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Financial Report




Annual Report and Statement of Accounts 
for the Independent Living (Extension) Fund
[Registered charity No 1019080]
for the year ended 31 March 2004

 

 

 

 

 

 

Page   Contents
   
1   Trustees’ Report
   
7   Statement of Trustees’ and Chief Executive’s responsibilities
   
9   Statement on the System of Internal Control
   
15   Auditor’s Report
   
17    Statement of Accounts
   
20 Notes to the Accounts

   


 





 

Independent Living (Extension) Fund
Registered charity No 1019080


Trustees' Report for the Year ended 31 March 2004


Independent Living Funds appointed Trustees

Sydney Shore CBE (to October 2003; Chairman to July 2003)
  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.


Margaret Cooper (Chairman from August 2003)
  Solicitor. Chairman of The Appeals Tribunal, including disability appeals tribunals. Chairman of industrial tribunals and fair employment tribunals.


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.

 

Anne Davies OBE (to October 2003)
  Former Chairman: Centre for Accessible Environments. Consultant on disability issues with NHS Trusts. Author and broadcaster.

 

Rachel Chiu
  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.

 

Peter Cooke (from October 2003)
  Professor of Automotive Industries Management; academic, writer and broadcaster on automotive and disability issues. International consultant on automotive industries. Non-executive director of Remploy. Winston Churchill Memorial Fellow of 2002.

 

Ann Goodborn (to May 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.

 

Stephen Jack (from May 2003)
  Chartered Accountant. Executive director of Collins Stewart Tullett plc and Hon Treasurer of the Greater London Fund for the Blind. Has held senior financial management positions in a number of international financial services organisations.

 

Marie Martin (from October 2003)
  Past Chairman of Age Concern Richmond upon Thames, now an advisor. Chairman of Shooting Star Children’s Hospice. Trustee of the Hampton Fuel Trust. Chairman of Linden Hall Day Centre. Ex manager of social services for Hounslow & Kingston Upon Thames. Presently an outreach worker for B N A Nursing.


A minimum of two and a maximum of seven Trustees are appointed by the Secretary of State for Work and Pensions for a term of five years. Trustees may elect their own Chairman and sub-committees.

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 Margaret Cooper (until July 2003;Chairman until July 2003), John Shepherd (Chairman from August 2003), Tom Begg and Stephen Jack (from August 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 (to July 2003), Tom Begg and Stephen Jack (from August 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 Department for Work and Pensions.


 

 


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

Mrs Elaine Morton

External auditor  Internal auditor
Comptroller and Auditor General
National Audit Office
157-197 Buckingham Palace Road
London SW1W 9SP
Bentley Jennison
St Matthews House
6 Sherwood Rise
Nottingham

The only fee paid to National Audit Office was £21,150 for the external audit.

Solicitors Bankers
Eversheds 
115 Colmore Row 
Birmingham B3 3AL
Lloyds TSB Commercial
Butt Dyke House
33 Park Row
Nottingham NG1 6GZ



Objectives 

The Independent Living (Extension) Fund, generally referred to as "the Extension Fund", was set up in April 1993 to continue the administration of awards to the users of the original ILF when that Fund closed. Its awards are made to disabled people in the form of regular monthly payments which enable them to pay for personal assistance. The Extension Fund is not accessible to new applicants.

The Fund is mainly financed by central government through the provision of grants in aid and is constituted as a charity with a board of seven Trustees appointed by the Secretary of State for Work and Pensions (formerly the Secretary of State for Social Security). The same Trustees are responsible for the Independent Living (1993) Fund, generally referred to as "the 93 Fund", which is a discretionary trust having similar financing and objectives and which accepts new applications.

The Fund exists to provide financial assistance, under the terms of the Trust Deeds, in an efficient, cost effective way that supports a disabled person’s requirements for personal care and domestic assistance which enables independent living (this statement of purpose was agreed by the Trustees).


The Trust Deed

The Trust Deed of the Extension Fund determines that awards will be made to people who were users of the original ILF provided that they:

 continue to live in the United Kingdom

 continue to need help with their personal or domestic care and live alone or with others who are unable to provide the extra care needed

 receive the highest care component of a disability living allowance

 have savings of less than £18,500 and income which is insufficient to cover the cost of the care needed 

The Trust Deed also determines certain restrictions upon how awards may be spent. The maximum weekly payment was increased to £665 from April 2002.


Organisation and administration

The Fund’s offices are at The Equinox Building, Island Business Quarter, City Link, Nottingham, NG2 4UU. The equivalent of 144 full-time staff administers both the 93 Fund and Extension Fund, and 79 self-employed ILF Assessors (based on an annual average) 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 visited at two-yearly intervals to enable a full review of care needs leading to an up to date offer of financial assistance, and improvements to payment security.

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.


Review of developments

The Extension Fund started in April 1993 with 21,500 users from the original ILF. The number still requiring assistance has reduced to 6,160 at March 2004 compared with 6,877 at 31 March 2003. The average weekly award to users at the end of the year was £226 per week compared with £204 at 31 March 2003.

The Fund has invested in training and development for staff to maintain and improve the standard of service provided for users. Process reviews are also being carried out in all areas of operation to ensure the most effective use of staff resources. Other administration costs have also been subject to review to ensure best value for money, and a programme of regular retendering for major services and supplies has been established.

The Fund has Contact Officers in all Social Services Departments in Great Britain and Health and Social Services Boards in Northern Ireland for the dissemination of information and advice about the Fund. The Fund has made presentations to social workers and disability groups on the operation of the Fund, and has also produced a Professional Users Guide.


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. Consultation will be extended to users in all areas by a variety of methods.

The Fund has agreed with the Department for Work and Pensions a regular data matching service for users who have given permission for information to be checked against state benefits. This will improve the Fund’s ability to respond to relevant changes of circumstance, and help ensure that payments are based on up to date information and incorrect payments are avoided.

The website (www.ILF.org.uk) has been maintained throughout the year to provide answers to frequently asked questions, and to give information about the User Group. The website includes a Publication Scheme in compliance with the requirements of the Freedom of Information Act 2000.


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. 99.9% of the £194 million grant in aid available for this year has been drawn on for users of the two Funds.

All the grant in aid is received as unrestricted funds. The Fund holds a working cash reserve sufficient to meet at least one week’s client payments, within a limit of 5% of the value of the grant in aid available for the year. Grant in aid is drawn on a four-weekly basis throughout the financial year, in time to ensure the working cash reserve is not exhausted. The Fund provides advance estimates of expenditure to inform government allocations of grant in aid from year to year; the Trustees are required to take reasonable steps to ensure expenditure does not exceed available funding.

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


Margaret Cooper, Chairman


Tom Begg, Vice Chairman


Stephen Jack, Treasurer

Independent Living (Extension) Fund
Registered charity No 1019080

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 Trust 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 (previously the Department of Social Security).

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 (Extension) 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


Margaret Cooper, Chairman


Tom Begg, Vice Chairman


Stephen Jack, Treasurer



Independent Living (Extension) Fund
Registered charity No 1019080

Statement on Internal Control for Year ending 31 March 2004


Scope of Responsibility


As Accounting Officer I have responsibility for maintaining a sound system of internal control that supports the achievement of the Independent Living Funds’ policies, aims, objectives and policies whilst safeguarding the public funds and the Funds’ 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. As one of the two Funds (the Extension Fund) is a registered charity, in line with the Charities Statement of Recommended Practice (SORP) 2000, the Trustees have a joint responsibility for the preparation of the accounts and annual reports with myself.

The Department for Work and Pensions (DWP) financially sponsors the Fund. The DWP Senior Accountable Official within the Disability and Carers Directorate of DWP is responsible for monitoring the activities of the Funds on behalf of the Secretary of State for Work and Pensions. In addition there is an accountability to the Permanent Secretary of DWP who is responsible for ensuring the financial and management controls applied by the Department and the Funds are appropriate and satisfactory. 

All constituting documents (Trust Deeds and Agreement document), under which the Funds operate, are produced by the Secretary of State for DWP for Trustees’ signature. This structure does have associated risks of documents being out of date but the Funds ensure regular liaison is maintained to proactively manage the issues.

The nature of the relationship and accountability with DWP means that some aspects of corporate governance are not directly controlled by the Funds. However the control system operated by the Funds takes into account the impact of the relationship with DWP as well as those policies set by DWP. 

The purpose of the system of internal control 

The system of internal control is designed to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an ongoing process designed to identify and prioritise the risks to the achievement of the Funds’ policies, aims and objectives, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically. The overall control environment has been developed further from October 2003 with the introduction of a validated assurance mechanism through internal auditors. This more comprehensive system has operated since that date to 
the end of the year at 31 March 2004 and up to the date of approval of the annual report and accounts, and accords with Treasury guidance.

Capacity to handle risk 

The strategy and leadership for managing risk is initially formulated by the Senior Managers and then recommended to the Audit Committee and Board of Trustees for agreement. The strategy identifies the key organisational risk areas and senior managers who take ownership of the risk area and report on the effectiveness of controls in their area of responsibility on a quarterly basis. 

Risk Management is an integral part of the strategic and business planning process as the key aims and objectives from the Funds’ Business Plan are assessed for risks against potential achievement. This is then continued through into the operational level of the management of the risk with action plans and key work objectives for relevant managers. New activities are assessed for risk and added to the risk register at the quarterly update.

The risk register is presented to and progress in managing risk and identifying new risk is reported to and discussed with the Audit Committee and then with the full Board on a six monthly basis. 

Staff are made aware of the key risk areas in their own areas through face to face briefings and discussions on outcomes from the control check system within their own areas. However it is recognised that we can learn from other good practices to embed the understanding of the risk management processes further in terms of all staff knowing the wider perspective outside their own direct area. This is already been addressed and further progress is planned for the following year through the recently developed method of electronic internal communication. Enhanced training on the process of risk assessment for section managers and comprehensive explanations on the progress being made to manage risk will also develop the further assessment of risk at operational level and ensure good practices are sustained. 

Relevant DWP personnel within the Carers Directorate Benefits Policy Division receive a copy of the risk register so are aware of the ILF organisational risks and mitigation plans. In addition they have been present when the full Board discusses risk management. Where DWP actions are directly linked to the mitigation of any ILF identified risk, proactive liaison takes place to ensure appropriate actions are taken and progress reported to the Board of Trustees. 


The Risk and Control Framework

Senior Managers are nominated as individual risk owners and have the authority to manage the risk directly or through others. The approach to risk is that assessments of risk are prioritised to ensure resources available for mitigation are directed appropriately. The Funds recognise that certain risks are inherent and, at a particular moment no active mitigation may be the appropriate response. Senior managers recognise that the risk environment is always changing so continue to consider risk management on a quarterly basis using an organisational wide risk register, collating and documenting progress on managing the key risks through the mitigation plans.

Risks are evaluated using a range of different factors. As an organisation providing a service to clients with high support needs, risks which impact on service delivery are rated as priority. Relationships with others such as local councils are also an important area as local councils directly contribute to our capacity to deliver our service as we rely on information from them. 

In addition, with a cash limited budget and as a publicly funded organisation, financial and payment security risk issues are also important. 

Consideration is always given to those areas where real or perceived image with key stakeholders including the sponsoring department are involved. Overall the Funds recognise all risks impact on overall reputation and the ultimate effectiveness of the organisation. 

The organisational register of risk assessed the key risk areas for the year as process and performance reflecting the stage the organisation had reached within the context of the programme of change. In relation to this stage in organisational development, technological risks including the IT infrastructure and system development were relevant. 

The risk control environment is comprised of control measures and control checks. Control measures represent day to day processes and systems which add value to the control process. This framework of management processes includes policies, management information, financial regulations, administrative procedures and a system of appropriate delegation and accountability. For example quarterly assessments of legislation changes impacting on the Funds’ activities are reported to the Senior Management team and progress updates on actions needed to ensure compliance are provided. 


Control checks to gain assurance across a wide spectrum of key areas also contribute by producing management information on a quarterly basis. Reporting ensures regular assessment of the effectiveness of the operation but also assesses the inherent design of a control to ensure continued relevance to the control framework. The control check reports also deal with any control failures and there were no significant control check failures during the year.

In addition there are regular reports made by managers, who 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 business projects.

Review of effectiveness

As Accounting Officer I also have responsibility for reviewing the effectiveness of the system of internal control. This is informed by a combination of sources including the reports from the internal control checks, from managers within the Funds who have responsibility for the development and maintenance of the internal control framework, comments made by internal auditors, the Department’s internal audit services (DWPIAS) and the external auditors in their management letter and other reports. 

