Flr¢roft College ofAdult Educ4tlon Report and Financial Statements Year Ended 31 July 2020 Charity registration number.. 511KJ33
Key Management Personnel, Board of Governors and Professional advisers Key mgnagement personnel Key management personn¢l w¢r¢ r¢pru¢nt¢d by the following in 2019120: Mel Lenehan Michael Conway Jones Princlpal and CEO. Aeeounting offietr Vice Principal Board of Governors A full list of Governor3 is given on pgge 16 of these financial slatemenls. Prln¢lp•l nd Regls¢ered Offl¢ 1018 Bristol Road. Selly Oak. Birniingham B29 6LH Profeulonal &dvlwrs FlnanclAI S¢8tements Regularlty Audltor5 Buzzacott LLP 130 Wood Street I)ndon EC2V 6DL Internal Audltors RSM Si Philips Point Temple Row Birmingham B2 SAF B4nlLers Lloyds Bank pl University of Birniin8ham 142 Edgb&ston Park Road Edgbaston Bimingham B15 2TY Investment Management Smith and Williamson 9 Colmore Row Blrmingham B3 2BJ
FIRCROFT COLLEGE OF ADULT EDUCATIOIY Contents Contents P*%e: Report of the Governing Body 15 Statement of Corporate Governance and Iniernal Control 22 Goveming Body's statement on the College'3 regulatory. propri¢ty and Complian with Funding body lerms and conditions of funding 23 Statement of Responsibilities of the Governing Body Independent Auditor's Report to the Governing Body of Fir¢roft College of Adult Education 27 Reportlng Aca)untant's Report on Regularity to the Governing Body of Fircroft College of Adult Education and the Secretary of Stale for Education acting through the Department for Education 29 Statement of Comprehensive Income and Expenditure 30 College Statement of Changes in Rcseryes 31 Balance Sheet as ai 31 July 32 Ststement of Cash Flows 33 Notes to th¢ Accounts
FIRcR0 COLLEGE OF ADULT EDUCATION rt of the Governin Bod NATURE, OBJEcfivES AND STRATEGIES The members of the Governing Body present their rewirt and the audited financial staiements for ihc year ended 31 July 2020. Legil s¢atus Fircroft College was initially set up in 1909 and theft re-estsblished as a charitable trt on 10 Sept¢mEer 1979, Charity number 510033, and is a dwigned inslilulion under the Further and Higher Education Art 1992 for the purpose of conducting residential &Iult education. Unlike mainstream Further Education colleges. Fircroft College is regulated by tIK Charity Commission. It ha5 no subsidiary undertakings. The College is also subject to regulation from other bodies Such as DfE. and the Education and Skill$ Funding Agency (ESFA) Publi¢ Benefit Test The members of the Governing Body. who are In of the charity. are disclosed on page 15. In setting and reviewing the College's strategic objectives. the Governing Body has had due regard for the Charity Commission's guidance on public benefit and particularly upon its supplementary guidance on the advancement of education. The guidance sets out the requirement that all organisations wishing to recognixd as charities must d¢monstrat< explicitly. that their aims are for the public ier11. The student statistics on pag¢ 4 indicate the extrnt to which the Coll¢g¢ its own 'sla1 justice" mission. College obJe¢ts #nd mlssion As set out in its Trust De the College's objects are "for ¢he public benefil, provide and promole Ékknlt. fvrther and higher educaiion IncldIng. wiihout limiration, Iheprovuion ofresidentit71 education" The College's ¢urrenl mission is To womote socialjuslice byprowdin8 adulis with 17n excellent leorning ¢nvironmeniforper50nal. professional andpolilical development.. V¥lues The Colleg¢ ha8 confirnled its valu¢s as: Insplrlng and transforJnaeive- W¢ strive to stimulate and enthuse individuals to develop their knowledge. confidence and skills to thange th¢ir liv&8 and communiti¢s for the better and for everyone to fulfil their FK)tential. Incluslve and diverse- We actively embra the uniqueness of ail individual& instil a cultur¢ of dignity and respect and ¢elebrate difference. Supportive- We provide an environment which Ikvelops intynden¢e whi15t recogDisin8 and rcsponding lo individua] needs. an environment in whi¢h all flourish. Coll&bor*tlYe- We are a community based on cfroFtrntion that shares knowledge and skills. We work in partnttship whcrcvw p(Issible to levrage our uniquenas.
FIRCROFT COLLEGE OF ADVLT EDUCATION Report of tbe GDvernlnE Body (continud) NATUR4 01vEs AND sfRATEGIES (¢ontinued) Values (conlinued) Develop and grow- As a l¢arning organisation we are c4Thmitted and open to continually improving what we do and how we do it so we can evolv¢ and resp)nd to a fast changing world. Impl¢mentation of Strategie plan Followin8 a strategic review in 2018, the College has a five year strdtegy and implementation plan which focuses on ensuring the long tem) susttinability of the Coll¢g¢. This builds UFrf)n the Su¢5S of its previous strategy and 1$ embedd¢d across the College in rn]s of its ddivery. 2019120 was the first year of the five year strategy. The College's strale Cjoals are to: l. Provide an excellent educgtion environment f(Y 011 2. Ensure the long tem) susiain8bility of the College 3. Develop th¢ College's exlerna] profile aThJ build on its repuMion Impacts of Covid-19 on strategle pla Due to th¢ d¢epening Covid-19 pgnd¢mi¢. the College temporarily closed for face-to face learning on the 17 March 2020 moving its teaching provision on-line wherever tM)ssible and practical. Back office operations also moved to remote working arrang¢menL8 at this time, and have continued to work su¢¢essfvlly for the r¢mainder of the financial year. A specific Covid-19 workin8 group wa5 established to examine and determine a]1 aspects of the College's response lo the pandemic {health & safety. risk aSSmen[ operaiional ¢t¢). and reports regularly to the Governing Body on progres5. cornpliance and initiatives. The College hL8 strictly observed the continuin8 Governmenl guidance throughout, and has continu courses to ¢ompl¢tion wherever F}sSIbIL li has also maintained coniact with students to finalise work or lo prepare than for a rcturn to learnin& Consequently. the College has be unable to deliver a full Fyograme of Lxjufses (especially residentially basd wurses) during 2019120. Ji has however met the revised delivery tsrg&s set by ESFA and WMCA in T¢conciliation of their respective fundin8 grants. R¢sidential education is a central tenet of Fircrotl and rana1 at th¢ heart of ihe Strate&v. The College re- opened in sternber 2020 artd will ntinue to deliver to this business model wherever possible. within Government r¢striclions as they vary relatlve to the threats rnised by the pandemic. Howev¢r the restriction of residenlial wovision may impx uwn the Colleges inrne flows during 2020121. The ex¢¢nt and imimct will depNid¢nl upon the funding arrdngements (or any varI10n$ to Ih¢m) as defined by ESFA and WMCA. Neither ESFA nor WMCA have issued funding guidance relot¢d to Covid-19 related disruption during 2020r21 fir1¢181 year. Early indications show a reluctance of students to enrol for the short non-residential COUTses planned in October. but this is against significant local coron&virns wntrols being introduced by Government in the Bimiingham. Solihull and Sandwell areas of greater Birniingham in September. The to HE ¢ours¢s have recrnited well and the College will k offering an additional wogrdmme in Health in 20r21. Further rIdlia1 courses will kgin in late OdoiKr 2020.
FIRCROFT COLLEGE OF ADULT EDUCATION Report ofthe Governing Body (continued) CURRENT AND FUTURE DEVELOPMENT AND PERFORMANCE Siudent numb¢ The College had 1.199 ESFA funded enrolments against the 2018119 figure of1,762. Consequently. the college fell short of its original funding allocation on its ASB ailoution (£355,836 82.10/0) and met its grant allo¢ation on Community allocaiion {£1.067,337 1000/0) whilst b¢ing below Advonced Learn¢r Loans Bursary (£316.490 97.8%). This perfomionce was adversely impacted by the coronavirus pandemic and associated Gov¢rnm¢nl lockdown restrictions. However in March 2020. ESFA revised Ihe contractual perfom)an¢e targets with further clarificaiions issued in August 2020. Thi5 reduced the perfornianee targets to between 68V/•- 99.9g/ofor AEB contracts. The ALL Bursary perfornian¢e is withln th¢ ESFA 30h tolerance. and consequently there will not be any adverse financial impact for the Coll¢8e. In line with its mission. Fircroft Coll¢g¢ re¢ruits high proportions of learners who have few educational qualifications (defined as none or at level l), on means tested benefits or attraci additional funding (disadvontsg¢d uplift) by nature of the deprived grea in which they live or their individual ¢iUM51anc¢s {e.g. mental healih, substance abuse or ¢x-off¢nd¢r) . Totsl ESFA funded leamers Leamers wth few educatlonal ualifKalions LeameryJ claimlng beneflts Access cours8 Short courses- Adu Sk1115 Short courses Community Learnin Total 19 286 894 11 190 759 88 458 547 960
FIRCROFT COLLEGE OF ADULT EDUCATION Report of the Governln8 Body (conlinued) CURRENT AND FuRE DEVELOPMENT AND PERFORMANCE (continu) Student achlevements The college runs accredited and unaccredited courses ranging from I day to 30 weeks and from Entry 3 10 Level 3. At evwy level our results ar¢ significantly olx)ve the lal¢st n8lional Qualificalion A¢hieYemenl Rates: 2018119 P955 Rate Benchmarkin National QAR 18119 Provislon Level Retention Rate Achievement Rate Entry Level 3 Level I Level 2 Level 3 98.0•/0 97.0° 96.511/0 98.0°/ 99.90/* 97.70/0 100.OO/• 87.90/0 Currl¢ulum Developments The College secured significant growth in 2019120 from Wesi Midlands Combined Authority. This enabled us to run a range of new programmes.. Microsoft and Adobe associate qualificafions. a Free Thinking pro8ramme for people new io the UK who had experienced significant trauma. a Level 2 leading io a Level 3 Award in Leadership and Ma[gement. a 2 Pre-Ac¢ess course in Health leading to a 2 Access urse in Hh for 2020r21. Ofsted Inspe¢¢lon The College had a short inspe¢tion in October 2017 and remains Good. We successfully complet¢d the 4 Next Step5 that inspector5 recornmended. in relation to Ac¢ess, observations, learner goals and data. The college has been self-assessing against new Education Inspection Framework sin¢e il was introduced in sePtemr 2019. Perform•n¢¢ IndleAtors In the most re¢¢nt National Learner Salisfa¢tion Survey. the college cam¢ top in the W¢sl Midlands wilh 960/0 of learners saying they would recommend us lo family and friends, With 19 other colleges in the West Midland$ we commissioned J2 ReSeah to obtain progression dats from l&%t year's students. The Oh progre55ing to employment (250h) was ¢omparable with the other colleges, and a scores at Fircmft were higher in relation to social skills, k¢eping well, being adive in society, volunteering and workin8 independently. The College is required lo complete the annual Finance Re¢ord for ihe ESFA, The Finance Record produces a financial health grading (as defin by Ihe ESFA), and ihe College grading for19120 is 'Outstanding"
FIRCROFT COLLEGE OF ADULT EDUCATION Report of the GovernlDg Body (continued) Covld-19 When the college closgj in March, we moved all our qualifications on-line and supported slud¢nts to achieve. We rdng all students and conlinu¢d lo ring the most vulnerdble students every week. We estsblished that 400/0 of our students were digitally excluded. so we ran a Wellbein£ ¢ourse by sending out activities and recording a video every fortnight. With the Red Cross and other partner5 we created alld distributed 1800 le8rning packs for families in t¢mpordry a¢commodation during lockdown. Future prospeets The College received notifi¢ation in Au8USt 2020 from the ESFA that they intend to undertake a targeied as$urance review of residential and leamer support funding claimed by the College in 2018119 and 2019120. This is in addition to the review of residential fundinB policy which is also iaking plac¢ by the DIE which will result in a new FE residential funding policy for 2021122. Note 19 on Page 47 identifies the initial feedback from th¢ ESFA of the assurance review. The College. in its planning for 2020121 is adhering to the funding rules which have now been clarifi¢d by l)oth the DfE and the ESFA. The College has incurred a reduction in the ALL bursary allocation for ihe year &s a direct result of the ESFA applying their inteFpretation of the ¢urr¢ni funding rules. To mitigate, an addiiional access programme in Health is planned and is curr¢ntly b¢ing recruited to. Student support funding and bursaries have been ¢ompletely updated and we have embedded capturÈng the need for students to be residents on all ¢ourses. An in¢re&s¢ in our loons all(tIon and bursary wtll be sought in October 2020. Covid-19 The College has planned o full programme of ¢OUTses in order to m¢el our ESFA and WMCA contract targets. Significant changes have been made to both the curriculum plan and the College estat¢ to ensure the college is Covid safe.
