 of these
	financial statements
Bankers:	Lloyds Bank ple
	14 Church Street
	SHEFFIELD
	S11HP
Solicitors:	Womble Bond Dickinson (UK) LLP
	1 Whitehall Riverside
	LEEDS
	LS14BN

Index to the financial statements

Report ofthe members ofthe Board ofGovernors incorporating the
Operating and Financial Review and Strategic Report	2-17
Corporate governance statement incorporating thestatement of
internal control	18-25
Statement of Regularity, Propriety and Compliance	26
Statement ofgoverning body's responsibilities	27-28
Independent auditor's reporttothe members ofThe Northern College for
Residential Adult Education Limited	29-32
Statement ofcomprehensive income	33
Balance sheet	34
Statement ofchanges in reserves	35
Statement of cash flows	36
Notes to the financial statements	37-53
Reportingaccountant'sassurancereportonregularity

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Report of the members of the Board of Governors incorporating the Operating and Financial Review and Strategic Report

Objectives and Strategy

The Board of Governors present their annual report together with the financial statements and auditor's report for The Northern College for Residential Adult Education for the year ended 31 July 2024.

The College

Northern College for Residential Adult Education is a Specialist Designated Institution based at Wentworth Castle, Barnsley, South Yorkshire. Founded in 1978.It is a designated under section 28 of the Further and Higher Education Act 1992, as eligible to receive funding from the Education and Skills Funding Agency (ESFA). The College is a charity for the purposes of the Charities Act 1993 as amended by the Charities Act 2011. On 29% November 2022 Colleges were reclassified by Office of National Statistics (ONS) into the central government sector, as a result the regularity framework for colleges has expanded to take into account the requirements of His Majesty's Treasury Managing Public Money (MPM). This sets out requirements for everyone working in central government to manage and deploy public resources responsibly in the public interest.

The College is a regional provider, offering a range of provision for adults on a residential and nonresidential basis across South and West Yorkshire as well as further afield.

The College prepares adults to re-enter education, gain employment or to make career changes through an immersive residential learning and support experience. The College is set in acres of National Trust gardens and parkland that students can access as part of their studies at Northern College.

The College provides a platform for reengagement with education and prides itself on designing bespoke pathways in partnership with its stakeholders. These partnerships allow the College to reach out to adults who may not have had the opportunity to fulfil their potential and unlock their ambitions. The curriculum is driven by local / regional economic and underpinning skills priorities which include health and social care, business and management, English, maths, digital skills and inclusive growth. The College offers a range of courses from entry to higher level programmes enabling adults to succeed regardless of starting point.

The College has a specialism in supporting the success of adults from disadvantaged backgrounds and those facing multiple barriers to education and skills development. Students regularly tell us the College has changed their life.

Northern College is the only adult residential College in the region and as such has a unique role in contributing to meeting local skills needs. Through residential education Northern College can offer a transformative learning experience, we accelerate personal growth, facilitate networking, and provide opportunities for specialised and immersive learning.

In March 2023, the College was inspected by Ofsted and judged Good across all areas and as making a reasonable contribution to the skills agenda.

Enabling inclusive growth is at the heart of the West Yorkshire Combined Authority (WYCA) and South Yorkshire Mayoral Combined Authority (SYMCA) Adult Skills Fund (ASF) commissioning strategies, as well as the individual Local Authority skills strategies, and is a central pillar of the Northern College curriculum. Providing adults with an opportunity to learn and raising the aspirations of some of the nation’s most disadvantaged communities is vital if the UK is to bridge the current skills and productivity gap which evidence shows is holding back the economy.

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Report of the members of the Board of Governors incorporating the Operating and Financial Review and Strategic Report

The College (continued)

The College is focused on reaching these adults. According to NOMIS data (May 2022), Yorkshire and Humber continue to lag behind national averages for working age population qualified to level 2, level 3, and level 4 and above with the gap widening at each level point, to a 5% point difference at Level 4 and above, (only 31% of the working age population are qualified to this level). This is compounded by higher rates of unemployment and long-term sickness. Labour market inactivity rates are a key regional issue with 222,000 adults categorised as long-term sick within the region. Yet of these people, 148,100 are recorded as wanting to work, creating a large pool of people who require support and skills to move into work.

The Company

The Northern College is a company limited by guarantee and has no share capital; the liability of its members is limited to an amount not exceeding £1. The College was incorporated on the 18 November 1977.

Mission and Values

The College's mission was reviewed in 2023 alongside the development of a new Strategic Plan 202326, and this was approved by the Board of Governors in July 2023. The College’s mission remains Inspiring positive change through adult education.

The College's values are:

e Always be ambitious - we have high aspirations and expectations; we balance support and challenge, and we seek to improve in everything we do.
e Have people at our heart - we share, innovate and collaborate, we value every individual, we are inclusive, and we celebrate diversity.
e Make things happen- we are clear and straightforward; we take personal responsibility, and we listen so we can understand and take action.

Implementation of Our 2023-2026 Strategic Plan

The College developed a new Strategic Plan for 2023-2026, which builds on a long and celebrated history of changing lives through education. It clearly states our ambition to ensure Northern College meets the needs of its students. Communities and the economy in future years. The College’s future is one of collaboration with our partners, where we reach out to others to maximise the impact of our work, ensuring our vision and values guide us.

The strategy was approved by the Board at its meeting in July 2023. The Strategy has 3 key strategic themes:

e Be sustainable - we will future proof the College by flexing our offer, ensuring maximum impact is gained from our unique assets.
e Elevate our profile - we will be recognised nationally and regionally as a leader in adult education.
e High quality - we will realise a clear and ambitious vision for high-quality, inclusive education and training building on our successful Ofsted inspection in 2023.

Strategic Context

In February 2021, the FE Commissioner set out a ‘perfect storm’ of circumstances which meant the College's financial future was uncertain. The College was placed in formal intervention and a Structure and Prospects Appraisal was triggered. Since then, working in collaboration with the FEC team, ESFA and South Yorkshire (SYMCA) and West Yorkshire Mayoral Combined Authorities (WYCA), and within

The Northern College for Residential Adult Education Limited Annual report and financial statements for the year ended 31 July 2024

Report of the members of the Board of Governors incorporating the Operating and Financial Review and Strategic Report

Strategic Context (continued)

the intervention framework, the College has made significant headway in addressing the challenges it faced.

In March 2023 a new Principal and CEO was appointed, who has continued to drive improvement.

In 2023/24 the College was granted £2.1M from the Department for Education as part of the Further Education Capital Transformation Programme fund.

In 2023/24 the College secured £622k from the Local Skills Improvement Fund to create a new Digital Hub and Immersive classroom.

In 2023/24 the College secured £200K from the SYMCA Innovation Fund to stimulate new Horticulture provision on the campus.

The College has worked to refocus key aspects of its curriculum in line with its funders priorities which has led to a 45% increase in accredited provision funding in 2023/24.

The FE Commissioner has continued to visit the College for Stocktake visits throughout 2023 and 2024 (the most recent being in November 2024), which acknowledged the positive progress with curriculum planning to broaden the curriculum and improving stakeholder engagement, as well as the effective financial information provided to governors and stable cash position. No new recommendations have arisen as a result of[these][visits.]

The key challenge facing the College remains that absence of a long-term, appropriate funding formula for Adult Residential Education from its majority funder. In January 2025 the SYMCA Board agreed it would follow the DfE methodology for residential funding for 2025/26 but there is still uncertainty for 2026/27 and beyond.

Current and future development and performance

Curriculum Developments

In our first Accountability Statement for 2023/24 we set out a series of targets to achieve in the previous academic year. As a result, we have:

° Delivered Sector Work Academies that have enabled students to move swiftly into work.
® Grown our Free Courses for Jobs Provision. ® Delivered new ESOL provision both in target communities and on campus as part of residential experience.
e Successfully introduced a new Access to HE pathway in Psychology. e Seen the successful conclusion of a regional review into the transformative Impact of Residential Education which found widespread agreement about the benefits of the learning experience, the physical surroundings and the residential offer. Examples were provided of where studying at Northern College appears to have had a genuinely transformational effect on the lives of particular students.
e Worked with our funders SYMCAto develop a new system for capturingthe impact of[Tailored] Learning.
© Refocused our Digital Curriculum.

The Northern College for Residential Adult Education Limited Annual report and financial statements for the year ended 31 July 2024

Report of the members of the Board of Governors incorporating the Operating and Financial Review and Strategic Report

Curriculum content

The curriculum is split into 2 key areas which is underpinned by the Northern College Skills Framework which focuses on resilience, adaptability, evaluation, innovation, problem solving and decision making.

Following robust career advice and guidance, learners will have individualised learning pathways which focus on supporting and developing purposeful progression towards further study or work aligned to the key local and national priorities.

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Health & Social Care English, Maths & ESOL
Counselling Community &
Social Action
Social Studies
Personal Wellbeing
Access to HE
Higher Education Employability
Business & Enterprise
Digital & IT
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Trade Union Studies

Our Curriculum priorities for 2024-25 are to:

e Grow and Diversify our Adult Skills Fund provision aligned to regional needs and priorities. Specifically, this will include:
- Arefreshed approach to Tailored Learning
- o New flexible / blended Level 3 pathways
- Building on the success of our Sector-based Work Academy Programme (SWAPS)
- o Increasing access to digital entitlement qualifications o New approach to Higher Level Skills including the introduction of new provision at Level 4 and Level 5
e Increase the digital literacy of our students and staff through the delivery of the Local Skills.
e Improvement Fund (LSIF) programme. Our digital strategy will drive developments in this area and ensure a future focused approach to technology within the College.
e Wewill seek opportunities to accelerate our progress to net zero by 2045 and increase awareness across the staff and student body.
e Develop a robust staff training and development offer for 2024-25 focused on supporting staff to meet our key priorities.

Resources

The College has various resources that it can deploy in pursuit of its strategic objectives.

The Northern College for Residential Adult Education Limited Annual report and financial statements for the year ended 31 July 2024

Report of the members of the Board of Governors incorporating the Operating and Financial Review and Strategic Report

Physical

The College is located in a peaceful, rural setting, including a magnificent grade one listed house, maintained in a way that enables everyone to experience the traditional features, inspiring and motivating students to learn. The house is situated in beautiful gardens and parkland managed by The National Trust to which College students have access. The College is one of[only] two residential Colleges in the country, providing residential accommodation for students, providing an immersive experience for adults, allowing them to focus 100% on their studies away from the pressures of everyday life.

On campus adults work together for an intensive period of time, rebuilding their confidence to learn, engaging with likeminded peers and becoming part of an adult learning community.

The College has secured capital funding through the FE Transformation Fund and LSIF to support and improve the condition of the estate and its facilities, this supported the conversion of the old library into a new Digital Hub which is available for all students, new secondary glazing is also being installed which will improve energy efficiency and sustainability.

Our unique campus and residential accommodation plays a fundamental role in the facilitation of successful teaching and learning. Our Strategy 2023-2026 sees us developing further in terms of new curriculum opportunities, space utilisation, commercial and partnership opportunities, and sustainability.

People

The College employed an average of 68 people (2022-23; 70), which includes teaching staff, learning support staff and business support staff.

Students

The College had 3,139 enrolments. 2,996 were funded through South Yorkshire Mayoral Combined Authority/West Yorkshire Combined Authority and ESFA 143 were funded through other sources such as HE, Multiply, loans, full cost and other projects.

Reputation

The College has a good reputation, locally, regionally and nationally. It was rated as Good in the last inspection by OFSTED in March 2023 with a ‘reasonable’ contribution to meeting skills needs. The College receives significant support from a wide range of stakeholders, who recognise the importance of the College’s unique provision to the local area. In October 2023 the College launched its new 20232026 Strategic Plan, which was attended by a wide range of Stakeholders including the Rt Hon Lord Blunkett, MP’s, Council officials, employers, community groups and other Colleges and HE institutions across South and West Yorkshire.

Stakeholders

The College has a wide range of stakeholders, including:

e Students e Education Sector Funding bodies (ESFA/SYMCA/WYCA) e Staff e Local Employers e Local Authorities e Mayoral Combined Authorities e The Local Community e Local Schools e Other FE Institutions e MP's

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Report of the members of the Board of Governors incorporating the Operating and Financial Review and Strategic Report

Stakeholders (continued)

e Trade Unions e Professional Bodies e National Trust

Financial

The College has strong cash reserves of £3,605k, and no borrowings. The College has net current assets of £2,608k, (2023: £1,850k) including £80k, pension liability (2023 £511k liability) with no long-term debt.

The value of the college’s share of net assets for the LGPS pension scheme was £1,407k, however this has been restricted due to the effect of the asset ceiling being the maximum value of the present of the economic benefits available in the form of the unconditional right to reduced contributions from the plan. A corresponding charge has been made to other comprehensive income in the period.

Following the ONS reclassification any borrowings now require DfE consent.

Charitable status and public benefit

The College is a registered charity and the members of the Board of Governors, who are its trustees, are disclosed on pages 18-20. In setting and reviewing the College's strategic objectives, the Board of Governors has had due regard for the Charity Commission's guidance on public benefit and particularly its supplementary guidance on the advancement of education.

As a registered charity the College is committed to demonstrating the benefits its work provides for individuals, communities and the wider public.

As a result of the ONS reclassification on 29% November 2022, whilst continuing to be a self-governing charity regulated by the Secretary of State for Education, the College is now subject to the framework for financial management set out under Managing Public Money (MPM), with 2023/24 being the first full year these changes have been in place. The College has updated its financial regulations and policies accordingly to ensure compliance with the new requirements.

The overall aim of the College as set out in its Memorandum of Association is ‘to advance adult education, particularly by the provision, organisation and arrangement of full-time or part-time courses of study or educational research, whether or not leading to any formal qualification’. The College's mission builds further on this overall aim.

The College welcomes adults from many different backgrounds, often those that have not had the opportunity to access education and are seeking to return to learning. The College prides itself in supporting all its students to reach their potential and successfully progress into further or higher education, and work. Students may have no prior formal qualifications, be active in communities and trade unions, need to study essential skills to enter the workplace or access improved job opportunities or wish to take on professional upskilling.

The College provides public benefit by ensuring that the learning it delivers:

e Improves the qualifications, skills and employability of the groups and individuals it engages in learning;
e Benefits in other areas of public policy, for example in enhancing health and wellbeing, reducing dependency on public services, supporting families and upskilling volunteers;

The Northern College for Residential Adult Education Limited Annual report and financial statements for the year ended 31 July 2024

Report of the members of the Board of Governors incorporating the Operating and Financial Review and Strategic Report

Charitable status and public benefit (continued)

e Transforms the lives of individuals which in turn contributes to the development of cohesive and resilient communities;
e Supports the region’s need to upskill its adult population and address issues of social deprivation, poverty and economic inactivity;
e Added value to the activities of communities and trade unions.

The College measures the impact of its work in a number of ways, primarily using data which is measured against internal performance indicators (Pls) and where possible against external benchmarks.

Transparency arrangements

The Board of Governors conducts its business through a number of committees. Each committee has terms of reference, which have been approved by the Board of Governors. These committees are: Audit, Curriculum, Quality and Student Experience, Search and Remuneration. The Audit Committee meets at least three times per year. The previous Policy and Finance Committee was combined with more regular Board of Governor meetings), the Quality Committee at least once per year, the Search Committee meets as and when required and normally at least once per year and the Remuneration Committee is convened at least once per year. Full minutes of all meetings are available from the Clerk to the Governors, except those deemed to be confidential by the Board of Governors, at:

The Northern College for Residential Adult Education Limited

Wentworth Castle

Stainborough Barnsley South Yorkshire $75 3ET

The Clerk to the Governors maintains a register of the financial and personal interests of the governors. The register is available for inspection at the above address.

