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Financial Report

                                             

 

 

  Annual Report and Statement of Accounts 
for the Independent Living (1993) Fund
for the year ended 31 March 2003



 

 

 

 

 

Page   Contents
 
1   Trustees Report
7   Statement of Trustees' and Chief Executive's responsibilities
9   Statement on the System of Internal Control
14   Auditor's Report
16   Statement of Accounts
19   Notes to the Accounts

 

 

 



Trustees' Report for the Year ended 31 March 2003

Independent Living Funds appointed Trustees

Sydney Shore CBE (Chairman)
Chairman since 1993. A career banker who retired as a General Manager of Lloyds TSB plc. Involved in fund raising, social and church activities and was formerly a Vice Chairman of a large NHS Trust.

John Shepherd OBE (Treasurer/Vice-Chairman)
Vice Chairman since 1993. Chartered Accountant. Retired Commercial Finance Director with extensive experience in the manufacturing industry. Has worked with, and for disabled people as a Director of Remploy.

Thomas Begg
Management consultant in health & social care. Retired Director of Social Services. Former assistant honorary secretary to the Association of Directors of Social Services. Former Social Services Adviser to the Assembly of Welsh Counties and to the Welsh Local Government Association.

Margaret Cooper (Chairman of Audit Committee)
Solicitor. Chairman of The Appeals Tribunal, including disability appeals tribunals. Chairman of industrial tribunals and fair employment tribunals. 

Anne Davies OBE
Immediate past Chairman: Centre for Accessible Environments. Consultant on disability issues with NHS Trusts. Author and broadcaster.

William Morrison CBE (to June 2002)
Chartered Accountant, formerly Deputy Senior Partner of KPMG. Has held non-executive directorships in listed companies, and similar appointments in other bodies over a period of years.

Adrian V Stokes OBE (to June 2002)
Chief Executive, CAT Ltd. Vice-President of the Disabled Drivers' Motor Club and the Royal Association for Disability and Rehabilitation. Governor of Motability. Member of Disability Appeal Tribunals. Non-Executive Director of Barnet Primary Care Trust and of the National Clinical Assessment Authority.

Rachel Chiu (from July 2002)
Watchmaker. Chairperson of Birmingham Chinese Youth Centre, Treasurer of Chinese Community Centre- Birmingham and Regional Committee member of WM Community Fund. Former Social Worker. Freelance consultant supporting community projects.

Ann Goodborn (July 2002 to April 2003)
Chartered Accountant. Finance Director with extensive experience in manufacturing industry and education. Has worked in a variety of roles including Corporate Finance, Audit, Project Management and Consultancy. Involved in Music for Youth, teaching for Birmingham Education Authority for many years.

The Trustees do not receive any remuneration, but are reimbursed for out-of-pocket expenses. There are no other unpaid persons or volunteers upon whose services the Fund is dependent.

Sub-committees

a) A Referrals Panel consisting of the Chairman plus one other Trustee, rotating on a monthly basis, considers in the first instance individual cases referred by the Chief Executive where she considers this is appropriate.

b) An Audit Committee consisting of William Morrison (member and chairman until June 2002), Margaret Cooper (chairman from July 2002), John Shepherd, Ann Goodborn (July 2002 – February 2003) and Tom Begg (from March 2003) is responsible for ensuring the operational co-operation between auditors and the Fund's Accounting Officer and staff, for assessing the outcome of external and internal audits, and dealing with risk management and corporate governance issues.

c) A Salaries Committee consisting of John Shepherd (chairman), Margaret Cooper, William Morrison (until June 2002) and Ann Goodborn (July 2002- February 2003) and Tom Begg ( from March 2003) is responsible for recommending senior staff salaries and changes to the general pay scales for directly employed staff, taking into consideration rates of pay in the Benefits Agency.

Chief Executive appointed by the Trustees and Accounting Officer as designated by the Principal Accounting Officer for Work and Pensions

Mrs Elaine Morton

Auditor 

Comptroller and Auditor General 
National Audit Office 
157-197 Buckingham Palace Road
London SW1W 9SP 


Solicitors

Eversheds
115 Colmore Row
Birmingham B3 3AL

Bankers

Lloyds TSB Commercial
Butt Dyke House
33 Park Row
Nottingham NG1 6GZ

Objectives 

The Independent Living (1993) Fund, generally referred to as "the 93 Fund", was set up in April 1993 to provide financial help for disabled people throughout the UK. Its awards are in the form of regular monthly payments to enable people to pay for personal assistance.

The Fund is mainly financed by central government through the provision of grants in aid and is constituted as a discretionary trust fund. The Secretary of State for Work and Pensions (formerly the Secretary of State for Social Security) appoints seven Trustees of the Fund. The same Trustees are responsible for the Independent Living (Extension) Fund, generally referred to as "the Extension Fund", which is a charity having similar financing and objectives, but which does not accept new applications.

The Trust Deed

The Trust Deed of the 93 Fund determines who is eligible for its help. A successful applicant must:

 be living in the United Kingdom

 be at least 16 and under 66 years of age

 receive the highest care component of the Disability Living Allowance

 be able to live independently in the community for at least six months

 have savings of less than £18,500 (effective from April 2002)

 have an income which is insufficient to cover the cost of the care needed

 be assessed by the local authority as being at risk of entering residential care, or capable of leaving it to live in the community

 receive at least £200 worth of direct payments and/or services per week from the local authority (net of any charge), and

 be assessed as needing additional care

The Trust Deed also determines certain restrictions upon how awards may be spent, and the maximum weekly payment that can be made to any user. The maximum weekly payment has been £395 since April 2002.

