Corporate report

The Coal Authority annual report and accounts 2021 to 2022: Accountability report

Updated 20 December 2022

1. Accountability report

The accountability report meets key accountability requirements to Parliament. The requirements are based on the Companies Act 2006, as adapted for the public sector.

It encompasses the matters required to be dealt with in a directors’ report and in the remuneration and staff report, as set out in Chapter 6 of the Companies Act. It covers such matters as directors’ salaries and other payments, governance arrangements and the audit certificate and report. It is signed and dated by the accounting officer.

The accountability report consists of 3 main parts. These are the:

• corporate governance report, dealing with the Coal Authority’s governance structures and how they support the achievement of the Coal Authority’s objectives

• remuneration and staff report, containing information about senior managers’ remuneration and other staff related disclosures required by the Companies Act and other governmental sources

• parliamentary accountability and audit report, comprising additional disclosures required by parliament, and a view on such matters as regularity of expenditure, fees and charges and long term expenditure trends. It includes the audit certificate and report

2. Corporate governance report

The corporate governance report consists of 3 main parts. These are the:

• directors’ report, which covers a variety of statutory disclosures not outlined elsewhere in the annual report and accounts

• statement of accounting officer’s responsibilities, which sets out clearly the responsibilities assumed with respect to the annual report and accounts by the nominated accounting officer, and the legislative basis for them

• governance statement, which explains the composition and organisation of the Coal Authority’s board and governance structures and how they support the achievement of the Coal Authority’s objectives

3. Directors’ report

The Coal Authority presents its report and audited financial statements for the year ended 31 March 2022. The accounts have been prepared in a form directed by the Secretary of State with the consent of HM Treasury in accordance with paragraph 15(1)(b) of Schedule 1 of the Coal Industry Act 1994 (“the Act”). The accounting officer authorised these financial statements for issue on the date of certification by the Comptroller and Auditor General.

3.1 Functions, duties and powers of the Coal Authority

The powers and functions of the Coal Authority were initially set out in legislation by the Coal Industry Act 1994 and the Subsidence Act 1991 (as amended by the Coal Industry Act 1994). We assumed our functions on 31 October 1994.

These functions are set out at www.gov.uk/coalauthority and relate to the coal industry and the management of interests inherited from the British Coal Corporation, licensing of coal mining operations, dealing with coal mining subsidence and providing information.

The 1994 Act has been further amended by subsequent legislation, including the Water Act 2003 and the Water Services (Scotland) Act 2005. This has extended the Authority’s powers to prevent or lessen the effect of the discharge of polluted water from a coal mine onto any land or into watercourses.

The Energy Act 2011 extended the Coal Authority’s powers to use its expertise in other non-coal mining related contexts including action to protect water quality from the effects of polluted mine water discharge from abandoned mines, as required by the Water Framework Directives.

3.2 Review of operations

The chief executive’s report in our performance report gives a summary of our activities during the year and the future outlook.

3.3 Finance risk management

The governance statement sets out the governance structures that we’ve used to monitor and control risk and the board’s approach to risk management. It also identifies and discusses the significant risks and the mitigation in place. We’ve a strong system of financial control and active financial risk management. We’ve no borrowings and rely on grant in aid and other income to fund our cash requirements.

We therefore have minimal exposure to liquidity, credit and cash flow risk. All assets and liabilities are denominated in sterling and so there is no exposure to currency risk. We do not hold any assets that are directly impacted by interest rate movements nor do we engage in any hedge accounting.

We hold some items on the Statement of Financial Position that are discounted using rates specified by HM Treasury, specifically provisions. HM Treasury vary these discount rates from time to time, which will affect both the Statement of Financial Position and the Statement of Comprehensive Net Expenditure. This had a significant impact in 2021 to 2022 (increase of £2,759 million compared to decrease of £15 million in 2020 to 2021).

3.4 Future developments

Our future developments and objectives have been discussed in other areas of the annual report, including the chief executive’s report and the strategic risks section of the performance report.

3.5 Research and development activities

We undertake a range of research and development activities to improve the efficiency of our operations and in particular reduce the long term net cost of treating mine water. This includes finding uses for our by-products (for instance iron ochre) and promoting the use of mine water flowing through abandoned mine workings as a source of geothermal heat and low carbon energy.

3.6 Post balance sheet events

We’ve no post balance sheet events requiring disclosure.