Development and Performance

Financial results

The College generated an operating surplus for the year of £355k, before pension adjustments (2023 (£370k deficit)). After pension adjustments a surplus of £167k, (2023 surplus of £788k). The College has accumulated income and expenditure reserves, of £2,758k and cash/cash equivalent balances of £3,605k, (2023: £3,209k). Tangible fixed asset additions during the year amounted to £236k, all of which related to improvements and equipment purchases. Net assets at the year-end were £3,590k, (2023 net assets £3,423k.

Cash Flows and liquidity

At £509k, (2023:£196k) a positive cash flow from operating activities was due to the receipt of capital grants in advance from DfE, of which £2,011k, was unspent at the year end. Creditors due within one year have reduced due to repayment of clawback funding to funders relating to under recruitment in the previous year, partly offset with a lower provision for clawback relating to 2023/24. The College's treasury management policy to diversify and invest surplus funds means the College continues to invest £3,563k, of liquid resources.

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Report of the members of the Board of Governors incorporating the Operating and Financial Review and Strategic Report

Financial Objectives

The College has set the following financial objectives:

e To achieve sustainability by remaining financially sound and to generate sufficient income to fund maintenance and improvement of its accommodation and equipment.
e To maintain the confidence of funders, bankers and auditors. e To develop trained and financially aware budget managers with an understanding of the financial environment in which the College operates.
e To diversify income streams to optimise future funding.

Performance Indicators

The College's key performance indicators, targets and results are set out below:

Key performance indicator	Measure/	Actual for
	Target	2023/24
Surplus as % ofincome - Exc FRS 102 Pension Surplus as % ofincome - IncFRS 102 Pension	i So	ee
EBITDA % - Education Specific
Pay as% of income (Exc restructuring and FRS102)	60.8%	61.3%
% of ESFA/SYMCA/WYCA recurrent grant income	86.2%	87.2%
Adjusted Current Ratio
	3.306	3,139
Financial Health	Requires	Requires
	Improvement	Improvement

Treasury policies and objectives

Treasury management is the management of the College's cash flows, its banking, money market and capital market transactions; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks.

The College holds three investment accounts: two notice accounts and one deposit account which pay variable interest, for use when the College has generated surplus funds.

The College has opened an additional investment notice account in year which has a Purpose of Trust deed attached, this is specifically relating to capital funding provided by the DfE which restricts use solely for the purpose intended.

All borrowing requires the authorisation of the Corporation and following ONS reclassification now requires DfE consent.

Reserves policy required

The College has historically had high level of reserves, these have reduced over recent years due to lower recruitment levels and changes to funding. Cash reserves currently include £2,011k, of capital grants received which have not yet been spent.

The College has no formal Reserves Policy but recognises the importance of reserves in the financial stability of any organisation and ensures that there are adequate reserves to support the College’s core activities. Monthly financial reporting includes the cash position including and excluding capital grants/clawback to ensure there is clear visibility of the underlying reserves position.

The Northern College for Residential Adult Education Limited Annual report and financial statements for the year ended 31 July 2024

Report of the members of the Board of Governors incorporating the Operating and Financial Review and Strategic Report

Sources of Income

The College has significant reliance on recurrent grant funding from the ESFA, SYMCA and WYCA for its principal funding source. In 2023/24, the three funding bodies combined provided 87.2% of the College's total income.

Quality Assurance

The College carries out Performance Management Reviews to monitor and oversee performance against targets, both financial and quality, in each area of the College. Through this process actions promptly address quality and performance issues to ensure a continuous focus on student experience and success. It also carries out a self-assessment process across departments and curriculum areas resulting in a College self-assessment report (SAR) and quality improvement plan (OIP). Progress reports, governor dashboard and annual reports are considered by the Curriculum, Quality and Student Experience Committee and the Board of Governors.

Student Achievements

Overall achievements at the College are 78 % (2022/23: 86%). There has been significant growth in accredited provision over the last 2 years.

Future Developments

The Governors, Principal and Executive Leadership Team ["ELT"] recognise that the College continues to operate in a challenging funding environment and that it will continually need to review the effectiveness of its provision against the funding received; the need to be cost effective and take measures to reduce the cost of provision; as well as to search for new areas of work which are consistent with the mission of the College. In March 2024, the Interim Principal/CEO was appointed on a permanent basis, since their appointment they have developed and expanded the Colleges external stakeholder engagement. The Director of Curriculum and Quality who commenced their role in May 2023 has brought new perspectives and new opportunities to develop the curriculum offer, including developing new areas of provision and new opportunities. The curriculum offer has been continually developed, the Community Learning provision reviewed including support from an external expert as well as stakeholder input.

The Colleges financial performance has again improved significantly from the previous year and student numbers have improved. The College is in a period of rapid change and recovery and this is reflected within the 3 year financial plan which has been set.

The College has developed a new Strategic Plan for 2023-2026, which builds on a long and celebrated history of changing lives through education. It clearly states our ambition to ensure Northern College meets the needs of its students, communities and the economy in future years.

Priorities for 2024-25 are: Grow and Diversify our Adult Skills Fund provision aligned to regional needs and priorities. Specifically, this will include: e Arefreshed approach to Tailored Learning e New flexible / blended Level 3 pathways e Building on the success of our SWAPS programme e Increasing access to digital entitlement qualifications e New approach to Higher Level Skills including the introduction of new provision at Level 4 and Level 5

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Report of the members of the Board of Governors incorporating the Operating and Financial Review and Strategic Report

Future Developments (continued)

Increase the digital literacy of our students and staff through the delivery of the LSIF programme. Our digital strategy will drive developments in this area and ensure a future focused approach to technology within the College. Specifically, this will include:

e Embedding the new Principles for the use of Al in FE colleges into college practice

We will seek opportunities to accelerate our progress to net zero by 2045 and increase awareness across the staff and student body. Specifically, this will include:

e Prioritising our Capital Transformation Funding on electrical works, luminaries and secondary glazing to deliver net zero targets
e Deliver a Net Zero training programme to staff and students across the College e Roll out of a supplier/contractor environmental impact assessment process

Develop a robust staff training and development offer for 2024-25 focused on supporting staff to meet our key priorities.

This will include a refreshed approach to Digital Capability, a focus on sector/ specialism upskilling, and ongoing work to promote the benefits of the natural environment for both productivity and wellbeing.

Student numbers

Post pandemic student numbers have been increasing year on year. In 2023/24 enrolment numbers for funded provision increased by 74%.

In 2023/24 the College delivered activity, under its funding contracts of £3,771k, and increase £782k / 26%.

Risk factors

The College has considerable reliance on continued government funding through the further education sector funding bodies, including MCA’s. In 2023-24, 87% of the College's revenue was ultimately publicly funded and this level of requirement is expected to continue. There can be no assurance that government policy or practice will remain the same or that public funding will continue at the same levels or on the same terms, this includes the residential uplift which is being reviewed.

The Governing body has overall responsibility for risk management and its approach to managing risks and internal controls is explained in the Statement of Corporate Governance.

A risk register is maintained at College level which is reviewed regularly by the ELT; and at each meeting of the Board of Governors and its committees as appropriate. The risk register identifies the key risks, the likelihood of those risks occurring, their potential impact on the College and the actions being taken to reduce and mitigate the risks. Risks are prioritised using a consistent scoring system.

Some of the principal risks for the College and their mitigating actions are listed below:

Funding

A. The methodology for funding residential provision has been under review since 2019. A methodology has been agreed with ESFA and WYCA, however SYMCA which provides the largest proportion of the Colleges funding has only agreed a funding methodology for 2025/26, a permanent methodology has yet to be agreed for 2026/27 and beyond, If the level of residential funding reduces this would have a significant financial impact. Discussions between the College and SYMCA are ongoing.

The Northern College for Residential Adult Education Limited Annual report and financial statements for the year ended 31 July 2024

Report of the members of the Board of Governors incorporating the Operating and Financial Review and Strategic Report

Funding (continued)

B. Recruitment continues to be one of the biggest risks for the College, numbers have improved significantly over the past two years, but further growth is required. The curriculum offer has been developed and expanded to respond to local and regional priorities which has supported growth.
C. The College still aims to increase its income diversity through the development of additional funding streams. As well as expanding commercial income through events and conferences, the College has undertaken a review ofthe estate and is looking to consolidate educational activities into the main house, the College is exploring a number of longer-term options to utilise other areas of the estate to generate additional sustainable income.
D. During the refurbishment of the Library, cracks were found in one of the ceilings below. A temporary solution has been identified, however a permanent repair is likely to require the College to secure external heritage funding. This will not impact on the Colleges ability to carry out its normal activities.
E. Staff recruitment and retention is a risk. The College did not benefit from last years DfE announcement aimed at supporting pay increases as this funding is only being channelled via 1618 funding, this resulted in the Colleges pay award for 2023/24 being much lower than many other Colleges who benefited from the funding increase. The increase in national living wage also continues to impact.
F. Curriculum developments are monitored through a clear curriculum planning cycle which takes into account feedback from stakeholders and students and allows for the development of recruitment strategies for new and developing areas of the curriculum. This in turn leads to the identification of potential project funding streams.

Financial risk

The College uses financial instruments, comprising of cash and other liquid resources and various other items such as trade debtors and creditors that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the College's operations. The main risk arising from the College's financial instruments is liquidity risk. The Executive Leadership Team review and agree policies for managing this risk and this policy has remained unchanged from previous periods. The College seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. Main sources of funding are achieved from the ESFA, SYMCA and WYCA by payments made through the funding.

Energy and Carbon Reporting

The College is committed to working towards a sustainable environment and from October 2022 the College has embedded it’s Sustainability policy which outlines the Colleges intention and commitment to a net zero carbon footprint by 2045,

The College has taken part in numerous net zero programmes which include; Leading the Change to Net Zero, Net Zero Accelerator programme. A six-week programme led by Barnsley Business Innovation Centre focusing on carbon footprint, innovation planning, supply chains and marketing alongside peer support sessions. The College also sits on the Climate Educations meeting and the Sustainability and Climate Change Group within Barnsley. These groups have specifically and vicariously supported the College to make changes within operational practice to reduce its carbon footprint. This includes a newly managed way of distributing heat within large areas in the building to reduce heat loss.

The Northern College for Residential Adult Education Limited Annual report and financial statements for the year ended 31 July 2024

Report of the members of the Board of Governors incorporating the Operating and Financial Review and Strategic Report

Energy and Carbon Reporting (continued)

The College is working within an Action Change Roadmap which identifies the key areas for the decarbonisation programme. The key areas fall within Leadership and Governance, teaching and learning, estates and operations, partnerships and data collection. Each area is allocated initiatives which feed into the Sustainability Committee for monitoring progression and sustainability value.

The Sustainability Committee includes students, staff and sustainability champions who meet once every half term to push forward the sustainability agenda and road map.

As a Grade 1 listed building working towards net zero there are many challenges. The College energy consumption has a Carbon Footprint of 386 Tonnes of CO2e per annum. The College will therefore be focusing on energy-saving activities within the planned period.

The DfE has allocated the College £2 Million from the Capital Transformation Allocation to support upgrades to mechanical & electrical infrastructure and services to improve utility use and carbon reduction initiatives in line with Net Zero aspirations. Focused works to reduce energy consumption and create efficiencies within heat, light and power commenced in academic year 2023/2024. To date the College has tendered and secured a contract for secondary glazing to Long Gallery, work will commence in January 2025. A feasibility and efficiency study has been completed to improve the efficiency of the internal wet systems and controls to reduce C02 and operating costs.

A new catering contract is in process and will be completed for a start date of 1 January 2025. Within the remit of the new contract, sustainability and compliance with the Colleges aspirations for net zero will be a key focus.

The Colleges Estates Strategy 2023 - 2026 clearly identifies strategic priorities around net zero aspirations which include an ‘established’ status on the Climate Actions Roadmap for FE Colleges, pledging to the Race to Net Zero campaign, shouting loudly about our commitment to net zero through relevant kitemarks and awards and embedding carbon literacy within the curriculum. A themed calendar of events for students is in place for academic year 2024/2025. There are several weeks identified for green/sustainability activities.

In 2023-24 electricity consumption was 8% lower than the previous year, this equates to a reduction in CO2 of 2,517kg, this is in addition to the 2,823kg reduction the previous year In June/July 2023 the College replaced 265 light fittings/bulbs with more energy efficient LED fittings which was funded via a grant from the DfE.

Staff and Student Involvement

The College considers good communication with its staff to be very important and to this end holds regular Principal's Briefings at which key messages are shared and an opportunity is given to all staff to bring points for discussion.

Northern College ensures Student Voice is heard by fostering an environment where students feel valued, heard and empowered to contribute meaningfully to their education and the wider College community. The College understands how this can significantly improve learning experiences, a culture of community, shared values and student wellbeing. The College creates a variety of platforms and safe spaces for interaction and expression of views. These include student surveys, class reps, peer feedback, Student Council, Student Ambassadors, case studies, collaborative strategic committees (Safeguarding/EDI/H&S/Catering/Sustainability).

The Northern College for Residential Adult Education Limited Annual report and financial statements for the year ended 31 July 2024

Report of the members of the Board of Governors incorporating the Operating and Financial Review and Strategic Report

Taxation

The College was not liable for any corporation tax arising out of its activities during 2023/24.

Equality and Diversity

Equality in Employment

As a Public Body, Northern College recognises the requirement to give due regard to the need to: =» Eliminate unlawful discrimination, harassment and victimisation and other conduct prohibited by the Act.
Advance equality of opportunity between people who share a protected characteristic and those who do not.
" Foster good relations between people who share a protected characteristic, and those who do not.

The College ensures this with respect to employment through adherence to a range of policies including: Equality, Diversity and Inclusion, Recruitment and Selection, and Dignity at Work. The College also publishes its Equality Report annually on its website.

Equality, Diversity and Inclusion

Northern College's strong commitment to the advancement of equality, diversity and inclusion is embodied in its mission and values. The College actively seeks to promote and advance equality of opportunity between people who share protected characteristics under the law and those who do not. It sets clear performance indicators in relation to the recruitment and achievement of disadvantaged and underrepresented groups.

The College is committed to ensuring equality of opportunity for everyone who learns and works at the College. We expect every member of the College community to promote equality of opportunity and achievement, to challenge conditions that place anyone at a disadvantage and help to create an inclusive community in which diversity is celebrated and valued. The College was judged to be Good in all areas in its last OFSTED inspection (March 2023) and was commended for promoting a culture of care and empathy in an inclusive environment where students feel valued, supported and respected.

The College has identified four overarching equality strands with related objectives as follows:

e Northern College will strive to ensure an inclusive and diverse student and staff community. e All students and staff will have an enriching, inclusive experience and will be treated fairly and with respect.
e The College will foster positive partnerships and community relationships for the good of the College and its students.
e Northern College will promote a culture of excellence and quality in delivering Equality, Diversity and Inclusion.

Disability Statement

The College is aligned to Public Sector Equality Duty (2011), Equality Act 2010, Ofsted requirements underpinned by effective equality objectives including Human Resource management.

To achieve these objectives:

e The College has made a commitment of support to adopt Association of Colleges equity, diversity and inclusion charter signed by the Principal and Governors.
e The Equality Diversity and Inclusion committee facilitates and monitors the Northern College Equality Objectives and Action Plan. This supports the Northern College to strive for an inclusive and diverse student and staff community.

The Northern College for Residential Adult Education Limited Annual report and financial statements for the year ended 31 July 2024

415

Report of the members of the Board of Governors incorporating the Operating and Financial Review and Strategic Report

Disability Statement (continued)

e The College provide a curriculum offer that enables those with no or limited qualifications to access education and progress in their learning and careers.
e The College ensure a diverse workforce that reflects the student population.
e The College has a Learning Support Lead, who provides information, advice and arranges support where necessary for students with disabilities. Specialist neurodiverse assessments take place to assist the team in creating the correct pathway of support.
e The College has a Learning Support Advisor who is a specialist in mental health and specific learning needs who provides 1:1 support and online packages/ to support independent learning.
e There is a wide range of assistive and adaptive technology, alongside physical resources (electric scooters, chairs etc) which are available to students once they have received an Additional Learning Assessment.
e The College ensures the catering team are aware of and can produce meals in line with individual dietary requirements.
e The College creates an inclusive physical environment where students, staff and visitor's accessibility and safety is promoted.
e Theadmissions policy is accessible via the College website and can be viewed where required with support by assistive technology. Appeals against a decision not to offer a place are dealt with under the complaints policy.
e There are several Learning Support Assistants who can provide a variety of support for learning. There is a continuing programme of staff development to ensure the provision of a high level of appropriate support for students who have learning difficulties, neuro diversity needs and/or disabilities.
e Achievements and destinations are recorded and published within reports which are reviewed by Executive leadership Team and the Governing body. All achievements and destinations are reviewed and monitored via the College's Equality, Diversity and Inclusion Committee.
e The College liaises with external mental health and wellbeing services to ensure all students receive support where required.
e The College ensures its accommodation is fit for purpose and is monitored via Health and Safety and Equality Objectives.

Trade union facility time

The Trade Union (Facility Time Publication Requirements) Regulations 2017 require the College to publish information on facility time arrangements for trade union officials at the College.

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| Number ofhours spenton facilitytine! |
[Number(Percentageof ofhourstotalspentpaid onfacility tradelunionactvities time hours spenton| paid trade union activities | 9.78% |
----- End of picture text -----

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Report of the members of the Board of Governors incorporating the Operating and Financial Review and Strategic Report

Safeguarding

The College is fully aware of its duty and is pro-active with regard to the Safeguarding of Children and Vulnerable Adults and its Prevent duty in line with the Counter Terrorism and Security Act 2015.

Going concern

The College is reporting net assets, after the pension provisions, of £3,590k; and net assets of £3,670k prior to defined benefit pension provisions. The cash balance as at 31% July 2024 remained strong with £3,605k of cash reserves, with nil borrowings, (£1,594k excluding unspent capital grants). The College has made a provision of £488k for clawback of unspent funding relating to 2023/24 and £88k to be received for Free Courses for Jobs in arrears, which will reduce cash reserves excluding unspent capital grants to £1,194k.

The Colleges recruitment and financial performance was significantly impacted by the pandemic and by changes to residential funding, over the last 3 years financial performance has improved significantly, from £1.1m deficit EBITDA in 2021/22 to £242k deficit EBITDA in 2023/24. Whilst the College has no borrowings and has a strong current ratio, the negative EBITDA position has resulted in a financial health score of requires improvement.

The forecast financial position for 2024/25 shows a continuing financial improvement with a positive EBITDA of £89k, despite a reduction in residential funding due to a change in how residential provision is funded, this would move the Colleges financial health score to Good.

The 3 year forecast is set is to continue on its recovery plan, generating a small positive EBITDA each year despite factoring in additional costs such as the national insurance increase and pay awards, with a cash low point of £1.2m/97 cash days.

The Board has ensured that future surplus and cash flow projections have been prepared on a prudent basis and is satisfied that there is sufficient headroom within these cash flow projections to ensure the College has adequate resources to continue in operational existence for a period of at least 12 months. The College has no current or planned borrowings. There are continuing challenges which are facing all Colleges within the Further Education sector, as well as some issues that impact specifically on Northern College.

The College is one of only two residential adult education Colleges in the country. The way in which the residential element of the Colleges provision has been under review since 2019, from August 2024 funding changed from an uplift factor to a nightly rate, this resulted in a reduction in the level of residential funding. The DfE and WYCA have moved to funding the College through the Residential Access Fund as part of Learner Support. At the end of January 2025, SYMCA agreed they would follow the same methodology, however, have only committed to this for 2025/26. The College has prepared its 3-year planning assumptions on the basis that this methodology will be adopted for the longer-term future, however the lack of commitment for future years from SYMCA does create some challenges beyond August 2026.

Learner recruitment has continued to improve, with an overall increase of 80% in enrolments from 2022/23 to 2023/24. At the end of January 2025, enrolment numbers were 21% higher than at the same point the previous year, and broadly in line with plan for 2024/25. At the last Stocktake visit the FE Commissioner recognised the College is working hard to broaden the curriculum which is supported by improved stakeholder engagement.

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Report of the members of the Board of Governors incorporating the Operating and Financial Review and Strategic Report

Going concern (continued)

Whilst the financial position has improved significantly through growth and cost reduction, the fixed cost base remains a challenge.

The College finance team continue to carefully evaluate the potential impact of these challenges, and these are reported to the Board monthly. The FE Commissioner recognised governors receive effective financial information and the financial position is stable.

Accordingly, after making appropriate enquiries, the Board of Governors have concluded that there is a reasonable expectation that the College has adequate resources to continue in operational existence and settle its liabilities as they fall due for the period of its cashflow forecast being to 31 July 2027 and has a reasonable expectation that funding conditions will be met, acknowledging there is evidence of some challenges in relation to funding rates for residential provision from SYMCA beyond 31 July 2026. For this reason, it continues to adopt a going concern basis in preparing the financial statements.

Disclosure of Information to Auditors

The members who held office at the date of approval of this report confirm that, so far as they are each aware, there is no relevant audit information of which the College’s auditors are unaware; and each member has taken all the steps that he or she ought to have taken to be aware of any relevant audit information and to establish that the College's auditors are aware of that information.

Approved by order of the members of the corporation on 12% March 2025 and signed on its behalf by:

M.[Sanders]

ON BEHALF OF THE BOARD Mark Sanders - Chair

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Corporate Governance Statement incorporating the Statement of Internal Control

Governance Statement

The following statement is provided to enable readers of the annual report and financial statements of the College to obtain a better understanding of its governance and legal structure. This statement covers the period from 1 August 2023 to 31 July 2024 and up to the date of approval of the annual report and financial statements.

Governance Code

The College endeavours to conduct its business:

i. in accordance with the seven principles identified by the Committee on Standards in Public Life (selflessness, integrity, objectivity, accountability, openness, honesty and leadership);
ii. in full accordance with the guidance to Colleges from the Association of Colleges in The Code of Good Governance for English Colleges (“the code”).

The College is committed to exhibiting best practice in all aspects of corporate governance and recognises that, as a body entrusted with both public and private funds, it has a particular duty to observe the highest standards of corporate governance at all times. In carrying out its responsibilities, it takes full account of the Code of Good Governance for English Colleges issued by the Association of Colleges in March 2015, (and updated in 2021) which it formally adopted on (17 December 2015).

In the opinion of the Governors, the College complies with all the provisions of the Code of Good Governance for English Colleges, and it has complied throughout the year ended 31 July 2024.

This opinion is based on an internal review of compliance with the Code/Governance evaluation which was reported to the board in December 2024 and the external review which was carried out and presented to the Board in April 2024.

The Corporation

Members of the Board of Governors

						Attendance
	Date of	Term of	Date of	Status of	Committees	%(Board)
	appointment	office		resignation	appointment
Mrs E Beal	01.03.2023	Ex-officio		Principal/Chief Executive		Member - Curriculum
					Quality & Student
					Experience
MsE Bell	29.11.2023	To	31.04.24	Student		75%
		31.05.24
MrG Burke	02.10.2024	4 years		Interest or	Member - Audit	n/a
				expertise
				relevant to the
				College
MrN Copley	11.04.2022		4 years	28.02.25	Interest or	Member -
				expertise	Remuneration
				relevant to the
				College

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Corporate Governance Statement incorporating the Statement of Internal Control

|Sc,
MsA|ees eeele,
Date of
Term of
appointment | office
First
4 years|ees eeele,
Date of
Term of
appointment | office
First
4 years|le,lee
Date of
Status of
resignation | appointment
Interest or|le,lee
Date of
Status of
resignation | appointment
Interest or|lean —
Committees
served
Chair - Audit|eee
%(Board)
2023/24
75%| |---|---|---|---|---|---|---| |Corrigan|Appointed
01.08.2018|||expertise
relevant
to the|(from 01.01.24);
Member-|| ||Reappointed|||College|Remuneration|| ||01.08.2022|||||| |Mr B Craig|11.04.2022|4 years|09.02.25|Interest or|Member -|88%| |||||expertise|Curriculum|| |||||relevant to the|Quality & Student|| |||||College|Experience|| |DrC Forrest | First
Appointed
01.08.2018||4years||Interest or
expertise
relevant to the|Chair -
Curriculum
Quality
& Student|75%| ||Reappointed|||College|Experience;|| ||01.08.2022||||Lead Governor|| ||||||Safeguarding|| |DrS Horner | 01.09.2021||4 years||Interest or
expertise
relevant
to the|Member -
Curriculum
Quality & Student|88%| |||||College|Experience|| |MrNJames_ | 13.07.2017||4years||Staff-Business||100%| ||Reappointed|||Support||| ||10.03.2022|||||| |Mr R Low|29.11.2023|4 years||Interest or|Member - Audit|50%| |||||expertise||| |||||relevant to the||| |||||College||| |MrM|11.04.2022|4 years||Interest or|Chair - Board of|88%| |Sanders||||expertise|Governors,|| |||||relevant to the|Company;|| |||||College|Member-|| ||||||Remuneration|| |MrS|01.04.2021|4 years||Interest and|Vice -Chair-|100%| |Schmoller||||expertise
relevant to the|Board;
Member
- Audit|| |||||College|to 31.07.2024|| |MsAMSpry | 02.10.2024||4 years||Interest and
expertise
relevant
to the|Member -
Curriculum
Quality
& Student|n/a| |||||College|Experience|| |Ms E Stanley | First
Appointed||to
31.12.23|31.12.23|Interest and
expertise|Chair
- Audit (to
31.12.2023)|100%| ||16.07.2015|||relevant to the||| ||Reappointed|||College||| ||16.07.2019||||||

The Northern College for Residential Adult Education Limited Annual report and financial statements for the year ended 31 July 2024

Corporate Governance Statement incorporating the Statement of Internal Control

	Date of	Term of	Status of	Committees	%(Board)
	appointment	office	resignation	appointment
MrM Stephens	29.11.2023	4 years	Interestand expertise	Member - Audit 30 31.07.2024	83%
			relevant to the
			College
ProfT	First	1 year	Interest and	Chair -	88%
Thornton	Appointed		expertise	Remuneration;
	16.07.09		relevant to the	Member-
	Reappointed		College	Curriculum
	01.08.2024			Quality & Student
				Experience

The Governance Framework

Itis a Department for Education requirement that all Further Education Colleges commission an external review of governance at least every three years. Northern College commissioned the consultancy Action Planning to undertake such a review which was carried out by David Saint during the period December 2023 to March 2024. The full review report was presented to the Board on 24 April 2024 and the reviewer approved the following summary:

The review recognised that governance at Northern College is in extremely good health, that Board members are highly engaged, and are doing an excellentjob of meeting their responsibilities. There is clear separation between governance and management. The Board has an impressive and wellbalanced range of knowledge and skills, professional expertise and life experiences. The Board is well supported by high quality papers and advice from the clerk. Governors clearly want the best for the students and the College and there is a good balance between student engagement and focus on strategic objectives. The Board is mindful of equality, diversity and inclusion and its members bring a diverse range of views and provide a range of perspectives. The relationship between governors and management is excellent and the Board has provided strong leadership and effective oversight to ensure financial stability during a period of financial challenge and intervention. The overall conclusion is that governance at the College is in robust health. The Board welcomed the areas to consider for further development relating to refining meeting arrangements to optimise use of governors’ time, standardising governor induction and appraisal, and reviewing approaches to student engagement.

The recommendations of the external review have been incorporated into the Governance Action Plan for 2024/25, progress against which is monitored by the Remuneration and Governance Committee.

The composition of the Board of Governors is set out below. It is the Board of Governors’ responsibility to bring independent judgement to bear on issues of strategy, performance, resources and standards of conduct.

The Board of Governors is provided with regular and timely information on the overall financial performance of the College together with other information such as performance against funding targets, proposed capital expenditure, quality matters and personnel-related matters such as health and safety and environmental issues. The Board of Governors usually meets four times per year. For 2023/24 the Board agreed a governance framework which removed the Policy and Finance Committee and increased the number of Board meetings. There were seven Board meetings in 2023/24.

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Corporate Governance Statement incorporating the Statement of Internal Control

The Governance Framework (continued)

The Board of Governors conducts its business through a number of committees. Each committee has terms of reference, which have been approved by the Board of Governors. These committees in 2023/24 were: Remuneration, Curriculum Quality & Student Experience (CQSE) and Audit. Full minutes of all meetings, except those deemed to be confidential by the Board of Governors, are available from the clerk to the corporation at the College’s registered address.

The Clerk to the Board maintains a register of financial and personal interests of the governors. The register is available for inspection at the College's registered address.

All governors are able to take independent professional advice in furtherance of their duties at the College's expense and have access to the Clerk to the Governors, who is responsible to the Board for ensuring compliance with all applicable procedures and regulations. The appointment, evaluation and removal of the Clerk are matters for the Board of Governors as a whole.

Formal agendas, papers and reports are supplied to governors in a timely manner, prior to meetings. Briefings are also provided on an ad hoc basis.

The Board of Governors has a strong and independent non-executive element and no individual or group dominates its decision-making process. The Board of Governors considers that each of its nonexecutive members is independent of management, and free from any business or other relationship which could materially interfere with the exercise of their independent judgement.

There is a clear division of responsibility in that the roles of the Chair of the Board of Governors and Principal/Accounting Officer of the College are separate.

Appointments to the Board of Governors

Any new appointments to the Board of Governors are a matter for consideration of the Board of Governors as a whole. The Board of Governors is responsible for ensuring that appropriate training is provided as required.

Members of the Board of Governors are appointed for a term of office not exceeding four years. The total period of membership as a governor is normally limited to eight years i.e. two four year terms of office. However, the Board seeks to manage a careful mix of new members bringing fresh perspectives, serving alongside experienced members, and this means that in exceptional circumstances, and in the interests of continuity, members may be re-appointed for a further period of office.

Corporation Performance

The Corporation carried out a self-assessment of its own performance for the year ended 31 July 2024 which was considered by the Board of Governors at its meeting in December 2024. The report assessed the College’s governance performance and code compliance. A quality improvement plan addressing areas identified for further development will be implemented. An external review of governance was also carried out and the full report was presented to the Board in April 2024 and recommendations incorporated into the Governance Action Plan for 2024/25.

Governor and Clerk Development Activities

The Corporation is committed to training and development and governors participated in the following development activities during 2023/24:

e Ofsted Inspection Framework e Safeguarding and Prevent Mandatory Training e = =Curriculum and Quality e Audit Masterclass

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Corporate Governance Statement incorporating the Statement of Internal Control

Governor and Clerk Development Activities (continued)

e New Governor Induction e = |nsolvency @ = Curriculum Walks The Clerk to the Governors participated in the following training and development activities during 2023/24:

e Cross College CPD Days e Insolvency © ICT e Equality & Diversity e Governance Professional Network e Health and Safety

Remuneration Committee

Throughout the year ended 31 July 2024 the College's Remuneration Committee comprised four members. The committee's responsibilities are to make recommendations to the Board on the remuneration and benefits of the Principal and other senior post holders and the pay awards of all staff. The Committee met on the 20th September 2023 and 9th July 2024.

Details of remuneration for the year ended 31 July 2024 are set out in note 8 to the financial statements.

Throughout the year the College complied with the AoC’s Senior Staff Remuneration Code.

Audit Committee

The purpose of the Audit Committee is to advise the Board of Governors on the adequacy and effectiveness of the College's systems of internal control and its arrangements for risk management, control and governance processes.