FIRcR0 COLLEGE OF ADULT EDUCATION Report of th¢ Governing Body (continued) FINANCIAL POSITION Fin8ncial results including fjnincial obJe¢tives The College reports a total loss on all operations of £(92.445) (2018119 - £110.887 surplus). Operationally the College reported a strong £246,881 surplus before investment gains and losse4 refle¢fing the benefits of additionallgTOWth funding ¢ontra¢ts delivered during the year. bul suffered a reduction in the valu¢ of its inv¢5tmenl portfolio following market volatility since the start ofthe coronavirus partdemic. The College continues to trer1t from significant levels of investment incom& However, the valuation of its inveslment portfolio fell by £(339,326) (9.10/•) due to changes in market valu4 of which 4257.925) is unrealised loss on valuation. The total omount recognised in th¢ Statement of Compreh¢nsive Income relating to investments is q206.403) (£227.450 in 2018119). Covid-19 In response to Gov¢rnm¢nt lockdown measur¢s. the College closed for f8¢e-tO-face delivery during March 2020. and conlinued delivery remotely wherever possibl¢. and supporting existing learners to su¢wsfully complete their courseslqualifications. Additionally. contact has been maintained with learners to both help provide support during th¢ IkdOWn and to provide guidance and assistance prior to their return to learning. The ESFA provided guidance in September 2020 relating to revised reconciliation arrangements for funding ntrncts. The College h&8 assessed its own delivery response and considers that it will meet the required ESFA crii¢rii and that there will be no requiremeni for clawback of income due to underperfornian¢¢. Investment income met bvdget targets despit¢ declarations by a significant numEtr of large UK COTporate5 of suspen5ionlreduction of dividend payments after March 2020. The College's invesiment managers have advised rebjrns may fail by 130h over a full year (c q17k)) across 2020f21. Conferencing and lettings in¢om¢s have been n¢8atively impa¢ied during 2019120 by c. £(52)k due to both lothlown and other Covid- 19 relat¢d restrictions. Cash flow h&8 been carefully managed during 2019120, and ban¢¢$ increased by £140k over the year whilst also funding £280k of capitsl additions from free cash flow. The College h&s not needed to seek SUprt from external sources or from releasing funds from its investments, and is free from borrowings. The financial ob)tiveS set by the Governing Body and their a¢hievemenl are set below: Objeetives Achievedg C&sh day$ (including short term investments) in excess of 25 Current ratio in excess of1.5 Reserves moTe than 2 months re costs Surplus for the ye4r on core activitie5 in excess of £20,000 150/o- 250/0 of income to be non-governmental No more than 71Ph of inwme to be payroll related Genernte ush inflow from operating activities Yes Yes
FIRCROFf COLLEGE OF ADULT EDUCATION Rtport of the Governing Body {wntinU) FINANCIAL POSITION (continued) Reserves Poliey Th¢ College has &cumulat¢d unrestri¢t¢d revenue Teserves of £5.683,152 which includes £610,135 for the re¢ognition of non-government grants under th¢ Accounting Standud FRS 102 and is therefore not available for distribution. but to offset future depreciation ¢harg¢s. It also in¢lud¢s £565J56 of investment revaluation reserves and £1.069.150 of designated reserves whose use ha5 E¢en earniarked by th¢ Governing Body - namely £341J86 for strat¢EiC pufFJses and £95.012 for student suppx)rt and £631752 for wital development purw)ses. In recent times the Coll¢ge h&% maintained sutTicient contingew funding to offset any r&Juctions in l¢vel$ of government fiujding. As part of the straiegic revtew being undertaken. including eva]uation of likely fijture funding levels. Fir¢roft will deiennine the level of reserves identified by the Governing Body as being appropriate for th¢ College. This will develop a clear Reserves Policy With reasons srat¢d for holding reserves. how they will k built up maintain. The Coll¢ge will revi¢w its level of Te5erves its policy on an annual basts. Capitsl base a•d planned mainteTrant¢ The College has a long lease int¢r¢5t in the Bristol Road proFfrty which to 2055, which include5 the reyn5ibility for the maintenance of th¢ buildin 8nd gn)unds. Con5¢quenily 4 planned mainl¢nan¢e programme was develoFd by the Colle8e in 2009. Thts progrdmme w&% revi¢wed and uExlated in 2016 to infomi future maintenance requirements. Whilst no sAgnificant items wer¢ id¢ntifi¢d. work to improve a number of smaller items Is underway. Durillg 2019f20 the Coll¢g¢ d¢livu¢d a number of impjrtant (yitsl infrastrre proj&xs. These have irKluded the renovation of th¢ Primrose Hill accommodation buildin& together with other renovation work to George Breeze Hall and the kitchens to include Covid-19 cornpliant work spaces. The College has fijnded a total capital expenditure of £279,523 from its own resou. Treasury policies and objectives Treasury management is the management of the Colle8¢'s cash flow% its bankin8 transactions: the effectiv¢ control of the risks associated with those activities: and the pursuit of optimum perforniance consistent with those risks. The College has a separate treasury manag¢ment rrt)li¢y in place and under that FK)licy any E)rrowings must iK authorise4J by the College's Governing Body. CA$b flows alld liquldlty The College h&$ seen a inflow in 2019r20 of £139.605 (2018119: ouiflow of £150.203) with the College Eenefiting from additional contrn¢tua] work from the ESFA and we Midlands Combined Authority (WMCA). At 31° July 2020 the College h&1 £0.6m of short t¢rni investMeneaSh deposits with a further £3.4m of listed inv¢stm¢nt Th¢ College has no borrowings. li manages its Surplus d¢sits to awre the appropriate balance between interest generation and working capital. 10
FIRcR0 COLLEGE OF ADULT EDUCATION Report of the Governlng Body (Continued) FINANCIAL POSITION (conlinued) Trad¢ unlon f#elllty tlme The College does meet the criteria for publishing inforniation un* the Trade Union (F&ility Time Publication Requirernents) Regulations 2017 on facility tim¢ arrangements for trade union officials at th¢ ¢oll¢ge. Payment performanee The Laie Payment of Commercial D¢bts (InrereM) Act 1998. in ihe abs¢n¢e of agr¢ement to the contrary. requires organisations to pay invoices 30 days after either. the customer gets the invoice, or the delivery of th¢ goods or $ice {if this is later). During the accounting period l August 2019 to 31 July 2020, the College paid 98 per cent of its invoices within 30 days. The College in¢urr¢d no interest charges in respect of Ie payment for this period. RESOURCES The Colleg¢ has various resources that it Can deploy in pursuit of its strategic objec¢ive5. Tangibl¢ resour¢¢s include the buildin8$ at the Bristol Road site, whieh are on a long lease (to 2055) from Bourneville Villag¢ Trusi. Financial- The College h&s £5.7m of net assets, with a turnover of £2.8m. People - The College employs 72 people (¢xpress¢d as average headcount basis). of whom 17 are teaching stsff. Repulolion - The College has a very good reputetir)n lollY and nationally. Maintaining a quality brand is essential for the College's su¢ce5s at attracting students and building external relationships. PRINCIPAL RISKS AND UNCERTAINfiES GovemoTS agreed a new Risk Management Policy in Morch 2018. The College Risk Register eL)ntinues to follow this mdhodology. The key risk elements at the close of 2019120 are: Ability to deliver residential courses to the level required to meet our ESFA and WMCA contracts due to Covid19 restrictions Possibility of second wave and local or national lockdowns Possibility of lower numbers of adult leamers enrolling Decline in financial health score due to audit and clawback decisions for 20121 Staff wellne55 and well-being due to Covid19 irnpacting on d¢livery Residential funding review resulting in a decline in funding levels for 2021122. Increasing focus of Adult Education Budget on job outcomes
FIRCROFTCOLLEGE OF ADULT EDUCATION Report of the Governing Body (conlinued) STAKEHOLDER RELATIONSHIPS In line with oth¢r colleges and with universities, Fircroft College has many stak¢holders. These include: Students Funding Bodies including the ESFA as our main funder and the West Midlands Combined Authority (WMCA) as our future funder under devolution of Adult Education Budget {AEB) FE Commissioner Staff. Governors and volunteers The voluntary sector- lo¢ally? regionally and nationally- in¢luding as employers Community gmups- locally and r¢giona]ly Other FE and HE institutions particularly the oiher Long Terni Residential Colleges and other Institutes of Adult Leaming Birmingham and oiher LEAS through th¢ Adult and Communily L£arning Alliance FE Colleges through the Furth¢r Educational Skills and Productivity Group Employers. The College r¢cogrtise$ ihe importance of these relationships and engages in regular communication with them through social medi4 regular meetings and by participating in relevant networksj joint funding bids. projects and 5p¢cia] initiatives. Staff and student involvement Employee engagement, conSul10n and communication is a fundam¢nt8] part of the ¢UTrent College obj¢¢tiv¢s. An Employee Voice Team is in pla¢¢. and me¢ts regularly. that is made up of 2 r¢pr¢5¢ntative5 from each area of the college. 2 employe¢ r¢pr¢sentatives. the union representative and HR. This foruTn is a two way m¢chanism for employees and management to collaborate on changes and projects that affect working life at the College. The Coll¢g¢ produ$ a monthly newsletter that aids communication and ine0$eS engagement. Staff are invited to t¢mly bri¢fings that cover slTategy> news and issues. Each academic year two stud¢nt governors are el¢rted to serve as members of th¢ College's Governing Body. and they join two staff governors who are elected for a thr¢¢ y¢ar tem). The Colleg¢ has a Sludent Engagement Strdtegy. Sdents are invited lo give feedback to th¢ College through learner satisfaction surveys, feedback fornis and regular focus groups and fo This year the College has also established a group of Sdent champions. In March 2019 the Ctslle£e was re•accredited wilh the Matrix kite mark in relation to the Inforniation, Advice and Guidance provided lo students and staff. Equality, Divenity and Inclusion The College is MMitted to ensuring Equality. Diversity and Inclusion for all who leam. work and us¢ ihe College's facilities. We respect and value positively differences and will not tolerate any form of behaviour or activity that discriminates without proper justification on the grounds of gender. rdce. disability. religious or cultural belief, sexual orientation, rnarit status. family re5FMJnsibilitie4 age, unrelated criminal nvi¢tions and economic status. 12
