The Accounts

Fast forward from 2004 to 2008...

According to the Charities Commission.... (which notes that the accounts were filed late)...

Financial year end (FYE)	Income	Spending	Accounts received	Annual Return received	View
31 Aug 2008	£4,073,425	£4,313,214	03 Jun 2009	03 Jul 2009 (3 days late)	Accounts SIR
31 Aug 2007	£3,674,716	£3,817,435	19 Mar 2008	05 Mar 2008	Accounts SIR
31 Aug 2006	£3,193,406	£3,856,011	13 Mar 2007	16 May 2007	Accounts SIR
31 Aug 2005	£3,146,621	£3,110,157	12 May 2006	12 May 2006	Accounts
31 Aug 2004	£2,896,008	£2,819,768	11 May 2005	11 May 2005	Accounts

2006 was clearly a bad year!

The gap between spending and income (2008) has widened.

According to this, the reason is clear:

"Expenditure has exceeded income for the year due to the major expansion of facilities to enable the school to offer more pupil places in future years"

So what they did is spend a lot of money to expand capacity, to increase revenue (and profits):

"Recent expansion of facilities has raised the pupil capacity of the school to 450 pupils. this will increase the income of the Foundation in future years."

Three main objectives:

• To continue to promote the school
• To recruit new pupils to fill the expanded facilities
• To return the trading operation to a positive financial for the year

If you want to look at trends and key ratios for comparisons then the last five years of accounts are here....

Interestingly the 2007 accounts say:

"The school continued to recruit new pupils from all western areas of Cornwall and full boarders from many overseas countries. The school continued with a full program of overseas educational fairs in Hong Kong, Spain and Germany. Locally the school held open days in Newquay, Hayle and St Ives and had a stand at
the Culdrose Air Day."

and

"The International Baccalaureate is becoming increasingly popular with schools as they become increasingly disillusioned with the A level exams. The Governors are pleased that they were one of the first schools to change"

Both the above quotations refer to the marketing expertise (or not) of Bolitho. It is odd that they think IB and A levels are mutually exclusive.

Clearly they have expanded - and yet need to fill the capacity. It is this inability to do so that has caused the problem. Having said that, the 2008 report states:

"The number of pupils attending the school continues to grow. The school has now completed the expansion of its facilities at Clarence House and on the main site to enable the school to take a maximum of 450 pupils. This expansion has been undertaken over the course of the last four years and the expenditure for this has been mostly charged against operating revenue. Naturally the resources for such an expansion have to be put in place before the additional pupils can attend the school. Part of this expansion of facilities has been financed by short term lease purchase and these payments have all now been completed. For the year ended 31 August 2008 the school incurred an operating deficit of £239,789 (2007 £142,719). This deficit reflects the current under utilisation of the increased capacity of the school. It is anticipated that the continued growth of pupil numbers will return the trading company to surplus next year."

and

"The school will continue to actively recruit additional pupils to the school. The demand for places in the school is strong and some of the year groups for September 2009 will be oversubscribed."

So there's over-subscription (in some classes) and yet underutilisation of capacity, high interest, expenditure exceeds income...nevertheless the 'connected' companies still received revenue (albeit in real terms, falling)

During the year the charitable company was invoiced by iBolitho Ltd the sum of £95,799 towards the cost of equipment rental and the rent of accommodation (2006 £122,069). St Erbyns Company Ltd invoiced the company £120,000 during the year for the rent of Clarence House for the provision of Vlth Form classrooms (2006 £120,000). Chart Court Farms Ltd has provided short term finance to the company during the year and provided management and financial services.

Mr J P W Clarke is a Director of all four companies. Mr K Jaggard and Mr D Dobson are directors of iBolitho Limited.

Mr Clarke was also the Chairman of the Trustees.

Let's begin

We start off by looking at some OLD figures - the ones from 2004 as they are readily available online...

"The charity achieved an operating surplus during the year of £76,266. The trustees expect to achieve an increased surplus during the next financial year. The bank loan and overdraft facility are secured by a fixed and floating charge over the charity's assets. Loan schemes were launched to enhance the school facilities in 1999 and 2002 and these remained in place during the year. The Bolitho Parent and Staff Association is a fund raising organisation run by the parents and staff of the school. The funds raised by the association are used to buy books and other equipment for the school . During the year the association donated £nil (2003 £5,117)."

and

"During the year the charitable company paid I Bolitho Company Limited the sum of £156,259 towards the cost of equipment rental and the rent of accomodation (2003 E22,463)
During the year the charitable company invoiced St Erbyns Company Ltd the sum of £11,068 for the work carried out towards the development of property. Mr J Clarke is a director of all three companies"

Mr Clarke was one of the Trustees and Chairman of the Board of Governors.....

School fees:

2,491,137 (2004) 1,942,984 (2003)

That's a healthy increase!

Teaching and care staff for the school:

1,152,568 (2004) 1,012,266 (2003)

64 teaching staff at these costs:

1,684,051 (2004) 1,428,373 (2003)

That's all good - though if you look at the loan interest, that's somewhat high....

Interest payable 84,415 (2004) 74,058 (2003)

Of course, that was in 2004. At the parents' meeting in January 2009 (according to The Times) this was said:

"Yes, if half a million pounds could be raised, the school’s future would be secure; indeed, it was trading at a surplus and recruitment for the coming years was better than expected. Yes, parents could have full access to accounts, current profit and loss statements, business plans and management accounts."

Secure future?
Trading at a surplus?
Recruitment for the coming years was better than expected (for 'recruitment' read 'revenue derived from fees)

Full access to the business plan...

Where did it all go wrong?