The Audit Committee meets on a termly basis and provides a forum for reporting by the College's financial statement auditors, who have access to the committee for independent discussion, without the presence of College management. The committee also receives and considers reports from the main FE funding bodies as they affect the College's business.

Management is responsible for the implementation of agreed audit recommendations and that internal audit undertake periodic follow-up reviews to ensure such recommendations have been implemented.

The Audit Committee also advises the Board of Governors assurance requirements in relation to internal audit and financial statements auditors and their remuneration for both audit and non-audit work as well as reporting annually to the Board of Governors.

The revised ACOP published in March 2014 removed the requirement for colleges to appoint internal auditors. In light of this the Corporation periodically reviews how appropriate assurance can best be gained and whether this should include the retention of an internal audit service. In December 2023, the Board of Governors approved a recommendation from the Audit Committee that assurance work for 2023/24 would be commissioned on a project-by-project basis from suitable specialist providers. The Audit Committee prepared a risk based internal audit plan for 2023/24. The plan was prepared in conjunction with the executive leadership team and was approved by the Board of Governors at its meeting on 20 December 2023.

The Northern College for Residential Adult Education Limited Annual report and financial statements for the year ended 31 July 2024

Corporate Governance Statement incorporating the Statement of Internal Control

Audit Committee (continued)

In March 2024 the Audit Committee approved the appointment of Wylie Bisset to carry out an independent funding review. Wylie Bisset have extensive experience in this area and carry out funding audits on behalf of the ESFA. This work was carried out during April/May and they reported their findings to the Audit Committee in June 2024. The overall conclusion was for a substantial level of assurance, and confirmation that the College was substantially adhering to the requirements of its funders and the ESFA funding rules.

A number of external assurances across a wide range of areas have been obtained during the year and the Audit Committee considered these provided adequate and effective assurance arrangements at the Audit Committee meeting in December 2024.

During 2023/24 the Audit Committee comprised four members ofthe Board of Governors. Membership excluded the Principal, staff governors and Chair of the Board of Governors. The Committee operated in accordance with written terms of reference approved by the Board of Governors.

The auditcommittee metthreetimes inthe year to 31	July2024. The members of the committee and
their attendance records are shown below:
Liz Stanley (chairto31.12.23)	Attendance (meetings attended) 100% (1)
Ann Corrigan (chair from 01.01.24)	100% (3)
Seb Schmoller (to 31.07.2024)	100% (3)
Ray Low (from 31.01.24)	100% (2)
MattStephens(from29.11.23)	50%(2)

Internal Control

Scope of Responsibility

The Corporation is ultimately responsible for the College's system of internal control and for reviewing its effectiveness. However, such a system is designed to manage, rather than eliminate, the risk of failure to achieve business objectives and can provide only reasonable and not absolute assurance against material misstatement or loss.

The Board of Governors has delegated the day-to-day responsibility to the Principal, as Accounting Officer, for maintaining a sound system of internal control that supports the achievement of the College's policies, aims and objectives, whilst safeguarding the public funds and assets for which she is personally responsible, in accordance with the responsibilities assigned to her in the Funding Agreement between Northern College and the funding bodies. She is also responsible for reporting to the Board of Governors any material weaknesses or breakdowns in internal control.

The purpose of the system of internal control

The system of internal control is designed to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an ongoing process designed to identify and prioritise the risks to the achievement of College policies, aims and objectives, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically. The system of internal control has been in place in Northern College for the year ended 31 July 2024 and up to the date of approval of the annual report and accounts.

The Northern College for Residential Adult Education Limited Annual report and financial statements for the year ended 31 July 2024

Corporate Governance Statement incorporating the Statement of Internal Control

Risks faced by the Corporation and capacity to handle risk

The Corporation has reviewed the key risks to which the College is exposed, together with the operating, financial and compliance controls that have been implemented to mitigate those risks. The Corporation is of the view that there is a formal ongoing process for identifying, evaluating and managing the College's significant risks that has been in place for the period ended 31 July 2024 and up to the date of approval of the annual report and accounts. This process is regularly reviewed by the Board of Governors.

The risk and control framework

The system of internal control is based on a framework of regular management information, administrative procedures including the segregation of duties, and a system of delegation and accountability. In particular, it includes:

° comprehensive budgeting systems with an annual budget, which is reviewed and agreed by the governing body
° regular reviews by the governing body of periodic and annual financial reports which indicate financial performance against forecasts
° setting targets to measure financial and other performance ° clearly defined capital investment control guidelines e the adoption of formal project management disciplines, where appropriate.

Throughout 2023/24 the College commissioned internal audit services on an assignment by assignment basis. This work was informed by an analysis of the risks to which the College was exposed, and the annual internal audit plan was based on this analysis. The analysis of risks and the internal audit plan was endorsed by the Corporation on the recommendation of the Audit Committee. An assurance review of all internal audit activity for 2023/24 and up to the point of signing the accounts was considered by the Audit Committee in December 2024 to ensure adequacy and effectiveness controls and assurance. This included:

e Overall effectiveness e Teaching, Learning and Assessment e Financial Reporting and Controls e Funding data / claims e Health, Safety and Welfare e §6Estates e Governance e Safeguarding and Prevent e Risk Management e Human Resources

Responsibilities under accountability agreements

The Department for Education and Education and Skills Funding Agency introduced new controls for the College on 29 November 2022 on the day that the Office for National Statistics reclassified colleges as public sector organisations in the national accounts. The ESFA chief executive communicated these changes to all college accounting officers and explained plans to introduce a college financial handbook in 2024. The College has reviewed its policies, procedures and approval processes in line with these new requirements to ensure there are systems in place to identify and handle any transactions for which DfE approval is required.

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Corporate Governance Statement incorporating the Statement of Internal Control

Statement From the Audit Committee

The audit committee has advised the Board of Governors that the corporation has an effective framework for governance and risk management in place. The audit committee believes the corporation has effective internal controls in place.

Specific areas of assurance undertaken included an independent financial review.

Review of effectiveness

As Accounting Officer, the Principal has responsibility for reviewing the effectiveness of the system of internal control. The Principal's review of the effectiveness of the system of internal control is informed by:

e internal audit assignments
e the work of the Executive Leadership Team within the College who have responsibility for the development and maintenanceofthe internal control framework
e comments made by the College's financial statements auditors and the reporting accountant for regularity assurance in their management letters and other reports.

The Principal/Accounting Officer has been advised on the implications of the result of her review of the effectiveness of the system of internal control by the Audit Committee which oversees the internal audit plan. A risk based internal audit plan to address weaknesses and ensure continuous improvement ofthe system has been put in place.

The Executive Leadership Team receives reports setting out key performance and risk indicators and considers possible control issues brought to their attention by early warning mechanisms, which are embedded within the departments and reinforced by risk awareness training. The Executive Leadership Team and the Audit Committee also receive reports from various external bodies, which include recommendations for improvement. The Audit Committee's role in this area is confined to a high-level review of[the][arrangements][for][internal][control.][ The][Board][of][ Governor's][agenda][includes][a][regular][item] for consideration of risk and control and receives reports thereon from the Executive Leadership Team and the Audit Committee. The emphasis is on obtaining the relevant degree of assurance and not merely reporting by exception. At its meeting in March 2025 the Audit Committee carried out the annual assessment for the year ended 31 July 2024 by considering documentation from the Executive Leadership Team and an internal audit assurance review, taking account of events since 31 July 2024. Based on the advice of the Audit Committee and the Accounting Officer, the corporation is of the opinion that the College has an adequate and effective framework for governance, risk management and control, and has fulfilled its statutory responsibility for “the effective and efficient use of resources, the solvency of the institution and the body and the safeguarding of their assets”.

Approved by order of the members of the Corporation on 12" March 2025 and signed on its behalf by:

M. Sandery

Mark Sanders - Chair, Board of Governors

E. M. Béal

Emma Beal - Principal and Chief Executive/ Accounting Officer

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Statement of Regularity, Propriety and Compliance

As accounting officer | confirm that the corporation has had due regard to the framework of authorities governing regularity, priority and compliance, and the requirements of the college’s accountability agreement, funding agreements and contracts with ESFA and DfE, and has considered its responsibility to notify ESFA of material irregularity, impropriety and non-compliance with those authorities and terms and conditions of funding.

| confirm on behalf of the corporation that after due enquiry, and to the best of my knowledge, | am able to identify any material irregular or improper use of funds by the corporation, or material noncompliance with the framework of authorities and the terms and conditions of funding under the college's accountability agreement, funding agreements and contracts with ESFA and DfE, or any other public funder. This includes the elements outlined in the "Dear accounting officer” letter of2?November 2022 and ESFA’s bite size guides.

| confirm that no instances of material irregularity, impropriety, funding non-compliance, or noncompliance with the framework of authorities have been discovered to date. If any instances are identified after the date of this statement, these will be notified to ESFA.

E. M. Béal

Emma Beal Accounting officer

12" March 2025

Statement of the chair of governors

On behalf of the corporation, | confirm that the accounting officer has discussed their statement of regularity, propriety and compliance with the board and that | am content that it is materially accurate.

M.[Sanders]

Mark Sanders Chair of governors

12 March 2025

The Northern College for Residential Adult Education Limited Annual report and financial statements for the year ended 31 July 2024

Statement of governing body’s responsibilities

Members' responsibilities for the financial statements

The members of the corporation are required to present audited financial statements for each financial year.

Within the terms and conditions of the corporation's accountability agreement, funding agreements and contracts with ESFA, SYMCA and WYCA, the corporation - through its Accounting Officer - is required to prepare financial statements which give a true and fair view ofthe financial performance and position of the corporation for the relevant period. Corporations must also prepare a strategic report which includes an operating and financial review for the year. The bases for the preparation of the financial statements and strategic report are the Statement of Recommended Practice - Accounting for Further and Higher Education, ESFA's College Accounts Direction and the UK's Generally Accepted Accounting Practice. In preparing the financial statements, the corporation is required to:

° select suitable accounting policies and apply them consistently
e make judgements and 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
® assess whether the corporation is a going concern, noting the key supporting assumptions, qualifications or mitigating actions, as appropriate (which must be consistent with other disclosures in the financial statements and auditor's report)
® prepare financial statements on the going concern basis unless it is inappropriate to assume that the corporation will continue in operation

The corporation is also required to prepare a strategic report, in accordance with paragraphs 3.23 to 3.27 of the F & HE SORP, that describes what it is trying to do and how it is going about it, including information about the legal and administrative status of the corporation.

The corporation is responsible for keeping proper accounting records which disclose, with reasonable accuracy at any time, the financial position of the corporation and which enable it to ensure that the financial statements are prepared in accordance with relevant legislation including the Further and Higher Education Act 1992 and Charities Act 2011, and relevant accounting standards. It is responsible for taking steps that are reasonably open to it to safeguard its assets and to prevent and detect fraud and other irregularities.

The corporation is responsible for the maintenance and integrity of its website; the work carried out by auditors does not involve consideration of these matters and, accordingly, auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Members of the corporation are responsible for ensuring that expenditure and income are applied for the purposes intended and that the financial transactions conform to the authorities that govern them. In addition, they are responsible for ensuring that funds from ESFA, and any other public funds, are used only in accordance with ESFA’s accountability agreement, funding agreements and contracts and any other conditions, that may be prescribed from time to time by ESFA, or any other public funder.

Including that any transactions entered into by the corporation are within the delegated authorities set out in the “Dear accounting officer” letter of 29 November 2022 and ESFA’s bite size guides.

The Northern College for Residential Adult Education Limited

238

Annual report and financial statements for the year ended 31 July 2024

Statement of governing body's responsibilities

Members of the corporation must ensure that there are appropriate financial and management controls in place to safeguard public and other funds and ensure they are used properly. In addition, members of the corporation are responsible for securing economic, efficient and effective management of the corporation's resources and expenditure so that the benefits that should be derived from the application of public funds from ESFA and other public bodies are not put at risk.

Approved by order of the members of the corporation on 12% March 2025 and signed on its behalf by:

M.Sanders:

Mark Sanders Chair of governors

Independent auditors report to the members of The Northern College for Residential Adult Education Limited

INDEPENDENT AUDITOR’S REPORT TO THE CORPORATION OF THE NORTHERN COLLEGE FOR RESIDENTIAL ADULT EDUCATION LIMITED

Opinion

We have audited the financial statements of The Northern College for Residential Adult Education Limited (the “College”) for the year ended 31 July 2024 which comprise the statement of comprehensive income, balance sheet, statement of changes in reserves, statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice) and the Accounts Direction issued by the Education and Skills Funding Agency.

In our opinion the financial statements:

e give atrue and fair viewofthe state of the College's affairs as at 31 July 2024 and ofthe[College's] surplus of income over expenditure for the year then ended; and
e have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;
e have been prepared in accordance with the requirements of the Companies Act 2006; and
e have been prepared in accordance with the Accounts Direction issued by the Education and Skills Funding Agency.

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

The other information comprises the information included in the Report and Financial Statements other than the financial statements and our auditor's report thereon. The governors are responsible for the other information contained within the Report and Financial Statements. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Northern College for Residential Adult Education Limited (Continued)

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement ofthis[other][information,] we[are][required] to report that fact.

We have nothing to report in this 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:

e the information given in the Report of the Corporation which includes the Directors’ Report and the Strategic Report prepared for the purposes of company law for the financial year for which the financial statements are prepared is consistent with the financial statements; and
e the Directors’ Report and the Strategic Report included within the Report of the Corporation 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 understanding of the College and its environment obtained in the course of the audit, we have not identified material misstatements in the Directors’ Report or the Strategic Report included within the Report of the Corporation.

We have nothing to report in respect of the following matters where the Companies Act 2006 or the Post-16 Audit Code of Practice issued by the Education and Skills Funding Agency require us to report to you if, in our opinion:

© adequate accounting records have not been kept by the College, or returns adequate for our audit have not been received from branches not visited by us; or
e the College financial statements are not in agreement with the accounting records and returns; or
e certain disclosures of the govenors’ remuneration specified by law are not made; or e we have not received all the information and explanations required for our audit.

Responsibilities of the Trustees of The Northern College for Residential Adult Education Limited As explained more fully in the Statement of the Member's Responsibilities set out on pages 27 and 28, the Trustees (who are also the directors and members of the college for the purposes of company law) are responsible for the preparation of financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Trustees are responsible for assessing the College's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Trustees either intend to liquidate the College or to cease operations, or have no realistic alternative but to do so.

Auditor's 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 auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the

Independent auditors report to the members of The Northern College for Residential Adult Education Limited (Continued)

aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which the audit was considered capable of detecting irregularities, including fraud Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements, to perform audit procedures to help identify instances of non-compliance with other laws and regulations that may have a material effect on the financial statements, and to respond appropriately to identified or suspected non-compliance with laws and regulations identified during the audit.

In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud through designing and implementing appropriate responses and to respond appropriately to fraud or suspected fraud identified during the audit.

However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:

e obtained an understanding of the nature of the sector, including the legal and regulatory frameworks that the College operates in and how the college is complying with the legal and regulatory frameworks;
e inquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud;
e discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud.

As a result of these procedures we consider the most significant laws and regulations that have a direct impact on the financial statements are Companies Act 2006, FRS 102, Further and Higher Education SORP, Charities Act, and the College Accounts Direction published by the Education and Skills Funding Agency. We performed audit procedures to detect non-compliances which may have a material impact on the financial statements which included reviewing financial statement disclosures.

The most significant laws and regulations that have an indirect impact on the financial statements are those which are in relation to the Education Inspection Framework under the Education and Inspections Act 2006, Keeping Children Safe in Education under the Education Act 2002 and data protection legislation. We performed audit procedures to inquire of management and those charged with governance whether the college is in compliance with these law and regulations and inspected correspondence and inspected correspondence with licensing or regulatory authorities in order to draw a conclusion.

