The trustees who are also directors of the charity for the purposes of the Companies Act 2006, present their report with the financial statements of the charity for the year ended 31st July 2024. The trustees have adopted the provisions of 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 Charity's objectives are:
To advance the education of disaffected young people in West Yorkshire between the ages of 16 and 19, who are unemployed, or lacking in qualifications, or at risk of persistent anti-social behaviour, or offending, by the provision of programmes of outdoor education other training and challenging activities to improve their personal and social skills.
Public benefit
We have referred to the guidance contained in the Charity Commission's general guidance on public benefit when reviewing our aim and objectives and in planning our future activities. In particular, the trustees consider how planned activities will contribute to the aims and objectives they have set.
Charitable activities
The project receives core funding for all the programmes from Calderdale College under a Study Programme subcontract. This ran from August 2023 to July 2024.
The project was successful in obtaining funding from Calderdale College to support young people with Higher Needs Additional Learning (EHCPs). The funding has enabled Project Challenge to continue providing key services and develop additional services for those most vulnerable young people.
The company employed from its funding, the following full and part time employees:
| - |
| Business Manager |
| Full time |
|
| - |
| Finance / Admin |
| Full time |
|
| - |
| Functional Skills Tutor - Maths |
| Part time 0.8 - Term time |
|
| - |
| Functional Skills Tutor - English |
| Part time 0.8 - Term time |
|
| - |
| N'Gage Vocational Tutor |
| Full time |
|
| - |
| ACTIV8 Vocational Tutor |
| Full time |
|
| - |
| Ignite Vocational Tutor |
| Full time - Term time |
|
| - |
| NGage Student Liaison |
| Full time - Term time |
|
| - |
| Activ8 Student Liaison |
| Part time - Term time |
|
| - |
| Ignite Student Liaison |
| Part time - Term time |
|
| - |
| School Liaison EHCP Support EHCP Support |
| Part time – Term time Part time 0.6 Part time – Term time |
|
| - |
| Cafe Supervisor |
| Part time 0.8 |
|
In addition the company commissioned one freelance worker to oversee Quality Assurance and external verification. In 2023/24 this was extended due to additional educational demand for under 16's excluded from schools and in need of bespoke 1:1 tuition.
Financial position
The charity has received income of £626,255 (2023: £609,977) and incurred expenditure of £595,230 (2023: £523,143) in the year, leaving a surplus for the year of £31,025 (2023: £86,834).
The changes made in 2023/24 were significant and had an impact. They were as follows;
- Growth in the number of Under 16s from schools leading to income stream of £145,000
Going forward into 2024/25 the following changes have been made;
- Under 16s are moving to commissioned places with a cap of 10 learners.
- Partnership with GoEducate to offer GCSEs under one roof at Orange Box
- Contract with Calderdale College has increased by 10% and cap of 10 EHCP learners
Principal funding sources
Calderdale College Core Funding
Funding bands remained static and this continues to prove to be an issue for Project Challenge. With an unpredictable client group it is difficult to manage both success factors and whether they will remain on full time programmes once enrolled to draw down maximum funding rates. The College funding was exhausted by May 2023. The contract must be continually reconciled throughout the year due to discrepancies which may arise as some learners transfer between College and Project Challenge. The programme had a 98% success rate.
Project Challenge remains the sole provider of roll on/off Study Programme in Calderdale. The client group are the most vulnerable young people furthest away from the employment market, this combined with post-pandemic challenges has meant there is greater need for our services as numbers of permanently excluded within Calderdale continues to rise.
The Project was successful in securing £38,000 from the Community Foundation to run a Healthy Holidays programme throughout the year for each of the school holidays. This included provision at Orange Box for 13-19 year olds, participating in games, healthy eating and craft activities. Another element was to partner with the Local Authority's Play Services and included employing Project Challenge learners to have a paid work experience producing healthy meals for targeted young people, from deprived postcodes across the Borough, in receipt of Free School Meals.
Orange Box
Being housed at Orange Box has enabled further partnerships with other services within the building, regarding opportunities for learners with the Healthy Holidays funding and the Household Support Fund.
The charity aims to maintain a sufficient level of reserves to ensure that uninterrupted services may continue in the event of short term funding problems, funding being withdrawn, redundancy payments and settlement of creditors.
The charity has a policy to retain reserves equivalent to 6 months running costs, which is £347,628 based on the future estimated costs for the 24/25 financial year. The rationale being that in the event of delays or cuts to funding the charity can continue to provide its services.
The charity has established a designated fund as provision for its redundancy liabilities, as at 31 July 2024 this was calculated as £60,000.
The trustees set out below their calculation of 'free' reserves based on these calculations, after taking account of reserves held for replacement of fixed assets (£5,000) and lease commitments (£1,507), there are no surplus 'free' reserves at 31 July 2024.
The trustees have taken a prudent approach in setting their reserves policy for the year and will continue to monitor the policy into the next financial year in order to move towards a surplus 'free' reserves position. With the intention of establishing asset renewal designated funds for IT and opportunity and innovation funds for the delivery and development of activities.
