Registered social landlords - Case Studies

Treasury

For a large national RSL group, we were commissioned to perform a detailed review of their treasury operations and strategy. Our review identified a significant strategic point in relation to their group structure and suggested a number of fundamental changes to their treasury and group structure strategy. This advice combined analysis of the tax, governance and treasury issues arising.

Value for money reviews

We were asked to perform a comprehensive value for money review of three core corporate services within a large and complex RSL group. The review identified a range of detailed measures of lasting benefit to improve efficiency and the quality of services provided by these three functions.

The most significant benefits were derived from helping both senior management and the board to appreciate that they had not struck the optimum balance between detail and overview in their monitoring processes, resulting in both duplication and excessive bureaucracy. The recommendations and benefits derived from our observations have been described by the chief executive as "insightful and providing a platform for change for the months ahead."

Business planning

We performed a business plan validation for a small RSL. Although the model used was basically sound, the structure of the model did not permit sensitivity analysis to be performed reliably. 

There were several reasons for this: 

• many of the cells were hard-coded where links to assumptions would be more appropriate, the model did not have a specific sensitivity sheet
• budget assumptions were hard-coded over previous projections which undermined some of the formulae and links
• and a number of the assumptions were out of line with their experiences in any case

Following our review, and following some amendments to the model that we helped insert, the capacity to perform sensitivity analysis was considerably enhanced.

LSVT accounting

When we were appointed as auditors to a new transfer association as their auditors at transfer, we discussed with them whether they felt that the promises they had made to their tenants and leaseholders during the period leading up to the transfer were binding. They strongly felt that they were. We agreed that as a result this was a constructive obligation that should be represented in their initial financial statements as a liability and capitalised in housing properties. Even though the transfer was financed by a cash dowry, this led to a significant balance being included in both liabilities and the cost of housing properties.

We advised extensively on how this should be calculated, disclosed and adjusted as time went by in the light of how the actual work programme progressed. This accounting treatment had numerous advantages, including providing more meaningful information on the fulfilment of the promises and the real value of the improvements made to the properties.