Internal auditors appointed in Autumn 2003 now provide independent assurance. The results of their reports are discussed with the senior managers collectively and with the staff in the area being audited. They have produced reports during this year on risk management and the system of financial control. The system of financial control was audited with an opinion of substantial assurance given. Some need to progress embedding of risk management was identified and accepted by the Trustees and an action plan to do this has been developed. An annual assessment of the effectiveness of the work of the internal auditors is being developed for the future. 

The Funds can access the services of DWPIAS and the Department can arrange for them to carry out an internal audit if required. During the year DWPIAS completed an assessment of control in the area of overpayments to standards defined in the Government Internal Audit Manual and an audit opinion of substantial assurance was given.

NAO, as external auditors, also consider the control processes and actively review progress. 

In summary the reports provided by internal and external audits have been positive with no areas of fundamental weakness in control. There are plans to address those areas meriting some attention ensuring a system of continuous improvement is in place.

The Audit Committee, on an annual basis, ensure that none of the auditors wish to discuss any issue relating to their reports on internal control or risk management matters directly with them without the presence of senior management. The documented responses show that none of the auditors have had any issue to raise on this basis during the year. 

The Board of Trustees 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. The Board remains committed to maintaining good internal control practices looking at both those areas which are within the exclusive remit of the Trustees but also ensuring active liaison is maintained in those areas where the Funds are impacted but does not directly control outcomes. In judging the effectiveness of the Funds’ controls, the Board of Trustees monitors the reports of management and the Audit Committee with 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 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 and affordability. 

Without diminishing its own responsibilities the Board has delegated certain processes to the Audit Committee and these include:

· initially reviewing the effectiveness of the risk management process agreeing a register of the organisation’s main risks and updates on progress prior to six monthly reports to the Board of Trustees;
· reviewing the internal, external audit and DWPIAS work plans;
· considering reports from management, internal audit, 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 internal, external or DWPIAS audit or governance reports.

I have been advised on the implications of the result of my review of the effectiveness of the system of internal control by the Audit Committee and the Board of Trustees and a plan to address minor weaknesses and ensure continuous improvement of the system is in place. 


Significant internal control problems

During the year there have been no significant internal control problems. 



Elaine Morton, Chief Executive


Margaret Cooper, Chairman


Tom Begg, Vice Chairman


Stephen Jack, Treasurer




The Report of the Comptroller and Auditor General to the Trustees of the Independent Living (Extension) Fund

I have audited the financial statements on pages 17 to 25. These financial statements have been prepared in the form directed by the finance memoranda and approved by the Treasury; they have been prepared under the historical cost convention and the accounting policies set out on page 20.

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

As described on pages 7 to 8, the Board of Trustees and the Chief Executive, as Accounting Officer, are responsible for the preparation of financial statements and for ensuring the regularity of financial transactions funded by Parliamentary grant (“Grant in Aid”). The Board of Trustees and the Chief Executive are also responsible for the preparation of the Foreword/other contents of the Annual Report. In discharging my responsibilities, as independent auditor, I have regard to the standards and guidance issued by the Auditing Practices Board and the ethical guidance applicable to the auditing profession. I have been appointed as auditor by the trustees under the terms of the extant letter of engagement and in accordance with the conditions of the trust deed. 
I report my opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the Charities Act Extension and whether in all material respects the expenditure, income and resources funded by Grant in Aid 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 Foreword is not consistent with the financial statements, if the Independent Living (Extension) Fund has not kept proper accounting records, or if I have not received all the information and explanations I require for my audit.
I read the other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. I consider the implications for my report if I become aware of any apparent misstatements or material inconsistencies with the financial statements. 
I review whether the statement on pages 9 to 14 reflects the Independent Living (Extension) Fund compliance with Treasury’s guidance on the 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. I am not required to consider, nor have I considered whether the Accounting Officer’s Statement on Internal Control covers all risks and controls. I am also not required to form an opinion on the effectiveness of the Independent Living (Extension) Fund corporate governance procedures or its risk and control procedures. 
The Report of the Comptroller and Auditor General to the Trustees of the Independent Living (Extension) Fund (continued)

