In this financial year the Association was able to provide 20 new properties for social housing. Most of these properties were accounted for in the previous financial year when the work to them was completed and therefore this growth is not reflected in this year’s balance sheet. Indeed, with the sale of two properties we have seen a small decrease in the net book value of our properties at the year end.
However, because these properties were let early on in this financial year, the Association had the benefit of nearly a full years rent on each, therefore increasing the rent receivable for the year by 14%. As turnover comprises mostly of rental income, I am therefore happy to confirm that the association’s turnover rose in total by 11.5% on the previous period and at the year-end was £1.5 million.
Careful monitoring of the Association’s budgets by the Board of Management through quarterly reporting procedures meant that expenditure was mostly kept to within targets. Aborted fees from cancelled developments counted for most of the increase against budget in general operating expenses, while the property accounts showed a larger than expected increase in the response maintenance budget, which was balanced in some part by a reduction in the cyclical maintenance spending. Housing operating costs were £10,000 over budget for the year, while development operating expenses were £20,000 over budget. Although significant, both these figures were in the main due to the aborted fees referred to earlier, and each showed an increase of 17% and 30% respectively.
Continuing low interest rates for the entire year meant that the Association interest on loan accounts for its housing properties decreased and this played a significant part in the property accounts showing a surplus of £421,283 after interest payable. This translated into a total operating surplus of £316,501.
As mentioned earlier the Association sold two of its properties to existing tenants. These disposals amounted to £245,000 and saw a transfer of £165589 to our disposals proceeds fund. The monies in this account now have to be used within two years of receipt for other social housing or it will be recouped by the Northern Ireland Housing Executive. Given the ongoing economic situation it is not anticipated that house sales will have a significant impact on the association’s assets over the next financial year.
Significantly, in March 2010 , the Association was removed temporarily from the development programme by the Department of Social Development. Clear indication was given of major items of good practice within the Association, and this led to a partial exemption on existing development schemes for 2010/11. However, by the year end the Association had put together a significant management plan to address the issues raised, and with a view to returning to development early in the new financial year. Given the exemption by the Department for four schemes already in the programme, I am confident there will not be a significant effect on the Association’s financial position in the short term. However effective and timely intervention will hopefully see the embargo lifted quickly and long term schemes can then again be developed with confidence and assurance.
Our endeavours throughout the year have been helped in the background by our many professional advisors. We rely greatly upon our external auditors, RTJ Ross, who assist us by providing invaluable advice on accounting, taxation, internal systems and other matters. Our funders, the First Trust Bank and Bank of Ireland continue to assist, support and advice the Association. We are also mindful of the consideration and helpfulness of the Department of Social Development and its staff who have provided us both with funding and advice throughout the year. This has been invaluable in helping ensure the Association continues in its specialist role of providing high quality homes in rural areas.
