FGB Minutes 10-12-12
Meeting of the Full Governing Body
Monday 10 December 2012 at 6 pm in the Library
Present: Martin Rigby (Chair), David Jenkins, Claire Beressi-Jones, Rob Campbell, Jayne Green, Brian Harrison, Michael Truscott, Hildegard O’Kane,, Alan Rodger, Elizabeth Sadler, Paula Carter, Julian Mellor and Lauren Allin.
In Attendance: Fran Difranco (Vice-Principal: Business and Administration [VPBA]), Cathy Ison (Finance Manager), James Gare (MacIntyre Hudson) and Joe Greenway (Clerk)
1 Approval of Absences
Apologies were received from Jake Reynolds, Patricia Labistour, Huw Jones, Deirdre Murphy, Suzy Offord and Nick Morley
The Chairman welcomed two new governors, Paula Carter and Julian Mellor, to the Board and to their first meeting
2 Declaration of Business Interests
Martin Rigby declared that his partner was employed by IVC as an Adult Education Tutor.
3 Financial statements to year end 31 August 2012
Alan Roger arrived during this item at 6.20pm.
The Chairman welcomed James Gare of MacIntyre Hudson (College Auditors) to the meeting and invited him to talk to the meeting.
Mr Gare prefaced his remarks by offering a personal opinion that the format of the accounts were 'far more complicated than was necessary' but, because IVC is an academy existing as a limited company by guarantee with charity status, the government has set the requirements for the financial statements which all are obliged to follow.
He reminded governors that there are two sets of accounts as there are two companies, the Academy and the Sports Centre, which is a subsidiary of the academy. To understand what the statements say about the financial health of the College it was best to think of them as one entity and use consolidated figures. He referred members to page 19, Consolidated Statement of Financial Activities, in the Academy Financial Statements.
- Column 5 Total Funds: shows an income of £17.8M, an expenditure of £6.5M and a year-end surplus of £11.3M.
- On becoming an Academy the college received a 'gift' of the land and buildings. This is recorded in column 4, the Restricted Fixed Assets with a value of £11.6M. Governors have no real 'control' over these figures.
- Similarly column 2, the Restricted Pension Funds, shows the assumed liability of IVC for that part of the Cambridgeshire County Council pensions’ fund of around £1.1M. Again governors have no real 'control' over these figures.
- Column 1 Unrestricted Funds: shows the monies that governors can use for ANY purpose that fulfils the Object as given in the Articles. It shows a surplus of £366k which is largely due to the profits made by the Sports Centre.
- Column 3 Restricted General Funds: shows the Grants from the EFA, the Pupil Premium monies etc and this must be used for educational activities. It shows a surplus of £574k.
- The total of the two surpluses shown in columns 1 and 3 of £941k gives the level of reserves carried forward to the next financial year. This can be used to provide working capital for the College and also to cover risks. Having a 'good' surplus is essential for continued operation. It should not be too high as this may lead to funding clawback and if too low it places the College at financial risk. Academies need a Reserves Policy and, to date, the EFA have issued no guidance on this matter. JG offered the opinion that when compared with the other academies for whom his firm act as auditors (140), the level of reserve shown by IVC is NOT atypical. He announced that his company will undertake an anonymised analysis of the Financial Statements of these 140 academies to produce some benchmarking data that will be shared with the college
- In conclusion he offered the opinion that IVC was in good financial health.
He then referred members to page 21, Balance Sheet, in the Academy Financial Statements.
- Column 1 shows figures for the Academy only, column 2 the figures for the Academy and Sports Centre combined.
- Fixed Assets. The land and buildings with a value of £11.6M
- Debtors. Largely VAT
- Cash in Bank. A substantial £1.3M. The VPBA advised the meeting that an arrangement was being set up with the College bank to sweep any money over £500k into a higher interest account.
- Net Current Assets of £941K. This shows the current liquidity of the College in a very positive position.
- The net value of the college as at 31 August 2012 was £11.4M.
Finally Mr Gare reported that the audit process went very well. All the recommendations given in the audit report are of an administrative nature and to be expected. IVC is a 'success story, financially' and that he was impressed 'with the way it is financially run'.
The Chairman thanked Mr Gare for his very informative and helpful explanation of the financial statements and invited questions and comments.
Valediction: The Chairman of the Resources Committee proposed a formal vote of thanks to the VPBA and the rest of the Finance Team for their very hard and clearly very good work in getting the college this far. This was supported nem con.
The Chairman of the Resources Committee then proposed the following resolution:
That subject to the final version having no material alterations that the Financial Statements for the year end 31 August 2012 are approved by the Full Governing Body.
The resolution was seconded by Elizabeth Sadler
Decision: The resolution to approve the Financial Statements for the year end 31 August 2012 was approved nem con.
The meeting closed at 6.30 pm.