FIRcR0 COLLEGE OF ADULT EDUCATION Report of the Governlng Body (continued) STAKEHOLDER RELATIONSHIPS (continued) Equality* Diverslty and Inclusion (continued) The College seeks to create a l¢arning community which reflects and celebrates the diverse community at large ixcause it values th¢ individual contributions of a]]. All leamer5, governors, Staff. volunteers and visitot3 will be ireated with respect and dignity and will be provided with a r¢sidential learning environment free from unlawful dis¢Timination. harassment or viclimisation. Within the framework of the law and best employment and educational practic< the College is committed lo achi¢ving and maintaining this envirorment, In 2012, Fir¢roft became the first College to achieve a gold award under the UK Equality and Diversity Award eme and has b¢¢n re-accredited with this award in both 2014, 2016 and 2018. The College publishes lis Equality. Diversity and Inclusion policy on its website. The College holds focus groups involving learners and staff who dis¢uss solution5 for issues affecting the Coll¢g¢ and are involved in making recommendlOnS and setting targets. Th¢ College has an EDI team with repres¢ntatives from across the College are&s. There is also a designated staff member as an Equality Champion. The Operations Committee rec¢iveg and discusses repo@ Mak recommendations and provides inforn)ation to the Governing Body. Fircroft College is a Disability Confident employer and h&s Committ to the principles and objectives of the Disability Confident scherne. The College considers all employmeni application5 from disabled persons. bearing in mind ihe aptitudes of the individuals concerned. and guarantees an interview to any disabled applicant who meets ihe essential criteria for the posl. Where an existing ¢mployee becomes disabled, every effort is made to ensure that employment with the College continues. The College's wlicy is to provide trainin& career development and opportunities for promotion that are, &s far as possible, identica] io thos¢ for other rnembers of staff. This is also reflected in the college policies as they are updated. The Colleg¢ is passionate about providing staff and governors ( needed) with outstanding training covering issues of ¢quality. div¢rsity and inclusion. Di58bllity statement The College seeks to achi¢ve the obje¢tives srt down in the Disability Discrimination Act 1995 as amended by the Special Edu¢ation Needs and Disability Acts 2001 and 2005 and Equality Act 2010. The College takes account of disability a¢$5 in ail rolling maintenance plans and new build initiatives. There are several ground floor bedrooms adapled to enable stud¢nls with disabililies to engage in residential learning. Access in and around the building h&s also been improved. b) Any appeals against a decision not to offer a place to a student are deali with under ihe complaints policy and procedure. Thes¢ are monitored for proiected characteristics. The College has an ongoing programme of staff development to ¢nsure that a]1 staff are aware of the issue5 and need$ of people with learning difficultie5 andlor disabiliti¢s. d) Staff members are availabl¢ lo advise and make arrangemenls for any student or member of staff who require any additional support including the purchase of specialist equipment or support staff. 13
FIRcR0 COLLEGE OF ADULT EDUCATION Report of the Governing Body (contlliuol) Covld-19 The Collegc has a wide range of stakeholders, many fromthe local community, and all ofwhom have been impacted to varying degrees to the ¢oronaviruspandemi¢. The College has re•opened in September 2 020 and every effort is being made to rc-gagewith stakeholder4 especlallywith students and referral partner& Disclosure of Information to auditor8 The governots whohe1doI£x atthe date of approval ofthis reportconfirm that, so far as they are each aware, there is no relevant audit inforn]ationofwhich the College'saudilorsare Unawa andeach govemor has tsken all the steps thatheor she ought to have tskento be aware of aDyrelevdnt audit infonnation and to establish that the College's auditor8ar¢ aware of that infollnation. Approvel by order ofthemembers of the Gov¢mingBodyon 27 January 2021 and signed onits behalfby: Dr C Twner Chatr 14
FIRCROFT COLLEGE OF ADULT EDUCATION Statement of Co rate Gov¢rnD¢¢ 4nd IDternal Cotttrol Corpornt¢ G¢)v¢rnaDee The following statement is provided to enable reader5 of the annual reFQrt and accounts of ihe College to obtain a b¢tt¢r understanding of its governance and legal sclUTe. This statement covers the period from I August 2019 to 31 July 2020 and up to the dat¢ of approval of the Annual Report and Financial Statements. The College endeavours to conduct its business: in a¢¢ordan¢e with the $¢ven principl&% identifi1 by the Committe¢ on Standards in Public Life (selflessness, integrity, objectivity. a¢countsbility. OFenne5s, honesty and leader5hip)' ii. in accordance wilh the guidan(% to colleges from the Association of Colleges in The Code of Gocd Governance for English Colleg¢s (he FouThJation Code.?" and iii. having due regard to the UK Corpjrate Governa¢ Code (he Cod) insofar as it is applicable to the fvrth¢r eilucation sector. The College is commttted to exhibiting best practice in all asFrtts of rporate governan¢e and in particular th¢ Coll¢ge h&$ adopi¢d and complied wÉth the Foundation Code. We do not comply wilh the UK Corporate Governance Code. However. w¢ have reportoj on our Corporate Governance arrangements by drdwing upon best prdctice available, including those &stCts of the UK corte Governance Code we consider to be relevant to Ihe fvrfher eduution sector and ixsl pr&tice. In the opinion of the Gov¢rning Bodyy the College g)mplies wtth the provisions of the Code in so far as they apply to ihe Furth¢r Education sector. and it has complied throughout the year ended 31 July 2020. The Goyerning Body recognises thaL a b(dy entrued with Erfjth public and private funds, it ha8 a particular duty to obs¢rve the highest standards of ¢orFK)raie governan at all times. Ln carrying out its responsibilitie& it take5 full account of The Code of Gov¢rnanc£ for English College5 issued by the Association of Colleges in March 2015. which it fOrnly &lopted in July 2015. As a registered Charity, the Governors. are also the Tn¢¢$ for the purpose5 of the Charities Act 2011. confirn] that they have had due regard for the Charity Commission's guidancz on public E¢nefit and that th¢ required ements oppear els¢wher¢ in these financial stst¢ments. 15
FIRcR0 COLLEGE OF ADULT EDUCATION Statemenl of Cor OT¢e Gov¢rnTrftce mnd Internil Control contlnuod Tht Governlng Body The governors who sery¢d on the Governin8 Body (GB) during the ye8r 8nd up to the date of signature of Ihis report gre sel out below: Nme Date of Appolntment Tem of Dgt¢ of resiznatlott Ctegory of A)eMber5hip Attendlnee Commit¢e¢5 GB Other Served Dr C Turner (Chair) July 2016 Reakyiirrted July2019 Marth2016 Chair of G ndo Egr¥JR E.O.SS Ms M Lenehan (PTinCip) L Lucas (Vice Ch&ir) Ex-orri¢io EXtTl¢ July 2001 Rtratv)iThted July 2014 July 2017 3 )tars March 2020 214 Awndss (Chair) B Kehrer oc10r 2 Re-appointgj July2015 July2018 0¢r 2018 3 )raTS July 2QO Voluntsry sgaor 316 AandG E Htithrt 2019 MrA M Chi5hu July2012 Vo]untsry sector 415 E,SS dR Re-OPP)inte)J July 2015 Ju5y 2018 Rev J Mulli5 July 2017 Re.apwtttied July 2020 March 2015 ReaNlnted July2018 Ocl 2017 Cathwy Family 515 E. SS and R {Chair) Mr T P¢ttitt Voluntsrysector 515 E Chair. OandR Ms N Chauhan Swff govemc¢ 719 MT J Darlin8 (ViceQh8ir Since Mah July 2017 R¢4kv)1ed July 2020 919 7n A (Char) andG 2020) Ms R w¢dk Ort 2017 GTiffJths Arnarno Inai Parveen Dad Pamiinder Gar¢ha Vivi¢nn¢ Shopley De¢ 2019 Adeeb Basharoi MaKh 220 Rashid Mawh 20 Oct 2019 Oci2019 Juty 2019 May 2020 May 2020 Student 8overrw Studeni govem)r CIH>Med Y6 iffj ss ss Ir2 Y3 C¢TroOed Sthff govern 3 yean Seo 2ff20 3 Years 315 Committee key A- Audi¢ C{milIe¢ E- Education Commi¢tee G=Govemance Commiltee O= OF¢rauons Commiitee R- Remunerion CLKnmitt¢¢ SS- Student Servitts Commiitee 16
FIRCROFT COLLEGE OF ADULT EDUCATION Statement of Cor orate GDvernance Inl¢rnal Control contlnued The Governing Body (continu¢d) Attendance inforniation shows Governing Body attendance and then Committee allendance durin8 the period to 29 July 2020 (last rneeling of 201912020). li 1$ th¢ Governing Body's responsibility lo brin8 indepcndenl jud8emenl to bear on issues of strategy. perfomlance, resourtts and standards of eondu¢t. The Governing Body is provided wilh regular and tim¢ly inforniation on the overall financial perforniance of ihe College together with other infomiation such &s performance against funding targets, proposed capital expenditure. quality matters and personnel related matteTS such as healih and safety and environmental issues. The Governing Body meet5 four time5 each y¢ar. The Governing Body eonducls its business through a number of rA)mrnittees. In July 2018, a new committee 5tru¢ture was approved and the cornmittees ¢ff¢ctiv¢ from the year 201812019 are Education Committee, Op¢ralion5 Committe4 Student S¢rvi¢¢$ Committee, Audit Committee and Governan¢¢ Committe¢ (approved by the Governin8 Body at th¢ October 2018 meeting). Full minutes of all rneetings. except ihoK deemed to be confidential by the Governing Body, are avallable on application from the Clerk to th¢ Gov¢rning Body at: Fircroft College. l 018 Bristol Road. Selly OaK Birmingham, B29 6LH. The Clerk io th¢ Governin8 Body maintains a register of financipl and p¢rsonal interests of the Govemors. The register is available for inspection at the above address. All governors are able to take independent professional lldvice in further8n¢e of their duiies at ihe College's expense and hav¢ &¢c¢s$ io the Clerk to the Governing Body who is responsible to the Governing Body for ensuring that all applicable proc¢dure$ and regulations are complied with. The appointment, evaluY4tion and remov&] of the Clerk are marters for th¢ Governin8 Body as a whole. Fornial agendas, papers and reports are supplied to governors in a tim¢ly manner. prior io Gov¢rnin8 Body meetings. Briefings are also provided on on od-ho¢ basis. The Governing Body has a strong and independent non-executive el¢m¢nt and no individual or group dominates ils decision making process. The Governing Body considers th ¢a¢h of its non- ¢xecutive members is independent of management and free from any business or othw relationship which ¢ould materially inierf¢re with the exercise of their independent judgement. There is a clear division of reswnsibility in that the roles of the Chair of the Governing Body and AOntIng Officer are separate. Covld-19 Following the Glosure of the College for face•tO•face thing in March 2020. the Governing Body determined io move to monthly meetings during ihe Covid-19 emergency. Audit and Governance Committees were retained ort a temily basis, all other committees halted and with business covered by Governing Body. This model of business is carried forward into 2020121. and is revi¢w¢d ternily. 17
FIRcR0 COLLEGE OF ADULT EDUCATION Statement of Cor orate GoverD8n¢e and Internal Control continued 12 Appolntments to the Goyernlng Body Any new appointments to ihe Governing Body are a matter for the consideration of ihe Governing Body as a whole. The Governing Body ha5 a Governance committtt, which is wmprised of at least three governors and 15 Te5ponsible for the selectiort and nomination of any new member for the Governing Body's consideration. The Governing Body is responsible for ensuring that appropriale training is provid¢d &5 required. MemE*rs of the Goveming Body are now appointed for a term of office not ex¢eeding 3 years in the first inslance. Remuneration Comrnittee Throughout the year ending 31 July 2020, th¢ members of the College's remuneration committee were the same as the College's Operations Committee (ex¢luding the Principal and staff governor) . The committee's responsibilities are io make recomrnendalions to the Goveming Body on the retnunerdtion and benefits of Ihe Accounting Offi¢er and other key management personnel. tklails of remunerntion for ihe year end 31 July 2020 ar¢ set out ift note 7 to the financial staiemenls. Audit Commlttee The Audit Cotnmittee ¢omprises four gov¢rnors of the College (who exclude the Acwunting Officer and Chair} and an external member. The Committee operates in accordance with wrilt¢n ternis of reference approved by ihe Governing Body. The Audit Committee meets on a temily basis and provides a forum for reporting by the College's irtt¢rnal. regularity and finaneral 5tat¢ments auditors. who have aceess to the Comrnitte¢ for independent discussion, without th¢ pres¢n¢e of College management. The Committee also T¢¢¢ives and considers reports from th¢ main FE funding bodie5 as they affect the College's busin. The College's intemal ?udilors revi¢w the systems of internai ¢onlrol. risk managemenl ntrOl5 and governance pro¢¢ss¢s in ac¢ordance with an agre¢d plan of input and report their findings to management and the Audit Committee. Management is responsible for the implementation of agreed audil recommendations, and internal audit undertakes periodic follow up reviews to ¢nsure such recommendations have been irnplemented. The Audit Committee also advises the Governing Body on the appointrnent of internal, regularity and financial staiement auditors and their remurteration for both audit 8nd non-audit work as well &8 reporting annually to the Governing Body. IJ Internal Control S¢ope of responsibillty The Governing Body is ultimately responsible for the College's system of internal control and for revi¢wing its effectiveness. However, such a system is designed to rnanage rather than eliminate the risk of failure to achieve iyjsiness obj¢ctiv¢s. and can provide only reasonable and not absolute assurance against maleTial misstatemenl or loss. The Governing Body has delegated the day-to-day responsibility to the Principal, as A¢counting Officer, for maintsining a sound system of iniernal ontrol ihat SUPPOTts the hleyernent of the College's policies. aims and objectives, whilst 18
