My 2021/22 statement ended with the hope that 2022/23 would be a more “normal” year.
In Covid terms, it was, as the prevalence of the virus waned, however, in other ways, it has been a year like no other – and not just in Sense Scotland, but across the whole social care sector.
In the face of many challenges, Sense Scotland continues to perform well, and the Board of Trustees remain proud of the high standard of care and support delivered by all staff across all functions, and the commitment they show to the organisation.
Particular highlights of the year include the performance of our Shops and Fundraising teams; strong Care Inspectorate scores; the ongoing integration of the Visual Impairment and Learning Disability (VILD) services which transferred to us in January 2022, and a morale-boosting visit from our Patron, Her Royal Highness The Princess Royal, to our TouchBase Dunbartonshire in October 2022. Our new website and strapline were also launched and have been used to great effect throughout the year, giving a much more modern feel to all of our internal and external communications.
The challenges, however, are significant, and almost all route back to the chronic under-funding of social care. The Adult Social Care Rate, set by Scottish Government, is inadequate and does not reflect the responsibility our staff carry, nor the value of the work they do. Attracting high quality staff to the sector is increasingly difficult, and retaining those we already have is equally tough.
My reflection on 2022/23 is that Sense Scotland is doing a remarkable job despite the current climate: all those things within our control and influence are being led and managed well, delivering impact to our beneficiaries.
My hope for 2023/24 is that we see a significant change in attitude towards third sector social care, an acknowledgement of the inherent unfairness in the system, and the consequential financial reward for services and a workforce which are truly appreciated.
As Chair, I know that Sense Scotland will continue to do the very best it can for the people it supports, and wonder how much more could be achieved with the appropriate Scottish Government support.
The trustees present their annual report and financial statements for the year ended 31 March 2023.
The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the charitable company's Articles of Association, the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective 1 January 2019).
Our vision is for the people we work with to live meaningful and independent lives in a world which supports them to achieve their own ambitions.
Our strategic objectives of Quality, Personalisation and Sustainability & Growth underpin all that we do. We review these objectives and our progress towards meeting them, as well as our internal and external operating environment, on a regular basis.
We work in partnership with the people we support, families, carers, and professionals to support and promote the interests of children, young people and adults who have communication support needs arising from a range of disabilities including, but not limited to, deafblindness, autism, cerebral palsy, sensory impairment, learning or physical disability, often against a backdrop of complex health needs.
We deliver services which provide choice and continuity across all age groups, and work closely with the individuals we support, their families and carers, and with professionals working in our field, to continually develop and improve service delivery, aiming at all times to exceed expectations.
We provide services in a variety of ways and use a person-centred approach, meeting the needs of the individual in a number of environments and settings; those services and settings can be housing support, respite services, day support, and charitable services supported by fundraising and grants.
We aim to be the provider of choice and to be recognised for developing and fitting our services around the individual. This requires us to respond quickly and effectively to changes in the social care sector, levels of expectation, changes in legislation and regulation and funding.
Our Values
To be open and honest
To recognise individual worth
To build relationships through trust
To act on the basis of individual aspirations and needs
To be accountable for our actions
These values apply to all of us – staff, trustees, volunteers, people we support, families and carers and others that we work with – and are an integral part of our induction and training, our communications and working policies.
We take a risk-enabling approach and believe that developing good communication skills with people helps to achieve the necessary balance of supporting individual choice while minimising risks to safety.
We provide high quality social care and charitable services, nationally and internationally, to over 1000 people and their families.
The impact of our work goes beyond those directly supported, and includes assisting families to understand their rights, access services and raise matters of importance to them. Our National Family Partnership Forum facilitates this.
Our 15 shops provide a much-needed and welcome alternative to shoppers throughout Scotland, and do so in a way that reuses, recycles, and contributes to safeguarding our environment.
We provide opportunities for people to volunteer with Sense Scotland, and currently have around 100 volunteers. We support them in the hope they can enrich their own lives and those of others.
We also provide opportunities for people to support our endeavours by their own fundraising.
We carry out surveys on the quality of what we provide, receiving positive feedback both internally and from the Care Inspectorate.
We encourage collaborative and partnership working.
We give those we support the opportunity to gain recognised awards through ASDAN, a pioneering curriculum development organisation and awarding body, offering programmes and awards which explicitly grow skills for learning, skills for work and skills for life.
The trustees have paid due regard to guidance issued by the Office of the Scottish Charity Regulator (OSCR) in deciding what activities the charitable company should undertake.
The description under the headings "Achievements and performance" and "Financial review" meet the company law requirements for the trustees to present a strategic report.
The past year has again been one of significant challenge: the continued, albeit reduced, impact of the Covid19 pandemic lingers, however, by far the bigger threat to the organisation, and the sector as a whole, is the chronic Government under-funding of social care. Low pay makes recruitment and retention of staff incredibly difficult, and thereby increases reliance on agency staff, which in turn leads to higher costs.
Despite all of this, our emphasis in the Operations function of the organisation over the past year has been on quality, with the establishment of an Operations Support Team to drive this. We have also continued to monitor and increase capacity (post-Covid19), although the recruitment and retention challenges referred to above impact this.
A strategic Workforce Group meets monthly to review recruitment and retention figures and generally discuss staffing pressures.
Our Staff and Volunteer Awards were held, in person, in September 2022 for the first time since 2018.
In June, a new role of Director of Planning, Development and Engagement was added to the Executive Team, and has greatly improved the functions within the role’s remit.
Our internal and external communications have improved, with the launch of our new website at the beginning of the Financial Year, and a focus on continually improving and updating content. The website incorporates our new strapline, “We Care, We Connect, We Communicate”, and our new colour palette, both of which have been used to great effect throughout the year.
Internally, we now circulate a weekly “In Touch” to all staff, which features messages from the Chair of the Board and the Chief Executive each month. We also send a monthly “Care and Connect” to all families.
Staff Engagement - Sense Scotland is committed to being a responsible organisation and employer. Our behaviour is aligned with the expectations of our staff, volunteers, the people we support, local authority customers, donors, funders and the communities in which we work. Our staff are the heart of the services we deliver and we encourage the involvement of employees through our Staff Partnership Forum ,weekly communications and annual surveys. We ensure we share common values that inform and guide our behaviours, so we achieve our goals in the right way. We invest heavily in staff training and development, with a high-quality programme for all staff, which commits to ongoing personal growth.
We are committed to eliminating discrimination and encouraging equality and diversity in our workforce. This is grounded in a fundamental commitment to human rights, and made explicit in an organisational policy, which includes assurance of equality and fairness in respect of gender. Sense Scotland is committed to stable contracts, fair and equal pay for all staff and the provision of a safe and secure working environment.
Our Fundraising activities have benefitted from the resumption of face-to-face activities, with good participation in the various Kiltwalks and a very successful Ladies’ Lunch at the end of 2022/23. We continue to communicate with donors throughout the year via our Loud and Clear publication, and also introduced the Sense Scotland Lottery this year.
Our Charity Shops traded throughout the year and, while we haven’t grown our portfolio, our sales in the existing shops have increased significantly over the year. Energy costs, however, impact on profit.
Our charitable services have increased their profile, impact and reach throughout the year.
In October, we agreed to work with a social enterprise, Mecoco, who make candles and provide volunteering opportunities for people with a disability, to learn from and support each other.
In addition to our ASDAN awards (previously mentioned) we now offer Duke of Edinburgh Awards to the people we support.
In March 2023 we received confirmation of funding to establish a Learning Hub, a 3-year individualised programme aimed at school leavers aged 18-21 with communication support needs. Preparatory work has started with a view to being up-and-running in Autumn 2023.
In January, we re-opened our café in TouchBase Glasgow (which was closed during the Covid19 period) for staff and people we support.
In the background, we’ve continued to strengthen our ICT, Finance, Learning & Development, HR and Recruitment Teams. To support the Recruitment Team, we introduced Job Train, an applicant tracking system.
We were delighted that Her Royal Highness, The Princess Royal, renewed her patronage of Sense Scotland for a further 3 years, and even more delighted when, in October 2022, she agreed to visit one of our services which had transferred from RNIB in January 2022. TouchBase Dunbartonshire was the venue, and staff, families and Trustees were there to meet her.
In Financial Year 2022/23, 89% of our income was derived from commissioned services from local authorities which developed into Health & Social Care Partnerships. We currently work with 22 local authorities. In addition, we work in partnership with several grant funders, including Children in Need, Robertson Trust, Creative Scotland, Barclays and many others to provide non-statutory services to the people we support and their families.