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 in the financial statements. It also includes an assessment of the significant estimates and judgements made by the Board of Trustees and the Chief Executive in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Independent Living (Extension) Fund 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, income and resources funded by Grant in Aid 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 also evaluated the overall adequacy of the presentation of information in the financial statements.
The maintenance and integrity of the Independent Living (Extension) Fund’s website is the responsibility of the Accounting Officer; the work carried out by the auditors does not involve consideration of these matters and accordingly the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

Opinion

In my opinion:

· the financial statements give a true and fair view of the state of affairs of the Independent Living (Extension) Fund as at 31 March 2004 and of the incoming resources and application of resources for the year then ended and have been properly prepared in accordance with the Charities Act 1993; and 
   
· in all material respects the expenditure, income and resources funded by Grant in Aid have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them.

 

John Bourn
Comptroller and Auditor General 
15 July 2004 
National Audit Office
157-197 Buckingham Palace Road
Victoria, London, SW1W 9SP


  

 

Independent Living (Extension) Fund Statement of Accounts
Registered Charity No 1019080


Statement of Financial Activities for the Year ended 31 March 2004
 

Unrestricted, restricted and endowment funds  Unrestricted, restricted and endowment funds 
   
Notes     2003-2004 2002-2003
£  £ 
Incoming resources    
 
Activities in furtherance of the 
trust's objectives
4a  72,929,704 71,279,580
   
Bank interest 92,388 102,568
 
Other income  - 70
 
Total incoming resources 73,022,092 71,382,218
 
Resources expended
 
Direct charitable expenditure:
Grants to individuals (70,661,515) (68,863,075)
Support costs (1,807,708) (2,269,340)
Management and administration 6 (29,526) (31,826)
 
Total resources expended (72,498,749) (71,164,241)
 
Net incoming resources 523,343 217,977
 
Balances brought forward at 1 April 2003 1,558,680 1,340,703
 
Balances carried forward at 31 March 2004  2,082,023 1,558,680


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 20 to 25 form part of this account


Balance Sheet as at 31 March 2004

Notes 31 March 2004 31 March 2003
£ £
Current Assets
 
Debtors 7 2,685,695 2,310,389 
Cash at bank and in hand 8 2,082,023 1,558,680
4,767,718 3,869,069
Current Liabilities
 
Amounts falling due within one year  (2,685,695) (2,310,389)
Total Assets less Current Liabilities 2,082,023 1,558,680
 
Fund Balances:
Endowment Trust Fund 4 127 125
 
Restricted income funds allocated to:
Grants to individuals 4 2,081,891 1,558,550
Management and administration 4 5 5
2,082,023 1,558,680

  
The notes on pages 20 to 25 form part of this account.


Elaine Morton, Chief Executive



Margaret Cooper, Chairman



Tom Begg, Vice Chairman



Stephen Jack, Treasurer

These accounts were approved by the Trustees on 14 July 2004 



Cash Flow Statement for the Year ended 31 March 2004

Notes 2003-2004 2002-2003
£ £
Operating activities
  
Grants in aid received  4 72,007,000 71,895,000
Other receipts  - 70
Payments to individuals 5 (70,283,859) (68,637,494)
Other operating cash payments 10a (1,289,993) (3,143,027)
 
Net cash inflow/(outflow)
from operating activities 10b 433,148 (114,549)
 
Returns on investments and 
servicing of finance
Interest received 10c 90,195 103,428
Increase in cash and cash equivalents 523,343 217,977
 
 
Reconciliation of Increase in Cash to Net Funds (see note 10d)
  2003-2004 2002-2003
  £ £
 
Increase in cash 523,343 217,977
Net funds at 1 April 2003 1,558,680 1,340,703 
 
Net funds at 31 March 2004 2,082,023 1,558,680

The notes on pages 20 to 25 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, 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. All funds are unrestricted.

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.

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 the Independent Living (1993) Fund to provide an administration service for this Fund and to charge an administration fee. Accordingly, this Fund and the Independent Living (1993) Fund are administered jointly by staff employed by the Trustees of the latter Fund. All management and administration costs for both Funds are borne in full by the Independent Living (1993) Fund, which recovers an agreed administration fee from this Fund. 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 liability, whilst any overpayment is shown as a prepayment in the notes to the accounts.
 
d) Fixed assets, depreciation and capital expenditure
Under the administration arrangements described at 3c, the Independent Living (1993) Fund purchases all assets necessary for the administration of both Funds, and bears the associated depreciation costs. 