The audit engagement team identified the risk of management override of controls and revenue recognition as the areas where the financial statements were most susceptible to material misstatement due to fraud. Audit procedures performed included but were not limited to testing manual journal entries and other adjustments and evaluating the business rationale in relation to significant, unusual transactions and transactions entered into outside the normal course of business and challenging judgments and estimates and performing tests of detail on a sample of revenue

Independent auditors report to the members of The Northern College for Residential Adult Education Limited (Continued)

transactions together with performing a review of the appropriate application of the College’s revenue recognition policy.

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

Use of our report

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

Richard Lewis (Senior Statutory Auditor) For and on behalf of RSM UK Audit LLP, Statutory Auditor Chartered Accountants Two Humber Quays Wellington Street West Hull HU1 2BN 2 s ters i

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Statement of comprehensive income

		2024	2023
	Note	£'000	£'000
Income
Funding body grants	2	3,880	3,317
Tuition fees and education contracts	3	43	164
Research grants and contracts	4	14	4
Other income	5	314	302
Investment income	6	123	62
Donations	7	2	-
Total income		4,376	3,849
Expenditure
Staff costs (inc restructuring)	8	1,981	2,302
Other operating expenses	2	1,773	1,631
Depreciation	12/13	241	223
Interest and other finance costs	10	26	63
Total expenditure		4,021	4,219
Surplus forthe year		355	(370)
Re-measurement of net defined benefit
pension scheme		(188)	1,158
Othercomprehensive income forthe
year		(188)	1,158
Total comprehensive income forthe year
attributable to the Corporation ofthe
College		167	788

The statement of comprehensive income is in respect of continuing activities.

The accompanying accounting policies and notes form an integral part of these financial statements.

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Balance Sheet

----- Start of picture text -----
|||||||||||| |---|---|---|---|---|---|---|---|---|---|---| |2024|2023| |Note|£'000|£'000| |Fixed|assets| |Tangible|fixed|assets|12|3,661|3,661| |Intangible|fixed|assets|13|22|27| |3,683|3,688| |Current|assets| |Debtors|14|217|200| |Investments|20|3,563|3,005| |Cash|at|bank|and|in|hand|20|42|204| |3,822|3,409| |Less:|Creditors:|amounts|falling|due|within|one|year|15|(1,214)|(1,559)| |Net|current|assets|2,608|1,850| |Total|assets|less|current|liabilities|6,291|5,538| |Creditors:|amounts|falling|due|after more|than|one| |year|16|(2,621)|(1,604)| |Provisions| |Defined|benefit|pension|scheme|asset/|(liability)|17/19|(39)|s| |Other|provisions|17/19|(41)|(511)| |Total|net|assets|3,590|3,423| |Unrestricted|reserves| |Income|and|expenditure|reserve|3,590|3,423| |Total funds|3,590|3,423|

----- End of picture text -----

The financial statements on pages 33 to 53 were approved and authorised for issue by the Board of Governors on 12% March 2025 and were signed on its behalf by:

M. Sanders

E. M. Beal

Mark Sanders - Chair

Emma Beal - Principal and Chief Executive/ Accounting Officer

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

statement of changes in reserves

statement of changeschanges in reserves
	Income and
	expenditure
	reserve
	£'000
Balance at 1 August2022	2,635
Deficitfrom the income and expenditure account	(370)
Other comprehensive income	1,158
Total comprehensive income forthe year	788
Balance at31 July2023	3,423
Surplus from the income and expenditure account	355
Other comprehensive income	(188)
Total comprehensive income forthe year	167
Balanceat31July2024	3,590

The accompanying accounting policies and notes form an integral part of these financial statements.

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Statement of cash flows

----- Start of picture text -----
|||||||||||| |---|---|---|---|---|---|---|---|---|---|---| |2024|2023| |Note|£'000|£'000| |Cash from|operating|activities| |Surplus/(Deficit)|for the|year|355|(370)| |Adjustment|for|non-cash|items| |Depreciation|236|218| |Amortisation|5|S)| |Decrease/(Increase)|in|debtors|(17)|42| |(Decrease)|in|creditors|due|within|one|year|(345)|(329)| |Increase|in|creditors|due|after|one|year|1,018|914| |(Decrease)|in|provisions|(471)|(279)| |Pension|cost|230|291| |Pension|contributions|paid|(375)|(273)| |Adjustments|for|investing|activities| |Investment|income|(123)|(62)| |Interest|payable|(4)|39| |Net|cash from|operating|activities|509|196| |Cash|flows from|investing|activities| |Investment|income|123|62| |Payments|made|to|acquire|fixed|assets|(236)|(170)| |(113)|(108)| |Increase|in|cash|and|cash|equivalents|in|the|year|396|88| |Cash|and|cash|equivalents|beginning|of the|year|3,209|3,121| |Cash|and|cash|equivalents|at end|of the year|20|3,605|3,209|

----- End of picture text -----

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Notes to the financial statements

1 Statement of accounting policies and estimation techniques

The following accounting policies have been applied consistently, other than in respect of the prior period error detailed below, in dealing with items which are considered material in relation to the financial statements.

Basis of preparation

These financial statements are prepared in accordance with the Statement of Recommended Practice (SORP): Accounting for Further and Higher Education 2019 (the 2019 F & HE SORP), The College Accounts Direction for 2023 to 2024 and in accordance with Financial Reporting Standard 102 - "The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland" (FRS 102). The College is a public benefit entity and has therefore applied the relevant public benefit requirements of FRS 102.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the College's accounting policies.

The financial staternents are presented in Sterling (£).

Going concern

The Northern College for Residential Adult Education Limited Annual report and financial statements for the year ended 31 July 2024

Notes to the financial statements

1 Statement of accounting policies and estimation techniques (continued)

Going concern (continued)

Whilst the financial position has improved significantly through growth and cost reduction, the fixed cost base remains a challenge.

Recognition of income

Income for tuition fees is recognised in the period in which delivery has taken place and includes all fees chargeable to students or their sponsors.

Income from research grants, contracts and other services rendered is included to the extent of the completion of the contract or service concerned. This is generally equivalent to the sum ofthe relevant expenditure incurred during the year and any related contributions towards overhead costs.

All income from short-term deposits is credited to the income and expenditure account in the period in which it is earned.

Income from specific endowments and donations is included to the extent of the relevant expenditure incurred during the year, together with any related contributions towards overhead costs.

The recurrent grants from the ESFA represent the funding allocations attributable to the current financial year and are credited direct to the income and expenditure account. Recurrent grants are recognised in line with planned activity. Any under-achievement against this planned activity is adjusted in the year and is reflected in the line of the recurrent grant recognised in the income and expenditure account.

The Northern College for Residential Adult Education Limited Annual report and financial statements for the year ended 31 July 2024

1 Statement of accounting policies and estimation techniques (continued)

Recognition of income (continued)

Non-recurrent grants from the ESFA or other bodies, received in respect of the acquisition or construction offixed[assets][are treated][as][deferred][capital][grants] and[amortised][in][line][with][depreciation] over the life of the assets. The deferred element is recognised as deferred income within creditors and allocated between creditors due within one year and creditors due after more than one year as appropriate.

Capital grant funding - government grants

Government capital grants for assets are accounted for under the accruals model. The grant income received or receivable will be recognised over the expected useful life of the asset, with any amount of the asset-related grant that is deferred being recognised as deferred income. The deferred income is allocated between creditors due within one year and those due after more than one year recognised in income when the performance-related conditions have been met and the grant will be received.

Accounting for post-employment benefits

Post-employment benefits to employees of the College are provided by the Universities’ Superannuation Scheme (USS) and the South Yorkshire Pensions Authority (SYPA). These are defined benefit schemes which are externally funded and contracted out of the State Second Pension. Contributions to the Universities' Superannuation Scheme are charged to the income and expenditure account so as to spread the cost of pensions over employees’ working lives with the College in such a way that the pension cost is a substantially level percentage of current and future pensionable payroll. Contributions to the scheme are determined by qualified actuaries on the basis of triennial valuations, using the projected unit method.

The USS is a multi-employer scheme and the College is unable to identify its share of the underlying assets and liabilities of the Scheme on a consistent and reasonable basis. The USS is therefore treated as a defined contribution scheme and the contributions recognised as they are paid each year. A liability is recorded within provisions for any contractual commitment to fund past deficits within the USS scheme.

The LGPS is a funded scheme. The assets of the LGPS are measured using closing fair values. LGPS liabilities are measured using the projected unit credit and discounted at the current rate of return ona high quality corporate bond of equivalent term and currency to the liabilities. The actuarial valuations are obtained at least triennially and are updated at each balance sheet date. The amounts charged to operating surplus are the current service costs and the costs of scheme introductions, benefit changes, settlements and curtailments. They are included as part of staff costs as incurred.

Net interest on the net defined benefit liability/asset is also recognised in the Income Statement and comprises the interest cost on the defined benefit obligation and interest income on the scheme assets, calculated by multiplying the fair value of the scheme assets and the defined benefit obligation at the beginning of the period by the rate used to discount the benefit obligations.

The difference between the interest income on the scheme assets and the actual return on the scheme assets together with other actuarial gains and losses are recognised immediately in other comprehensive income.

Re-measurement comprising actuarial gains and losses, the effect of the asset ceiling and the return on scheme assets (excluding amounts include in net interest on the net defined benefit liability) are recognised immediately in other comprehensive income.

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Notes to the financial statements

1. Statement of accounting policies and estimation techniques (continued)

Accounting for post-employment benefits (continued)

The LGPS assets are managed by the scheme trustees at scheme level, and the determination / allocation of assets to each individual employer in the scheme is managed by the scheme actuary. The assets are allocated to each employer for accounting purposes based on the valuation of the assets at the latest triennial valuation as adjusted for subsequent contributions received from the employer, asset returns, and benefit payments made (either on a cash basis or actuarial basis).

The retirement benefit obligation recognised represents the deficit or surplus in the defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

Short term Employment benefits

Short term employment benefits such as salaries and compensated absences (holiday pay) are recognised as an expense in the year in which the employees render service to the College. Any unused benefits are accrued and measured as the additional amount the College expects to pay as a result of the unused entitlement.

Enhanced pensions

The actual cost of any enhanced ongoing pension to a former member of staff is paid by the College annually. An estimate of the expected future cost of any enhancement to the ongoing pension of a former member of staff is charged in full to the College's income and expenditure account in the year that the member of staff retires. In subsequent years a charge is made to provisions in the balance sheet using the enhanced pension spreadsheet provided by the funding bodies.

Tangible fixed assets

Land and buildings are stated at deemed cost less accumulated depreciation and accumulated impairment losses, these assets are depreciated over their estimated useful life of between 28 and 48 years. Land and buildings inherited from the Local Education Authority are stated in the balance sheet at valuation based on depreciated replacement costs, as the open market value for existing use is not readily obtainable. Freehold land is not depreciated.

Improvements made to the property and buildings built by the college are included at cost less accumulated depreciation.

Where land and buildings are acquired with the aid of specific grants they are capitalised and depreciated as above. The related grants are credited to a deferred income account within creditors and are released to the income and expenditure account over the expected useful economic life of the related asset on a basis consistent with the depreciation policy. The deferred income is allocated between creditors due within one year and those due after more than one year.

Finance costs which are directly attributable to the construction of land and buildings are not capitalised as part of the cost of those assets.

Subsequent expenditure on existing fixed assets

Where significant expenditure is incurred on tangible fixed assets after initial purchase it is charged to the income and expenditure account in the period it is incurred, unless it increases the future benefits to the College, in which case it is capitalised and depreciated on the relevant basis.

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

1 Statement of accounting policies and estimation techniques (continued)

Equipment and improvements to property

Equipment costing less than £1,500 per individual item is written off to the income and expenditure account in the year of acquisition. All other equipment is capitalised at cost. Capitalised equipment is depreciated over its useful life as follows:

Equipment 5%-33% per annum Improvements to property 2%-20% per annum Motor vehicles 14%-25% per annum

Where equipment is acquired with the aid of specific grants it is capitalised and depreciated in accordance with the above policy, with the related grant being credited to a deferred income account within creditors and released to the income and expenditure account over the expected useful economic life of the related equipment.

A review for impairment of a fixed asset is carried out if events or changes in circumstances indicate that the carrying value of any fixed asset may not be recoverable. Shortfalls between the carrying value of fixed assets and their recoverable amounts are recognised as impairments. Impairment losses are recognised in the Statement of Comprehensive Income and Expenditure.

Intangible Fixed Assets

Intangible assets costing £2,000 or more are capitalised and recognised when future economic benefits are probable, and the cost or value of the asset can be measured reliably. Intangible assets are initially recognised at cost and are subsequently measured at cost, net of amortisation and any provision for impairment.

Amortisation is provided on intangible fixed assets at rates calculated to write off the cost of each asset on a straight-line basis over its expected useful life, as follows: Purchased computer software - 5 Years Branding/Website - 10 Years

Operating leases

All leases are operating leases and annual rents are charged to the comprehensive income on a straight line basis over the lease term.

Financial Instruments

The College has chosen to adopt Sections 11 and 12 of FRS 102 in full in respect of[financial][instruments.]

Financial assets and liabilities

Financial assets and financial liabilities are recognised when the College becomes a party to the contractual provisions of the instrument.

Financial liabilities and equity are classified according to the substance of the financial instrument's contractual obligations, rather than the financial instrument's legal form.

All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets measured at fair value through the profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless arrangement constitutes a financing transaction. A financial asset or financial liability that is payable or receivable within one year is measured at the undiscounted amount expected to be received or paid net of impairment, unless it is a financing transaction.

The Northern College for Residential Adult Education Limited Annual report and financial statements for the year ended 31 July 2024

1. Statement of accounting policies and estimation techniques (continued)

Financial assets and liabilities (continued)

Financial assets and financial liabilities are offset only when there is a current legally enforceable right to set off the recognised amounts and the intention to either settle on a net basis, or to realise the asset and settle the liability simultaneously.

Derecognition of financial assets and liabilities

A financial asset is derecognised only when the contractual rights to cash flows expire or are settled, or substantially all the risks and rewards of ownership are transferred to another party, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party. A financial liability (or part thereof) is derecognised when the obligation specified in the contract is discharged, cancelled or expires.

Agency arrangements

The College acts as an agent in the collection and payment of discretionary learner support funds. Related payments received from the Education and Skills Funding Agency, South Yorkshire Mayoral Combined Authority or West Yorkshire Combined Authority and subsequent disbursements to students are excluded from the income and expenditure of the College where the College is exposed to minimal risk or enjoys minimal economic benefit related to the transaction.

Judgements

Judgements in applying accounting policies and key sources of estimation uncertainty

In preparing these financial statements, management have made the following judgements: . Determine whether leases entered into by the College either as a lessor or a lessee are operating or finance leases. These decisions depend on an assessment of whether the risk and rewards of ownership have been transferred from the lessor to the lessee on a leaseby-lease basis.
" Determining the existence of a minimum funding requirement for the Local Government Pension Scheme to including in the asset ceiling in measuring and recognising a surplus in the scheme. This judgement is based on an assessment of the nature of the scheme as a statutory scheme and is the inherent implied continuance and the operation of the primary and secondary contributions.

Critical accounting estimates and assumptions

. Tangible fixed assets - Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In reassessing asset lives, factors such as technological innovation and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposed values.
" Local Government Pension Scheme - The present value of the Local Government Pension Scheme defined benefit obligation depends on a number offactors that are determined on an actuarial basis using a variety of assumptions. The assumptions used in determining the net cost (income) for pensions include the discount rate. Any changes in these assumptions, which are disclosed in note 19, will impact the carrying amount of the pension liability. Furthermore, a roll forward approach which projects results from the latest full actuarial valuation performed at 31 March 2022 has been used by the actuary in valuing the pensions obligation at 31 July 2024. Any differences between the figures derived from the roll forward approach anda full actuarial valuation would impact on the carrying amount on the pension obligation.