In 2022/23 total income was £24,917,392, up by £3,663,998 (17%) on the previous year. Income from Care Services was £22,232,280 compared to £18,722,106 the previous year. Donations and legacies were £971,219 in 2022/23 compared to £1,067,079 in 2021/22. Expenditure increased from £21,472,597 in 2021/22 to £25,487,357 in 2022/23, an increase of £4,014,760 (19%).
On January 17 2022, 4 services and circa 100 staff and service users transferred into Sense Scotland from RNIB. The transfer was smoothly implemented and has added to the income and reach of Sense Scotland. A full year of these services is included in the results to 31 March 2023.
Major grants received are identified in note 4 to the financial statements. The Trustees are indebted to all donors for their support, both financial and otherwise, without which it would not have been possible to achieve all that we have.
The Trustees wish to note the continued support of the Scottish Government in respect of a variety of funds. The Trustees also wish to note their thanks to local authorities, health boards and other statutory agencies who have continued to support Sense Scotland through grant and other funding.
Expenditure
Operating Expenditure increased by £4,014,760 (19%) from £21,472,597 in 2021/22 to £25,487,357 in 2022/23.
In the year to 31 March 2023, the salary rate for adult social care workers was increased from £10.02 to £10.50 in April 2022.
An increase in the use of agency staff versus prior year was once again required to assist in areas of staff shortages. Both of these, along with the increased running costs associated with the RNIB services now embedded within Sense Scotland, contributed to the increase in Operating Expenditure.
Salary costs at £21,480,278 (£18,017,731 in 2021/22) remain our main area of expenditure, accounting for 84% of total expenditure.
Our key financial performance indicators during the year were as follows:
| 2023 |
| 2022 |
| £ |
| £ |
Donations & Legacies | 971,219 |
| 1,067,079 |
Charitable Activities | 22,232,280 |
| 18,722,106 |
Other trading activities | 1,484,786 |
| 1,270,526 |
Investments | 1,861 |
| 4,183 |
Other income | 227,246 |
| 189,500 |
|
|
|
|
Total Income | 24,917,392 |
| 21,253,394 |
|
|
|
|
Charitable Activities | 23,779,384 |
| 19,758,222 |
Raising funds | 321,314 |
| 363,637 |
Shops | 1,386,659 |
| 1,350,738 |
|
|
|
|
Total Expenditure | 25,487,357 |
| 21,472,597 |
|
|
|
|
Operating expenditure for the year | 569,965 |
| 219,203 |
|
|
|
|
Pension Fund Provision Release | 3,531,239 |
| 0 |
|
|
|
|
Net surplus/(deficit) for the year | 2,961,274 |
| -219,203 |
|
|
|
|
Unrestricted Funds | 9,417,647 |
| 6,396,857 |
Overall result for the financial year ending 31st March 2023
Due to the release of the long-term pension liability net income for the year 2022/23 is £2,961,274. See comment in pension section.
Overall result from operating activities shows a deficit of £569,965 due in the main to rising labour costs and the ongoing use of agency staff to support staff vacancies. Sense Scotland is committed to rewarding its staff within its financial constraints in this period of increasing consumer costs and will continue to do so to maintain and reward its loyal workforce.
As a result of ongoing improved cash control and collection, the cash position at the end of the year improved slightly to £3,904,793 from £3,854,120 in the prior year (see note 28).
Pension Repayment Plan & Cessation
A further instalment of £75,205 of the agreed re-payment plan was paid in September 2022.
However, following a cessation valuation as at December 31, 2022 agreement was reached with the LPFA that Sense Scotland have paid sufficient contributions to have covered all liabilities and the funding agreement was terminated.
As a result the liability of £3,531,239 has been released to the income statement as non-operational Income.
Reserves and Investments
The Trustees set a target of 12 weeks operating costs as a desired level of general reserves covering Net Current Assets, to ensure continuity of operations. This decision is reviewed annually, considering the nature of the client group for which the charity is entrusted to provide care and support.
As of 31 March 2023, the company has a level of 5.8 weeks’ cover. This is a reduction compared to the prior year due to a reduction in Net Assets (mainly debtors) and increased business running costs. The weeks’ cover is calculated by dividing the general reserves covering Net Current Assets (see note 23) by the average expenditure for one week.