Organisation and administration

The Fund’s premises until January 2003 were in Block 6, Government Buildings, Chalfont Drive, Nottingham, NG8 3RD; the Funds relocated in January 2003 to The Equinox Building, Island Business Quarter, City Link, Nottingham, NG2 4UU. The equivalent of 124 full-time staff administers both the 93 Fund and the Extension Fund. In addition 73 (based on an annual average) self-employed visiting social workers carry out assessments for both Funds.

There has been an increase in staff in order to improve user service. This includes a substantial review process ensuring that users are revisited at two-yearly intervals to enable a full review of care needs leading to an up to date offer of financial assistance. The premises at Chalfont Drive were insufficient to accommodate the increased staff, and this led to a major relocation project culminating in the move to the Equinox Building. The relocation project was subject to the contract services arrangement used by the Department for Work and Pensions (DWP) for its own accommodation needs, and DWP approved the relocation costs and ongoing running costs which were an inseparable part of providing accommodation and facilities for the Funds under the conditions of the main DWP contract.

The Fund seeks to employ disabled persons where they meet the criteria advertised for the post, and will make all adjustments possible within reasonable limits of resources and business needs to meet the terms of the Disability Discrimination Act.

The partnership with local authorities marks the main difference between the 93 Fund and the original Independent Living Fund (although there are also differences in eligibility criteria and financial limits). Disabled people must have the support of their local social services department in making an application to the Fund.

The Fund publishes its basic information leaflet in ten languages, large print, Braille and talking tape.

Review of developments

A total of 3,203 new applications were received during the year, compared with 2,690 during 2001-02. By the end of March 2003, 9,006 people were receiving awards from the 93 Fund and the average weekly award was £242 per week, compared with 8,060 people receiving an average £227 per week at March 2002. The most prevalent primary disabilities amongst users of the Fund are severe learning difficulties (25.8%), multiple sclerosis (15.5%), cerebral palsy (14.9%), spinal injury (7.1%), and brain damage (5.4%).

A government “quinquennial review” report was published in December 2001. Major improvements in the treatment of earnings and capital were introduced from April 2002 together with an increase in the maximum weekly payment approved by the Secretary of State for Work and Pensions. A number of other improvements included in the recommendations were introduced during the year.

The Fund has Contact Officers in all Social Services Departments in Great Britain and Health and Social Services Boards in Northern Ireland for dissemination of information and advice about the Fund. Information seminars were held towards the end of the year, and the Fund has also made presentations to social workers and disability groups on the operation of the Fund.

Regional meetings were held for Visiting Social Workers during the year. Fund staff attended to enable discussion of issues arising from the Revisit process.

A User Group was set up during 2001-02 with users from counties close to the Fund’s offices, and this group has made a significant contribution to the review of Funds literature resulting in a revised information pack for all users. An exploratory meeting for users in the London area took place toward the end of the year, as a first step towards extending consultation to users in all areas.

The website (www.ILF.org.uk) was set up in April 2001, and has been maintained throughout the year to provide answers to frequently asked questions, and to give information about the User Group.



Financial position

The 93 Fund and Extension Fund are jointly financed, mainly out of money voted by Parliament as grants in aid for the purpose of making regular grants to individuals. 96.7% of the £178 million grant in aid available for this year has been drawn on for users of the two Funds. The grant in aid available included a contingency amount for possible additional applications resulting from means test changes in December 2001 and the increased maximum weekly amount payable from April 2002, but the actual growth was lower than the full amount provided.

The Fund is committed to prompt payment of bills for goods and services received. Payments are normally made within the period specified in the contract. Where there is no contractual or other understanding, they are paid within 15 days of the receipt of the goods or services, or presentation of a valid invoice or similar demand, whichever is later. 95% of invoices paid in the year met this target.

The Fund does not hold reserves for any purpose. Assets are held only for the purpose of managing the Fund. The Trust Deed provides that the Trustees: (i) can borrow only with the specific agreement of the Secretary of State; (ii) cannot lend; (iii) cannot issue guarantees or indemnities; (iv) can only invest Fund moneys in interest-bearing accounts.

The statement of accounts presented with this report has been prepared in accordance with an agreement made between the Trustees and the Secretary of State for Work and Pensions. 


                                                                   
Elaine Morton, Chief Executive

                                                                 
Sydney Shore CBE, Chairman

                                                
John Shepherd OBE, Treasurer/Vice Chairman





Statement of Trustees' and Chief Executive's Responsibilities

In accordance with the Trust Deed, the Secretary of State for Work and Pensions appoints the Trustees of the Fund. The Trustees are required to appoint, with the approval of the Secretary of State, a full time official to be known as the Chief Executive.

Under the Trust Deed and the consequential agreement between the Trustees and the Secretary of State, the Trustees are required to prepare a statement of accounts for every accounting period (financial year) in the form agreed with the Secretary of State. The accounts are prepared on an accruals basis and must give a true and fair view of the income and expenditure and state of affairs of the Fund.

In preparing the accounts, the Trustees are required to:

observe all relevant guidance given in "Government Accounting" and the Treasury publication “Executive Non-Departmental Public Bodies: Annual Reports and Accounts Guidance” as amended from time to time;

ensure that every statement of accounts shall meet best commercial accounting practices including Accounting Standards issued or adopted by the Accounting Standards Board, and Statements of Recommended Practice, insofar as they are appropriate to the Fund and are in force for the financial period for which the statement of accounts is prepared;

prepare a Trustees' report (to be included with the statement of accounts), which confirms that the accounts have been prepared in accordance with the agreement made with the Department for Work and Pensions.

