Five Year Financial Projections Return: Submission date for 2022 - New FAQs January 2022


25 January 2022

New FAQs - January 2022

In response to a change in the Five Year Financial Projections (FYFP) opening and closing dates we have added new FAQs.  This is in response to the comments and concerns of some RSLs around an earlier submission date.


There are a number of business advantages for RSLs and SHR in bringing forward the submission deadline but the main one is that it will allow us to engage with RSLs more quickly in relation to any potential financial issues we identify.  This is to ensure that we discharge our responsibility to protect the interests of tenants and service users in a timely way.  Using data from the FYFP means early analysis of key forecast ratios can begin ahead of the main analysis based on the complete set of form submissions. This helps identify emerging risks more quickly.


Most RSL year ends are as at 31st March, therefore many will have their audits in May. Once the audited accounts are agreed, the process of completing the FYFP return for many begins (as the first column in the submission is the actual figures for the year just completed). Further work is involved in getting the cash balance updated in the projections and ensuring the figures are submitted in the required format.   


Our current guidance, set out in the FYFP User Guide has remained substantially unchanged for many years and states that:


“There is no need for the information entered into the 2021-22 column (Year 0) to reflect the final audited accounts position.  It is sufficient that the most recent business plan / management accounts / pre-audit figures are used. 


So finalised audited figures for the prior year are not required. All of the figures we use in relation to prior years are solely reliant upon the information contained in the Annual Financial Statements (AFS) return, and not the FYFP return. However, the prior year figures do provide a useful comparison to the projected figures before the final audited figures are available.  We would not want to lose this option.


Bringing the deadline for submission forward from 30th June to 31st May will mean this return will now have to be completed during the audit with draft (and therefore potentially inaccurate) figures.  And also at a busy time for finance teams, particularly as we see the ongoing and longer-term than hoped continuation of the pandemic.   


As mentioned above pre-audit figures are sufficient for this return. RSLs told us that  without the requirement for an audited cash figure, the return could be completed even earlier, possibly as early as March. This would fit with current planning and budgeting processes, obviate the need to return the projections to Boards for a second time to reflect the audited accounts and avoid the already busy end of year and audit schedules. 


In response to this feedback we have also brought forward the opening date to 01st March which also retains the 3 month period for completion of the return.


What if we cannot meet the 31st May deadline?


If RSLs anticipate that they will find it challenging to meet the 31st May deadline this year they should contact their Finance Lead at the earliest opportunity.  


Not waiting for audited figures means that the closing cash position may not be accurate.  Is that okay?


Yes, in response to discussions with RSLs we amended our requirements in relation to the closing cash figure for the prior year and its automatic link to the opening cash for the first projected year.  This allows RSLs to submit their return earlier using the most recent figures available, without waiting for the audited figures to support the closing cash position in the prior year.  It also provides RSLs with the option, should they want to take it, to provide an accurate opening cash figure for the first projected year which need not match the closing cash reported for the prior year.


We also recognise and accept that this could lead to differences between the closing cash on the projected Statement of Cashflows and the Statement of Financial Position.


If we don’t know the actual pension figure is it okay to use our budgeted figure?


Yes. Some RSLs have also said that they cannot forecast pension figures and are likely to straight line forecast this figure and this is also okay.


Would audited figures not give SHR a truer picture and so better flag potential risks?


We receive the audited figures from the AFS return.