Minutes of the Eighteenth Meeting of the Resources Committee held at 5.30pm on Tuesday 27 November 2012 in Room 614 at the Shiney Row Campus PRESENT:
Ms S Atkinson, Mr A Carter, Mr R Edmonds, Mr I Forster (Chair), Mr N Harrett, Mr A Holmes, Mrs A Lawson-McLean.
Mr D Howells, Ms A Isherwood, Mrs J Ridley, Ms P Veitch (for item R/12/54)
Ms R Ferguson (Dickinson Dees)
APOLOGIES FOR ABSENCE AND DECLARATIONS OF INTEREST Apologies for absence were received from Mr B Campbell and Mr S Crake.
MINUTES OF THE PREVIOUS MEETING OF 2 OCTOBER 2012 The minutes were accepted as an accurate record.
MATTERS ARISING THEREFROM There were no matters arising.
CONTRACT REPORT FOR THE PROVISION OF OUTSOURCED CLEANING SERVICES
Confidential The Committee deemed the report confidential from public scrutiny as it contains commercially sensitive information. Ms Veitch left the meeting at 5.45pm R/12/65
BUDGETARY CONTROL STATEMENTS The Vice Principal Finance presented the budgetary control statements for the twelve months ended 30 September 2012. He explained that the income and expenditure account was showing an operating surplus of £503k for the two months to date after providing £60k for potential contingencies. It was noted that all three areas of income, staff costs and non-staff costs were below budget however it was still early in the financial year and it was expected that this would be corrected as the year progresses. A budget exercise was 1
currently being undertaken within the College and the outcome would be reported to the Committee at its next meeting in January. In terms of enrolments it was noted that 16-18 learners were looking positive and compare favourably with the previous year’s figure. It was noted that 19+ enrolments were also looking strong particularly as many of these learners tend to enrol later in the year. The Vice Principal explained that the Funding Methodology was going to change in 2013-14 and whilst the full implications were not clear it was expected that there would be some elements of the curriculum which are currently funded that would cease to be funded. The College may need to re-design some programmes to reduce the impact of any reduction in funding. A Governor asked for details on other areas of funding that the College was pursuing, including ESF. It was agreed to provide a briefing note explaining what was being done. The Committee received the budgetary control statements. R/12/66
AUDIT HIGHLIGHTS AND MANAGEMENT LETTER The Vice Principal Finance presented the report drawing the Committees attention to the key issues arising from the KPMG audit of the College’s financial statements and ILR funding audit. The Committee discussed and noted the conclusions set out in section 3 of the report and acknowledged that External Audit had confirmed to the Audit Committee that it was a good report. In relation to pensions considerations on page 15 of the report, the Vice Principal said that he had raised with auditors the question asked at the last meeting regarding the actuarial assumptions. They had confirmed that the assumptions fall within an acceptable range however they could be challenged. The Committee: i. received the Audit Highlights and Management Letter; ii. agreed to recommend the report to the Board for approval.
DRAFT ANNUAL REPORT AND FINANCIAL STATEMENTS The Vice Principal Finance presented the report outlining the key points detailed in sections 2 and 3 of the report. The Committee noted that following a review of the activities of the subsidiary companies, the amount owed to the College by COSC Supplies has been impaired by £1.5m in the College’s own accounts as the full value was no longer considered to be
recoverable from the subsidiary company. This adjustment does not affect the group accounts. In response to a question it was agreed that the Vice Principal Finance would explore with the Collegeâ€™s accountants whether the College was required by the financial reporting standards to include a public benefit statement in its financial statements in order to demonstrate its compliance with charity law. The Clerk advised that in any event the public value statement which would be included in the College Annual Report currently being prepared by the Acting Principal would, by demonstrating the way in which the College works with its local communities, be another means of demonstrating charity law compliance. A Governor queried the amount relating to other services provided by the Internal Auditor on page 30 of the report. The Vice Principal Finance explained that the College had asked Grant Thornton to undertake an internal audit of the project to look at the costs involved in the project and to make recommendations regarding what they saw as the best way forward. Following this review, the College had engaged Grant Thornton in a consultancy capacity to work alongside management to ensure that all of the recommendations were addressed appropriately. As a consequence of this work the capital cost of the project had been reduced. The Chair explained that a presentation would be given to the Board in the new year on the key achievements of the project to date as that had been identified as a suitable stage in the project timeline. It was noted that the project was on track and on budget. The Committee: i. ii.
received the draft report and financial statements for 2011/12; recommended the report and financial statements to the Corporation for its approval without amendment; iii. noted the financial position of Blue Square trading Limited and City of Sunderland College Supples Limited and agreed, in the general interests of the College, to provide financial and other support to enable them to continue to trade; iv. agreed to provide KPMG with a management representations letter confirming general and specific matters in line with International Standards on Auditing. R/12/68
The Committee: received the report. Confidential The Committee deemed the report confidential from public scrutiny as it contains commercially sensitive information. 3
ANNUAL REPORT ON TREASURY MANAGEMENT The Vice Principal Finance presented the report setting out the College’s treasury management activities. It was noted that the College continues to adopt a prudent approach with regard to investments and had made repayments on all borrowings in accordance with the respective loan agreements. There were no breaches to any loan covenants during 2011/12. It was noted that, as agreed at the July Board meeting, the College had spread its investments between four Banks rather than two in order to minimise any risk following the downgrading of the Banks. Since then, the College had consulted with the University of Sunderland and the City Council to gather information about the institutions with whom they lodge funds. It was proposed that the College would continue to place deposits only with those institutions having a credit rating amongst those most healthy in the financial sector and would continue to keep those ratings under review. It would also take into account information used by other large local organisations in selecting preferred institutions and the methodology they use for assessing the relative amounts to be lodged with each. The Committee: received the report and recommended it to the Board for approval.
PROPOSED PAY AWARD The Vice Principal Finance presented the report explaining that at the time of writing the report, whilst Unison members had voted to accept the proposed pay recommendation, UCU had not accepted the proposal however they would not take any industrial action regarding pay. It was proposed that the College would pay award to both Unison and UCU members. This was consistent with previous years where the award had been made when the union nationally had been in dispute over the pay award. In addition, the College wished to adopt the Living Wage minimum for the small number of staff who would fall below the threshold even after implementation of the pay recommendation. It was noted that there was sufficient capacity within the budgeted surplus and contingency to meet the award. The Committee agreed to: i.
Implement the AOC recommended pay award of: • An increase of 0.7% on all salaries above £15,000 per annum • An increase of £200 on all salaries below £15,000 per annum 4
ii. Implement the Living Wage hourly rate of ÂŁ7.45 for all staff who will still fall below it after the implementation of the AoC recommended pay award with all recommendations to be implemented with effect from 1 August 2012 R/12/71
ANY OTHER BUSINESS There was none.
DATE, TIME AND VENUE OF NEXT MEETING The next meeting will take place on Tuesday 22 January 2013 at 5.30pm in Room 614, Shiney Row Centre.
The meeting closed at 6.50pm.