The Trustees, with the assistance of the Chief Executive, are required to apply accounting practices and financial systems to the administration of the Trust so as to enable them to:

monitor and take reasonable steps to ensure compliance with the terms and conditions upon which money has been paid to and accepted by the Trustees as part of the Trust Fund;

monitor and take reasonable steps to ensure that expenditure in any financial year does not exceed the programme, budgets and forecasts in respect of that financial year and the amount of public funds provided by way of grant made to the Independent Living (1993) Fund for that financial year;

take reasonable steps to safeguard against fraud and theft;

keep and maintain books, records and accounts and apply accountancy practices and financial systems which fully and properly record all money received and paid respectively by and on behalf of the Trustees for the purposes of the Trust.

The Trustees and the Chief Executive are responsible for effective control of the full range of issues related to corporate governance. A separate statement is provided on the system of internal control.


                                                                  
Elaine Morton, Chief Executive

                                                                 
Sydney Shore CBE, Chairman

                                                 
John Shepherd OBE, Treasurer/Vice Chairman




Statement on Internal Control for Year ending 31 March 2003

Accounting Officer’s Responsibilities

As the Accounting Officer I have responsibility for maintaining a sound system of internal control that supports the achievement of the Fund’s aims, objectives and policies set by both the Department for Work and Pensions (DWP) and the Board of Trustees of the Fund whilst safeguarding the public funds and the Fund’s assets for which I am personally responsible, in accordance with the responsibilities assigned to me in Government Accounting.

The Board of Trustees also has responsibility for maintaining a sound system of internal control and for reviewing its effectiveness. The regular reporting to the Board of the work undertaken to assure myself that the system of internal control is working effectively means that there is no separation or difference between the mechanisms the Board and I use in this assurance process.

I acknowledge my separate Accounting Officer responsibilities to Parliament in particular my responsibility for taking action as set out in paragraphs 14 to 18 of the Non Departmental Public Bodies Accounting Officer Memorandum should the Trustees contemplate a course of action involving a transaction which I consider would infringe the requirements of regularity and propriety or which does not represent prudent or economical administration, efficiency or effectiveness. I also acknowledge that no Trustee individually or the Board collectively are permitted to give me instructions which conflict with my duties as the Fund’s Accounting Officer. During the period under consideration neither situation arose. Therefore it is proper to set out a joint statement on internal control within the Fund between the Board of Trustees and myself as Accounting Officer.

Corporate Governance Arrangements

The Fund is sponsored by DWP and operates by Trust Deeds set up by the Secretary of State. This means that some aspects of the corporate governance of the Fund are not controlled by the Fund and overall governance assessments are dependent on some activity within DWP. 

All constituting documents (Trust Deeds, Conditions of Grant and Financial Memorandum) are produced by DWP for Trustee signature. This structure does have associated risks of documents being out of date but the Fund acts proactively to ensure regular liaison is maintained to manage the issues.

The Board of Trustees and I acknowledge that the control environment within our direct influence has been strengthened during the year. This reflects the ongoing recognition that robust risk management systems are crucial to the effective management of the Fund.


The following statement on internal control covers the financial period of the accounts and up to the date of their approval.

Internal Control

The system of internal control is designed to identify the major risks to the achievement of the Fund’s aims, objectives and policies. The system is intended to manage rather than eliminate the risk of failure to achieve and therefore it can only provide reasonable and not absolute assurance of effectiveness.

The strategy for managing risk is formulated by the Senior Managers and then recommended to the Board of Trustees for agreement. The system of risk management is based on an ongoing process identifying risks, evaluating the likelihood of the risk occurring and impact should they occur and then setting up processes to manage them efficiently, effectively and economically.

Risk Management is an integral part of the strategic and business planning process. Senior Managers continue to consider risk management on a regular basis using an organisational wide risk register, collating and documenting progress on managing the key risks through the mitigation plans. This process has been in place for all of the year end 31 March 2003 and up to the date of approval of the accounts.

The system of internal control also includes a framework of management processes including policies, management information, financial regulations, administrative procedures and a system of delegation and accountability.

Other key controls in the system include:

· A comprehensive system of internal checks and validation set up from October 2002 with three monthly reports on the effectiveness of both the operation of the check and the design of the check as the intended control. Standards for the findings of the check have also been set.

· Reporting on any control breakdowns.

· Comprehensive budgeting systems with an annual budget approved by Trustees in consultation with DWP.

· Regular financial reports tracking expenditure against forecasts.

· A robust procurement policy, process and review to ensure continued best value for money.

· Organisational controls involving the segregation of incompatible duties.

· An appropriate Organisational structure to support the processes with defined procedures for seeking and obtaining approval for major organisational change.

· Personnel policies to underpin the Fund’s work.

· The creation of an organisational performance management system with key indicators to maintain a proactive approach to monitoring, reporting on performance and accountability.

· The operation of a Salaries Committee by the Board of Trustees to agree salaries for staff at all levels.

As Accounting Officer I also have responsibility for reviewing the effectiveness of the system of internal control. The Fund does not have its own Internal Audit function at the present time but the issue is presently under review. The Fund can however access DWP’s internal assurance service (DWPIAS) and DWP can arrange for them to carry out an internal audit of the Fund if required. My review is informed by:

· A regular quarterly programme of workshops to identify and keep up to date the record of risks facing the organisation.

· Quarterly reports from managers who, as allocated risk owners, have responsibility for the development and maintenance of the internal control framework on steps taken to manage risk in their own areas of responsibility including progress on key projects.

· Reports from DWPIAS, to standards defined in the Government Internal Audit Manual, which includes an independent opinion on the adequacy and effectiveness of the system of internal checks with any recommendations for improvement. In April 2002 DWPIAS gave a substantial assurance rating in relation to governance and in February 2003 gave a substantial assurance rating to the internal controls processes and the methodology to evaluate the results.

