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Agenda item

Accounts 2019/20

Minutes:

The Senior Finance Manager (Client) introduced his report setting out the audited Report and Financial Statements for the year ended 31 March 2020 for approval prior to submission to the Charity Commission by 31 January 2021.

 

The Senior Finance Manager (Client) advised the Committee that:

 

·  No major issues had been identified regarding the accounts during the audit and the auditors had indicated that they were happy to issue an unmodified audit opinion.

 

·  Some adjustments had been made to the draft accounts, but none of these had any impact upon the financial resources available to the Charity.

 

·  The total funds of the Charity as shown on the Balance Sheet had reduced from £5.17m to £4.38m, with the Statement of Financial Activities showing a net funds decrease of £785,495 for the year.  The two main reasons for this were (a) the reduction in the value of the Charity’s investment in Charifund (£192,574 over the course of the year) and (b) a reduction of £620,000 in the value of investment properties.

 

·  There were two parts to the reduction in the value of investment properties.  Firstly, there was a £270,000 downward revaluation of the four residential properties on the Estate.  Following the revaluations for the 2018/19 accounts where the auditors had suggested a different valuation methodology, there were further discussions and the auditors now accepted that the method used by the Council’s valuer was appropriate.  The values had been reset taking into account the latest valuation figures.  Secondly, following discussions with the auditors, there was a reduction in the value of Tyland Barn from £350,000 to zero reflecting the fact that the property is let on a 125-year lease at a peppercorn rent.

 

·  Accounting adjustments agreed with the auditors after the draft accounts were submitted to them included depreciation of the play area (£115,205) and reclassification of electricity works undertaken as part of the car park construction as repairs and maintenance rather than capital spend.

 

·  The purpose of the Letter of Representation for 2019/20 was to ask the Committee to confirm some statements relating to the audit and the information supplied to the auditors during their audit.

 

·  The purpose of the Audit Findings Report was to bring to the attention of the Committee various issues that had arisen from the audit, including the status of audit issues raised in previous years.  Two of the three issues had been resolved, but the Officers would continue to monitor the remaining one relating to a potential tax liability in respect of car park income and seek professional advice if necessary.

 

In response to questions:

 

The Senior Finance Manager (Client) advised the Committee that:

 

·  Although there had been a reduction in the value of Tyland Barn from £350,000 to zero for accounting purposes, there would be a reinstatement valuation for insurance.

 

·  The amounts owed to creditors in 2019/20 included the money owed to the Borough Council in respect of the car park improvement works.  Last year’s instalment had not been paid at the time of closure of the accounts due to uncertainties about cashflow in the pandemic situation.

 

·  The reduction in financial assets was due to the impact of the pandemic on the value of the Charity’s investment in Charifund.  However, the value of the investment had now started to recover.

 

·  The increase in financial assets measured at amortised cost reflected the car park improvement loan.

 

The Democratic Services Officer advised the Committee that:

 

·  Kent County Council was made a party to the 1971 lease between the Cobtree Charity Trust Limited (the lessor) and the Maidstone Borough Council (the lessee) and its consent was needed in relation to certain transactions.  It was believed that this was to ensure that the Estate continued to benefit the inhabitants of Maidstone and other members of the public.  There were some things that the Charity could do without consent.  For example, an agricultural lease of less than 21 years would not require consent.  Requests for consent would be made to the appropriate Director at the County Council.

 

RESOLVED:

 

1.  That the Trustee’s Report and Financial Statements for the year ended 2019/20, attached as Appendix 1 to the report of the Senior Finance Manager (Client), be approved and submitted to the Charity Commission.

 

2.  That the Letter of Representation, attached as Appendix 2 to the report of the Senior Finance Manager (Client), be approved.

 

3.  That the contents of the Audit Findings Report, attached as Appendix 3 to the report of the Senior Finance Manager (Client), be noted.

 

Supporting documents: