EC Meeting Papers July 2018

GENERAL FEDERATION OF TRADE UNIONS EDUCATIONAL TRUST

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 DECEMBER 2017

Financial administration. In 2016 the GFTU established a fully professional finance team to support our work. The new Head of Finance established a new Finance Policy which has been adopted and implemented and is subject to annual review. Accountancy. We tendered for new accountants last year and appointed Sturgess Hutchinson. This has reduced our costs and improved the quality of service. Regular management accounts are produced internally. An annual budget is fixed and assessed monthly. Financial review The results of the year are set out in the consolidated Statement of Financial Activities on page 9 and show a deficit of £418,469 (2016 –£427,438). The group had net assets of £728,616 (2016 - £1,147,085) as shown on the Balance Sheet on page 10, represented by a restricted fund surplus of £ (2016 - £2,207,043) and an unrestricted fund deficit of £ (2016 - £1,059,958). The trust continues to be, in part, financially supported by the Federation, which maintains adequate resources to fund the Trust’s operations through the provision of Gift Aid. The Federation has assured the Trustees that it expects to maintain the Gift Aid payments to the Trust at a sufficient level to enable the Trust to continue its current activities. The funding from the GFTU depends on its health financially and this in turn depends on two factors, the number of affiliates and the impact of the triennial pension scheme valuations. One larger GFTU affiliate did not re affiliate last year but five new small and medium sized affiliates joined. The pension scheme valuation was better than predicted, the deficit is reduced somewhat but the annual GFTU payment into this of £70,000 remains the same though to be repaid over a shorter period. In addition the Pension scheme following considerable advice is adopting a new statement of funding principles and investment strategy. In 2015 significant expenditure was made on a new integrated computer system to replace outdated hardware throughout. This was struck by a near fatal computer virus that seriously damaged all GFTU related organisations. As an illustration all of the Trusts Education Programmes were destroyed I would estimate the cost of this alone as £130,000. The system was then struck by some other spam attacks and has remained unstable since. A comprehensive independent review of our situation and future requirements is underway and an interim report has been received. Tenders for a new maintainer will be circulated and a new six month post of ICT Officer will be created. Reserves policy The Trust has two funds, the General Reserve Fund, which the Trustees are free to use in accordance with the charitable objectives set out in the Trust Deed and the Restricted Reserve fund, which can only be used to fund the specific projects undertaken by the Trust. The Restricted Fund also includes the sum of £3,000,000, which the Trust is required to maintain under the terms of exceptional Gift Aid donated by the Federation in 2005. The Executive Committee of the Federation has varied the terms of the restriction to take account of fluctuations in the value of underlying investments. There is no governing requirement to hold a specific level of General Reserve, due to the financial support of the Trust by the General Federation of Trade Unions. At present the General Reserve stands at £1,241,824 deficit (2016: £1,059,958 deficit). The Trust’s policy is to achieve positive general reserves over the medium term. In 2017 the General Federation of Trade Unions had a surplus of £574,764 (2016 – £541,587) and showed a surplus before Gift Aid of £574,764 (2016 - £641,587).

Future plans The Trust has established a small working group to assist the viability assessment of the proposed new build at Quorn.

The Trust has continued to take detailed reports on performance at Quorn Grange Hotel and Nursery and has established a wholly own subsidiary to run the nursery.

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