FIRCROFT COLLEGE OF ADULT EDUCATION Statement of Cor orate Governance Internal Control ¢ontinued safeguarding the public funds and assets for which she is personally responsibl4 in accordance with the responsibilities assigned to her in ihe Finan¢ial Memorandum between the College and the ESFA. She is also r¢spon5ibl¢ for reporting io the Governing Body any rnaierial weakness¢s or breakdowns in internal control. The PUTP05e of the system of Internal control The system of inlernal control is design¢d to manage risk rather ihart to eliminate all risk of failure to achieve policies, aims and objectives. it can therefore only provide reasonable and not ab501ute &8surance of effectiveness. The System of intemal control is based on an ongoing pro¢¢ss designed to identify and PTiOritise the risks io ¢h¢ athi¢v¢rn¢At of College policies, aims and objectiv¢s. to evaluate the likelihood of those risks being r¢alised and the impact should they b¢ realised. and io manage them ¢fficiently> effe¢tiv¢ly and cnOMIcally. The system of internal control has been in place in Fircroft College for the year ended 31 July 2020 and up to ihe date of approval of the annual r¢port and accoun Capacity to handle risk Th¢ Governing Body has reviewed the key risks to which the College is exposed. together wilh ihe operatin& finan¢ial and Complian controls that have been implemented io mitig¢ those risks. Th¢ Governing Body is of the view that there is a forniai ongoing process for identifyin& evaluating and managing th¢ College's signifi¢ani risks has been in pla¢¢ for the year ended 31 July 2020 and up to the dale of approval of th¢ annual report and accounts. This pro¢ess is regularly reviewed by lh¢ Governing Body. The rtsk Jnd Control fr4m¢work The system of int¢mat ¢ontrol is bas on a framework of regular management information. administrative procedures including the segregation of duties. and a 5y5tem of d¢l¢gation and aCCOUTJtability. In particular. it includes: mprehensive budgeling systems with an annual budget which is reviewed and agreed by the Governing Body. regular reviews by th¢ Goveming Body of p¢riodi¢ and annual financial reports which indicate financial perfornian¢¢ against forec&s1s. setting targets to m¢&sure financial and other perfonnan¢e. Clearly defined capital investment control guidelines. the adoption of fornial proj¢ct managem¢nt disGiplines where appropriate. Fircroft College has an internal audit servic4 which operdtes in a¢cordance with the requirements of the ESFA'S Post-16 Audit Code ofPracrice. The work of the internal audit service is informed by an ana]ysis of the risks to which the College is exposed, and annual internal audit plans are based on this analysi5. The analysis of risks and the inlernal audit plans are endorsed by the College's Governing Body on the recommendation of the Audit Committee. At minimum 8thnuaily. th¢ head of the inlernal audit (HIA) provides th¢ Governing Body with a report on internal audit auivity in the College. Th¢ report includes the HIA'S independent opinion on the adequacy and effectiv¢n¢ss of Ihe College's system of risk Ma[eMent, controls and governance processes. The Covid-19 related move by the College to r¢mote op¢rations during mid-march 2020 impacted upon the schedule of interna] audits, with two of four planned audils being cancelled. As a consequence of this reduced work programme the HJA ha5 not included an opinion relatirtg to 2019120. 19
FlliCROFf COLLEGE OF ADULT EDUCATION Sthtement ol Cor orate GoYernan¢¢ and Internal Control Continued Reylew of Effec¢lvenes5 As Accounting Officer, the Principal h&s responsibility for reviewing the eff¢ctivene5s of the system of intemal control. Th¢ Principal's review of the effectiv¢ness of the system of intemal control 15 inforn)ed by: the work of the internal auditors. the work of the executive managers within ihe College who have responsibility for the development and maintenance of th¢ internal control fram¢work. comments made by the College's financial statem¢nts auditors and the regularity reporting a¢untants in their management letters and other reports. The Accounting Officer has been adwsed on the impl]tIOnS of the result of her review of the effectiveness of the system of internal conlrol by the Audii Committee, whith oversees the work of the internal auditor. risk Committee and other sources of assurnnce. a plan to address weakne55¢S and ¢nsur¢ continuous improvement of the system is in place. The management team receives reports setting out key p¢rfom)ance and risk indicators. and considers possible ¢ontrol issues brought to their #ttention by early warning m¢¢hanisms, which are embedded across the College. The management team and th¢ Audit Committee also r¢¢eive regular r¢poTts from internal audit and other sourc¢s of assurance, which include re¢ommendations for improvement. The Audit Committee's Tole in ihis area is confined to a high level review of the arrdngements for interna] control. Th¢ Gov¢ming Body's agenda Includ a regular item for nsideration of risk and control and r¢¢eiYes reports Ihereon from the management ieam and Audit Committee. The emphasis 1$ on obiaining the relevant degree of as5urJn¢¢ and not merely reporting by exeeption. At its December 2020 meeting, the Governing Body Carried out the annual assessment for th¢ year ended 31 July 2020 by considering docurnentation from the management team and int¢m81 audit, and taking account of events since 31 July 2020. Based on the advice of ihe Audit Commiltee and the Accounting Officer, the Governing Body is of the opinion thal th¢ College an adquate and efflIv¢ fram¢work for govemance. risk management and control. and h&$ fulfilled its ststutory responsibility for "the effeclive and ¢fflici£nl t4se ofresources, Ihe solvency ofthe insfiiufion and ihe safesNarding of rheir £Se1$, Corporgtlon performance The Corporation has nol ¢arried out a self$¢Ment of its own perfomian¢e for the year ended 3 1st July 2020. Going Concern The Governors hav¢ considered ihe requiremenl that the financial statements should be ppared on a going concern basi5 unless they intend to liquidat¢ the charity or ce operations, or have no realistic alternativ¢ but to do so. After making appropriate enquirtes. the Governing Body considers that the College has adequate Tegources to ntillue in operational existence for the foreseeable future, and are committed to fund any shortfall for 20
FIRCR0 COLLEGE OFADULT EDUCATION Statement of Cor rate GOrnanCe alld Internal Contrnl eoD¢inued maintain a hith level of liquidandinvestnKnt assets whith total ovff £4.15rn at 31 stJuly 2020. and provides a substantial1.7times coveroverits current futxling. The College has no bom)wings, banking covenants or pension deficits. andr¢ttLrn a strongopeTaiional pttfOrnwi of the College io 2019120 in achieving an ESFA Financial Health Scoreof Oul#aThli Approv byor&rof thememEers of the GovemingBodyon 27* January2021 and signedon its behalfby: Dr C Turner Chair M Lenehan Accoullting oificer 21
FIRCROFT COLLEGE OFADiILT EDUCATION Governing Body's statement on the College's regulatoryg proprlety and eompllance with Funding body terms And eDnditions of fundin The College has CO41der its restK>nsibility to nrtifythe Ed10n& Skills Funding Agency (ESFA) of material i¢SU1anty, impropriety and non-compliance with tern)s and conditions of fundin& under the rmancial enralMin place beeTh the College alld theESFA. As part of our c(XLsidcration we have had due re8ardto the requiremeDts of the fmancialmem(rdnth]m. We confirni onbehalf of thecollege.that after enquiry, aTrlto the be# ofourknowlalge,we ar¢ abk l) identify anymaterial irregularoritnpryr use of fiwds by theColl¢g4 ormataial non-complianr£ with the Education & Skills Funding Agency's ternis and conditions of funding under the Colkge's fmancial memoratjaum. We confmthat no instaoc&8 of material Irrelan.tyO[ fut¥Jingnon-conwIian have been discovered to date beyond those disputed items outlined in notr 19 in the notes to the accounts. If any instances are identifiedafter thedate of this ststemert these will ben(ifiedto the ESFA. Dr C Thrner Chair M lnehan Aecounting Offietr Date". 27th January202E 22
FIRCRO COLLEGE OF ADULT EDUCATION ststement of Res onsibilities of the Governin The membersof the GovemingBody (wlm) act as ttusttts forthe charilable activities of the College) are Tequircd to preseut audited financial StateMtsf each finan¢ialyear. The law applicable to charities in Elland and the ternis and ¢ODditions of the Financial bAemordndum between the Education & Skills Funding Agency and the Governing Body of the College. requires the Gov¢rning Body ofthe College. througb its Accounting Officer, to preparefuwKial statents and the for each financial year in accordance with the 2015 SteMent ofRecommended Practice - Accountingfor Further andHigherEducation andwith the CollegeAcc(Nfftts Direction 20J9to 2020 issuedby the ESFA, and which give a trneand fairviewofthe statsofaffalof the College andof the College's result for tbat period. tn preparingthe fmallcial slatfments the Gove£ningBody i8 l¢quirlt0. sekct suitable 8Lrounting polici¢s andaN)tythCm¢oISlrt1Y Tuake judgenKnts and estimatesthatarer¢a5(KJable and pru(knt stste wbether applicable Accounting Standards have been followed. subject to any material departures disclosed and explained ID the fin]21 slalanaits prepare financial statenKnts on the going conc¢m basis, unl&ss itts inapprowi*e to assume that th¢ College will continue in OpdtiLmL The GoveTningBody is alsoreqillredto pre¥we a Memkn Rep)rt whiChde[lswhat it is trying to do and how it is gY•ingabout IL includingthe legal andadministrative status ofthecollege. The Governing Body i8 reSIL8Ible forkeq>ingprow aL%tIngC(thwhICb disclose with reasonablc accuracy, at anytime,the fclaI positionof the College, and which enable it to ensure that the flnancial ststements are prepared in accordance with the relevant legislation of incorporation and other relevant accounting stsndard& Itis responsible fortakingst¢F6 thatare reax)llab1Yope to it in Ord to safeguard the ass¢ts of th¢ Colleg¢ andto preVta1detCct fra aThl other1egUlaritsf5. The maintenance and integrity of thccollege wd)site is the r¢sw)rtsli >ility of the Governing Body of the College. the work carried out by the auditors does not illvolvc consideration of these matters and. accordingly. the auditorsaccept noresronsibiIity f(r anycbanges that may have0c(rred to the financial ststements since they wffe initiallypresentrdonthc website. Legislation in the UnitedKingdom governing the preparntion anddissemination of fInala1 statenrnts maydiffe¥ frn legislation in other jurisdiction& Member5 of the GovcrningBody are ffssx)nsil)le for¢riDgthatexFTrliture andincome are applied for the puOseS intalded byParliamart and thatthe finla1 trdrtsxtionsconforni to the authoriti&s that govern them. In addition they aTe $}nSIble forensuringthat funds from the ESFA are used only in accordance with the Financial Memorandum with the ESFA and any othercoTrJitioDS that may bcpreribCdfrorn time to time. Members of theGoverningBodymust ensurethat thereare aJ4)mpriate fuwicial and management controls in place in order to safeguard public and other funds and to ensuTC they are used properly. In addition. m¢mbersof the GoVnIng Body areresp)nsible forse¢wingeconomicaL efficient and effective managementof the College'sresourcesaDd¢xFtyJittir4 so that the be¢fits that sEM)uld be derived from the applicationofpublic fund% from tbcESFA arc notput at risk. Approval by order ofthcrnc ¢ Governing Bodyon 27th JarnJary2021 and sigmed on its behalf by: Dr C Turner Chair 23