31.7.24
£
Total Funds at 31/7/24 414,135
Less : Designated Redundancy Fund (60,000)
Total Unrestricted General Funds 354,135
Less : Replacement of fixed assets (5,000)
Less : Lease Commitments (Note 14) (1,507)
Less : 6 Months Operating Costs (347,628)
'Free' Reserves at 31/7/24 £0
Project Challenge continues to build a reputation for being an AP - Alternative Provision provider for young people with 'high needs' and for a cohort of statutory school age (under 16's) to prevent becoming permanently excluded. Current under 16 AP in Calderdale seriously lacks the capacity to accommodate some particularly challenging young people both with and without an Education Health Care Plan.
2023/24 we had 14 referrals from schools looking for alternative provision on a mixture of full, part time and 1-2-1 courses.
Post 16 in receipt of an EHCP will be capped at 10 from within Calderdale College. This remains an issue as we are often consulted for more than 10 places and could accommodate these.
The charity is a limited company, limited by guarantee, and as such is controlled by its Memorandum and Articles of Association.
Organisation
The Articles of Association state that, at every Annual Meeting, one third of the Trustees who are subject to retirement shall retire. Following the Companies Act 2006 the Trustees who retire by rotations are those serving the longest. For those who were appointed on the same day those who retire shall (unless otherwise agreed amongst themselves be determined by majority votes, the Chair will have the casting vote.
The Trustees meet quarterly with the Business Manager informing of major changes/issues by a newsbites email.
Trustees have areas of responsibility and can meet to deal with emerging issues for their area, making decisions that do not need a vote.
Induction and training of new trustees
All Trustees receive induction on their appointment to the Board and receive appropriate training during their term of office. They are all in receipt of an enhanced DBS check.
Related parties
The Secretary is also the Business Manager of the Project. None of the other Trustees have a beneficial interest in the Company.
Risk management
The trustees have a duty to identify and review the risks to which the charity is exposed and to ensure appropriate controls are in place to provide reasonable assurance against fraud and error.
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:
The trustees report was approved by the Board of Trustees.
The trustees, who are also the directors of Project Challenge 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 charity 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; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity 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 charity and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Approved by order of the board of trustees on __________________ and signed on its behalf by:
Allan Naylor- Trustee
I report to the trustees on my examination of the financial statements of Project Challenge (the charity) for the year ended 31 July 2024.
Having satisfied myself that the financial statements of the charity are not required to be audited under Part 16 of the Companies Act 2006 and are eligible for independent examination, I report in respect of my examination of the charity’s financial statements carried out under section 65 of the Charities Act (Northern Ireland) 2008 and section 145 of the Charities Act 2011. In carrying out my examination I have followed the general Directions given by the Charity Commission for Northern Ireland under section 65(9)(b) of the Charities Act (Northern Ireland) 2008 and the Directions given by the Charity Commission under section 145(5)(b) of the Charities Act 2011.
Since the charity’s gross income exceeded £250,000, the independent examiner must be a member of a body listed in section 145 of the Charities Act 2011 and section 65 of the Charities Act (Northern Ireland) 2008. I confirm that I am qualified to undertake the examination because I am a member of the Association of Chartered Certified Accountants, which is one of the listed bodies.
I have completed my examination. I confirm that no matters have come to my attention in connection with the examination giving me cause to believe that in any material respect:
accounting records were not kept in respect of the charity as required by section 386 of the Companies Act 2006.
the financial statements do not accord with those records; or
the financial statements do not comply with the accounting requirements of section 396 of the Companies Act 2006 other than any requirement that the financial statements give a true and fair view, which is not a matter considered as part of an independent examination; or
the financial statements have not been prepared in accordance with the methods and principles of the Statement of Recommended Practice for accounting and reporting by charities applicable to charities preparing their financial statements in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102).
I have no concerns and have come across no other matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the financial statements to be reached.
The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.
Project Challenge is a private company limited by guarantee incorporated in England and Wales. The registered office is Orangebox, Blackledge, Halifax, West Yorkshire, HX1 1AF.
The financial statements have been prepared in accordance with the charity's governing document, the Companies Act 2006, FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" 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)". The charity is a Public Benefit Entity as defined by FRS 102.
The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
At the time of approving the financial statements, the trustees have a reasonable expectation that the charity 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.
Restricted funds are subject to specific conditions by donors or grantors 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.
Cash donations are recognised on receipt. Other donations are recognised once the charity 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.
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 charity 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 charity 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 charity's balance sheet when the charity 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 charity’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 charity 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.
In the application of the charity’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.
The average monthly number of employees during the year was:
The remuneration of key management personnel was as follows:
The charity is exempt from taxation on its activities because all its income is applied for charitable purposes.
The charity operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the charity in an independently administered fund.
The unrestricted funds of the charity comprise the unexpended balances of donations and grants which are not subject to specific conditions by donors and grantors as to how they may be used. These include designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes.
At the reporting end date the charity had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
There was related party transaction with Plus Public Affairs Limited to the sum of £25,644.50 for monthly Quality manager service.
The charity had no material debt during the year.