In 2006, incoming resources were £37,637,000 (2005: £36,353,000). The majority of these funds are government grants of £30,774,000 (2005: £29,274,000); the small increase was due to funds received from the Department of Health for the Independent Complaints Advocacy Service (ICAS) which ended on 31 March 2006 (See note 3a in the financial statements).
The DTI, on behalf of Government as a whole, provide an unrestricted grant in aid of £23,605,000, being 65 per cent of our revenue and covering core costs of the organisation including supporting the bureaux network, providing the information system and the provision of the IT and administrative infrastructure.
During the year new grants were received from: Remploy for the Healthy Minds at Work project; Friends Provident Financial, Barclaycard and GUS Charitable Trust for the Financial Literacy project; Macmillan to provide advice to carers; and Yorkshire Water and MBNA for Money Advice Projects.
In 2006, the resources expended were £37,515,000 (2005: £39,685,000). The 2005 amount included a one-off payment of £2,467,000 to the NACAB Pension and Assurance Plan (1991). This cost was allocated on the basis of staff numbers over all charitable activities.
The biggest increase in expenditure related to bureau grants distributed under the ICAS project, where grants were paid to bureaux to deliver the service at a local level. During the year our Citizens Connect Programme, which provided IT systems and connectivity between Citizens Advice and bureaux, was completed. As a result our overall expenditure on providing IT systems was less than in previous years.
The DTI have advised that there is a strong likelihood that our grant will reduce by 10 per cent from 2006/07 and that it will not increase in line with inflation through to 2010/11. As a consequence Citizens Advice has embarked on a savings programme which is aimed at improving efficiency and making better use of resources by reducing bureaucracy and ceasing low priority activities. In addition we will seek to improve our revenue by exploiting commercial opportunities and negotiating a fair full recovery of overheads from funders. The trustees have set a target to reduce reliance on the DTI funding by £4 million per annum, to be achieved by 2008/09.
Reserves policy
At 31 March 2006, total reserves held were £7,895,000 (2005: £7,773,000). Of this amount £2,807,000 (2005: £3,000,000) were restricted funds for agreed projects. The balance of reserves £5,088,000 (2005: £4,773,000) comprises all unrestricted funds from the DTI, other sources and those designated for a specific purpose (see note 17 to the Financial Statements).
The unrestricted DTI balance as at 31 March 2006 has been agreed with the DTI and a target set with effect from 31 March 2007 whereby DTI reserves must not exceed the equivalent of one month of grant funding.
Restricted reserves carried forward represent the balances of ongoing projects. The funders have agreed that projects are not complete at 31 March 2006.
Pension scheme
Citizens Advice participated in one defined benefit multi-employer pension scheme during the year – The National Association of Citizens Advice Bureaux Pension and Assurance Plan (1991). Citizens Advice adopted FRS 17 for the first time in the year ended 31 March 2005. The last full actuarial review was dated 1 April 2004. The policy on the pension scheme is shown in note 1 to the financial statements. The disclosure required under FRS 17 is shown in note 22 to the financial statements.
At the end of 2004/05 Citizens Advice contributed a one off payment of £2,467,000 towards the deficit in order to meet its share of the pension liability. Consequently the employer contribution rate was set at 5.9 per cent for 2005/06 and will continue at that level for the next two years subject to the actuarial review which will take place in April 2007.
From 1 April 2005, staff had the choice of a stakeholder pension and the existing defined benefit scheme. The accrual rate for new and existing staff on the defined benefit pension fell on 1 April 2005 from 1/65th to 1/80th. This will not affect benefits already accrued. Existing staff had the opportunity to buy back the extra accrual. From April 2005 the employee contribution rate was 8.2 per cent.
Investment policy
As required in its Memorandum paragraph 4(o), in furtherance of its objects, and for no other purposes, the charitable company has the power to invest the monies of the charitable company not immediately required for its purposes in or upon such investments, securities or property as may be thought fit, subject nevertheless to such conditions and such consents as may for the time being be imposed or required by law. The accounting policy on reserves is shown in notes 1 and 17 to the financial statements.
All surplus funds are invested at the best interest rate attainable and interest rates are monitored regularly. Citizens Advice considers it to be prudent to hold all surplus funds in an interest bearing account so that there is no risk to the capital amount of funds. This is to protect the grant awarded to Citizens Advice for the purpose it was intended.
Fixed assets
Movements in fixed assets are shown in note 11 to the financial statements.
Payment of creditors
All invoices not in dispute were paid within 30 days of receipt of the invoice or the agreed contractual terms if otherwise specified. Citizens Advice terms of trade apply to all suppliers who supply goods and services worth over £5,000 a year. A copy is available by writing to the Company Secretary at the registered office address as set out in the administrative details of this report.
Payment of grants to bureaux
Citizens Advice awards grants to bureaux. Agreed criteria are used to regulate bureau grants awarded from the DTI funds and other funder projects. The main criteria for grants to be awarded are as follows:
- partnership funding with Local Authorities for paid bureaux workers
- grants to improve buildings to meet Disability Discrimination Act requirements
- IT partnerships
- supporting regional and national social policy and advice.
Auditors
The financial statements of Citizens Advice have been audited by PriceWaterhouseCoopers LLP. The audit fee was £34,000. Citizens Advice puts out a competitive tender for its audit every five years. The next tender is due for the financial year commencing 1 April 2007.
Standard of reporting
The trustees’ of Citizens Advice present their report and the audited financial statements for the year ended 31 March 2006. The financial statements comply with the Statement of Recommended Practice (SORP) – Accounting and Reporting by Charities as revised in 2005, the Charities Act (1993) and the Companies Act (1985), the accounts section of the DTI Financial Memorandum and the annual reports and accounts guidance from the central Treasury Accountancy Team and HM Treasury.
As far as the directors are aware, there is no relevant audit information of which the company’s auditors are unaware. The directors have taken all steps that ought to have been taken as directors in order to make themselves aware of any relevant audit information and to establish that the company’s auditors are aware of that information.
Signed by order of the board
STEPHEN WILLIAMS
Company Secretary
26 July 2006
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