Risk Management
Enterprise Risk Management (ERM) is central to Sense Scotland’s strategic management process, whereby Sense Scotland methodically addresses the risks attaching to our activities.
It is the role of Trustees and the Senior Management Team (SMT) to translate the ERM approach into tactical and operational objectives, assigning responsibility throughout the organisation to each manager and employee responsible for the appropriate management of risk.
Each risk identified is clearly stated, stakeholders identified, quantified, control measures in place and any improvement actions required.
Directors and senior staff are accountable for strategic risk management within areas under their control, including the devolution of the risk management process to operational managers.
The Chief Executive is responsible for maintaining the Sense Scotland Risk Register and for reviewing it annually.
The Audit and Risk Committee reviews the Risk Register at each meeting, evaluating any updates and controls put in place by management. Risk Management is a standing agenda item for all Audit and Risk Committee meetings.
The safety and wellbeing of the people we support is central to our approach to risk, and risk assessment and management were key to our continued delivery in a Covid19 context. We adopt a risk-managed approach whilst working toward ensuring their ambitions and stated outcomes are met.
Going Concern
Alongside the operational challenges outlined above, the pandemic has impacted the financial performance of Sense Scotland. The Trustees and management team have taken proactive steps to mitigate this wherever possible.
In assessing Sense Scotland’s ability to continue as a going concern, the Trustees have considered the liquidity position of the company and the expected future cash flows under a downside (worst case) scenario.
While continued restrictions on the ability to deliver all of the usual services will be expected to reduce elements of Sense Scotland’s income, the Trustees have various mitigating actions available to them to reduce the negative impact on cash flows.
The forecast indicates that Sense Scotland will be able to continue to operate, to service its debts and pay its liabilities as they fall due for the period of the forecast analysis which covers at least 12 months from the date of this report. Accordingly, the Trustees have prepared the financial statements on a basis of going concern.
Financial Risk Management
Risk management is carried out under policies approved by the Board with financial risks being identified, evaluated and responded to by the Audit and Risk and Finance Committees.
Currency Risk
Sense Scotland operates almost wholly within the UK and is exposed to minimal currency risk. The organisation’s borrowings are denominated in Sterling.
Credit Risk
At the year end, approximately 64% of our debts were due by local authorities and five authorities represented 48% of the total. Despite this concentration, Sense Scotland considers that the credit risk attaching to these debts is low.
Liquidity Risk
Prudent liquidity management implies maintaining sufficient cash balances and the availability of funding through an adequate amount of committed credit facilities. Due to the nature of the underlying business the aim is to maintain flexibility in funding by keeping committed credit lines available.
Cash Flow Interest Rate Risk
Sense Scotland has no significant interest-bearing assets and its income and operating cash flows are substantially independent of changes in market interest rates.
How did we perform against the plans we set out in last year’s Trustees’ Annual Report?
Our aim for 2022/23 was to continue to deliver and develop good quality, safe, sustainable and impactful social care and charitable services, while strengthening and improving our infrastructure to monitor improvement, support growth and respond to the external operating environment.
This has been achieved, despite the social care sector challenges, due to a lot of hard work and commitment from the entire workforce.
Our new 3-year strategy launched at the end of 2022/23 and focuses on six key strategic aims over that period:
Establish Sense Scotland as a leader in the provision of specialist services for people with complex communication support needs associated with learning and/or sensory disabilities.
Ensure our social care services are sustainable and evolve to meet demand.
Support carers to access breaks and explore new short break models.
Deliver programmes and projects to enhance the lives of people with communication support needs and their families across Scotland.
Generate new and sustained sources of income.
Nurture social care leaders of the future and value, recognize and reward our staff and volunteers.
Sense Scotland is a charitable company incorporated as a private company limited by guarantee. Sense Scotland was established as a charitable company in November 1993 and is governed by Articles of Association, as revised and approved on 3rd July 2023, under the Companies Act 2006.
The trustees, who are also the directors for the purpose of company law, and who served during the year and up to the date of signature of the financial statements were:
Appointment of Trustees
The Board of Trustees is responsible for the appointment of additional Trustees from time to time. The Nominations Committee is a sub-committee of the Board which has delegated responsibility to manage the recruitment and selection of Trustees. As far as possible, recruiting Trustees (whether by co-option or election) covers the widest possible search. This ensures that the most experienced and capable Board is formed. It is important that the Board is able to recruit new members whilst retaining the stability to govern the organisation.