· Any comments made by external audit in their management letter and other reports.

· Quarterly assessments of the impact of future legislation on the Fund’s activities are reported to the Senior Management team with progress reports on actions needed to achieve compliance. 

The Board’s understanding of the risks to the delivery of the Fund’s objectives and the effectiveness of the system of internal control is informed by regular reports from the Chairman of the Audit Committee. Significant risk issues would be referred by the Audit Committee to the Board for consideration.


Role of the Audit Committee

The Board of Trustees confirms that that it is ultimately responsible for the system of internal control and for reviewing its effectiveness. It has established some key procedures and policies to review the effectiveness of the system of internal control. Without diminishing its own responsibilities the Board has delegated certain tasks to the Audit Committee and this includes:

· Reviewing the effectiveness of the risk management process including receiving and agreeing a register of the organisation’s main risks.

· The Chief Executive reporting regularly on the maintenance of the internal control framework as well as the effectiveness of the management of the risks.

· Reviewing the external audit and DWPIAS work plan.

· Considering reports from management, DWPIAS and external audit on the system of internal control and material weaknesses in their management letters.

· Discussing with management the actions to be taken on any identified control weaknesses identified by the Audit Committee or in external or DWPIAS audit or governance reports.

· Ensuring compliance with relevant laws and regulations and any known breaches are being rectified.

· The Chairman of the Audit Committee reporting the outcome of the Audit Committee meetings to the Board and the Board receiving the minutes of all the meetings. 

The Board’s Review of the Internal Control Statement

In judging the effectiveness of the Fund’s controls the Board monitors the reports of management and the Audit Committee. It also reviews financial information monthly and key performance indicators quarterly. The Board approves projects with high risk and/or high financial costs. Those decisions are informed by analysis of risk, value for money, affordability and contribution to the delivery of the Fund’s objectives.

Before producing the statement the Board, through the Audit Committee, has reviewed the following:

· The commitment to maintaining good governance practices in those areas which are within the exclusive remit of the Trustees.

· All requirements under the Fund’s constituting documents (Trust Deed, Conditions of Grant Agreement and Financial Memorandum) are being complied with.

· Instances of fraud, malpractice or significant losses have been reported.

· Processes used to identify, assess and manage risk are operating effectively.

· Any other significant issue impacting on risk management and internal control is reported.

Commitment to Best Practice in Governance and Control

The Board of Trustees remains committed to the high standards of internal governance needed to ensure ongoing compliance with DAO (Gen) 13/00 (HM Treasury’s corporate governance requirements for central government and NDPBs issued through Dear Accounting Officer circulars).

As the Fund operates within a changing environment the Board recognises the need for continual review of risk management processes and reporting to ensure controls remain appropriate and work effectively. 


                                                                   
Elaine Morton, Chief Executive




The Certificate of the Comptroller and Auditor General to the Trustees of the Independent Living (1993) Fund

I certify that I have audited the financial statements on pages 16 to 27 which have been prepared under the historical cost convention as modified by the revaluation of certain fixed assets and the accounting policies set out on page 19 to 20.

Respective responsibilities of the Trustees and the Chief Executive and of the Auditor

As described on page 7 of the Trustees Report, the Trustees and the Chief Executive are responsible for the preparation of the financial statements and for ensuring the regularity of financial transactions. The Trustees and the Chief Executive are also responsible for the preparation of the other contents of the Annual Report. My responsibilities, as independent auditor, are guided by the Auditing Practices Board and the auditing profession's ethical guidance.

I report my opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the agreement between the Trustees and the Secretary of State for Work and Pensions and whether in all material respects the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them. I also report if, in my opinion, the Trustees Report is not consistent with the financial statements, if proper accounting records, or if I have not received all the information and explanations I require for my audit.

I review whether the statement on pages 9 to 13 reflects the compliance with Treasury's guidance 'Corporate governance: statement on internal control'. I report if it does not meet the requirements specified by Treasury, or if the statement is misleading or inconsistent with other information I am aware of from my audit of the financial statements.

Basis of audit opinion

I conducted my audit in accordance with United Kingdom Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts, disclosures and regularity of financial transactions included in the financial statements. It also includes an assessment of the significant estimates and judgements made by the Trustees and Chief Executive in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Fund’s circumstances, consistently applied and adequately disclosed.

I planned and performed my audit so as to obtain all the information and explanations which I considered necessary in order to provide me with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by error, or by fraud or other irregularity and that, in all material respects, the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them. In forming my opinion I have also evaluated the overall adequacy of the presentation of information in the financial statements.

Opinion

In my opinion:

· the financial statements give a true and fair view of the state of affairs of the Independent Living (1993) Fund at 31 March 2003 and of the net movement of funds, total recognised gains and losses and cash flows for the year then ended and have been properly prepared in accordance with the agreement of the Secretary of State for Work and Pensions; and 

· in all material respects the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them. 

I have no observations to make on these financial statements. 

John Bourn 
National Audit Office
11 July 2003

Comptroller and Auditor General 
157-197 Buckingham Palace Road
Victoria
London
SW1W 9SP





Statement of Financial Activities for the Year ended 31 March 2003

Incoming resources Notes Restricted and endowment Funds 2002-2003       Restricted and 
endowment 
Funds
 2001-2002 
£       £ 
Activities in furtherance of the trust's objectives  4a  102,998,859      83,347,883 
             
Bank interest 157,913      160,454
            
Other income 4b  2,277,906      1,570,589 
          
Total incoming resources  105,434,678     85,078,926
            
Resources expended     
Direct charitable expenditure: 
Grants to individuals
5 (97,877,624)       (80,306,661)
Management and administration 6 (5,421,382)        (3,536,988)
Total resources expended (103,299,006)      (83,843,649) 
             
Net incoming resources 2,135,672      1,235,277
    
Balances brought forward at 1 April 2002 2,555,064       1,319,787
            
Balances carried forward at 31 March 2003 4,690,736      2,555,06

 

All gains and losses are included in the Statement of Financial Activities.