4 Analysis of funds

Unrestricted income funds Endowment Total Total
apportioned between: Trust Fund 2003-2004 2002-2003
Grants to Support costs,
individuals management &
administration
£ £ £ £ £
Grants in aid received (a) 70,807,200 1,199,800 - 72,007,000 71,895,000
Grants in aid: (debtor)/creditor
at 1 April 2003 (a) (2,286,889) 1,095,548 - (1,191,341) (1,806,761)
Grants in aid: debtor/(creditor)
at 31 March 2004 (a) 2,664,545 (550,500) - 2,114,045 1,191,341
 
Grant income 71,184,856 1,744,848 - 72,929,704 71,279,580
Bank interest - 92,386 2 92,388 102,568
Other income - - - - 70
 
Funds available 71,184,856 1,837,234 2 73,022,092 71,382,218
Expenditure (see notes 5 & 6) (70,661,515) (1,837,234) - (72,498,749) (71,164,241)
 
Net movement in funds 523,341 - 2 523,343 217,977
Funds brought forward at 1 April 2003 1,558,550 5 125 1,558,680 1,340,703
Funds carried forward at 31 March 2004 2,081,891 5 127 2,082,023 1,558,680


Unrestricted funds are held for the purpose of making grants to individuals and for meeting the related support costs and management and administration costs. The endowment trust fund consists of the original endowment and any bank interest earned on the sum, and is held in trust. There are no arrangements for transfers between funds.

(a) Grants in aid summary

Received (Debtor)/Creditor Debtor Total Total
2003-2004 1 April 2003 31 Mar 2004 2003-2004 2002-2003
£ £ £ £ £
Department for Work
  and Pensions 68,809,000 (1,211,732) 2,064,310 69,661,578 68,195,117
Department for Social
  Development 3,198,000 20,391 49,735 3,268,126 3,084,463
 
Totals 72,007,000 (1,191,341) 2,114,045 72,929,704 71,279,580


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

Debtors at 1 April 2003 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 2004 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 2004, and prepayments made in the current financial year in respect of the next financial year included as debtors in the balance sheet at 31 March 2004.


5 Grants to individuals (see note 3b)

2003-2004 2002-2003
£ £
Payments made in year  70,283,859 68,637,494
Creditors at 1 April 2003 (2,286,889) (2,061,308)
Creditors at 31 March 2004 2,664,545 2,286,889
Grants payable for year 70,661,515 68,863,075
Number of individuals in receipt of payments 6,562 7,389

Individuals paid for the year includes all users who received any payment for the financial year, whether or not they were in payment for the whole year, and whether or not they were in payment at the end of the year.

6 Support costs, Management and administration

2003-2004 2002-2003
  £ £
Administration fee for support costs (see note a)  1,807,708 2,269,340
  
Administration fee for trustees expenses 8,376 8,326
Auditor's remuneration 21,150 23,500
  
Total management and administration 29,526 31,826
Total support costs plus management and administration 1,837,234 2,301,16

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

The Chief Executive and senior management staff receive no remuneration from this Fund, but the apportioned cost of senior salaries is included in the administration fee (included in staff costs in the analysis in note a).

(a) Analysis of administration fee for support costs

As explained in note 3c the Independent Living (1993) Fund provides a management and administration service for this Fund and recovers an administration fee. The proportion of the administration fee attributed to trustees’ expenses is shown separately above; the remaining components of the administration fee are summarised below.


2003-2004 2002-2003
£ £
Staff costs 984,170 1,152,471
Computer running costs 49,665 28,029
Postage, printing and stationery 116,271 94,242
Accommodation and utilities 239,935 545,715
ILF Assessors' fees and expenses 279,080 342,798
Services, communications, training, etc 138,587 106,085
Amount payable for year 1,807,708 2,269,340

Some costs have risen due to increased activity in 2003-04; however the relative changes in case load between this Fund and the Independent Living (1993) Fund has resulted in an overall reduction in the administration fee.

Staff costs includes apportioned amounts of £814,658 (salaries), £76,124 (Employer’s NI) and £65,036 (Employer’s pension contribution) for the 144 staff employed to administer both this Fund and the Independent Living (1993) Fund; no staff were employed at a salary above £50,000.