Sense Scotland aims to create a Board that is representative of its beneficiaries and includes parents/carers of those we support. At least half of the Board’s Trustees have links to communication support needs, whether personally, professionally or as a parent/carer/family member, recognising the diversity within disability.
The role of the Board includes strategic planning, financial and legal monitoring of a wide range of activities, and authorship and custodianship of Sense Scotland’s mission and values. To do this, the Board needs a wide range of skills, knowledge and experience to enable it to effectively fulfil its duties.
Trustee induction and training
New Trustees undergo an orientation day to brief them on: their legal obligations under charity and company law; the Scottish Charity Regulator’s guidance on Trustee duties; the content of the Articles of Association; the committee and decision-making processes; the business plan and recent financial performance of the charity. Trustees have access to a resource pack consisting of a Governance Handbook, organisational structures and external support and advice in carrying out their role.
Organisation
The Board of Trustees, which can have up to 15 members, with a quorum of 5 members, is responsible for the strategic direction and policy of the charity. The Board meets four times per annum (over the past year, meetings have again been held virtually).
There are seven sub-committees as follows:
Sub-Committee | Purpose |
Finance | To ensure that financial resources are employed appropriately in furtherance of strategic objectives. |
Audit and Risk | To monitor and review the effectiveness of internal and external auditing procedures and outcomes, advising and reporting to the Board. |
Remuneration | To ensure that both the remuneration strategy and its implementation is perceived by all stakeholders to be transparent, fair and effective. |
Nominations | To identify any skills gaps in the Board membership, oversee the recruitment processes of Board members and make recommendations to the Board of new Board members for election or co-option. |
Fundraising | To support the Fundraising Team through generation of ideas and sharing of contacts. |
External Affairs | To support and promote the organisation through relationships with external stakeholders. |
Governance | To ensure effective and efficient governance of Sense Scotland, and conduct a regular skills audit of the Trustees versus the strategic requirements of the organisation. |
Each Committee reviews its Terms of Reference annually.
A scheme of delegation is in place and day to day responsibility for the provision of services rests with the Chief Executive along with the Executive Team and Senior Management Team (see note 26).
The Executive Directors (Key Management Personnel)
Angela Bonomy Chief Executive Officer
Brian Murphy Director of Operations
David Donnelly Director of Finance
Joanne O'Donnell Director of Planning, Development & Engagement.
* These directors, although designated as directors, are not statutory directors.
In accordance with the company's articles, a resolution proposing that William Duncan + Co (Audit) Ltd be reappointed as auditor of the company will be put at a General Meeting.
The trustees' report, including the strategic report, was approved by the Board of Trustees.
The trustees, who are also the directors of Sense Scotland for the purpose of company law, are responsible for preparing the Trustees' Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Company Law requires the trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that year.
In preparing these financial statements, the trustees are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charities SORP;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in operation.
The trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The trustees are responsible for the maintenance and integrity of the charity and financial information included on the charitable company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Opinion
We have audited the financial statements of Sense Scotland (the ‘charitable company’) for the year ended 31 March 2023 which comprise the statement of financial activities, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charitable company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The trustees are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the trustees' report for the financial year for which the financial statements are prepared, which includes the directors' report and the strategic report prepared for the purposes of company law, is consistent with the financial statements; and
the strategic report and the directors' report included within the trustees' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report included within the trustees' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 and the Charities Accounts (Scotland) Regulations 2006 (as amended) requires us to report to you if, in our opinion:
adequate and proper accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the statement of trustees' responsibilities, the trustees, who are also the directors of the charitable company for the purpose of company law, are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the trustees are responsible for assessing the charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.
We have been appointed as auditor under Chapter 3 of Part 16 of the Companies Act 2006 and section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and report in accordance with the Acts and relevant regulations made or having effect thereunder.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Enquiry of management, those charged with governance and the entity's solicitors around actual and potential litigation and claims;
Enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations;
Performing audit procedures over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for potential management bias;
Reviewing minutes of meetings of those charged with governance; and
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations; and
Reviewing the level of and reasoning behind the company's procurement of legal and professional services.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and to the charity’s trustees, as a body, in accordance with regulation 10 of the Charities Accounts (Scotland) Regulations 2006. Our audit work has been undertaken so that we might state to the charitable company's members and trustees those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company, the charitable company’s members as a body,and the charitable company’s trustees as a body, for our audit work, for this report, or for the opinions we have formed.