The net movement in funds arises wholly from continuing activities.

The notes on pages 19 to 27 form part of this account.


Balance Sheet as at 31 March 2003

Notes 31 March 2003   31 March 2002
£ £
Fixed Assets
Tangible fixed assets 385,495 315,811
Current Assets 8 5,766,483 3,085,959
Debtors
Cash at bank and in hand 9 4,305,240   2,239,253 
  10,071,723 5,325,212
Current Liabilities
Amounts falling due within one year 10  (5,766,482)  (3,085,959)
Net Current Assets 4,305,241 2,239,253
 
Total Assets less Current Liabilities  4,690,736   2,555,064
 
Fund Balances:
Endowment Trust Fund 4 125 124 
Restricted income funds allocated to:
Grants to individuals 4 2,946,832  2,111,377 
Management and administration 4 1,358,284 127,752 
Restricted capital funds 385,495   315,811
4,690,736   2,555,064

 

The notes on pages 19 to 27 form part of this account.



Elaine Morton, Chief Executive


Sydney Shore CBE, Chairman


John Shepherd OBE, Treasurer/Vice Chairman



These accounts were approved by the Trustees on 9 July 2003 

 

Cash Flow Statement for the Year ended 31 March 2003

Notes   2002-2003       2001-2002
Operating activities £      £ 
Grants in aid received 4 100,341,000      83,927,000
Other cash receipts 11a  3,119,767       1,646,233
Payments to individuals  5  (96,946,345)      (80,978,002) 
Other operating cash payments 11b (4,371,735)      (3,388,362) 
      
Net cash inflow from operating activities     
11c 2,142,687       1,206,869 
      
Returns on investments and      
servicing of finance      
Interest received 11d  155,552       157,584
      
Capital Expenditure and Financial Investment
     
Acquisition of fixed assets (232,606)      (81,393)
Sale of fixed assets 354      40
       
Net cash (outflow) from investing activities (232,252)       (81,353) 
      
Increase in cash and
cash equivalents 
2,065,987      1,283,100 


 
 


Reconciliation of Increase in Cash to Net Funds
(see note 11e)

2002-2003  2001-2002
£ £  
Increase in cash 2,065,987  1,283,100 
Net funds at 1 April 2002     2,239,253      956,153
Net funds at 31 March 2003     4,305,240      2,239,253


The notes on pages 19 to 27 form part of this account



Notes to the Accounts

1 Nature and purpose of funds

The Trust Fund was established on 25 February 1993 with an initial endowment of £100 from the Secretary of State for Work and Pensions. This money is held in perpetuity with any interest earned being added to the original sum.

The main source of funding is grants in aid from the Department for Work and Pensions (Great Britain) and the Department for Social Development (Northern Ireland). This funding is given under the terms of an annual conditions of grant agreement between the Secretary of State and the Trustees, restricted as to use in order to provide assistance with the cost of personal and domestic care to disabled applicants meeting the terms of the Trust Deed and to meet the management and administration costs and capital costs of the Fund. There are no unrestricted funds.

All assets and liabilities revert to the Secretary of State for Work and Pensions in the event of the closure of the Fund.

2 Accounting convention

The accounts are prepared under the historic cost convention, and in the form agreed between the Trustees of the Fund and the Secretary of State. Without limiting the information given, the accounts also meet the applicable requirements of the Charities (Accounts and Reports) Regulations 1995, the Statement of Recommended Practice for Accounting by Charities (SORP 2000) issued by the Charity Commissioners, the accounting standards issued and adopted by the Accounting Standards Board, and supplementary guidance on public sector accounting issued from time to time by Her Majesty's Treasury.

3 Accounting policies

The following policies have been used consistently in dealing with items which are considered material to the Fund's accounts:﷓

a) Grants in aid received

Funding to cover grants to individuals and management and administration expenses is provided through grants in aid from the Department for Work and Pensions and the Department for Social Development. Grants in aid are received on the basis of the Fund's estimated cash payments during the financial year. Grants in aid received for capital expenditure are explained in note (e) below.

Since these accounts are prepared on an accruals basis the grants in aid received (see note 4) are adjusted to reflect accruals at the beginning and end of the year. The balances at the end of the financial year reflect indebtedness between the Fund and the Departments, which will be met through the cash provisions in the following year.

b) Grants to individuals

Grants to individuals are discretionary grants made within the terms of the Trust Deed. Payments are made every four weeks in arrears, and grants due but unpaid at 31 March are accrued for in these accounts. 

Where grants are returned in whole or in part, the refunds are brought to account at the date of receipt. Potential refunds are not accrued for. Grants to individuals are shown net of refunds in these accounts.

c) Management and administration

The Secretary of State has agreed to allow this Fund to provide an administration service for the Independent Living (Extension) Fund and to charge an administration fee. Accordingly both Funds are administered jointly by staff employed by the Trustees of this Fund. All management and administration costs for both Funds are borne in full by this Fund, which recovers an agreed administration fee. 

