Registered number: 09915776
SMALLER AUTHORITIES AUDIT APPOINTMENTS LTD
FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE YEAR ENDED 31 MARCH 2024
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SMALLER AUTHORITIES AUDIT APPOINTMENTS LTD
REGISTERED NUMBER: 09915776
BALANCE SHEET
AS AT 31 MARCH 2024
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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SMALLER AUTHORITIES AUDIT APPOINTMENTS LTD
REGISTERED NUMBER: 09915776
BALANCE SHEET (CONTINUED)
AS AT 31 MARCH 2024
The Company's financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the statement of income and retained earnings in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 2 August 2024.
The notes on pages 5 to 10 form part of these financial statements.
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SMALLER AUTHORITIES AUDIT APPOINTMENTS LTD
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
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Market Development Reserves
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Comprehensive income for the year
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Comprehensive income for the year
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Comprehensive income for the year
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SMALLER AUTHORITIES AUDIT APPOINTMENTS LTD
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STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
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Comprehensive income for the year
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The notes on pages 5 to 10 form part of these financial statements.
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SMALLER AUTHORITIES AUDIT APPOINTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Smaller Authorities' Audit Appointments Limited is a private company limited by guarentee incorporated in England and Wales with a registered office of 77 Mansell Street, London, E1 8AN.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies.
The following principal accounting policies have been applied:
The Company sets the scale fees in respect of the audit of Local Councils. For administrative purposes, it requires Audit firms to invoice the opted-in bodies on its behalf and to act as its collecting agents in respect of those fees. The Company in turn invoices those Audit firms at the scale fee adjusted for its remuneration.
The accounting policy has been changed in order to reflect real and contractual arrangements between the Company and its suppliers of those services, resulting in a restatement of the prior year comparatives.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
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SMALLER AUTHORITIES AUDIT APPOINTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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The average monthly number of employees, including the directors, during the year was as follows:
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SMALLER AUTHORITIES AUDIT APPOINTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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Charge for the year on owned assets
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Prepayments and accrued income
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Cash and cash equivalents
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SMALLER AUTHORITIES AUDIT APPOINTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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Creditors: Amounts falling due within one year
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Other taxation and social security
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Accruals and deferred income
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SMALLER AUTHORITIES AUDIT APPOINTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Indemnity Reserve
The original Memorandum of Understanding with the Department of Communities and Local Government (DCLG) required the Company to establish and maintain an 'Indemnity Fund' to cover any costs related to auditors' work that may not be recoverable from authorities, especially where an auditor has taken legal action, and to indemnify audit firms for legal costs relating to any judicial review.
Reserve is consistent with the original government requirements
General Reserve
The General Reserve has no specific purpose and is held to ensure funds are available for contingencies and provide financial strength to the balance sheet. The recommended guideline is between 3 and 12 months of net revenue expenditure.
Redistribution Reserve
The joint procurement, along with 100% participation of Smaller Authorities and low inflation has left the company in a strong position. The company has conducted consultation with representatives of Smaller Authorities on how this may be shared and redistributed to smaller authorities as part of the benefits of procurement at scale. The sector bodies support investing in projects which will streamline the audit process and support good governance. The bodies also support considering the use of reserves when the next contract is let to smooth out any potentially large increases in fees. Furthermore at this time, the results of the governments ‘reform’ stage of the review of local audit will be known and any impact on Smaller Authorities better understood. SAAA will continue to support the sector and will consult with them further on the effective use of SAAA's reserves, including this redistribution reserve.
Market Development Reserve
Given the current problems in the principal authority market and impact of higher than anticipated inflation in recent years, there could be capacity issues which may require changes to be made to contracting and pricing arrangements. The initial reserve established in 2022/2023 has been increased this year in order to accommodate any such changes.
Projects Reserve
Large strategic project costs are likely in future years such as the potential ongoing AGAR digitisation project, which could incur high costs if full digitisation is thought to be a desirable development, and other projects may require the appointment of project managers or IT specialists for a fixed term.
Procurement Reserve
This reflects the anticipated costs involved in undertaking the next 5 yearly audit contracts procurement due in 2026, which is likely to require structure with added complexity.
Discontinuance Reserve
In the event of winding up, dissolution or any significant amendment to the articles of association, the Company as a non-for-profit company is committed to distribute any surpluses and reserves to a party or parties nominated by the Secretary of State, potentially the opted-in smaller authorities.
This reserve was established to estimate the costs that might be incurred if the Company was to be discontinued; for instance, if the Redmond Review or similar authorities should all be administered by the
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SMALLER AUTHORITIES AUDIT APPOINTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
8.Reserves (continued)
same organisation.
The Directors have reviewed the historic accounting policy for recognising revenue and have now changed it to more accurately reflect the contractual relationship between itself and its customers. The effect of the change in the accounting policy is to restate the revenue and gross surplus. Previously, these figures were disclosed in note 2 to the accounts and have no effect on the retained earnings for the year.
The auditors' report on the financial statements for the year ended 31 March 2024 was unqualified.
The audit report was signed on 2 August 2024 by Stephen Sampson (Senior Statutory Auditor) on behalf of Milton Avis LLP.
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