7 Debtors

31 March 2004 31 March 2003
£ £
Due from Departments (see note 3a) 2,114,045 1,191,341
Prepayment to 93 Fund (see note 3c) 562,555 1,112,146
Accrued bank interest 9,095 6,902
2,685,695 2,310,389

All debtors are due within one year.

8 Cash at bank

2003-2004 2002-2003
£ £
Balance at 1 April 2003 1,558,680 1,340,703
Net cash inflow 523,343 217,977
 
Balance at 31 March 2004 2,082,023 1,558,680
 
REPRESENTED BY: 31 March 2004 31 March 2003
  £ £
 
Endowment Trust Fund 127 125
Restricted income funds allocated to:
   Grants to individuals 2,081,891 1,558,550
   Management and administration  5 5
  2,082,023 1,558,680


9 Liabilities

31 March 2004 31 March 2003
£ £
(a) Amounts falling due for payment within one year
   Liability due to individuals but not paid (see note 3b) 2,664,545 2,286,889
   Accrual for audit fee 21,150 23,500
2,685,695 2,310,389
(b) There were no amounts falling due for payment after one year.

10 Reconciliations to Cash Flow Statement

2003-2004 2002-2003
£ £
(a) Reconciliation of support costs and management and administration
expenses to other operating cash payments
 
Support costs 1,807,708 2,269,340
Management and administration expenses 29,526 31,826
Decrease in accruals 2,350 -
(Decrease)/increase in prepayments (549,591) 841,861
 
Other operating cash payments 1,289,993 3,143,027
 
  2003-2004 2002-2003
(b) Reconciliation of net movement in funds to  £ £
net cash inflow from operating activities
 
Net movement in funds 523,343 217,977
Interest received (90,195) (103,428)
(Increase) in debtors (375,306) (225,581)
Increase in current liabilities 375,306 225,581
 
Net cash inflow from operating activities 433,148 114,549
 
(c) Reconciliation of bank interest to interest received
Bank interest 92,388 102,568
(Increase)/decrease in accrued interest (2,193) 860
Interest received 90,195 103,428
(d) Analysis of net funds
31 March 2003 31 March 2004 Cash flows Cash flows
2003-2004 2002-2003
£ £ £ £
Cash at bank 1,558,680 2,082,023 523,343 217,977
 
Totals 1,558,680 2,082,023 523,343 217,977


11 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 283 items with a total value of £1,120,838 written off in 2003-04 (230 items with a total value of £847,403 written off in 2002-03). Losses for 2003-04 included one write-off of £150,512 relating to a client who had received a compensation payment administered by the Public Trust Office; the information was not known at the time of the original application, the client’s family had little information about the compensation, and the money had been used up when the details came to light; the write-off was approved by Trustees and the Department for Work and Pensions as the money had been received in good faith by the client’s family, and had been spent on care costs.

12 Trustees' interest and indemnities

The Trustees received no remuneration. However, the administration fee described in Note 6 includes £8,376 (£8,326 in 2002-03) in respect of Trustees’ reimbursements for travel and subsistence. Payments were made to nine Trustees in 2003-04 (seven Trustees in 2002-03). No transactions were undertaken in which any Trustee or person connected with any Trustee has 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.


13 Related party transactions

The Independent Living (Extension) 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). The Trustees are the controlling party.

The Trustees are also the trustees of the Independent Living (1993) Fund, a private trust with similar objectives in relation to the provision of financial assistance to disabled people with the costs of care. The trust provides an administration service for this Fund and charges a management fee. The fee for the year was £1,816,084 (£2,277,666 in 2002-2003) and debtors of £562,555 (£1,112,146 in 2002-2003) 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 (Extension) Fund.

14 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 9).

15 Other commitments and liabilities

The Independent Living (Extension) Fund does not operate a pension scheme as it does not employ staff (see note 3c).

Capital expenditure authorised and committed at 31 March 2004 was nil (nil at 31 March 2003). Capital expenditure authorised and not committed at 31 March 2004 was nil (nil at 31 March 2003).

There were no contingent liabilities at 31 March 2004 (nil at 31 March 2003).

There are no lease or hire purchase commitments.

 

 

 

 

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