The administration fee is estimated for the year in advance and paid on the basis of the original estimate. At the end of the year the fee is recalculated according to the agreed method for attributing and apportioning costs; any underpayment is shown as a creditor, whilst any overpayment is shown as a liability in the notes to the accounts.

d) Fixed assets and depreciation

Assets costing £500 or more individually or as grouped assets are capitalised in these accounts in the year of acquisition, and are valued at historic cost. All assets are recorded in a fixed assets register to facilitate proper control. Depreciation is charged on a straight line basis over the estimated useful life of each asset, commencing in the year following its acquisition.

Fixed assets are depreciated over the following expected life spans:﷓

 - Furniture 10 years

 - Office equipment 5 years

 - IT hardware 5 years

 - IT bespoke software 3 years

Under the administration arrangements described at 3c, this Fund purchases all assets necessary for the administration of both Funds.

e) Capital expenditure

Funding for capital acquisitions is included in the grants in aid and in accordance with SSAP 4 and SORP 2000, is allocated to a separate restricted capital fund. Amounts are transferred from this fund to restricted income funds (management and administration) to match the related annual depreciation charges over the expected useful lives of the associated fixed assets and to match any losses on disposal of items with a remaining net book value (see notes 4 and 7).

f) Leases

Leases are accounted for on an accruals basis. The charge to the Fund for the year is shown under Management and Administration costs, and any amount unpaid at the end of the financial year is included in Liabilities (see notes 6 and 10). The Statement of Financial Activity thus reflects the charge to the Fund for the year.

g) Support and Administration costs

All resources expended other than payments to individuals are shown as management and administration costs. This reflects the fact that the Fund is set up for the sole purpose of providing financial assistance to disabled people under the terms of the Trust Deed, and all administrative expenditure is directly attributable to this purpose.


4 Analysis of restricted funds

Restricted income funds allocated between

Restricted capital funds  

Endowment Trust Fund

Total 2002-2003

Total 2001-2002
Grants to individuals Management & administration
£ £ £  £  £  £
Grants in aid received (a) 97,781,800 2,326,594  232,606 100,341,000 83,927,000
Grants in aid: (debtor) at 1 April 2002
     (a) (2,710,215) (348,017) -  -  (3,058,232)  (3,637,349)
Grants in aid: debtor at 31 March 2003
    (a)  3,641,494     2,074,597 -       -       5,716,091       3,058,232
Grant income 98,713,079 4,053,174 232,606  - 102,998,859 83,347,883
Bank interest - 157,912   - 1 157,913 160,454
Other income (b) - 2,277,906   -   - 2,277,906  1,570,589
Transfers between funds (c)  -     162,922     (162,922)    -     -       -
Funds available 98,713,079  6,651,914 69,684 1  105,434,678 85,078,926
Expenditure (see notes 5 & 6) (97,877,624)     (5,421,382)     -       -      (103,299,006)     (83,843,649)
Net movement in funds 835,455 1,230,532 69,684 2,135,672 1,235,277
Funds brought forward

at 1 April 2002

    2,111,377     127,752     315,811      124       2,555,064      1,319,787
Funds carried forward

at 31 March 2003

2,946,832 1,358,284  385,495 125 4,690,736   2,555,064


All funds held by the Fund are restricted funds for the purpose of making grants to individuals and for meeting the related management and administration costs. Restricted capital funds are held for the purpose of fixed asset acquisitions and related depreciation and disposals in accordance with the policy described in note 3(e). The endowment trust fund consists of the original endowment and any bank interest earned on the sum, and is held in trust. The only arrangements for the transfer of funds are those detailed in note c below.

(a) Grants in aid summary

Received (Debtor)  Debtor  Total  Total 
2002-2002   1 April 2002 31 Mar 2003 2002-2003 2001-2002
£ £ £  £ £
Department for Work
and Pensions 97,701,000 (2,983,631) 5,551,186 100,268,555 81,167,613
Department for Social
Development 2,640,000    (74,601)    164,905    2,730,304    2,180,270
Totals  100,341,000    (3,058,232)    5,716,091     102,998,859    83,347,883

Grants in aid are provided from the Consolidated Resource Accounts of the above Departments.

Debtors at 1 April 2002 match grants to individuals and management and administration payments made during the year in respect of the previous financial year and prepayments made during the previous year in respect of this year.

Debtors at 31 March 2003 match unpaid grants to individuals and management and administration expenditure due for the current financial year shown as creditors in the balance sheet at 31 March 2003, and prepayments made in this financial year in respect of the following financial year included as debtors in the balance sheet at 31 March 2003. 


(b) Other income summary

2002-2003  2001-2002
£  £
Administration fees 2,277,666 1,570,489
Profit on disposal -  20
Other income     240     80
Total other income     2,277,906     1,570,589

Administration fees are paid by the Independent Living (Extension) Fund for the attributed and apportioned management and administration costs of that Fund (see note 3c).

(c) Transfers between funds

As explained in note 3e, funding is transferred from restricted capital funds to match the depreciation charge for the year and losses on disposal of capital assets (£162,922 in total for this year and £129,217 for 2001-2002 - see note 6).

5 Grants to individuals (see note 3b)

2002-2003  2001-2002 
£  £
Payments made in year 96,946,345 80,978,002
(Creditors) at 1 April 2002 (2,710,215) (3,381,556) 
Creditors at 31 March 2003 3,641,494     2,710,215
Grants payable for year 97,877,624     80,306,661
Number of individuals in receipt of payments 9,576 8,310


  

6 Management and administration

2002-2003 2001-2002
£  £
Directly employed staff:
Gross pay 2,176,088 1,811,531
Employer's National Insurance contributions 184,449 155,290
Employer's contribution to pension schemes and insurances (see note 12) 176,688 147,061
Total direct salary costs 2,537,225 2,113,882
Agency staff   58,430 42,883
Total staff costs (see note a) 2,595,655 2,156,765
Trustees' expenses 17,988 15,961
Computer running costs 63,128 52,650
Postage, printing and stationery 203,603 161,299
Accommodation and utilities (see note b) 1,229,088 153,738
Visiting social workers’ fees and expenses 875,172 587,523
Auditor's remuneration   35,250 35,250
Depreciation 92,897 127,611
Losses on disposal (see note b)  69,671  1,585
Services, communications, training, etc 238,930     244,606
Total costs 5,421,382  3,536,988

 
The Fund is exempt from paying Corporation Taxation under the provisions of paragraph 505 of the Income and Corporations Tax Act 1988.