FIRCROFT COLLEGE OF ADULT EDUCATION Ind¢ endent Auditor'5 Re ort to the Covernors of Flreroft Colle e of Adult Educotion Opinion We have audited the financial statements of Fircroft College of Adult Education (the 'college') for the year ended 31 July 2020 which comprise the stal¢ment of comprehensive income and expenditure, the 5taternent of changes in reserves, th¢ balance sheet, the siatem¢nt of ¢&sh flows and notes lo th¢ financial statements. including a summary of significant accounting )liCIes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom A¢¢ounling Standards. including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and R¢public of Ireland. (Uniled Kingdom Generally A¢pted A¢untIng Pra¢ti¢¢). In our opinion. the financial ststements.. give a true and fair view of the state of ihe college's affairs as at 31 July 2020 and of its surplus of expenditure over income for the year th¢n ¢nded' and have been properly prepared in ac¢ordance with United Kingdom Genera]ly Accepted A¢unting Practice. Basis for opinion We conducted our audit in ac¢ordance with International Standards on Auditing (UK) {ISAs (UK)) and applicable law. Our responsibilili¢s 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 Ilege in accordanc¢ with the ethical reqU1mentS thal are relevant to our audit of the financial statements in th¢ UK. including the FRC'S Ethical Standard, and w¢ have fulfilled our other dhical responsibilities in aecordance with thes¢ rwuirements. We believe that th¢ audit evidence we have obtained is sufficien¢ and appropriale to provide a b&8is for our opinion. ConcluSiODS relating to golng eoneern We have nothing to report in respect of ihe following matt¢rs in relation lo which the JSAS (UK) require us to report io you where.. the Governing Body's use of the going concern b&8is of a¢VnI]ng in the preparation of the financia] 5tatemeniS is not appropriate,. or the Goveming Body has not disclosed in the financial ststements any identified maierial uncertainties that may c&st significant doubt aboul the college's ability to continue to adopt ihe going concern bLsis of accounting for a period of al least twelve months from the date when ihe financiai Statements ar¢ authorised for issue. 24
FIRCROFT COLLEGE OF ADULT EDUCATION Inde endent Audltor'i Re ort to the Governor9 of Flr¢roft Colle ¢ of Adult Edu¢Allon ¢ontinued Other Inform•tlon The Governing Body is responsible for ihe other infornialion. The other information comprises th¢ infoTmation included in the annual report, other than the financial Statements and our auditor's report thereon. Our opinion on the financial slalcments does not cover the other information and. excep¢ to the extent otherwise expliciily Stat in our report, we do not express any forni of wurance conclusion thereon. In connection wilh our audit of the financial statements, our responsibility is to read the oiher information and. in doing so. wnsider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misslal¢ments. we are required to delerniine whether there is a material mis5ts1emeni in the financial 5tat¢ments or a material misslalement of the other inforniation. If, based on the work we have perforn)ed. we conclude that there is a matuial missement of this other infoTmation, we are required to report that fact. We have nothing to report in this r¢gard. Matters on which we ore required to report by exception We have nothing to report in respect of ihe following matters in relation to which the Chariiies Act 2011 or the Post 16 Code of Practice issued by the Education and Skills Funding Agency requires us to report to you if, in our opinion: the inforn)ation given in the Report of the Govemin8 Body is inconsistent in any material respecl with the financial statements. or proper ac¢ouniing records have not been kept- or the financial statements are not in agreement with the aecounting re¢ords and Teturns- or we have not receiv all the information and explanations we require for our audit. Responslbllltles of tb¢ Govern5n8 Body As explained more fully in the statement of Tesponsibiliti¢s of membets of the Governing Body. th¢ Governing Body is responsible for the pr¢paraiion of the finan¢ial statements and for being satisfied that they give a tru¢ and fair view, and for such internal control as th¢ Governing Body determines is neSary to enable the preparation of financial statements that are free from material misstaiement, whether due to fraud or error. In preparing the financial statemenls. the Governing Body is responsible for assessing th¢ College's ability to ntinue as 8 going ncern, disclosin& as applicable, matters reled to going con¢¢m and using the going ¢on¢¢rn basis of accounting unless the Governing Body either intends to liquidal¢ the college or to cease operations, or has no Tealisti¢ dternative but to do so. Auditor'$ responsibilities for the Audit of the fJnin¢i#l ststements Our objectives ar¢ to obtain re8sonabl¢ &8suranee about whether the financial slaternents as a whole are free from material misstatem¢nt. whether due to fraud or error. and lo issue an auditor's report thal includes our opinion. Reasonable &ssurance is a high level of assurancq but is not a guarantee that an audit conducted in aCrdance wilh ISAS (UK) will always detect a material misstatement when it exists. Misstatements Can arise from fraud or etror and are considered material if. individually or in the aggregate. they could reasonably b¢ exp¢cted to influence the economic d¢cisions of users taken on the basis of these financialstatem¢nts. 25
FIRCROFT COLLEGE OF ADULT EDUCATION Inde dent Auditor's Re ort ¢0 the Governors of Fir¢roft Coll e of Adul¢ Eduutlo ¢ontinued Audltor'$ responsibilities for the audit of the rm9¢1 ststemtDts (continued) A fvrther description of our resp(yn5ibilities for the audii of the financial statements is located on the Financia] Reporting Council's w¢bsiit at www.fr¢.org.uklauditorsr¢SnsibjllI1e5. This description forms part of our auditor's repJTL Use ofour Reprt This report is made lelY to the Governin8 B(Kty in aOrdance with the Collw's Articles of Govemment. Our audit work has been undertaken so that we might state to the MemEer5 of the Gov¢ming Body those matters we are required io state to them in an auditorfs report and for no other purpose. To the fullest extent perniilted by law. we do noi w or wume resw)nsibility lo anyone h¢r than the college artd the Memi*rs of the Governing Body, for our audit work for thi5 reFOTL or for the opinions we have fomied. Buz28cott LLP Chart¢red Accountants and Registered Auditor 130 Wood Street iA)ndon EC2V 6DL 10 February 2021 26
FIRCROFT COLLEGE OF ADULT EDUCATION Reporting Accountant's RepL)rt on Regularity to the Governing Body of Fircroft College (fi4the Governing Body") 4nd the Se¢retsry of State for Edu¢atlon Acting through the Edu¢Mtion And Skills Funding Agency "the ESFA, In accordance with ihe tem)s of our engagement letter dated 20 OctoE*r 2020 and further to Ih¢ requirements of the fin¢la] memorandum with Ihe Education and Skills Funding Agency we have carried out an ¢ngagement to obtain limited assurance about whether anything h&8 come to our attention that would suggest that in all material respects the expenditure disbursed and income received by Fircroft College during ihe period l August 2019 to 31 July 2020 haye not been applied to the pury)oses id¢ntified by Parliament artd the financial transaction5 do not conforn) to the authorities whi¢h govern them. The framework that has be¢n applied is s¢1 out in the Post 16 Audit Code of Practice ('%he Cod¢'? issued by th¢ ESFA and in any relevant conditions of funding concerning adult education notified by a relevant funder. In line with this frameworL our work has specifically not considered income received from the main funding grants generated ihTough the Individua]i5ed Leamer Record (ILR) returns, for which the ESFA has other &ssurance arrang¢ment5 in placr. This report is made solely to the Governing Body of Fircroft College and the ESFA in accordance with the tern)s of our engagement letter. Our work h&8 been undertaken so that we might state to the Governing Body and the ESFA those matters we are required io slate in a report and for no other purpose. To the fullest ¢xt¢ni pemiitted by law. we do not accept or &ssume responsibility to anyone other than the Governing Body of Fircroft College and the ESFA for our work, for thi5 fcpoTL or for the conclusion we have fornied. Respective resp&n$ibilities of the Governing Body ofFiTcroft College and the reporting accountant The Governing Body of Fircroft College is rpOnSibl< under the requirements of the Further & Higher Education Act 1992. 5ub5equent legislation and r¢lated regulations and guidance. for ensuring that expenditu disbursed and income received is applied for the purposes intended by Parliament and the finan¢ia] transactions conform to the authorities which govern th¢m. Our responsibilities for this engagement are established in the United Kingdom by our profession's ethical guidance and are to obtain limited assurance and report in ac¢ordan¢e with our engagement letter and th¢ requirements of the Code. We report to you whether an)rthing has Come to our attention in ¢arrying out our work which suggests that in all material respects, expenditure di5bur5ed and in¢ome Teceiv¢d during ihe year ded 31 July 2020 hav¢ not been applied to purposes intended by Parliamenl or ihat the financial transactions do not confomi to the authorities which govern them. Approach We conduct¢d our engagement in accordance with the P05t 16 Audit Code of PrdCti¢e issued by the ESFA. We performed a limit urance engagement a8 defined in that framework. The objective of a limited assurance engagement 15 to perforni such procedures as lo obtain inforniation and explanations in order to provide us with sufficient appropriate evidence to expr¢s$ a negative Conclusion on regularity. A limited Issurance ¢ngag¢ment is more limited in scope than a reasonable assurance engagem¢nl and consequently do¢s not enable us to omain Lssurance that we would becom¢ aware of all significani matters that might be identified in a reasonable assuranc¢ ¢n8ag¢menl. Accordingly. we do not express a positive opinion. 27
FIRcR0 COLLEGE OF ADULT EDUCATION Reporting Accountant's Report on Regul4rlty to the Governing Body of Fircroft College of Adult Edu¢4tion ("the Coverning Body") and the Se¢retgry of state for Ed¢tiOn Atting through ¢he artment for Educgtion Ilthe De artment, continued Approaeh (continued) Our engagement includes examination, on a test b&sis. of evidence relevant to the regularity of the college's incgme and expenditure. The work undertaken to draw lo our conclusion includes.. An assessment of the risk of malerial irregularity and impropriety across all of the college's activitie5. Further lesting and review of self-&ssessm¢nl questionnaire including enquiry. identification of control processes and examinaiion of supporting evidence acro all areas identifi¢d well as additional verifi¢alion work where considered necessary. 8nd Consideration of ¢vidence obtained through th¢ work detailed above and the work completed as part of our financial Siatements audil in order to support ihe regularity conclusion. Conclusion In the course of our work. except for the matter li$t¢d below. nothing has come to our attention which suggests that in all material r¢spects the expenditur¢ disburs¢d and income received during the year ended 31 July 2020 has not been applied to purposes intended by Parliament and the financia] transactions do not conform to the authorities which govern them. The ESFA has undertaken a targeted assurance review of residenti81 and le8rn¢r support funding claimed by the College in 2018119 and 2019120. As detailed in note 19, this review has id¢ntifi¢d a potential variance in trealment from the 2013114 agreement to the latest funding rule5 of between £309.000 and £350.000. Buzzacott LLP Chartered Awountants 130 Wood Street London EC2V 6DL 10 February 2021 28
