Minutes of the EleventhMeeting of the Resources & Capital Projects Committee held at 5.30pm on Tuesday 24 November2015 in Room H1.22 at the Bede Campus
PRESENT:Mr P McEldon (Chair), Mrs E Bass, Mr A Holmes, Mrs A Isherwood and
Mr R Saelzer
IN ATTENDANCE:Mr D Howells, Mrs M Robson
CLERK:MsP Veitch
RC/15/52APOLOGIES FOR ABSENCE AND DECLARATIONS OF INTEREST
Apologies were accepted from Mrs S Atkinson and Mr R Lawson. The Clerk declared an interest in item 58 due to her staff role.
RC/15/53MINUTES OF THE PREVIOUS MEETING OF 29 SEPTEMBER 2015
The minutes were accepted as an accurate record.
RC/15/54MATTERS ARISING THEREFROM
There were none.
RC/15/55BUDGETARY CONTROL STATEMENTS
The Director of Finance presented the draft budgetary control statements for the two months ended 30 September 2015. There is an underlying operating surplus position rather than the budgeted £198k. The slight positive movement is due to lower than budgeted expenditure in the Income and Expenditure Account.
Governors reviewed the information in the annexes and the income targets and targets for student recruitment and agreed that key income lines relating to student recruitment be incorporated in the next report to enable the Committee to better monitor the risk of under recruitment.
Governors considered Borrowings as a percentage of income which is forecast at 55.81% at 31stJuly 2016. The Vice Principal Finance and Resources explained that this is due to the timing of the receipt for the sale of Shiney Row and Hylton campuses and once received will reduce the ratio to around 40%. The current ratio is in line with the capital bid submitted to the Skills Funding Agency and it will also be highlighted when the final accounts are submitted. He went on to advise that a 4/5 year plan is being developed which was welcomed by the Governors.
The Committee:i)Noted, discussed and received the report.
RC/15/56AUDIT HIGHLIGHTS MEMORANDUM AND MANAGEMENT LETTER
The Governors considered the results of the ILR audit review conducted in October 2015 and discussed the nature of the errors found. They were satisfied that the errors are being corrected across the entire population and the amended data is that submitted to the Skills Funding Agency in November 2015. The Governors also discussed the option of employing a member of staff to undertake the audit work but concluded that external audit is a key part of the assurance framework.
The Committee:i)Reviewed, discussed and received the report.
RC/15/57DRAFT ANNUAL REPORT AND FINANCIAL STATEMENTS
The Committee considered the draft annual report, noting that in 2014/15 the College and its subsidiary companies made an operating deficit of £356k after accounting for several “one-off” or technical items.
Governors considered how the financial health of the College compares to other colleges. The Vice Principal Finance and Resources advised that the overall financial health rating is Satisfactory due to the impact of the reconfiguration of the College estate and the new build and the associated revenue effects and timing of cash flows. The Governors noted that the gearing ratio is Good. The Vice Principal Finance and Resources stated that he would be writing to the SFA advising specifically of the circumstances surrounding the financial health grade.
The Committee:i)Considered and commented on the draft report and financial statements for 2014/15; and
ii)Recommended the report and financial statements to the Board for its approval; and
iii)Noted the financial position of Blue Square Trading Limited and City of Sunderland College Supplies Limited and recommended to the Board to agree, in the general interests of the College, to provide financial and other support to enable them to continue to trade; and
iv)Recommended to the Board to provide KPMG with a management representations letter confirming general and specific matters in line with International Standards on Auditing.
RC/15/58INSURANCE ANNUAL REPORT
The Governors considered the report and discussed the insurance cover, cost and claims history together with the results of the recent procurement process for the new contract commencing 1st August 2015. The Governors welcomed the reduction in the cost of premiums as a result of the procurement exercise.
The Committee:i)Discussed, noted and received the report; and
ii)Agreed that information relating to individual premiums should remain confidential for the duration of the contract.
RC/15/59ESTATES, CAPITAL PROJECTS AND FINANCING
The Governors discussed the update on the City Campus development. Referring to the forthcoming comprehensive spending review, they considered whether there was a potential risk of funding being withdrawn as a result of the local authority facing significant funding reductions. It was noted that the agreement had been vetted in advance by the College’s legal advisers.
The Committee:i)Discussed and received the report.
RC/15/60ANY OTHER BUSINESS
There was none.
RC/15/61DATE, TIME AND VENUE OF NEXT MEETING
The next meeting is on Tuesday 26th January 2016 at 5.30pm at Bede Campus.
The meeting closed at 6.15pm
1