58/23. Declarations of Interest
M. Hartland declared an interest as a parent of a student at the college.
59/23. Minutes of Meeting Held 24 October 2023 (Appendix – Agenda Item 3)
Resolved: That the Minutes of the meeting held on 24 October 2023, be approved as a true and correct record.
60/23. Matters Arising
Minute 55/23. Estates Termly Report and Capital Bids Update
A meeting of the Estates Strategy Working Group would be held on Monday, 11 December 2023. Members of the Committee who were not members of the Working Group were invited to attend. The Board Chair requested that they receive the minutes of previous meetings of the Working Group, together with the original Estate Condition Report, to provide background and context to the Working Group’s discussions.
61/23. Financial Statement Auditors (FSA) Report – Draft Financial Statements for Year Ended 31 July 2023 (Appendices Agenda Items 5)
The EDoF presented the following reports –
Financial Statements for the Year Ended 31 July 2023
The Draft Financial Statements for the Year Ended 31 July 2023 (previously circulated) which, having been audited, indicated a ‘clean’ unqualified audit opinion in terms of both truth, and fairness and regularity. Minor amendments identified at the meeting would be incorporated into the final version to be submitted to the Board.
The Audit Committee had also considered the draft Financial Statements at its meeting on 22 November 2023 (Audit Min. No. 32/23 refers) and had recommended them to Board.
The EDoF explained that there had been a minor adjustment made regarding the treatment of the college staff headcount in the Statements. The anticipated regularity assurance opinion would also be unmodified.
The Financial Statements auditors would attend the Board meeting and the Letter of Representation and final version of the Financial Statements would be signed at the Board meeting in December 2023.
Going Concern Assessment
The EDoF also presented a report (previously circulated) providing the Committee with assurance regarding the status of the college as a going concern. The draft year end accounts, 2023 - 2024 financial plan and year to date operating outcomes demonstrated continuing good financial health. The EDoF advised that governors were required to assess the college’s going concern and that the auditors needed to be satisfied that the assessment was robust. The auditors had considered that the Board’s Going Concern assessment was reasonable and therefore the accounts had been appropriately prepared on the going concern basis.
The latest weekly cashflow forecast for the year illustrated a sound ongoing cashflow position with no period of pressure on cashflows. The changes to timing of ESFA funding payments made in April 2023, meant that the college’s Cash position was more stable and regular than in previous years.
Resolved: That, having considered the draft Financial Statements, the report of the Executive Director of Finance and Financial Statements auditors and the reports on going concern, the Committee RECOMMENDED TO BOARD that
- the Committee considered the Shrewsbury Colleges Group to be a going concern; and
- the audit findings and draft year-end financial statements 31 July 2023, as amended, be approved.
ACTION: REPORT TO BOARD
62/23. Period 3 Management Accounts (Confidential Appendices - Agenda Item 6)
The Committee received the Period 3 Management Accounts and update (previously circulated). The Accounts had been circulated to all governors.
The key issues and differences between the Budget and Forecast out-turn were:
Regarding Income
- Increased 16-18 Funding reflected the revised 16-18 funding allocation.
- Reduced HE and Learner loan income reflected the lower enrolments to date.
• Full cost activity had commenced positively, so the forecast had been left equal to budget. - “Multiply” activity had been included in the forecast at this stage.
- A portion of SEA equipment allowance recognised as income to offset equipment had not been capitalised. The Committee sought assurance that this was the most appropriate treatment of this allowance. The EDoF explained that increased Materials costs would be offset by matching the SEA grant released to income where equipment purchased is expensed and not capitalised.
Regarding Pay
Whilst pay was ahead of budget due to inclusion of the 6.5% pay settlement (as opposed to the 4% originally budgeted) and additional new posts required to support increased groups and students, the Year to Date remained below the full-year forecast run rate, as the risk to the budget had been mitigated by the receipt of additional funding. The Teacher Pension increase had been mitigated by promise of addition to the existing TPS grant from April 2024.
Regarding Non-Pay
- Exam costs continued to run ahead of plan. In response to questions, the EDoF explained that the balance of the year-to-date variance was assumed to be due to timing differences. The P/CEO explained that further analysis was needed to gain greater assurance on the full year outturn.
- Exams costs remained a significant challenge as was the cost of supporting bursary payments and transport costs.
- Materials costs included equipment acquired as part of the T level Specialist equipment allowance that was below capitalisation thresh-holds.
The Committee also noted that the college had been successful in securing grants from the Higher Skills Improvement Fund and the Local Skills Improvement Fund. The Committee sent its congratulations to the officers involved in the bid submissions on their success in attracting more funding to further improve student experience. However, whilst the funding was welcome, the challenges in developing the estate to meet the longer-term demographic growth expected remained.
The EDoF updated the Committee on the successful LSIF and HSIF bids and on the progress of the Multiply contract delivery.
The Committee concluded that, whilst the current year outlook remained positive, there remained some risks in the delivery of the 2023-24 Budget, including:
- Inflationary cost and pay pressures.
- Recruitment to HE provision. In response to questions, the EDF reported that the college was planning January HE starts but that this would not materially fill the anticipated shortfall in HE funding.
- Exams fees continue to be a concern area with increase in qualifications requiring exams.
The P/CEO advised that, whist acknowledging the value to the college of the numerous grant funding bids secured so far, the college would now consider carefully what funds to bid for going forward, due to the ability of the college to manage and deliver to the funding deadlines multiple and complex capital projects at the same time. The Committee supported this approach.
The Committee considered that the Board would benefit from a progress report on the numerous grants secured together with an update on where the funding would be spent.
63/23. Estates Update (Agenda Item 7)
The EDF provided a verbal update on The Welsh Bridge Campus relocation of the Learning Resources Centre from the Quarry Building to Priory Hall and expansion of teaching space in the Quarry Building (Post-16 Capacity Bid) – the college was due to go out to tender in January 2024; the project would be completed in the Summer.
64/23. Risk (Appendix - Agenda item 8)
The Committee examined those risks within its remit and agreed that they had either been identified and adequately discussed at the meeting. The 2023 – 2024 Strategic Risk Register had been reviewed by the Audit Committee and recommended to Board.
The Committee discussed the possible cumulative risk presented to the college in managing and delivering the multiple unplanned projects generated by grant bid success. It was agreed that this be added to the Strategic Risk Register.
It was noted that whilst FBO Risk 1 (Risk of significant under recruitment of planned 16-18 learner numbers) had not materialised in September 2023, it would be updated to the 2023 – 24 year.
57/23. Date of Next Meeting – Tuesday, 30 January 2024 from 5.30 p.m.
The meeting concluded at 7.12 p.m.