FIRcR0 COLLEGE OF ADULT EDUCATION Statement of Com rehensive In¢ome gnd Ex enditure Note 2020 2019 Inefyme Funding body grants 2,429a48 .914.371 Tuition fees and &lucation contracts 251518 121.822 Other income 17.986 84.489 Investment in¢ome 132,923 145.685 Donations 13.OIKI 15.51J) Total Income 2,849,775 2.281,867 Expenditure Staff costs 1,731ffj24 ,484,102 Other opeNing expenses 669937 614JOI Depreciation 10 201 J33 154,342 Total Expenditure 2,602,894 2,252.745 Surplus before other g4ins #nd losse$ 246,881 29.122 (L0s5) / Gain on irtvestments Net realis Net unrealised (81,401) {257,925) (11,967) 93.732 (Deficit) I Surplu$ before Tax (92,445) 110,887 Taxation Totsl Comprehensive Income for the Year (92.445) 110.887 Represented by: Restricted comprehensive inwme Unr¢5tri¢t¢d compr¢hen5ive income (92,445) 110.887 (92,445) 110,887 29
FIRcR0 COLLEGE OF ADULT EDUCATION Colle e Statement of Chan es In R¢s¢rvey In¢ome ind R¢strlcted To¢•1 Expenditure Reserves Reserves Blan¢ *t 111 Augus12018 5.661.710 54.952 5,716.662 Surplus from the Inrne and eXndituTe aKount 110.887 110,887 Trnnsfers i%tween restricted unre5trided (3,0) B414nce at 31vt Juty 2019 Deficit from the iTll)me and exFenditure account (92W5) {92,445) Transfers ithyeen reslrided and In(Me and expenditure reserve5 Balanee at 31° July 2020 30
FIRcR0 COLLEGE OF ADULT EDUCATION BAl&nce Sheet as at 31 J Note 2020 2019 Nonwcurrent Assets Tangible fixedassets Inv¢sttnents io 2,363,855 3,507,528 2,285,665 3,762,705 Totslfixed assets S,871J83 6,048,370 Current assets Stock Trade and otherreceivabi¢s Short terni investsnents Cash and ¢asbeiwivalents 3,691 87,329 148,666 498,696 3,775 134,536 148.695 439.259 12 13 Total Current assets 738,382 726.265 Less . Creditors- amounts falling due wlthin one year 14 (264,526) (316,951) Net current as$ets 473,856 409,314 Totsl assets less eurrent liabilities 6J45,119 6.457,684 Creditors- amounts fallingdueafter one year 15 (610.135) (630,135) NET ASSETS 5,735,104 5,827,549 Restrl¢ted reserves Unrestrleted reserv Income and expenditure account 16 51,952 51,952 5,683,152 5,775,597 Total reserve$ 5,735,104 5,827.549 The funcial statementson pages 29 to 50 were approvedbythe Governing BodYal authorised for issue on 27th January 2021 andwere onbehalfof the Governing Body by. Dr C Turner CIMir M Len¢han Accountfing olcer 31
FIRcR0 COLLEGE OF ADULT EDUCATION Siatement of Cash Flows Note 2020 2018 Cash flows from op¢r&ting activiti (Deficit) surplus for Éhe year (92145) 110,887 Adjus¢men¢ for nonwcash Items Deplation Decrease l (lllcre) in stocks Decrease l (Inease} in debtors (Decrease) I Incrwe in creditors due within one 201J33 84 47207 154.342 (361) (37.481) (52,42S) (20,000) 62,667 (20,000) (De¢re> in creditors due after one year Adjustment for investing or financial ¢¢ivilies Net investsnent gain Investment income 339297 (132,923) (81,751) (145,685) Net cash flow from operating aetivitits 290 128 42.618 Cash flow5 from Investlng activitles Investment income Disposal of non-current asset inv¢stm¢nts Payments made to acquire non-current ass¢t investments Payments made to acquire fixed &%sets 132.923 363,422 145,685 515,086 {367J45) (279,523) (406.291) (447.301) Net Cash flow from Investing a¢tlvltles 150,523 192,821 In¢rese l (Decrease) in ¢*sh ¥nd Cash equivalents lli tbe year 139.605 150.203 Cash and c&sh equivalents at beginning of the year 17, 611,166 761,369 C&8h and cash equivalenls at end of the year 750771 611.166 32
FIRCROFf COLLEGE OF ADULT EDUCATION Notes to the Accounts A¢¢ouDtlng pollcies Sialen*nl ofaceounlin8policies The following aountIng policies ha been applied nsIst¢ntIY in d¢a]ing with items which are nsidered maierial in relation to th¢ financial ststement& Basis ofpreparntion Th¢s¢ financial statements have been prepared in aly4)Td with the Statement of RernMended Practice.. Accounting for Further aTJd Higher Education 2015 (the 2015 FE HE SORP). the College AUnts Dirertion for 2019 to 2020 and in acrdanCe with Financial R¢FKJrting StandaTd 102 - -The Financial Reporting Standard applicable in th¢ United Kingdom and Republic of Ir¢land- (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 rMpliance with FRS 102 requires the use of certain critical a¢¢ounting estimates. It also Tequire5 management to eXClse judgement in applying the College's accounling policies. 0/40RI18 Th¢ financial statements are Prepared in ac¢onkn with the historical cost nVentIOn unless otherwise Going ¢on¢ern The activitia of the College. together with the factors likely io affed its future development and perfomiance are sd out in the Report of the Goveming Body. Th¢ financial position of the College. its cash flow. liquidity and borrowings are described in the Financial Stst¢m¢nts and accompanying Notes. and note 19 outlining contingeni liabfftlities and p05t balanc¢ shed ev¢nts. The College has no loans or overdrats and th¢ College's f(Jrecasts and fmanci81 prOj110n5 indi¢ate that none will be required for the foreseeable futurt A¢¢ordItlY the College has a reasonable expectation that it has more than adequate resources to continu¢ in operational existence for the foreseeable fUtll and for this rea50n wll continue to adopt the going concern basis in th¢ pr¢parnlion of its Financial Statem¢nts. Recognilion olin¢om¢ Reven¥e grantfvnding Govemment revenue grdnts includ¢ funding Lh)dy recurrent grdnts and other grants and ar¢ accounted for under the ac¢nMI model as peThIff by FRS 102. Funding Ix)dy rurrent grants are mwured in line with best estimates for the period of what is receivable and depend on the particular income stream involvd. Any under or over a¢hi¢vment for the Adult Skills Budget is adjusted for and reflected in ihe level of recurrent grant recognised in the income and exrthditure accuunt. The final grdnt income is nomially ddemiined with th¢ conclusion of the year end reconciliation process with the funding body following th¢ year end. and the results of any funding audits. 33
FIRcR0 COLLEGE OF ADULT EDUCATION Notes to ¢he Accounts (continued) Ac¢ouDtlng policie5 (continu) Recoxnilion ofincome (conlin4ed) Revenue srantfvnding (¢oniinued) Grants (including research grants) from non•government 50urtts arc rc£ognised in income wh¢n the College is enliiled io the income and F¢rforn)ance related conditions have been meL Income received in advance of performance related conditions being met is recognised as d¢f¢rrryl income within creditors on the balanc¢ sheet and released to incom¢ as the conditions are meL Copital grantfynding Government capital grants are (apitslI held a5 deferr income and re¢ognised in incom¢ over the expecled useful life of ihe asseL under th¢ wua] model as perniitted by FRS 102. h¢r. non-govemmeniai. capital grants are recognis in income when the College is entitled to the futth subj1 io any performance related nditions being met. Inrne received in &lvan¢¢ of p¢rforn]ance related conditions being met 15 recognised as deferred income within credilor5 on the BanCe Sheet and released to income as ¢ondiiions are met. Fee income Income from tuition fe¢5 15 Tecowllsed in the pui(rfl for which it 15 rwxived and includes all fees payable by students or their swnsors. lrtvesimenl In¢ All income from 5hort-teTm deposits or inve5tmrnts is oedi*d to th¢ xtKome and expenditu account in ihe peri1 in which il is earned on a rec¢ivabl¢ basis. Renldr¢se Where income is received for purposes specified by th¢ doTh)r or by the ternis of appeal under which it was rnisd. that inconje 1$ included in the westricted reserves. Any use of the restricted SerVe is included as eXditUre shown on the fac¢ of the Staiement of compr¢hwlVc [Trme. 34
FIRCRorr COLLEGE OF ADULT EDUCATION No¢es ¢0 the A¢eounts (continued) A¢cDunting policies (continued) Accounlingforposlaemploymeni benefits Post-employment benefits to tutors of the College are provided by the Teachers. Pension S¢heme (TPS). The TPS is a defined ben¢fit schem4 which is ¢xt¢rnally funded and ntracted out of the Sthte Second Pension. TeocherJFension scheme The TPS is an unfunded scheme. Contribution5 to the TPS are calculated so as to spread the cost of pensions over employees. working lives with the Coll¢g¢ in such a Wdy that the pension cost is a substaniia]ly level percentage of current and future pensionable payroll. The contriblon5 are detennined by qualified actuaries on Ihe basis of quinquennial valuations using a [ffosp¢1ve benefit method. The TPS is a multi-employer scheme 8nd the College does not Frf)55e5s suificient information to us¢ defined benefit accounting. The TPS is therefore treated as a defineAJ contribution plan and the conlributions reco8nised as an expense in the income stat¢ment in the periods during which servicts are rendered by employees. No members of stsff are m¢mbers of the L1 Government P¢nsion Scheme (LGPS). Short lenn Employmeni benef Short term employment benefits such 45 sa]aTies and Compensat absences {holiday pay) ar¢ re¢ognis¢d as an expense in the year in which the employee5 Tender service to th¢ College. Any unused benefits are a¢¢rued and measured ih¢ addittonal amount the College expects to pay a$ 4 result of the unused entiil¢m¢nt. Non-CurrentAssets- Tongiblefuedd&Yets Tangible fixed &8sets are stated at ¢ost less accumulated depreciation and accumulated impairnient losses. Certain items of fixed assets that had been revalued to fair value on or prior to the date of transition to the 2015 FE HE SORP. are measured on the basis of deemed cosL being the revalued amount at the dal¢ of ih revaluation. Where parts of a fixed asset have different useful liv4 thy ore accowited for &s separate items of fixed assels. The College's pollcy is to cary all assets at historiul cosL except the financial benefit of the lease arrangements (see below) which ts carried at valuation but now d¢emed c05t& L4ndand buildings The Coll¢ do¢s not pay a market rate for the lease of the premis¢s from which il operate4 h¢n¢e the College has capitalised the berit it receives from thi5 arrangement Any improvements to the buildings are includ1 at COSt. Finance cost& which arc directly 8ttributabl¢ lo the Construction of land and buildings ar¢ capitalised as part of the cost of thos¢ assets. Equipmep7t Equipment COSting l¢ss than £250 per individual itan is recognised as expenditure in the period of acquisition. All other ¢quipment is capita]ised at cosL 35
FIRCRoFfcoLLEGE OF ADULT EDUCATIOIY Notes ¢0 the Ae¢ounts (continued) Accounting policies (continued) Non-currenl Ae$- TaHgiblefLYed assels (conlinuedj Depreciatio Long leasehold land and buildings d¢precia¢¢d on a straight line basis over the lemi of Ihe lease (45 years to l April 2055). Capitalised equipment is depreciated on a straight line b&sis ov¢r its useful economic life as follows: General equipment Computer equipm¢nl Fumiture, fixtures and fittings Computer software 5 years 3 years 10 years 5 years A full y¢ar's depreciation will calculated and appli¢d in th¢ financial year of acquisition of any asset. A review for impairn)ent of a fixed asset is carried out if events or ¢hang¢s in circumstance5 indi¢al¢ that the carrying amount of any fixed a55el may not be recoverabl¢. Shortfalls between the canying value of fixed assets and their recoverabl¢ amounts are recognised as impairnients. Impairnient losses are r¢cognis¢d in the Stalemenl of Comprehensive Income and Expenditure. Stsbsequent expendilure on exisilngfixeda$seiJ Where significant expenditure is incurred on tangible fixed assets after initial purchase it is charged to the Stat¢ment of Comprehensive Income in the period it is incurred, unless it increases the future benefits tr) the College. in which ¢&s¢ it is ¢apitalised and depreciated on the relevant basis. Leasedussets Costs in respect of operating leases ar¢ ¢harg¢d on a straighi-line basis over ihe lease terni to the Stat¢ment of Comprehensive In¢ome and Expenditure. Any le premiums or inc¢ntiv¢s relating to lease5 signed after I August 2014 are spread over the minimum lease temi. JnveslmeNIs Listed investmenls held as non-current assets and current asset investments, which may include listed investments. are stated at fair value, with movements recognised in Comprehensive Income. Inv¢stments comprising unquoted equity instruments are measured at fair value, e5tirnated using a valuation technique. Siocks Siocks are stated at the lower of their cost (using the cost method) and nel realisable va]ue b¢ing selling price less sts to complete and sell. Where necessary. provision is mad¢ for obsolete, slow moving and defective items. Mainle4Yance ofpremises The College has a maintenance plan in line with its gbligations under its legse agreement with Boumville Villag¢ Trust. 36