William Duncan + Co (Audit) Ltd is eligible for appointment as auditor of the charitable company by virtue of its eligibility for appointment as auditor of a company under section 1212 of the Companies Act 2006.
Donations and legacies
Shops
The statement of financial activities includes all gains and losses recognised in the year.
All income and expenditure derive from continuing activities.
Donations and legacies
Shops
Sense Scotland is a private company limited by guarantee incorporated in Scotland. The registered office is TouchBase Glasgow, 43 Middlesex Street, Kinning Park, Glasgow, G41 1EE.
The financial statements have been prepared in accordance with the charitable company's Articles of Association, the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended), FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the Charities SORP "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective 1 January 2019). The charitable company is a Public Benefit Entity as defined by FRS 102.
The financial statements are prepared in sterling, which is the functional currency of the charitable company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.
Alongside the operational challenges outlined in the Trustees Report, the pandemic has impacted the financial performance of Sense Scotland. The Trustees and management team have taken proactive steps to mitigate this wherever possible.
In assessing Sense Scotland's ability to continue as a going concern, The Trustees have considered the liquidity position of the company and the expected future cash flows under a downside (worst case) scenario.
While continued restrictions on the ability to deliver all of the usual services will be expected to reduce elements of Sense Scotland's income, the Trustees have various mitigating actions available to them to reduce the negative impact on cash flows.
The forecast indicates that Sense Scotland will be able to continue to operate , to service its debts and pay its liabilities as they fall due for the period of the forecast analysis which covers at least months from the date of the financial statements.
At the time of approving the financial statements, the trustees have a reasonable expectation that the charitable company has adequate resources to continue in operational existence for the foreseeable future. Thus the trustees continue to adopt the going concern basis of accounting in preparing the financial statements.
Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.
Designated funds comprise funds which have been set aside at the discretion of the trustees for specific purposes. The purposes and uses of the designated funds are set out in the notes to the financial statements.
Restricted funds are subject to specific conditions by donors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements.
Income is recognised when the charitable company is legally entitled to it after any performance conditions have been met, the amounts can be measured reliably, and it is probable that income will be received.
Direct activities represent income earning in respect of contracted services with local authorities, health boards and other statutory agencies and are recognised when the services are performed.
Cash donations are recognised on receipt. Other donations are recognised once the charitable company has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.
Voluntary income is received by way of grants and donations, committed giving and legacies which are included in full in the Statement of Financial Activities when receivable. Grants where entitlement is not conditional on the delivery of a specific performance by the charity, are recognised when the charity becomes unconditionally entitled to the grant.
Investment income is included when receivable.
Legacies are recognised on receipt or otherwise if the charitable company has been notified of an impending distribution, the amount is known, and receipt is expected. If the amount is not known, the legacy is treated as a contingent asset.
Income from non cash donations, other than goods donated for sale through our shops, are valued at an estimate of their value to the charity. Volunteer services are not quantified nor included in the financial statements.
Income from Charity retail shops, through sale of donated goods, and from the sale of our Christmas cards and merchandise is accounted for on a receivable basis.
Income generated from Fundraising income is similarly accounted for on a receivable basis, except for event income where income is recognised when invoiced.
Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement, and the amount of the obligation can be measured reliably.
Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges are allocated on the portion of the asset’s use.
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of financial activities.
At each reporting end date, the charitable company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
The charitable company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the charitable company's balance sheet when the charitable company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the charitable company’s contractual obligations expire or are discharged or cancelled.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the charitable company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.
The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as incurred.
The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in income/(expenditure) for the year.
Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other recognised gains and losses in the period in which they occur and are not reclassified to income/(expenditure) in subsequent periods.
The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.
In the application of the charitable company’s accounting policies, the trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Donations and legacies
Gifts In Kind
Gifts In Kind
A significant amount of work is undertaken for Sense Scotland on an unpaid basis by volunteers. The financial value attached to the unpaid volunteer help has not been quantified and is not reflected in the financial statements. However, Sense recognises and acknowledges the significant reduction in running costs achieved by the provision of such help.
