Agenda item

The Committee received a report and were informed that the Farnham Park Sports Fields Charity accounts had been audited by Azets Audit Services. The auditors’ report (Appendix 1) was draft and could change once the outstanding audit work had been completed and finalised.  The draft Annual Report and the Financial Statements for the year ended 31 March 2021 had been prepared in accordance with the requirements of the Charities Act 2011 and had adopted the provisions of Accounting and Reporting by Charities Statement of Recommended Practice and Financial Reporting Standards.

The net worth of Farnham Park Sports Fields Charity had decreased by £226k from £678k in 2020 to £452k in 2021, of which £73k was depreciation of assets. The net operating expenditure for the year was £226k compared to £328k in 2019/20.  COVID-19 restrictions had a significant negative impact on the Charity’s income during FY 2020/21, with the golf course facilities closed between late March 2020 and mid-May 2020, early November to early December 2020, and subsequently from early January 2021 to 29 March 2021, as a result of the national lockdowns; and social distancing restrictions in place during the limited period that the course was able to open.  Catering and functions income were similarly impacted because of the national restrictions for hospitality, with even longer periods of closure required; and the sports fields, in common with the majority of playing field facilities, suffered from the restrictions in place on team sports.  Mitigation of £384k for some of these income losses had been received through the Government’s Support Scheme which improved the overall net operating loss compared to the prior year.

While operating costs had been reduced wherever possible, savings at the golf course and playing fields during the periods of national lockdowns were limited, since the sites had to be maintained ready for a return to play, to avoid future loss of income. Staff vacancies were left unfilled during the financial year, with the remaining team working flexibly; this included the redeployment of staff members to the Council’s wider Covid response whenever possible, including to help with managing unprecedented numbers of visitors to Country Parks, and to support surge testing.

A summary of the other actions taken to reduce costs and generate additional income were included at paragraph 1.6 of the report.  As reported to the Committee in March 2021, provision had made within the Council’s MTFP 2021/22 for growth to cover the Trust’s projected operational losses. Work was also in hand to review the future operating arrangements with a focus on increasing financial sustainability, with the Service Improvement team currently undertaking an initial options appraisal to inform recommendations to CMT and Members.

Members sought additional information and were informed:

-                      that the audit work was still not complete as a bank reconciliation of £21k needed to be sorted.  The Committee was being asked to approve the accounts as long as they were not subject to any material changes.

-                      that any future loans made to the charity would have regard to the Council’s Leisure Strategy, and also be subject to a valid business case.

-                      on the status of the repayment of outstanding loans made by the Council to the charity, and on the payment of pension contributions for staff.

-                      on the proactive work being done to increase financial sustainability.  It was commented that due to the size of the club house it was not able to support outside functions.

Having reviewed the Farnham Park Sports Fields Charity audited Annual Report and Financial Statement for the year ended 31 March 2021 and raised issues which Members felt they needed assurance on, it was –

RESOLVED –

(1)               That the Service Director – Corporate Finance (and Section 151 Officer), following consultation with the Chairman of the Audit and Governance Committee, be authorized to make any final amendments to the Accounts arising from outstanding audit work, as long as these changes were not material, prior to the approval of the accounts by the auditor.

(2)               That a verbal update be provided to a future meeting on the outcomes of the outstanding audit work (ACTION LOG).