(a) Emoluments paid to senior staff having authority or responsibility for directing or controlling the major activities of the Fund are:

Band Name and position
£45,000 - £50,000 Elaine Morton (Chief Executive)
£30,000 - £35,000 Trevor Chapman (Operations Director)
Gillian Smith (Personnel Director)
Gary Stephenson (Finance Director)
£25,000 - £30,000 Jacky Fisher (Social Work Director)

 
Jacky Fisher works for the Fund on a part-time basis. The Fund pays an amount equivalent to 8% of gross salary into a “defined contributions” group pension scheme (see note 13).

An average of 124 directly employed staff (106 in 2001-2002) were employed to administer this Fund and the Independent Living (Extension) Fund (see note 3c). Part time staff are included in proportion to hours worked.

(b) Accommodation and Utilities includes the relocation costs (£931,596) and ongoing costs of the move to Equinox Building in January 2003. The one-off costs and the higher running costs were approved by Trustees under advice from the Department for Work and Pensions, as an integral part of the provision of accommodation and facilities under the Department’s general arrangements for these services.

Accommodation and Utilities includes £223,891 in respect of operating leases for accommodation at Chalfont Drive and accommodation and facilities at Equinox Building (see note 14).

The Department’s contract for accommodation and facilities includes the provision of office furniture. Furniture fixed assets held by the Fund at the date of the relocation were transferred to the service provider at nil cost. The book value of these items (£65,031) is included in the losses on disposal figure.

7 Fixed assets

Furniture Office IT hardware  Total  Total 
(see note b) equipment and software 2002-2003   2001-2002
£ £ £  £ £
COST
Balance at 1 April 2002  98,108 32,776 524,778 655,662 584,049
Additions in year 10,173  2,737  219,696 232,606 81,393
Disposals in year (108,281)    (1,987)    (31,920)     (142,188)    (9,780)
Balance at 31 March 2003 nil     33,526    712,554    746,080     655,662
DEPRECIATION               
Balance at 1 April 2002 29,405  9,085 301,361 339,851 220,414
Charge for the year (see note a) 9,812 6,555 76,530 92,897 127,612
Disposals in year (39,217)     (1,192)     (31,754)   (72,163)    (8,175)
Balance at 31 March 2003 nil    14,448    346,137     360,585    339,851
NET BOOK VALUES
At 31 March 2003 nil 19,078 366,417 385,495 315,811
At 1 April 2002 68,703 23,691  223,417 315,811 363,635

(a) Depreciation for the year is based on historical cost at the start of the year (see note 3d).

(b) Under the provision of the contractual arrangement between the Department and the service provider, furniture assets were required to be transferred to the service provider at the Equinox Building in January 2003. Cost disposals include £98,463 and depreciation disposals include £33,432 in relation to the transfer of assets. 


8 Debtors

31 March 2003  31 March 2002
 £ £
Due from Departments (see note 3a) 5,716,091  3,058,232
Accrued bank interest  13,015  10,654
Other debtors 9,004  419
Prepayments 28,373    16,654
5,766,483      3,085,959


All debtors are due within one year.

9 Cash at bank

2002-2003  2001-2002
£ £ 
Balance at 1 April 2002  2,239,253  956,153
Net cash inflow 2,065,987 1,283,100
Balance at 31 March 2003 4,305,240 2,239,253
         
REPRESENTED BY: 31 March 2003 31 March 2002
   £ £ 
Endowment Trust Fund 125  124
Restricted income funds allocated to:
Grants to individuals 2,946,831  2,111,377
Management and administration 1,358,284 127,752
4,305,240 2,239,253



10 Liabilities

31 March 2003 31 March 2002
£  £
(a) Amounts falling due for payment within one year    
Liability due to individuals but not paid (see note 3b) 3,641,494  2,710,215
Liability due to Extension Fund 1,112,146 270,285
Trade creditors 977,592 70,209
Accrual for audit fee 35,250     35,250
5,766,482    3,085,959


Trade creditors includes £731,897 for one-off relocation costs related to the move to new premises in January 2003.

The liability due to the Extension Fund represents a prepayment of management fees. As explained in note 3(c) the fee is paid on the basis of original estimates and then recalculated at the end of the year, the excess is shown as a liability. The recalculation at 31 March 2003 was significantly affected by changes due to the relocation in January 2003.

(b) There were no amounts falling due for payment after one year.


11 Reconciliations to cash flow statement

2002-2003  2001-2002
 £  £
(a) Reconciliation of other income to other cash receipts
         
Other income 2,277,906 1,570,589
Profit on disposal (20)
Increase in creditor with Extension Fund 841,861     75,664
Other cash receipts 3,119,767    1,646,233

 

(b) Reconciliation of management and administration expenses to
other operating cash payments
Management and administration expenses  5,421,382  3,536,988
Depreciation (92,897)  (127,611)
Losses on disposal (69,671) (1,585)
(Increase) in trade creditors and accruals (907,383)  (16,396)
Increase/(decrease) in other debtors and prepayments 20,304  (3,034)
Other operating cash payments 4,371,735  3,388,362

  
The increase in trade creditors includes £731,897 in respect of one-off relocation costs related to the move to new premises in January 2003 (see note 10).