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Notes to the financial statements

2. Funding body grants	2024	2023
	£'000	£'000
Adult Skills Budget
ESFA	162	261
SYMCA	2,741	1,932
WYCA	786	737
Adult Learner Loan Bursary	66	218
Advanced Learner Loans	39	88
Release ofgovernment capital grants	86	81
	3,880	3,317
3. Tuition fees and Education contracts	2024	2023
	£'000	£'000
Tuition Fees:
Home fees and charges	43	164
4. Research grants and contracts	2024	2023
	£'000	£'000
Release from Government capital grants	14	4
5. Other income	2024	2023
	£'000	£'000
Catering and residence operations	153	147
Other income generating activities	149	147
Other	12	8
	314	302
6. Investment income	2024	2023
	£'000	£'000
Interest receivable	123	62
7. Donations	2024	2023
	£'000	£'000
Unrestricteddonations	2	-

The Northern College for Residential Adult Education Limited Annual report and financial statements for the year ended 31 July 2024

44,

Notes to the financial statements

----- Start of picture text -----
|||||||||||| |---|---|---|---|---|---|---|---|---|---|---| |8.|Staff|costs| |Staff costs|during|the|year|were|as|follows:|2024|2023| |£'000|£'000| |Wages|and|salaries|1,868|1,854| |Social|security|costs|189|183| |Pension|costs|(see|note|19)|(76)|228| |1,981|2,265| |Restructuring|costs| |Contractual|-|37| |Non-contractual|-|-| |1,981|2,302| |The|average|monthly|number|of persons; persons;|including|key|management|personnel|but|excluding| |teaching|staff;|expressed|as|average|headcount|and|calculated|monthly|basis,|was:| |2024|2023| |Number|Number| |Teaching|staff:| |Teaching|departments|-|teaching|staff|23|18| |Total|Teaching|support|services|11|14| |Total|teaching|staff|34|32| |Non-teaching|staff:| |Other|support|services|7|7| |Administration|and|central|services|14|18| |Premises|13|13| |Total|non-teaching|staff|34|38| |Total|staff|68|70| |The|College|paid|£nil|severance|payment|in|the|year.|

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The average monthly number of persons; persons; including key management personnel but excluding sessional teaching staff; expressed as average headcount and calculated monthly basis, was:

There were no special severance payments (2023 - fnil).

The above amount includes (£145k) (2023: £18k) in relation to the LGPS FRS 102 net current and past service pension cost, (£456k) (2023: (£244k)) in relation to the USS FRS 102 net current and past service pension cost.

The number of staff, including key management personnel and the principal, who received emoluments in the following ranges was:

----- Start of picture text -----
|||||| |---|---|---|---|---| |2024|2023| |Number|Number| |Staff|Staff| |£60,001|to|£65,000|-| |£65,001|to|£70,000|1| |£70,001|to|£75,000|1| |£75,001|to|£80,000|1|1| |£80,001|to|£85,000|1|1| |£85,001|to|£90,000|-| |£90,001|to|£95,000|-| |£95,001|to|£100,000|-| |£100,001|to|£105,000|1|-| |£105,001|to|£100,000|-| |SS .|

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The Northern College for Residential Adult Education Limited Annual report and financial statements for the year ended 31 July 2024

Notes to the financial statements

8. Staff costs (continued)

Key management personnel

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the College and are represented by the Executive Leadership Team.

Team.
	2024	2023
	Number	Number
The number of key management personnel including the accounting
officer was:	3	4
Key management personnel’s emoluments are made up as follows:
	2024	2023
	£'000	£'000
Salaries	261	300
Pension contributions	72	58
Totalkeymanagementpersonnelemoluments	333	358

In addition to the above, national insurance amounted to £31k (2023:£38k)

There were no amounts due to key management personnel that were waived in the year, nor any salary sacrifice arrangements in place.

The above emoluments include amounts payable to the Accounting Officer (who is also the highest paid officer) of:

		2024	2023
		£'000	£'000
Salary		102	110
Pension	contribution	28	Zi
		130	131

The governing body has adopted and complied with the Association of Colleges Senior Post Holder Remuneration Code and pay in line with its principles and this has been followed.

The remuneration package of Senior Post Holders (key management personnel), including the Principal and Clerk, is subject to annual review by the Remuneration Committee of the governing body who use benchmarking information, linked to the value and performance delivered to provide objective guidance.

The Principal and Clerk report to the Chair of the Board of Governors, who undertakes an annual review of her performance against the College’s overall objectives using both qualitative and quantitative measures of performance.

Other key management personnel salaries are based on an agreed scale which is reviewed annually.

The Northern College for Residential Adult Education Limited Annual report and financial statements for the year ended 31 July 2024

Notes to the financial statements

8. Staff costs (continued)

8. Staff costscosts (continued)
	2023/24	2022/23
Pay multiple ofthe Principal/Chief Executive/Accounting Officer	3.29	3.79
basic pay and the median earnings ofthe College’s whole
workforce
Pay multiple of the Principal/Chief Executive/Accounting Officer	3:57	4.09
total emoluments and the median earnings of the College's
wholeworkforce

Members of the Board of Governors, other than the principal, and staff representatives, did not receive any payment from the College other than reimbursement of travel and subsistence expenses incurred in the course of their duties.

Directors’ remuneration

The members of the College’s governing body are also the directors of the company, for the purposes of company law. Directors do not receive remuneration for their role as a member of the College's governing body, but may be remunerated for other positions held at the College. Remuneration paid to directors during the year was:

	2024	2023
	£'000	£'000
Emoluments	150	177
Pension contribution	41	34
	191	211

Post-employment benefits are accruing for 2 directors (2023: 3) under a defined benefit scheme. No directors (2023: none) were members of defined contribution schemes.

9. Other operating expenses

		2024	2023
		£'000	£'000
Teaching costs		491	295
Non-teaching costs		328	370
Premises costs		954	966
		1,773	1,631
Other	operating expenses include:	2024	2023
		£'000	£'000
Auditors' remuneration (excluding VAT)
-	Financial statements audit	48	46
-	Internalaudit	5	-

Write offs and losses - There were no write offs or losses over £5,000.

Guarantees, letters of comfort and indemnities - there were no guarantees, letters of comfort or indemnities entered into outside the normal course of business.

Compensation payments and ex-gratia payments - there were no compensation payments or ex-gratia payments during the year.

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Notes to the financial statements

10. Interest and other finance costs

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|||||||||||||||||| |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| |2024|2023| |£'000|£'000| |Net|interest|and|defined|benefit|pension|scheme|26|63| |11.Taxation| |The|College|was|not|liable|for|any|corporation|tax|arising|out|of|its|activities|during|the|year.| |12.|Tangible|fixed|assets| |Freehold|Improve-| |land|and|ments| |buildings|to|property|Equipment|Vehicles|Total| |£'000|£'000|£'000|£'000|£'000| |Cost| |At|1|August 2023|3,715|895|ZZ|-|6,532| |Additions|-|116|120|-|236| |At|31|July|2024|3,715|1,011|2,042|-|6,768| |Depreciation| |At|1|August 2023|851|304|1,716|-|2,871| |Chargefor|the|year|95|62|7?|-|236| |At|31|July 2024|946|366|1,795|-|3,107| |Carrying|amount|at|31|July| |2024|2,769|645|247|-|3,661| |Net|book|amount|at|31|July| |2023|2,864|591|206|-|3,661|

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The College was not liable for any corporation tax arising out of its activities during the year.

13. Intangible fixed assets

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|||||||| |---|---|---|---|---|---|---| |Software,| |Website|&| |Branding| |£'000| |Cost| |At|1|August|2023|63| |Additions| |At|31|July 2024|63| |Amortisation| |At|1|August|2023|36| |Charge|for|the|year|5| |At|31|July|2024|4]| |Net book value|at 31|July 2024|22| |Net|book amount|at|31|July|2023|27|

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The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Notes to the financial statements

14. Debtors

	2024	2023
	£'000	£'000
Amounts falling due within one year:
Trade receivables	34	62
Prepayments and accrued income	183	138
	217	200
15. Creditors: amounts falling due within one year
	2024	2023
	£'000	£'000
Trade payables	210	299
Other taxation and social security	46	47
Other creditors	-	-
Accruals and deferred income	272	266
Holiday pay accrual	8	V4
Government capital grants	190	120
Amounts owed to the ESFA	187	219
Amounts owed to SYMCA	228	555
Amounts owed toWYCA	73	42
	1,214	1,559

16. Creditors: amounts falling due after more than one year

		2024	2023
		£'000	£'000
Government capital grants		2,621	1,604
17. Provisions
	Obligation
	to fund
	deficit
	on USS	Enhanced
	Pension	pension	Total
	£'000	£'000	£'000
At 1 August 2023	470	41	Sli
Additional provision
made/(released) in the year	(456)	4	(452)
Utilised in the year	(14)	(4)	(18)
At31July2024	-	41	41

The enhanced pension provision relates to the cost of staff who have already left the College's employment, and commitments for costs from which the College cannot reasonably withdraw from at the balance sheet date. This provision has been recalculated in accordance with the guidance issued by the Funding Body. The assumptions for calculating the provision for pension enhancements on termination under FRS 102, are as follows:

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Notes to the financial statements

17. Provisions (continued)

17. Provisions (continued)
	2024	2023
Price inflation	3.15%	3.15%
Netinterestrate	5.00%	5.05%

Defined benefit obligations relate to the liabilities under the College’s membership of the Local Government Pension Scheme and Universities Superannuation Scheme. Further details are given in note ag.

The obligation to fund the past deficit on the Universities Superannuation Scheme (USS) arises from the contractual obligation with the pension scheme for total payments relating to benefits arising from past performance. Management has made an assessment of future employees within the USS scheme, salary payment and the likely yield from a mid-range corporate bond over the period of the contracted obligation in assessing the value ofthis provision.

Due to the deficit recovery contributions ending in December 2023, the pension liability has been unwound in 2023/24, split between interest payable and staff costs. The overall impact of this is a nil position as shown in the table above.

18. Capital commitments

Capital commitments in 2024 amounted to £321,991, (2023: Enil).

19. Pension and similar obligations

The College's employees belong to two principal pension schemes, the Universities’ Superannuation Scheme (USS) and the South Yorkshire Pensions Authority (SYPA).

The pension chargefor the year including the movement in the USS provision (see note 16) is as follows:

	2024	2023
	£'000	£'000
Universities’ Superannuation Scheme contributions paid	151	181
USS additional provisions	(456)	(244)
	(305)	(63)
South Yorkshire Pensions Authority contributions paid	875	273
FRS 102(28) charge	(145)	18
	230	29)
Enhanced pension provision	(1)		-
	(76)	228

Universities' Superannuation Scheme

The Universities’ Superannuation Scheme is a multi-employer benefit scheme. Contributions on a pay as you go basis are credited to the exchequer under arrangements governed by the Superannuation Act 1972.

The pensions cost is assessed every three years in accordance with the advice of the government actuary. The assumptions and other data that have the most significant effect on the determination of the contribution levels are as follows:

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Notes to the financial statements

19. Pension and similar obligations (continued)

Latest actuarial valuation	31 March 2023
Actuarial method	Projected Unit
Discount Rate	4.3%
Pensionable Salary Growth	n/a
Price Inflation (CPI)	3.0%
Market value of assets at date of last valuation	£73.1 Billion
Proportion of members' accrued benefits covered bythe actuarial value of	111%
theassets

Under the definitions set out in FRS 102(28.11), the USS is a multi-employer pension scheme. The College is unable to identify its share of the underlying assets and liabilities of the scheme. Accordingly, the College has taken advantage of the exemption in FRS 102 and has accounted for its contributions to the scheme as if it were a defined contribution scheme. The College has set out above the information available on the scheme and the implications for the College in terms of the anticipated contribution rates.

South Yorkshire Pensions Authority

The SYPA is a funded defined benefit scheme, with the assets held in separate trustee administered by South Yorkshire Pensions Authority. The total contribution paid for the year ended 31 July 2024 was £459,000 (2023: £358,000) of which employer's contributions totalled £375,000 (2023: £273,000) and employees' contributions totalled £84,000 (2023: £85,000). The agreed contribution rates for future years range from 26.8% to 30.9% for employers and from 5.5% to 12.5% for employees, depending on salary.

There were no outstanding or prepaid contributions at either the beginning or end ofthe financial year. The next scheme valuation for LGPS will be 31 March 2025, with the new employer contribution rates applicable from 1 April 2026.

Parliament has agreed, at the request of the Secretary of State for Education, to a guarantee that, in the event of an FE body in the statutory sector closure, where there is no transfer or merger, outstanding Local Government Pension Scheme liabilities would be met by the Department for Education. The guarantee came into force on 12 November 2024.

Principal Actuarial Assumptions

The following information is based upona full actuarial valuation of the fund at 31 March 2022 updated to 31 July 2024 carried out by a qualified independent actuary. In prior years, the policy has been to recognise the impact of pension increases on pension obligations in line with the Pension Increase Order (P| Order) laid during the relevant accounting period as that is when the PI Order is known with certainty.

The value of the college’s share of net assets was £1,407k, however this has been restricted due to the effect of the asset ceiling being the maximum value of the present of the economic benefits available in the form of the unconditional right to reduced contributions from the plan. A corresponding charge has been made to other comprehensive income in the period.

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Notes to the financial statements

19. Pension and similar obligations (continued)

	At 31 July	At 31 July
	2024	2023
	%	%
Future rate of increase in salaries	3.35	3.60
Future pension Increase rate (CPI)	2.75	3.00
Discountrateforschemeliabilities	5.00	5.05

The current mortality assumptions include sufficient allowance for future improvements in mortality rates. The assumed life expectations on retirement age 65 are:

		At 31 July	At 31 July
		2024	2023
Retiring	today
Males		20.5	20.6
Females		23.6	23:6
Retiring	in 20 years
Males		21.3	21.4
Females		25.0	25.0

The assets of the scheme relating to the College at the balance sheet date and the expected rate of return were:

return were:
	Value at	Value at
	31 July	31 July
	2024	2023
	£'000	£'000
Equity instruments	8,716	8,255
Government bonds	2,732	2,632
Property	1,301	OS¢
Cash/liquidity	260	120

Total fairvalue of assets	13,009	11,964
Actualreturnonplanassets	1,025	(201)

Amounts recognised intheStatement ofcomprehensive income in respect ofthe plan are as	Amounts recognised intheStatement ofcomprehensive income in respect ofthe plan are as	Amounts recognised intheStatement ofcomprehensive income in respect ofthe plan are as
follows:
	2024	2023
	£'000	£'000
Amounts included in staff costs
Current service cost	(230)	(291)
Past service cost	-	-
Total	(230)	(291)

The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Notes to the financial statements

19. Pension and similar obligations (continued)

----- Start of picture text -----
|||||||||||| |---|---|---|---|---|---|---|---|---|---|---| |2024|2023| |£'000|£'000| |Amounts|included|in|interest|and|other finance|costs| |Net|interest|cost|4|(39)| |Amount|recognised|in|Other|comprehensive|income| |2024|2023| |£'000|£'000| |Return|on|pension|plan|assets|420|(617)| |Experience|gain/losses|arising|on|defined|benefit|obligations|(366)|(403)| |Change|in|financial|assumptions|underlying|the|scheme|liabilities|415|2,929| |Amount|recognised|in|Other comprehensive|income|469|1,909| |Movement|in|net|defined|benefit|asset/(liability)| |during|year| |2024|2023| |£'000|£'000| |Net|defined|benefit|asset/(liability)|in|scheme|at|1|August|751|(1,101)| |Movement|in|year:| |Current|service|charge|(230)|(291)| |Asset|and|Liability|Reconciliation| |2024|2023| |£'000|£'000| |Changes|in|the|present|value|of defined|benefit| |obligations| |Defined|benefit|obligations|at|start|of|period|11,213|13,018| |Current|service|cost|230|291| |Interest|cost|601|455| |Contributions|by|scheme|participants|84|85| |Actuarial|(gains)|(87)|(2,225)| |Benefits|paid|(439)|(411)| |Defined|benefit|obligations|at|end|of period|11,602|11,213| |Changes|in|fair value|of|plan|assets| |2024|2023| |£'000|£'000| |Fair value|of|plan|assets|at|start|of|period|11,964|TALOV?| |Interest|income|605|416| |Return|on|plan|assets|(excluding|net|interest|on|the| |defined|benefit|pension|scheme|420|(316)| |Employer|contributions|375|273| |Contributions|by|scheme|participants|84|85| |Benefits|paid|(439)|(411)| |Fair value|of|plan|assets|at the|end|of the|period|13,009|11,964|

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The Northern College for Residential Adult Education Limited

Annual report and financial statements for the year ended 31 July 2024

Notes to the financial statements

19. Pension and similar obligations (continued)

----- Start of picture text -----
||||||||| |---|---|---|---|---|---|---|---| |2024|2023| |Recognition|of|net|assets|£'000|£'000| |Present|value|of|detined|benefit|obligations|11,563|11213| |Fair|value|of|plan|assets|13,009|11,964| |Net|asset|1,407|751| |Restriction|to|level|of|asset|ceiling|(1,446)|(751)| |Present|value|of|unfunded|obligations|(39)|:|

----- End of picture text -----

The value of the college’s share of net assets has been restricted due to the effect of the asset ceiling being the maximum value of the present of the economic benefits available in the form of the unconditional right to reduced contributions from the plan. A corresponding charge has been made to other comprehensive income in the period.