Included within Gifts in kind is an amount representing the market value of retail outlets gifted for use by the Charity during the year. Where a value can be assigned for gifts in kind this has been quantified as above.
Housing Support
Day Services
Respite
Arts Programmes
Development
Other Activities
Local Authority services provided under contract
Direct payments
Grants receiveable
Housing Support
Day Services
Respite
Arts Programmes
Development
Other Activities
Housing Support
Day Services
Respite
Arts Programmes
Development
Other Activities
Housing Support
Day Services
Respite
Arts Programmes
Development
Other Activities
Local Authority services provided under contract
Direct payments
Grants receiveable
Housing Support
Day Services
Respite
Arts Programmes
Development
Other Activities
TouchBase Glasgow
VILD Services transfer agreement income
Sundry income
Fundraising events
Shops
Charity shops
Shops
Care Services
Day Services
Respite
Arts Programmes
Development
Other Activities
Other direct costs
Care Services
Day Services
Respite
Arts Programmes
Development
Other Activities
Other direct costs
Finance
% of Staff
Information Technology
% of Staff
Human Resources
% of Staff
Management & Admin
% of Staff
Touchbase Glasgow
None of the trustees (or any persons connected with them) received any remuneration or benefits from the charitable company during the year, and £nil (2022 - £202) was paid to trustees for travelling expenses during the year.
The average monthly number of employees during the year was: 973 (2022 - 926).
The average FTE monthly number of employees during the year was:
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
A loan was offered by Social Investment Scotland via the Third Sector Resilience Fund in 2020, on an interest rate of 0%, repayable over 4 years and 6 months beginning 30th November 2020.
A loan was offered by Social Investment Scotland via the Recovery and Resilience Fund in 2022, on an
interest rate of 3%, repayable over 9 years beginning 31st March 2022. Capital is not repayable until the 85th month (31st March 2029).
The charity has been repaying its allocated deficit contributions in line with the agreement with the London Pension Fund Authority (LPFA) since the last triennial valuation in 2019. A payment of £75.205 (2022 - £72,556) was made during the year.
An updated valuation was performed in December 2022 by Barnett Waddingham.
The Actuarial Valuation report confirmed Sense Scotland had paid sufficient contributions to the pension fund to cover its liabilities in full and was therefore deemed to be discharged from its obligations to the fund in accordance with regulation 64. Formal agreement was reached by both parties, and legally executed, with the funding agreement being terminated on 31st December 2022. At that date Sense Scotland became an exiting employer in the fund.
The release of the pension obligation liability totalling £3,531,239 has been credited to the Statement of Financial Activity during the year in line with the above. As a result of the obligation being terminated, the Securities provided by Sense Scotland in relation to the pension liability were satisfied and discharged post year end.
Deferred income is included in the financial statements as follows:
Sense Scotland has the following restricted funds;
Direct Services - These are funds raised by services through events such as raffles, community fairs and quizzes. All funds raised are for the service's own use and should not be used to cover shortfall in service income or overspends in relation to the day to day running of the service.
Other Services - These are grant funds received from external funders for activities such as Arts, Development and Transition Programmes.
Fundraising & Trading - These are funds raised by individuals which are unspent at year end.
There were two legacies known (2022 - four), but not received, at the year end which were not included in these financial statements.
There were no grants or donations which the conditions were not met.
Securities and fixed charges to a maximum of £500,000 (2022 - £500,000) have been issued in respect of The Royal Bank of Scotland.
At the reporting end date the charitable company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The remuneration of key management personnel is as follows.
The Trustees delegate day to day responsibility to the Directors of Sense Scotland. These are:
Angela Bonomy - Chief Executive Officer
David Donnelly - Director of Finance
Brian Murphy - Director of Operations
Joanne O'Donnell - Director of Planning, Development & Engagement
During the year the charitable company entered into the following transactions with related parties:
Sense Scotland provides services to eight (2022 - eight) close family member of Trustees.
£430,026 of fees and allowances income (2022 - £406,200) was received in relation to these service users during the year
£49,406 (2022 - £48,602) was included within the debtor balance at 31st March 2023 in relation to transactions of this nature with Trustees.