(c) Reconciliation of net movement in funds to
net cash inflow from operating activities
Net movement in funds 2,135,672 1,235,277
Interest received (155,552)  (157,584)
Depreciation charge 92,897 127,611
Losses on disposal 69,671  1,585
Less profit on disposal (20)
(Increase)/decrease in debtors (2,680,524)  579,281
Increase/(decrease) in current liabilities 2,680,523     (579,281)
Net cash inflow from operating activities 2,142,687    1,206,869

 

(d) Reconciliation of bank interest to interest received
Bank interest  157,913 160,454
(Increase) in accrued interest (2,361) (2,870)
Interest received 155,552 157,584



(e) Analysis of net funds
 

Note  31 March 2002   31 March 2003 Cash flows  Cash flows
  2002-2003 2001-2002
£ £  £  £ 
Cash at bank 9 2,239,253     4,305,240     2,065,987    1,283,100
Totals  2,239,253     4,305,240     2,065,987     1,283,100





12 Losses

Although payments to individuals are discretionary grants (see note 3b) action is taken to recover payments which are found to have been based on incorrect information. Losses are recorded where it is decided not to pursue recovery, and there were 200 items with a total value of £108,227 written off in 2002-03 (123 items totalling £64,422 in 2001-02).


13 Pension commitments

The Independent Living (1993) Fund does not operate its own pension scheme. Staff employed directly by the Fund are encouraged to participate in a personal pension scheme operated by Scottish Widows' Fund and Life Assurance Society. This is a defined contributions group pension scheme to which the Independent Living (1993) Fund contributes an amount based on each participating employee's gross salary. In 1994﷓1995 the Trustees of the Fund approved a contribution rate of eight per cent of gross salary and this rate continued in 2001-2002 and in 2002-2003. The value of each employee's contribution is at the discretion of the employee.

Staff joining the Fund since the arrangements were set up do not have to join the scheme. In this event the Fund does not make any contribution to other schemes, because of the group pension arrangements agreed with Scottish Widows.

Pension scheme contributions due for staff directly employed by the Independent Living (1993) Fund are charged as revenue expenditure and included in the Financial Activity account in the year in which the charge accrues. The total of the pension contributions due from the Fund for 2002-2003 was £173,330 (£144,364 for 2001-2002).

The value of accrued contributions not paid over to the pension scheme at 31 March 2003 was nil (nil at 31 March 2002).


14 Leases and hire purchase

A four-year accommodation lease was signed by the Trustees on 8 March 2000 for accommodation at Chalfont Drive. This lease was terminated by joint agreement in January 2003 upon relocation to the Equinox Building. No lease has yet been signed for the accommodation and facilities provided under the general arrangements used by the Department for Work and Pensions, but a Tenancy at Will was signed by the Trustees in order to allow the relocation to progress. The ongoing commitment under that document is shown below, and the lease agreement is expected to be for the same amount. There are no other leases, and no hire purchase commitments.

Operating lease rentals due within the next year on leases expiring within:

31 March 2003  31 March 2002
 £ £
One year - -
Two to five years - 62,500
More than five years 691,409 -



£533,013 of the above commitment is in respect of accommodation, and £158,396 is in respect of facilities. These are an integral part of the main Department for Work and Pension contract for such services, and the Trustees approved the commitment under advice from the Department.


15 Trustees' interests and indemnities

The Trustees receive no remuneration. Seven Trustees received reimbursement for travel and subsistence expenses amounting to £17,988 (£15,961 in 2001-2002). No transactions were undertaken in which any Trustee or person connected with any Trustee had a material interest.

There are no policies of insurance against loss arising from the neglect or default of the Trustees, nor any policies providing an indemnity for Trustees in respect of the consequences of any such loss.

By the terms of the Trust Deed, the Secretary of State for Work and Pensions provides that Trustees are not personally liable for any loss to the Fund other than that arising from wilful and individual fraud, wrongdoing or omission on the part of a Trustee who is found to be liable.


16 Related party transactions

The Independent Living (1993) Fund is administered by Trustees appointed by the Secretary of State for Work and Pensions. Related parties are the Trustees and all parts of the Department for Work and Pensions including its agencies (as representing the Secretary of State). Services provided free of charge by the Benefits Agency, such as site messengers and courier services, are included at nil value. The Trustees are the controlling party.

The Trustees are also the trustees of the Independent Living (Extension) Fund, a registered charity with similar objectives in relation to the provision of financial assistance to disabled people with the costs of care. The Fund provides an administration service for that charity and charges a management fee. The fee for the year was £2,277,666 (£1,570,489 in 2001-2002) and creditors of £1,112,146 (£270,285 in 2001-2002) representing prepaid fees are included in the accounts.

During the year no other related parties, including the Trustees and key management staff, have undertaken any material transactions with the Independent Living (1993) Fund.


17 Financial instruments and associated risks

The Fund has no borrowings and relies primarily on departmental grants for its cash requirements, and is therefore not exposed to liquidity risks. The Fund also has no material deposits, and all material assets and liabilities are denominated in sterling, so it is not exposed to interest rate risk or currency rate risk. All liabilities are due for payment within one year (see note 10).


18 Capital commitments

Capital expenditure authorised and committed at 31 March 2003 was nil (nil at 31 March 2002).

Capital expenditure authorised and not committed at 31 March 2003 was nil (nil at 31 March 2002).


19 Contingent liabilities

There were no contingent liabilities at 31 March 2003 (nil at 31 March 2002).

 


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