The College is aware that the Court of Appeal has recently upheld the decision in the Virgin Media vs NTL Pension Trustees II Limited case. The decision puts into question the validity of any amendments made in respect of the rules ofa contracted-out pension scheme between 6 April 1997 and 5 April 2016. The judgment means that some historic amendments affecting s.9(2B) rights could be void if the necessary actuarial confirmation under s.37 of the Pension Schemes Act 1993 was not obtained. Until further investigations have been completed by the UK Government's Actuary's Department and/or any legislative action taken by the government, the potential impact if any, on the valuation of scheme liabilities remains unknown.

20. Changes in net funds

----- Start of picture text -----
|||||||||| |---|---|---|---|---|---|---|---|---| |At|1| |August|At 31|July| |2023|Cash|flows|2024| |£'000|£'000|£'000| |Cash|at|bank|and|in|hand|204|(162)|42| |Investments|3,005|958|3,563| |Net funds,|cash|and|cash|equivalents|3,209|396|3,605|

----- End of picture text -----

21. Company limited by guarantee

The Northern College Company is limited by guarantee and has no share capital. The liability of its members is limited to an amount not exceeding £1. At 31 July 2024 there were 12 members (2023: 12 members).

22. Related party transactions

There have been no related party transactions during the year.

The total expenses paid to or on behalf of the Governors during the year was £185.95 to one governor (2023: £444.97; two governors). This represents travel and subsistence expenses and other out of pocket expenses incurred in attending Governor meetings and charity events in their official capacity.

No governors received any remuneration or waived payments from the College during the year (2023 nil).

Independent reporting: accountant'sF report on regularity‘ to the corporation of The Northern College for Residential Adult Education Limited and the Secretary of State for Education acting through the Education and Skills Funding Agency

INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON REGULARITY TO THE CORPORATION OF THE NORTHERN COLLEGE FOR RESIDENTIAL ADULT EDUCATION LIMITED AND THE SECRETARY OF STATE FOR EDUCATION ACTING THROUGH EDUCATION AND SKILLS FUNDING AGENCY

Conclusion

We have carried out an engagement, in accordance with the terms of our engagement letter dated 7 November 2022 and further to the requirements of the accountability agreement, grant funding agreements and contracts with the Education and Skills Funding Agency (the “ESFA”) and the Department for Education (the “DfE") or those of any other public funder, to obtain limited assurance about whether the expenditure disbursed and income received by The Northern College For Residential Adult Education Limited during the period 1 August 2023 to 31 July 2024 have been applied to the purposes identified by Parliament and the financial transactions conform to the authorities which govern them.

In the course of our work, nothing has come to our attention which suggests that in all material respects the expenditure disbursed and income received during the period 1 August 2023 to 31 July 2024 have not been applied to purposes intended by Parliament and the financial transactions do not conform to the authorities which govern them.

Basis for conclusion

The framework that has been applied is set out in the Post-16 Audit Code of Practice (the Code) issued by the ESFA and in any relevant conditions of funding concerning adult education notified by a relevant funder.

We have complied with the independence and other ethical requirements of the FRC’s Ethical Standard and the ethical pronouncements of the ICAEW. We also apply International Standard on Quality Management (UK) 1 Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements and accordingly maintain comprehensive systems of continuing quality management. We believe the assurance evidence we have obtained is sufficient to provide a basis for our conclusion.

Responsibilities of Corporation of The Northern College For Residential Adult Education Limited For Regularity

The Corporation of The Northern College For Residential Adult Education Limited is responsible, under the grant funding agreements and contracts with the ESFA and the requirements of the Further & Higher Education Act 1992, subsequent legislation and related regulations and guidance, for ensuring that expenditure disbursed and income received are applied for the purposes intended by Parliament and the financial transactions conform to the authorities which govern them. The Corporation of The Northern College For Residential Adult Education Limited is also responsible for preparing the Governing Body's Statement of Regularity, Propriety and Compliance.

Reporting accountant’s responsibilities for reporting on regularity

Our responsibilities for this engagement are established in the United Kingdom by our profession's ethical guidance and are to obtain limited assurance and report in accordance with our engagement letter and the requirements of the Code.

Independent reporting; accountant’s. report on regularity‘ to the corporation of The Northern College for Residential Adult Education Limited and the Secretary of State for Education acting through the Education and Skills Funding Agency (Continued)

The objective of a limited assurance engagement is to perform such procedures as to obtain information and explanations in order to provide us with sufficient appropriate evidence to express a negative conclusion on regularity. A limited assurance engagement is more limited in scope than a reasonable assurance engagement and the procedures performed vary in nature and timing from, and are less in extent than for a reasonable assurance engagement; consequently a limited assurance engagement does not enable us to obtain assurance that we would become awareofall significant matters that might be identified in a reasonable assurance engagement. Accordingly, we do not express a positive opinion.

We report to you whether anything has come to our attention in carrying out our work which suggests that in all material respects, expenditure disbursed and income received during the period 1 August 2023 to 31 July 2024 have not been applied to purposes intended by Parliament or that the financial transactions do not conform to the authorities which govern them.

Our work included identification and assessment of the design and operational effectiveness of the controls, policies and procedures that have been implemented to ensure compliance with the framework of authorities including the specific requirements of the grant funding agreements and contracts with the ESFA and those of any other public funder and high level financial control areas where we identified a material irregularity is likely to arise. We undertook detailed testing, on a sample basis, on the identified areas where a material irregularity is likely to arise where such areas are in respect of controls, policies and procedures that apply to classes of transactions.

This work was integrated with our audit of the financial statements and evidence was also derived from the conduct ofthat[audit][to] the extent[it] supports the[regularity][conclusion.]

Use of our report

This report is made solely to the Corporation of The Northern College For Residential Adult Education Limited and the Secretary of State for Education acting through the ESFA in accordance with the terms of our engagement letter. Our work has been undertaken so that we might state to the Corporation of The Northern College For Residential Adult Education Limited and the Secretary of State for Education acting through the ESFA those matters we are required to state in a report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Corporation of The Northern College For Residential Adult Education Limited and the Secretary of State for Education acting through the ESFA for our work, for this report, or for the conclusion we have formed. REM WE_— Aydt3 LLP. RSM UK AUDIT LLP Chartered Accountants First Floor Two Humber Quays Wellington Street West Hull HU1 2BN Date:

a1 hr C2)

STRICTLY PRIVATE & CONFIDENTIAL

Audit findings report

Issued to:

The Northern College for Residential Adult Education

Year ended 31 July 2024

12 March 2025

Executive summary Key audit risk findings Qualitative aspects of accounting Recommendations on controls Appendix

3 4 11 12 14

Executive summary

Status and overview of the audit

This report summarises our key findings in connection with the audit of financial statements of The Northern College for Residential Adult Education Limited, and the regularity reporting in respect of the year ended 31 July 2024.

The scope of our work was communicated to you via our Audit Plan document. We believe that the audit approach adopted will provide the audit committee with the required confidence that a thorough and robust audit has been performed.

Our audit work is substantially complete subject to the outstanding matters listed below, and we anticipate issuing an unqualified audit opinion on the true and fairness of the College’s financial statements and an unmodified regularity conclusion.

Signed management representation letters
Update to the date of signing for post balance sheet events

Final materiality

Materiality has not changed since we presented our audit plan which was set at £134,000. We will report on misstatements exceeding our clearly trivial threshold of £6,730.

Unadjusted misstatements

Details of the unadjusted misstatement is included in the Appendix. The misstatement related to: ~~Se~~  Correction of overstated trade creditor balance. ~~ee~~  Unfunded LGPS liability costs reclassification. ~~Po~~  Government grant liability reclassification. ~~Be~~

Audit findings report | 3

Key audit risk findings

(See Appendix for risk description and planned work)

We have set out below details of those areas that we considered to be the key audit risks arising when we presented our audit plan.

----- Start of picture text -----
Our audit plan was communicated to you prior to the financial year end of the college and the completion of Audit risks summary
our planning procedures. No further significant risks were identified during the audit of the College that we consider should be brought to the attention of those charged with governance. A] Risk Risk identified
item
1 Management override of controls
3 Significant risks 2 Income recognition
X Ee Po
<
1
3 Going concern
2
4
4 Defined benefit pension scheme
5
Higher risks 5 Capital grant funding
Regularity Conclusion
In addition to the audit risks noted above, our findings in relation
to the regularity conclusion can be found on the following pages.
Magnitude of misstatement Other risks
----- End of picture text -----*

----- Start of picture text -----
Magnitude of misstatement
----- End of picture text -----

Likelihood of misstatement

= ISA 240 'The auditor’s responsibilities relating to Fraud in an audit of financial statements' identifies that there is a presumed fraud risk in relation to revenue recognition and management override of controls. As a result, these have been classified as significant risks.

Audit findings report | 4

Audit risks

Significant risk: Management Override of Controls

Procedures & Findings

We have tested the appropriateness of a sample of journal entries recorded in the general ledger and other adjustments made in the preparation of financial statements, tracing selected entries back to source documentation.

We have also reviewed significant accounting estimates and policies which could involve bias resulting in a material misstatement; and discussed the basis and business rationale for any significant non-routine or contentious transactions which came to our attention during the course of our audit.

No significant non-routine or potentially contentious transactions were identified during the course of our audit work.

No evidence of manual override of controls or bias have been identified.

Audit findings report | 5

Audit risks

Significant risk (in relation to apprenticeship income only – although nil 2023/24)

Procedures & Findings

We have reviewed the accounting treatment adopted in respect of each material grant funding stream, to determine whether income is recognised appropriately based on the underlying funding agreement/contract.

We have focused on learner eligibility and funding rates applied performing substantive tests of details and utilising PDSAT reports to further inform our risk assessment in respect of potential errors of material misstatement of the funding body income due to errors in the data reflected in the final ILR claim. As part of our response, we have used RSM’s funding body income specialists as part of the audit team.

We encouraged management to go through the process of running the PDSATS reports as part of completing their final claim.

We have conducted substantive procedures over the income recognised in the financial statements and reviewed the PDSAT / Funding Rule Monitoring reports.

We have reviewed the minutes and correspondence with the College funding bodies and noted no issues which need to be brought to your attention.

We have also reviewed the accounting policies which appear to be consistent and in line with the SORP. We consider that income has been accounted for appropriately in the financial statements.

Our testing has highlighted a data quality point. This is noted in the “recommendations on controls” section of this report. However, these points do not have an impact on College funding body income in the year ended 31 July 2024.

Our testing on the College funding body income has not identified any errors. The results of our work have been concluded with satisfactory results.

Audit findings report | 6

Audit risks

Significant risk Going Concern

Procedures & Findings

We have reviewed and challenged the Governor’s and management’s going concern assessment, including but not limited to consideration of the financial plans, budgets and forecasts prepared on behalf of the Governors. We have considered whether the forecast position and management’s sensitivity analysis, including the key underlying assumptions and stress testing performed, appear reasonable and whether a material uncertainty exists. As part of this we have considered supporting evidence provided by management and challenged where necessary including performing a review of student numbers.

We have reviewed all currently available correspondence with the FEC and the MCAs to understand and assess the actions that have or are being put in place and considered the implications for the audit report. We have held discussions with the chair of the board in regard to the longer-term viability of the College.

Based on the updated cashflow forecasts to 31 July 2027, the Governors concluded that the College’s financial statements be prepared on a going concern basis, and the College has sufficient funds to meet its liabilities as they fall due for a period of their assessment period being to the 31 July 2027.

The Governors noted while assessing the updated forecasts the existence of an uncertainty, which is disclosed in the financial statements. This uncertainty is due to changes beginning from 1 August 2024 as the funding changed from an uplift factor to a nightly rate, this resulted in a reduction in the level of residential funding. The DfE and WYCA have moved to funding the College through the Residential Access Fund as part of Learner Support. At the end of January 2025, SYMCA agreed they would follow the same methodology, however, have only committed to this for 2025/26.

As any likely expected shortfall in respect of SYMCA residential nightly funding rate can be covered entirely by cash balances held for the period under assessment it is therefore deemed this matter is not material to the going concern assessment.

We have concluded that there is no longer a material uncertainty in relation to the College’s adoption of the going concern basis of accounting. As a consequence of this, our audit report remains unmodified.

The disclosures presented within the College’s financial statements are appropriate and provide sufficient information about the basis of preparation of the financial statements.

Audit findings report | 7

Higher risk Capital Grants

Audit risks

Procedures & Findings

We have reviewed the accounting treatment adopted in respect of each material grant, determined whether funding is recognised appropriately based on the underlying funding agreement, contract, the Colleges accounting policy and FRS 102/F&HE SORP.

We have reviewed the accounting treatment adopted in respect of each material grant.

We can confirm these have been recognised appropriately based on the underlying funding agreement and contract and in accordance with the College group accounting policy and in accordance with FRS102 and F&HE SORP.

We have raised a reclassification adjustment to recognise the current element of capital grants within the financial statements. This remains unadjusted and is in our appendix of audit misstatements.

Audit findings report | 8

Audit risks

Higher risk Defined Benefit Pension

Procedures & Findings

We have review and evaluated management’s conclusion of whether an asset should be recognised in accordance with the scheme rules and whether it is appropriately measured and reviewed the key data and underlying assumptions used by the actuary to calculate the balance, to ensure that these appeared reasonable. We particularly focused on the discount rate and inflation (CPI) given the recent economic turmoil.

We have also reviewed the related disclosure in the financial statements to ensure that this is appropriate.

In respect of the Local Government Pension Scheme (LGPS) impact on the College’s financial statements, valuation has been prepared as at 31 July 2024 for the South Yorkshire Pension Fund of which the College is party to.

The valuation has been prepared taking account of current experiences of inflation and significant increases in discount rates. These factors along with other assumptions have had a significant impact on the actuarial valuation. This has resulted in the South Yorkshire Pension Fund being in an accounting surplus position. In line with financial reporting standard, the amount which should be recognised in the financial statements is lower of the surplus in the plan (being the value reflected in the FRS102 accounting valuation) and the actuarial valuation of the future service cost.