FIRCROFT COLLEGE OF ADULT EDUCATION Notes to the A¢¢ounts (continued) Aceounting policies (continued) Financial liabilities gnd equity Financial liabilities and equity are clwified according to the Substance of the financial instrument's ntrtUal obligation4 rath¢r ihan the financial instrument's legal form. All loans. investrnenls and short t¢m) deposits held by ihe College are cl&ssified as basic financial instruments in accordance with FRS 102. These instruments ar¢ initially recorded al the transaction price less aiiy transaction ¢osls (historical cost). FRS 102 requires that basic finan¢ial instruments are sub5cquently measured at amortised cosL however the College ¢al¢ulated that the difference between the histori1 cost and amortised cost basis is not mat¢rial and so these financial instruments are stated on the balance sheet at historical cost. anS and investments that are payable or receivable within one year are not discounted. Ttualio The College is considered to ras5 the tests sel out irt Paragraph I Schedule 6 Finance Act 2010 and therefore it meets the definition of a charity for UK ¢orporation purpose5. AordinglY9 the College is p)t¢ntially exempt from taxation in r¢spe¢t of in¢om¢ or ¢apital gains received within ¢aiegories covered by section5 478- 488 of the Corporntion Tax A¢1 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992. to th¢ extent that such incom¢ or gains are applied exclusively to charitable purposes. The College receives no similar exemption in re5P¢Ct of Valu¢ Added T. Irrever&bIc VAT on inputs is included in the costs of such inputs and added lo th¢ ¢ost of tangible fixed assets &$ appropriate, where the inputs themselves are tangible fixed assets by natur Cash cash equlvolenls Cash includes c&sh in hand. and sums on short teTm deposits with recognised banks, investment managers, building societies and government securitie5. Deposits are repayable on demand if they are in practice available within 24 hours without penalty. C&sh equivalents 8re short terni. highly liquid investments that are readily convertible to known amounts of cash with in5ignifi¢ant risk of change in valu¢. An investment qualifies as a cash equival¢nt when it has maturity of 3 months or less from the dat¢ of aULSition. Provisions and contingeni liabilitles Provisions are recognised wher¢ the College has a present legal or constructive obligation as a result of a p&st eveni and it is probable that a transfer of economic benefit will be required to settle the obligation and a reliable estimat can be made of the amount of the obligation. Where the effe¢t of th¢ time value of money is material. the amount expecled to be quired to settle the obligalion is recognised at present value using a pre-tax discount rate. The unwinding of the discount is recognis¢d as a finance cost in the statem¢nt of comprehensive income in the period it arises. A Contingent liability arises from a past ¢vent that gives the College a possible obligation whose existence will only be confirnied by the occurrence or otherwise of uncertain fvture ¢v¢nts not wholly within th¢ control of Ihe 37
FIRCROFT COLLEGE OF ADULT EDUCATION Notes to the Accounts (continued) Accounting policies (continued) Coll¢8e. Contingent liabilities 8]so arise in circumstances where a provision would otherwise be made bui either it is not probable that an outflow of resource5 will be required or th¢ amount of the obligation ¢annot be measured reliably. Contingent liabilities are not recognised in th¢ balan¢e sheet but are disclosed in the notes to the financial statem¢nls. Judgemenls in upplying occounlingpolicies amdkey sourc¢f ofemlmllilon uncertainly In preparing these financial statements. management have made the following judgments.. Determine whether leases entered into by the College either as a lessor or a lessee are OFerating or finance leases. Th¢5g decisions depend on an Lssessment of wheiher the risks and rewards of ownership have been Iransferred from the lessor to the l¢ss¢e on a lease by le&se basis. Deterniin¢ whether ihere are indicators of impaim)ent of th¢ group's tangibl¢ assets. Factors taken into consideration in reaching such a decision include the economi¢ viability and expected future financial perforniance of the asset and where il is a compon¢nt of a lar8er wh-gen¢rating unit. the viability and expectd future perforn]ance of that unit. Oih¢r key SOMr¢¢s ofeslimalion uncertainty Tangiblefixed assets The total figur¢ for Tangibl¢ Fixed Assets includes £1281.900 which is the value, deemed Cost, &s¢ribed to th¢ financial benefit of the long ]ehOld properties tr2n5f¢rred to Fircroft College by professional valuers in 2009 and 2010. Tangibl¢ fixed assets are depreciated over their useful lives taking into account residual values. where appropriate. The a¢tual liv&8 of the assets and residual values aff assessed annually and may vary depending on a number of factors. In re-assessing asset lives. facloTS such as technological innovation and mairtt¢nance programmes are tsken into account. Residual valu¢ &ssessTnents consider issu¢s such a8 future market conditions, the remaining lif¢ of th¢ asset and projected disposal values. As noted abov¢ the long leasehold prort is depTeciat¢d over the remaining lease Icrm. 38
FIRCROFT COLLEGE OF ADULT EDUCATION Notes to the A¢¢ounts (conlinued) l Fundlng Body Grants 2020 2019 Recurrent 8ranls ESFA delivery ESFA stud¢nl support funds West Midlands Combined Authority delivery Specific grants ,501,575 328,433 550,000 ,572.621 321,750 Teachers P¢nsion Scheme ntributOry grant Release of government copital gran15 29a40 20,1111 20,000 Total 2,429,348 1,914,371 2 Twltion F¢e$ 4nd Educ#tion Contrn¢ts 2020 2019 Advanced level course fees for learners aged over 24 Tuition fees Education contracts 46,596 41.300 12,955 67,567 198,614 Tothl 256,518 121,822 3 Other Income 2020 2019 Residencies. catering and ¢onferen¢¢$ Miscellaneous income 13JSI 4.435 52.064 32.425 Total 17,986 84,489 39
FIRcR0 COLLEGE OF ADULT EDUCATION Notes to the A¢¢ounts (continued) 4 1nvestmeDt Income 2020 2019 Other investment income Other intvesl receivable 131,865 1,058 143,869 1,816 Total 132,923 145.685 5 Donations 2020 2019 Donation for upkeep of the gardens Other Donations and Bequests 2.000 11,000 15,500 Totsl 13,000 15.500 6 Staff Costs The average numb¢r of p¢rsons (including key management p¢rsonnel) ¢mploy¢d by the College during the year. on average headcount b&sis, w&s: 2020 2019 No. (Restal¢d) TeachTng stsff Non-t¢a¢hing staff 17 55 12 72 72 84 Stsff costs for the above person$ 2020 2019 Wages and salaries Social security costs Other pension costs 1,367,641 119,033 163.204 1.166.454 103.104 114.768 P*yToII sub total Contra¢ted out staffing services 1,649,878 78,246 1,384,326 78.110 1,728,124 3JOO ,462,436 21.666 Fund2m¢ntal restructuring costs- contractual Total stsff costs 1,731,624 1,484,102 40
FIRCROFfcoLLEGE OF ADULT EDUCATION Notes to the A¢¢ounts (contintsed) 6 Staff Costs (continued) Key management personnel Key managemenl personn¢l are those persons having authority and responsibility for planning. directing and controlling the activitie5 of the College and are represented by the Principal and the Vice Principal. The Governing Body works to an agreed process of reviewing the rernuneration of the senior post holders based on review against whole coll¢g¢ perfornian¢¢ measures. as previously defined by governors and used for ¢olle8¢ wide pay reviews. and relevani benchmarking. The Remuneration Committee receives reports diredly from Head of People and Commercial Development (who perfomis this role on behalf of the Committee). The Remunerdtion Committee evaluates the whole college perfornian¢e measures and reviews benchmarking data from other IAL'5, where available, and the AOC, then agrees recomm¢ndation5 to b¢ made to the full Governing Body for any changes in remuneration. The principles of fairnes5, ind¢p¢ndence, justification and transparency are delivered through the agreed Procedure and reporting process. Staff costs include compensation paid to key management personnel for loss of offi 7 Emoluments of Key managemenl personnel, Accounting Offiter and other higheT paid slaff 21120 2019 No Number of key ManageMt personnel including the Ac¢ounting Offieer was: The number of key management personnel and other staff who r¢¢eived annual emoluments, excluding employer contribution5 lo national insurance and pensions but including benefits in kind. abov¢ £60.000 was- K¢y management personnel Other st#ff 2020 2019 2020 2019 £60,00110 £65.000 p.& £95,001 to £IOO.000 p.& £1 00,001 to £105.000 p.& 41
FIRCROFT COLLEGE OF ADULT EDUCATION Notes tt) ¢h¢ Accounts (continued) 7 Emoluments of Key management personnel. Accounting Officer and other hlgher PAld staff (continued) Key management personnel emoluments are made up a5 follows: 2020 2019 Salari¢s Social security Costs 161,646 19,911 210.842 25.341 181,557 38378 236.183 34.456 Pension contributions Totsl emoluments 219,835 270,639 Th¢re were no amounts due to key manag¢m¢nt personnel that were waived in the year, nor any salary sacrifice arrangements in place. The above compensation includ¢s amounts paid lo the Principal and Chief Executive who is the accounting officer and who is also the highest paid member of stsff. Their pay and remuneration is a5 follows: 2020 2019 Salaries Pension contributions 100,614 23,825 96,796 15,952 124,439 112,748 The pension contributions in respect of the Accounting Offi¢er and senior post-holders are in r¢spect of employer's ¢ontribution5 to ih¢ Teachers. Pension Scheme or College seheme as appropriate. These are all paid at the same rate a5 for all other members of the Tea¢h¢rs' Pension Scheme. The Governors of the Colleg¢ other than the A¢counting Officer and aff member4 did not receive any payment from the instilulion other than the reimburs¢ment of travel and subsistenee ¢xp¢ns¢s incurred in the course of their duli¢s. The College does not have any Overse activities. Compensation for loss of office has be¢n paid to one fornier member of key management personnel. Compensation for loss of olet paid to former key management personnel 2020 2019 Compensation paid lo th¢ former post-holder- contractual 19,841 The severanee payment was approved by the Colleg¢'s Remuneration Committee and Governing Body. 42
FIRCROFf COLLEGE OF ADULT EDUCATION Notes ¢0 the A¢¢ounts (continued) 7 Emoluments of Key m#nagement personnel, Account5ng Ol¢er ond other higher p#id st¥ff (continu¢d) 20211 2019 Principal's basic salary as a multiple of the median of all staff Principal and CEO'S lotal remuneration as a multiple of th¢ median of all staff 5.45 8 Other operating expenses 2020 2019 Teaching costs Non-teaching wsts Premises costs 115,674 435,577 118,686 102,000 394,159 118.142 Total 669,937 614.301 The College has a contractsa] obligation to maintain the buildings it lease5 from Boum¢ville Village Trust and consequently has a planned maintenance programme for these buildings. More information ¢an b¢ found in the Report of the Governing Body. Capital base and planned maintenanee. on page 6. 2020 2019 Other operating expenses Include: Auditor's remuneration: Financial statements audit Other services provided by the financial slat¢m¢nts auditors - Internal auditor5. remuneration Hire of land and buildings under operating leases 10.740 8J04 8244 149 9.732 7.596 10,680 149 9 Taxatlon The Governors do not klieve the College to be liable for any income tax arising out of its activities during either year. 43
