As Honorary Treasurer of the Association I am very pleased to report on another successful year in terms of our financial performance. The year has seen a modest expansion of the Association with modest growth of the house-building programme accompanied by consolidation of all aspects of the company’s business. The Association completed the building of a further 6 new dwellings, resulting in a total of 416 properties for letting at the end of March.
The Association’s Income and Expenditure Account confirmed a 5% increase in turnover, arising from rental income from the increased housing stock and an increase in rents. After operating costs which rose by 9% and interest charges, a surplus of £248655 has been generated, bringing our accumulated reserves to £1,820,623. As in the last couple of years the Association has benefited not only from modest and stable interest rates but also the deferral of borrowing on its capital development expenditure until as late as possible. Although during the year this deferral did cause some temporary problems with cash flow due to the external economic and banking climate, the Association did secure an offer of funding of £1.5 million from Northern Bank and drew down £375,000 of this before the year end to ease any on-going cash flow problems.
With these funds in place the Association has been able to confirm its commitment to planned and cyclical maintenance of its stock for the medium term and that programme has been agreed by the Senior Management Team.
The 5% increase in turnover now means that the Association has a gross potential receivable rent of just under £2 million. It is expected that the gross receivable rent will rise to just under 2.1 million by the end of the incoming year. The control and management of voids and tenant debt to prevent loss of income continues therefore to be a high priority for the Board of Management and in particular given the proposed changes to the welfare system over the next few years.
Under the Statutory House Sales Scheme for Housing Association tenants within Northern Ireland, the Association sold three properties. As can be seen from our turnover, this has not had a marked effect on our main revenue stream and I anticipate that the incoming year will not see any further significant inroads into that revenue stream. With projected continued steady development our overall stock numbers will rise once again.
The Association remains focussed on its regulation and control. Our internal audit report provided satisfactory assurance in Financial Controls, Human Resources, Risk Management and Email/Internet Security. The Department for Social Development also carried out a follow-up audit in 2011. Most recommendations made by them had been implemented at the year end.
I would like to thank our private financing partners at Bank of Ireland, First Trust Bank and Northern Bank along with The Department for Social Development and Northern Ireland Housing Executive who provide the public funding aspect of our business. These and our professional advisers have contributed along with our Board of Management, the vital elements which make the Association the vibrant and unique organisation it is today. We are very grateful also to our other financial advisers and, in particular, the External Auditor R T J Ross, who, while continuing to provide a statutory service, also demonstrate a commitment to the voluntary housing sector through invaluable advice to us on accounting, taxation, systems and other financial matters. Our Internal Auditors, Deloitte LLP have been central in the Association quest for continued improvement in our controls and systems and have provided a robust and challenging audit process to aid that improvement,
Overall this year has been a successful financial year for the Association and, with consistent growth within the development programme planned for the next few years, the Association is well placed to continue its unique role of meeting housing demand and providing high quality accommodation in rural areas.