In respect of the South Yorkshire Pension Fund, management have performed an analysis of the asset ceiling which included considering both the future service cost and future employer contributions payable over the year to 31 July 2025. Management concluded, based on the actuarial calculation that due to the present value of employer contributions being in excess of the present value of the future service cost, the asset ceiling is £nil and therefore, no asset or liability has been recognised in the financial statements.

We have reviewed managements calculations and agree that the recognition of a £nil asset in respect of the South Yorkshire Pension Fund is appropriate and in line with the Financial Reporting Standard.

In respect of the LGPS scheme:

•The College has adopted standard assumptions which we have reviewed for reasonableness against market data and benchmarked against other Pension schemes in the sector and found no issues to report.

•The financial statements correctly present the movement of the LGPS asset in the year, appropriately disclosing amounts in the Statement of Comprehensive Income including the remeasurement of the ned defined benefit pension scheme.

In the draft financial statements presented for audit, management have accounted for the unfunded LGPS liability by netting off the costs against net interest income rather than accounting for this within other comprehensive income.

Audit findings report | 9

Regularity

Other audit risks

Procedures & Findings

This is the second period since the reclassification of colleges to the public sector on the 29 November 2022. The framework of authorities, being the rules which underlie regularity, relevant to FE colleges were expanded and consequently this expanded the scope of our work. The framework remains as the Accounting Officer letter and the Bite-size guided published by the ESFA. A College Financial Handbook has been published but it is not effective until 1 August 2024.

In the current year the full year will have been subject to the regularity framework and colleges will have been expected to refine and ensure all policies and procedures are compliant with the framework and have been embedded permanently into their system of internal controls and the culture within the organisation. In particular that consent requirements are now identified in advance and sought appropriately without reliance on retrospective consents.

This underlies the consideration required by the accounting officer in preparing and concluding on their Statement of Regularity, Propriety and Non-Compliance and the consideration thereof.

As these changes are still relatively new this still increases the areas where a material irregularity is likely to arise.

Our review to date has not identified any issues of non-compliance and as such we anticipate being able to issue an unmodified regularity conclusion.

Audit findings report | 10

Qualitative aspects of accounting

Management judgements and accounting estimates

The following areas are considered to be the principal management judgements and estimates. The graphic below visually represents the impact (lower or higher) on the financial statements of a change in management’s estimate. In overview, a reasonably possible change in estimate that has a low impact means that such a change will have limited impact on the financial statements.

Areas of judgement / estimate	Low impact	High impact
Assumptions for the defined benefit pension scheme
Useful economic life of tangible fixed assets

Audit findings report | 11

Recommendations on controls

We have set out below recommendations on internal controls which came to our attention during the course of our audit work. This does not constitute a comprehensive statement of all internal control matters or of all improvements which may be made and has addressed only those matters which have come to our attention as a result of the audit procedures performed. An audit is not designed to identify all matters that may be relevant to you and accordingly the audit does not ordinarily identify all such matters.

In addition, we also note below data quality points which in this instance do not impact on funding however under different circumstances may have an impact on funding.

Control Observation

Recommendations and response

Supplier Changes Review

Recommendations

We recommend management maintain this audit trail in future.

From our testing over supplier changes it was noted that whilst these checks were performed detailed evidence had not been maintained on a case by case basis.

Management response

----- Start of picture text -----
Control recommendation
Significant control
recommendation
xiim”
Assessment
key Other control recommendation
----- End of picture text -----*

An active file is now being maintained to enable a clear audit trail.

* = these represent a risk of material misstatement to the financial results

Audit findings report | 12

Recommendations on controls

In addition, we also note below data quality points which in this instance do not impact on funding however under different circumstances may have an impact on funding.

Data quality observation

Recommendations and response

Recommendations

ILR consistent with evidence pack

The provider should ensure that regular checks between the ILR and paperwork are conducted to ensure that the data held on the ILR is accurate.

Our testing identified the following issues:

SCRCA

Control recommendation Significant control recommendation xiim” Assessment key Other control recommendation*

One learner where the date of birth in the ILR did not agree to the paperwork.

Management Response

One learner where the home postcode on the ILR did not agree to the paperwork

Community Learning

Three learners where the home postcode on the ILR did not agree to the paperwork.

Whilst no funding is at risk the provider is returning inaccurate data to the funding agencies.

Checks are in place, however these have not been as regular as required due to high volumes of enrolments in Term 3 and a staffing vacancy within the team. A number of new exception reports have been put in place to help the team identify any data issues and the Head of MIS & ICT will ensure regular checks take place.

* = these represent a risk of material misstatement to the financial results

Audit findings report | 13

Appendix

Summary of unadjusted misstatements

A summary of the unadjusted misstatements identified during the course of our work is set out below, analysed between misstatements of fact and differences in judgement.

Audit findings report | 15

Financial statement disclosures

During the course of our audit, we reviewed the adequacy of the disclosures contained within the financial statements and their compliance with both relevant accounting standards and the requirements of the Companies Act 2006 and the Statement of Recommended Practice (SORP).

The following disclosure matters were brought to your attention and subsequently adjusted / not adjusted in the revised financial statements.

Unadjusted disclosures	Adjusted disclosures
Final amendments raised to pension disclosures including unfunded liability cost reclassification noted in our misstatements schedule. Removal of a disclosure in the notes to the financial statements within the LGPS section that is not required and enhancement of disclosures in respect of asset ceiling and the Virgin Media case and LGPS guarantee announced on 12 November 2024.
Narrative updates provided in first review of draft financial statements to management. Updates to the disclosures relating to going concern.

Audit findings report | 16

Other matters to be reported

Representations requested

In addition to those representation which we request on all audit assignments we will not be seeking specific representations (http://www.rsmuk.com/standard-representations).

Independence

In accordance with the International Standard on Auditing (UK) 260 “communication with those charged with governance”, there are no changes to the details of relationships between RSM UK Audit LLP including its related entities and persons in a position to influence the conduct or outcome of the audit and The Northern College for Residential Adult Education and its connected parties that may reasonably be thought to bear on our independence, integrity and objectivity and the related safeguards from those disclosed in the audit plan.

Audit findings report | 17

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Audit findings report

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vi Illlil Audit risk summary taken from the audit plan Jiitl 1114 Ip 11 ii

Audit risk summary

Risk	Description	Response
Management override of controls Systems of internal control are designed to mitigate inherent risks of error within the core control systems to an acceptable level. By nature, a management override or by-pass of controls cannot be eliminated by the implementation of controls and therefore as part of our audit we will perform additional tests of detail to address the risk. We have tested the appropriateness of a sample of journal entries recorded in the general ledger and other adjustments made in the preparation of the financial statements, tracing selected entries back to source documentation. We have reviewed significant accounting estimates and policies which could involve bias resulting in a material misstatement. We have discussed the basis and business rationale for any significant non-routine or contentious transactions which came to our attention during the course of our audit.
Income recognition Funding bodies grant income: ESFA, SYMCA, WYCA and Community Learning The College receives significant levels of grant funding. Income from each funding stream should be recognised in accordance with the college’s accounting policy and the Statement of Recommended Practice: Accounting for Further and Higher Education reflecting its entitlement under the underlying funding agreement as applicable. Specific areas for consideration are as set out below. We have assessed the risks which is principally a risk of overclaims of funding in the ILR which the college is not entitled to. The particular risks being: • Learners who are not eligible for funding • Learners who do not exist • Activity that did not take place • At the wrong funding rate There also risk of incomplete data points in the ILR, erroneous data and insufficient supporting evidence to support entitlement to funding for learner in accordance with the funding rules. We have reviewed the accounting treatment adopted in respect of each material grant funding stream, to determine whether income is recognised appropriately based on the underlying funding agreement/contract. We have focussed on learner eligibility and the level of funding claimed by performing substantive tests of details. We will also utilise PDSAT reports and the Funding and Rule Monitoring reports (FRM) to further inform our risk assessment in respect of potential material misstatement of the funding body income due to errors in the data reflected in the final ILR. As part of our response, we have used RSM’s Education and Skills Funding and Data specialists as part of the audit team. We have encouraged management to go through the process of running and reviewing the PDSATS reports, and FRM reports as part of their regular ILR claims.

Audit findings report | 20

Audit risk summary (continued)

Risk	Description	Response
Going concern	The Governors are responsible for assessing whether adopting the going	We have reviewed and challenged the Governor’s and management’s
	concern basis of accounting for the financial statements remains	going concern assessment, including but not limited to consideration of the
	appropriate for the foreseeable future. Consideration in this regard must be	financial plans, budgets and forecasts prepared on behalf of the
	given to a period of at least one year from the expected date of approval of	Governors. We have considered whether the forecast position and
	the financial statements.	management’s sensitivity analysis, including the key underlying
		assumptions and stress testing performed, appear reasonable and
	Our area of focus will focus will be ongoing compliance with the	whether a material uncertainty exists. As part of this we have considered
	requirements of the FEC and MCAs and will include a detailed review of all	supporting evidence provided by management and challenged where
	matters relating to the likely material uncertainties around residential	necessary including performing a review of student numbers.
	funding uplift and recruitment of learners.
		We have reviewed all currently available correspondence with the FEC
	It is essential that we have sufficient time to build such efforts into the	and the MCAs to understand and assess the actions that have or are
	performance of our audit engagement. It may be necessary for you to defer	being put in place and considered the implications for the audit report. We
	your reporting deadlines to ensure our quality audit is not compromised	have held discussions with the chair of the board in regard to the longer-
	and to allow management time to reassess any judgements and estimates	term viability of the College.
	as necessary.
Defined benefit pension scheme	The asset/liability that is required to be recognised under FRS 102 in	We have reviewed and evaluated:
	respect of the College’s share of the Local Government Pension Scheme	• management’s conclusion of whether an asset should be recognised in
	surplus/deficit is expected to be significant.	accordance with the scheme rules and whether it is appropriately
		measured
	Where the actuary’s accounting valuation of the College’s share of the	• the key data and underlying assumptions used by the actuary to
	Local Government Pension Scheme is a surplus the amount to be	calculate the balance, to determine whether these appear reasonable.
	recognised as an asset will require consideration of whether the college	We have particularly focused on the discount rate and inflation (CPI)
	can obtain future economic benefit as a result of an unconditional right to	given the ongoing economic pressures.
	reduced contributions or an unconditional right to a refund. Where it is
	determined that there is an unconditional right to reduced contributions,	We have also reviewed the related disclosure in the financial statements
	judgement will be needed to be made of whether a minimum funding	to determine whether this is appropriate.
	requirements should be included in the asset ceiling. Its measurement will
	depend on this outcome and may require further actuarial calculations.
	There is a risk that an asset should not be recognised or that its value is
	materially misstated.
	The underlying actuarial accounting valuation is based on college data and
	a number of key actuarial assumptions. There is a risk that the amount may
	be materially misstated where the data and/or assumptions used are not
Audit findings report	21	appropriate.

Audit risk summary (continued)

Risk	Description	Response
Capital grant funding The College receives significant levels of grant funding in relation to capital projects. Income from each grant should be recognised in accordance with the college’s accounting policy. We have reviewed the accounting treatment adopted in respect of each material grant, to determine whether funding is recognised appropriately based on the underlying funding agreement, contract, the Colleges accounting policy and FRS 102/F&HE SORP

Audit findings report | 22

Audit risk summary (continued)

Risk	Description	Response
Regularity - Reclassification to public sector This is the second period since the reclassification of colleges to the public sector on the 29 November 2022. The framework of authorities, being the rules which underlie regularity, relevant to FE colleges were expanded and consequently this expanded the scope of our work. The framework remains as the Accounting Officer letter and the Bite-size guided published by the ESFA. A College Financial Handbook has been published but it is not effective until 1 August 2024. In the current year the full year will have been subject to the regularity framework and colleges will have been expected to refine and ensure all policies and procedures are compliant with the framework and have been embedded permanently into their system of internal controls and the culture within the organisation. In particular that consent requirements are now identified in advance and sought appropriately without reliance on retrospective consents. This underlies the consideration required by the accounting officer in preparing and concluding on their Statement of Regularity, Propriety and Non- Compliance and the [governing body/corporation]’s consideration thereof. As these changes are still relatively new this still increases the areas where a material irregularity is likely to arise. We anticipate that there may have been timing issues in obtaining consent from the ESFA in the period both in terms of identifying issues in advance and obtaining timely consent. We have focused our work on the following areas that we expect to most likely to impact requiring consent in advance: Novel, contentious or repercussive This is a new concept and whilst the published guidance is clear that consent is required it can require judgment to determine if a particular transaction falls into this category as the guidance acknowledges it is not practical to give examples or provide guidance points. We have discussed this with management. Special severance payments We have considered whether any severance or redundancy payments made met the definition of ‘special severance’ payments and in particular consideration in respect of pay in lieu of notice and whether it is contractual. We have enquired of management, in conjunction with our review of the Self Assessment, where consents were requested and if there were any timing issues in obtaining those consents from the ESFA both in terms of identifying issues in advance and obtaining timely consent (including retrospective consent). We have considered any challenges or conditions in respect of consent requests and follow up accordingly We have discussed with the accounting officer and the chair the approach that has been taken for them to ensure the accuracy and completeness of the Statement of Regularity, Propriety and Non-Compliance and the disclosure of any relevant matters.

Audit findings report | 23

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The Audit Committee Annual Report to the Board of Governors 2023/24

Purpose of the Report

1.3. The report must include:

Section A - Audit Committee Opinion 2023/24

Section B - Introduction and Context

Section C - The Audit Committee in 2023/24

1. Terms of Reference

2. Meetings and Membership

3. Skills and Experience

4. Effectiveness

Section D – The work of the Audit Committee in 2023/24

6. Internal Audit

7. Appointment and Oversight of the Financial Statement Auditors

8. Monitoring the Implementation of Recommendations

9. Risk Management and Assurance

10. Fraud, Irregularity and Whistleblowing

11. Closed Session with Auditors

12. Health and Safety

13. Further Education Commissioner (FEC) Intervention and Supervised Status

17. The Internal Audit 2022/23

Section F – Financial Statements Audit

18. Overview

Financial Statements Audit 2022/23

Financial Statements Audit 2023/24

Improper Revenue Recognition – AEB and Community Learning 2023/24

Regularity Self-Assessment 2023/24

Additional Services Provided by the External Auditor

Section G –Significant Issues

19. Overview

FEC Intervention

Changes to Residential Funding Rules

Terms of Reference - The Audit Committee

1 Membership

Audit Committee Performance against 2023/24 PIs

Order of Business

The Audit Committee Self-Assessment Checklist 2023/24

Committee and Membership Yes No Comments/Actions Required

Company information

Company information

Index to the financial statements

Report of the members of the Board of Governors incorporating the Operating and Financial Review and Strategic Report

Objectives and Strategy

The College

Report of the members of the Board of Governors incorporating the Operating and Financial Review and Strategic Report

The College (continued)

The Company

Mission and Values

The College's values are:

Implementation of Our 2023-2026 Strategic Plan

Strategic Context

Report of the members of the Board of Governors incorporating the Operating and Financial Review and Strategic Report

Strategic Context (continued)

Current and future development and performance

Curriculum Developments

Report of the members of the Board of Governors incorporating the Operating and Financial Review and Strategic Report

Curriculum content

Resources

Report of the members of the Board of Governors incorporating the Operating and Financial Review and Strategic Report

Physical

People

Students

Reputation

Stakeholders

Report of the members of the Board of Governors incorporating the Operating and Financial Review and Strategic Report

Stakeholders (continued)

Financial

Following the ONS reclassification any borrowings now require DfE consent.

Charitable status and public benefit

Report of the members of the Board of Governors incorporating the Operating and Financial Review and Strategic Report

Transparency arrangements

Development and Performance

Financial results

Cash Flows and liquidity

Report of the members of the Board of Governors incorporating the Operating and Financial Review and Strategic Report

Financial Objectives

The College has set the following financial objectives:

Performance Indicators

Treasury policies and objectives

Reserves policy required