FIRCRofT COLLEGE OF ADULT EDUCATION Notes to the Accounts lcorttinued) 10 TwDgible fixed assets Land and buildings long Equipment le4s¢hold and furniture Total Co$¢ or vAlu4tion At l August 2019 Additions Disposals 3.418.577 118.876 679.065 160,647 (76.612) 4.097.642 279.523 (76,612) At 31 July 2020 37.453 763,100 4JOO,553 Depreciatlon At l August 2019 Charg¢ for the yegr Eliminaid in respect of disposals 1.384,947 64.138 427.030 137,195 (76,612) 1,811.977 201.333 (76,612) At31 July 2020 1.449,085 487,613 ,936,698 Net book value at 31 July 2020 2.088J68 275,487 2 J63,855 N¢t book value at 31 July 2019 2.033.630 252,035 2,285.665 I I Nonacurrent inv&stmtnts 2020 2019 Balance at l August 2019 Additions at C05t Disposals at book value (proceeds £363.422, Tealis&l loss¢s 481,401)) Net (losses) gains on revaIuation at 31 July 2020 3,739.493 367J45 (44423) (257096) 3.766.537 406.291 (527,053) 93.718 Market value at 31 July 2020 3404 119 3.739.493 C¥h held by investhienl managers 103,409 23.212 Balance *t31 Juty 2020 3.50728 3,762.705 R¢presenteAI by: Fixed ini¢re5t stocks (list¢d) Equities and unit tnS (listed) Overseas (listed) h balances 799,874 1,611,878 992J67 103,409 879.894 1.776.626 1,082,973 23.212 Totsl Tot81 cost of Ilsted investments 3 507J28 78 3.762,705 2,616,933
FIRCROFT COLLEGE OF ADULT EDUCATION Notes to the Accounts {continued) 12 Debtors 21120 2019 Amoun15 falling du¢ within one year: Amounts due from the ESFA Trade debtors Prepayments and accrued income 45,030 19,059 70,447 14,132 73,197 Tot•1 87J29 134,536 2020 2019 13 Current Investments Short lerni deposits 148,606 148,695 148,666 148,695 Deposils are held with banks and building so¢ietie5 operating in the London market and licensed by the Financial Condu¢l Authority with more than three months maturity at the balance sheet dale, 14 Credltors: Amounts F8llln8 Due wlthln Ont Year 2020 2019 Trade creditors Other ¢reditors Other taxation and social security Accruals Deferred income- Government Capital grants Amounts owed to the ESFA 92,280 64.641 33,284 54a21 20,000 52,394 64,014 30,393 70.222 20.000 79,928 Total 264,526 316.951 45
FIRCROFT COLLEGE OF ADULT EDUCATION Notes to Ihe A¢¢ounts (continued) 15 Creditor5: Amount5 Falling Due after One Year 2020 2019 Deferred inMe- Government Capita] grdnts 610,135 630.135 16 Restri¢ted Reserves 2020 2019 Centenary Appeal Stydent Hardship Work with ex•off¢nders 30280 8,444 13328 30,280 ,444 13.228 Totsl 51,952 51.952 17 C4sh Cash equivalents 4nd analysis of Chang in net debt C#sh Flow$ 2019 21120 Cash at bank and in hand Cash held in short terni investments Cash held by investment managers 439,259 148,695 23,212 59,437 (29) 80,197 498,096 148,666 103.409 Net Funds 611,166 139,605 750,771 18 Lease obllgations At 31 July the College had minimum I¢ payments under non-¢ancellable op¢raling le¢$ as follows: Futsre minimum lease paym¢nts due 2020 2019 Land and bwildings Nol later than one year Later than one year and not later than five years Later than five years 149 596 4.424 149 596 4.573 5.169 5.318 46
FIRCROFf COLLEGE OF ADULT EDUCATION No¢a to the Accounts {ntInUed) 18 Le#5e obliga¢ion$ (continued) Other Not later than one year Later than one year and not later than five y¢ars 8.454 18J22 7.914 25,156 2&776 33,070 Total I8¢ due 31,945 38.389 19 Contingent Ilbiliti¢s •Dd post balan¢e sbeet events During 2019 the DfE signalled its intention to undertak¢ a rni¢w of ffsidenti41 fi]nding policy. and in Augus¢ 2020 ihe ESFA infornied the College of its intent to perfonn a targeted &ssurdnce review of resid¢ntial artd learner support funding across the four Specially Designatoj Institutions (SDI'S) remaining in England. The ESFA tasked the Provider Market Oversight Assurance Team (PMOA) to undertake its review with the following scope'This assurdnce review has assigned io the tan bause of concerns that hav¢ b¢¢n identified following iK)th an #udii at Ruskin College and art analysis of the dats suppliry] by the three Sp¢¢ialist DesignateAI Inslitirtions (SDIS) in rtsp)nse to the preliminary work for the review of th¢ residentiai access funding for 2021122. This targeted assurance review will allow the ESFA to quantify any funds at risk for ih¢ three SDIS con¢emed-. In furth¢r ¢larifiLZtion received on the Semember 2020 from the ESFA PMOA team the scope of th¢ir review was identified as residenti and l¢arner supp)rt funding claimed by the College in 2018119 and 2019120. Since 2013114 the College has follow¢d the funding terms includoj within an agreemeni between the SDI'S and ESFA (an agr¢¢ment rogniSed by th¢ E8FA). However ESFA claim they have changed and modified iheir Funding Rules since 2013114, Witho specific notice of change to the SDI'S or of fundamental change from the nature of the 2013114 agreemenL ESFA PMOA Team in January 2021 have FrOVid their initial Val10n of variance in treaknent from th¢ 2013114 agreement to their latest funding ruls For the Yea under review (2018119 and 2019120) th¢y have ca]culated a preliminary variance of £309k- £350k in favour of ESFA. ESFA have indicated they will seek to recover this value from the College. Furthermore. thw have verbally indicated that they res¢rve the right to further review years 2016117 and 2017118. but have given no indication of recovery considerdtions. ESFA are yet to provide the College with forniai notifiLion of th¢ clai or the basTS upon which they are seeking clawback The College h&$ not agreAI with any of th¢ claim(s). had no opp)rtunity to review or Chall8¢ Ihe ESFA'S position or assessmeni and no payment timetabl¢ exist& Based on the inforniation available to GovernoTS when approving the firwicia] statement4 no ¢vid¢nce has been provided ihat ESFA'S position is l¢gally va]id or enables the probability or amount of any pol¢ntial obligation to b¢ measured with sufficient reliability. The College has engagoj legal advice in the delerniination of thi5 matter. 47
FIRCROFT COLLEGE OF ADULT EDUCATION Notes to the Accounts (continued) Governors have specifically considered the implication5 of the interim ESFA rert against these financial statem¢nt$, ¢urrent Ilquidity. and forward business plans. They continue to beli¢v¢ the College remains viable and robust, 20 RelAted party transactions •) Funding Bodies Trdnsadion$ with the ESFA are detailed in notes I, 11, 12 and 13. b) Governor8 The toial expenses paid lo or on behalf of ihe Govemors durin8 the year was £984 in resp¢¢t of l governor (2019: £1.027' irt respect of 3 governots). This represents travel and subsistence expense5 and other out of pockei expenses incurred in attendin8 Governor meetin8s and ¢hRrity ¢vents Sn their offi¢ial capacity. No Oovernor hag ree¢ived any reMUnerlon or walved payments from the College during the year (2019: none). ¢) Other rtlittd p4rtles A 10141 amount of £10,875 of consultin8 fees in the year (2019 £12.163) were paid io lhe husband of the Chair of Governors for the provision of specialist sector knowledge and support in ar¢gs of financial modelling and management infom)ation sysiems. A balanc¢ of £nil <2019 - £nil) was due to them at year end. The College sought and gained Charity Commission approval for thi$ appointment, which was approved by Governing Body in December 2019. A total amount of £39,581 (2019 - £43,571) were paid to Companies within the Pertemps Group under long ¢stablished agreements. A balance of £nil 12019 - £11.303) was due to them at year end. The wife of the governor Mr Earl Hibbert is a salaried director with Pertemps. Mr Hibberf became a governor of th¢ College in October 2018. and subsequent to the arran8¢ment$ wlth Pertemps. and resigned in December 2019. 48
FIRCRO COLLEGE OF ADULT EDUCATION Notv to the Accounts (continued) 21 P¢nslon and similar obligltions The College's employees belong to two principal pension schemes. the Teachers Pension Scheme England and Wales ('TPS') for academic slaff and a group pension plan for non-academic staff. The group pension plan is administered by The People's Pension. The TPS scheme is a defined Lxnefil scheme and the group pension plan is a defined contribution schem¢. The Coll¢8e pays employer contributions at a rate 23.680/0. The pension costs ar¢ asse55ed in accordance with ihe advice of ind¢p¢ndent qualified actuaries. The latest fornial actuarial valuation of the TPS was 31 March 2012. Totsl pension eost for the ye*r 2020 2019 Teachers, Pension Scheme. employer contributions paid Group Pension Plan.. employer contributions paid 107,585 55,758 58J53 56,$40 Total pension cost for the year 163,343 114093 There were outstanding ¢onlributions of £21,099 at 31 July 2020 (2019 - £16.004). T¢achers> Pension Scheme Th¢ Teachers. Pension S¢heme (TPS) is a statutory. contributory. d¢fin¢d benefit s¢h¢me, governed by the Teachers. Pension S¢heme Regulations 2014. These regulalions apply to teachers in schools. llegeS and other edu¢ational establishments. Membership is automati¢ for teachers and lethir¢rs at eligible institutions. T¢aehers and lecturers are able lo opt out of the Trs. The TPS is an unfunded scheme and members contribule on a 'pay as you go, basis - these ntributions. along with those made by employ¢rs. are credited to the Ex¢h¢qu¢r under arrangements governed by the above Act. Retirement and other pension b¢nefits are paid by public funds provided by Parliament. Under the d¢finilions set out in FRS 102 (28.11), the TPS is a multi-employer pension plan. The College is unable to identify its share of the underlying assets and liabilities of the plan. Accordingly, Ihe College has taken advantsge of the exemption in FRS 102 and has accounted for its contributions lo the scheme &$ if it were a defined-contribution plan. The College h&s sel out above th¢ inforniation available on th¢ plan and the impli¢alions for the College in leTrnS of the anticipated contribution rates. The valuation of the TPS is carried out in line wilh regulations mad¢ under the Public Service Pension Acl 2013. Valuations credit the teachers, pension account wilh a real rate of retum assuming funds ar¢ invested in notional investments ihat produce that real rate of return. 49
FIRCROFT COLLEGE OF ADULT EDUCATION Notes to the Accounts (Continued) 20 Pension 4nd simil$r oblSgatlons (continued) Te4chen' Pension Seheme (continued) The lalest actuarial review of the TPS w&5 carried out as at 31 March 2016. The valualion rerA)rt w&s published by the Department for Education (the Department) in April 2019. The valuation reported total scheme liabilities (pensions currently in payment and the e5timat¢d cost of future benefits) for s¢rvice to the effective date of £218 billion. and notional &8sets (eslirnated future contributions together with the notional investments held at the valuation date) of £198 billion giving a notional p&st s¢rvic¢ deficit of £22 billion. As a result of the valuation. new employer ntrIbution rates were sel at 23.680/0 of pensionable pay frorn September 2019 onwards (compared to 16.480/• during 2018119). DfE ha8 agreed to pay a teacher pension ¢mploy¢r cOntriblon grdnt to cover the additional costs during the 2019-20 academic year. A full copy of the valuation report and supporting documentation can be found on the Teachers, Pension Scheme website at the following lo¢ation.' htt s:Ilwww.¢ea¢h¢rs ension5.co.uk14media1documentM¢rnberldocum¢nIn herne-actuarial-valuation-2016 ws-it mslteachers- ion- The pension costs paid to TPS in the year amounted to £107.585 (2019- £58,353). 50