Report of the Head of Finance and Resources - Management Letter 2014/15 - Update Report
- Meeting of Cobtree Manor Estate Charity Committee, Wednesday 23rd March, 2016 4.30 pm (Item 143.)
- View the background to item 143.
The Committee considered the report of the Head of Finance and Resources setting out the current position with regard to the issues identified in the External Auditor’s Management Letter that accompanied the Accounts for 2014/15.
Members were reminded that the External Auditors had recommended that the Charity should have its own accounting records separate from the Council; that the Council stop reclaiming input VAT on behalf of the Charity; and that consideration should be given to changing the legal status of the Charity.
Members were given an
update by Officers on these three issues and were advised
that a spreadsheet had been set up in
the Council’s financial management system, Agresso which allowed the financial transactions of
the Charity to be processed separately;
the Auditors had considered the VAT
status of the Charity in a separate report and recommended that the
Council cease reclaiming input VAT on behalf of the Charity as it
considered that the management fee paid to Mytime for running the Golf Course at Cobtree was a lease payment. However, it has been confirmed that the management
fee was for running the Golf Course on behalf of the Trust and not
a fee for the lease. Therefore this fee
was considered a standard rated supply and therefore all input VAT
could be reclaimed.
Although the VAT had been claimed correctly, the Auditors recommended that the Trust should be registered separately for VAT as the taxable supplies for the Trust are over the threshold for registering for VAT and these supplies are separate to the Council’s supplies.
the Auditors had recommended that
consideration be given to changing the legal status of the
Charity. The Head of Mid Kent Legal
Partnership had indicated that a review of all the charitable
bodies would be undertaken and a report would be brought back to
the Committee once this work has been completed. If there was a change to the legal structure of
the Charity then this could require a new company to be set
In response to
questions by Members, Officers confirmed that:
the Head of Mid Kent Legal Partnership
would be asked to submit terms of reference for the review
to Members before carrying out the
review of the charities.
the Trustees’ liability issue
would be investigated and a report would come back to the next
MBC enforce the car parking in Cobtree
but the machines are the property of Cobtree Manor Estate Trust. This is dealt with by separate arrangement at no
cost to the Trust although the Council receive the income from any
That the Committee notes the current position with regards to the
issues identified in the External Auditor’s Management Letter
that accompanied the Accounts for 2014/15;
That legal advice is sought on the setting up a new
That Officers report back to the next meeting on the
Trustee’s liability issue and the response to the
auditor’s recommendations; and
Charity be registered as a separate body for VAT
Voting: For: 5 Against: 0 Abstentions: 0
- Management Letter 2014/15 - Update Report, item 143. PDF 73 KB View as HTML (143./1) 69 KB
- Appendix A - Management Letter 2014/15, item 143. PDF 614 KB
- Appendix B - Legal Structures, item 143. PDF 222 KB