3.7 Branches outside the UK

We’ve no branches outside the UK.

3.8 Donations

We made no political or charitable donations during the year.

3.9 Employee involvement

We’re committed to engaging with staff throughout the business as outlined in ‘Our people’.

3.10 Employment

We’re committed to equal opportunities and have a strong focus on diversity and inclusion. This commitment means that decisions to appoint, reward, train, develop and promote are taken on the basis of skills and abilities, matched against the requirements of the job.

We support and celebrate difference and are working to attract, develop and maintain a more diverse workforce. We are making progress but know there is more to do.

We seek to attract and retain high calibre employees. Opportunities for training are given high priority to ensure that all staff can contribute to their own career development.

3.11 Pensions and other post retirement benefits

Former and current employees who have chosen to join are covered by the provisions of the Principal Civil Service Pension Scheme (PCSPS) which is an unfunded multiemployer defined benefit scheme. The accounting policy is given in note 1 to the accounts and further information about the scheme is provided in the remuneration and staff report.

3.12 Personal data

There were no Information Commissioner’s Office (ICO) reportable data breaches during the year. The governance statement provides further details of our information risk management activities.

3.13 Long-term expenditure trends

Long-term expenditure trends are reviewed by the directors as part of the annual review of provisions.

3.14 Auditors

The Comptroller and Auditor General was appointed under the Coal Industry Act 1994 and reports to Parliament on the audit examination. The audit fee was £80,500. No remuneration was paid to our auditors for non-audit work and no other services were provided.

3.15 Access to information and complaints

As a public body, we’ve a duty to answer requests under the Freedom of Information Act 2000 (FOIA) and the Environmental Information Regulations 2004 (EIR).

We received 68 requests (FOIA, EIR and Subject Access Requests) during the year and answered all in accordance with the deadlines and standards set by the ICO. No requests went to appeal.

We received 45 letters from Members of Parliament, 5 from Members of the Scottish Parliament and 4 from Welsh Senedd Members.

We received 15 complaints from members of the public and other customers. 2 complaints were referred to the ombudsman. All other complaints were dealt with under our complaints procedure and resolved within the organisation. Our complaints procedure can be found on our website

4. Board of directors

Board and their interests

No board member of the Coal Authority has any financial interest in the Coal Authority. A register of interests is maintained which is open to the public to view at our offices in Mansfield or can be accessed on our website.

There were no related party transactions in respect of board members in 2021 to 2022.

4.1 Lisa Pinney MBE, chief executive

• appointed as chief executive from 1 June 2018 • appointed as board director from 1 June 2018 to 31 March 2020 • reappointed to 31 March 2023

4.2 Paul Frammingham, chief finance and information officer

• appointed as board director from 1 April 2011 to 31 March 2014
• reappointed to 31 March 2017
• reappointed to 31 March 2020
• reappointed to 31 March 2023

4.3 Carl Banton, operations director

• appointed as board director from 22 March 2021 to 31 March 2023

4.4 Jeff Halliwell (from 1 April 2021), chair

• appointed as board director from 1 April 2021 to 31 March 2024
• appointed as chair from 1 April 2021 to 31 March 2024

4.5 Steve Wilson, non-executive director

• appointed as board director from 1 April 2017 to 31 March 2020
• reappointed to 31 March 2023

4.6 Jayne Scott, non-executive director

• appointed as board director from 1 April 2019 to 31 March 2022
• reappointed to 31 March 2025

4.7 David Brooks, non-executive director

• appointed as board director from 1 April 2022 to 31 March 2025

4.8 Gemma Pearce, non-executive director

• appointed as board director from 1 April 2016 to 31 March 2019
• reappointed to 31 March 2022

5. Statement of the accounting officer’s responsibilities

Under paragraph 15(1)(b) of Schedule 1 to the Coal Industry Act 1994 the Secretary of State, with the consent of HM Treasury, has directed the Coal Authority to prepare for each financial year a statement of accounts in the form and on the basis set out in the Accounts Direction.

The accounts are prepared on an accruals basis and must give a true and fair view of the state of affairs of the Coal Authority and of its net expenditure, financial position, changes in taxpayers’ equity and cash flows for the financial year.

In preparing the accounts, the accounting officer is required to comply with the requirements of the government’s Financial Reporting Manual and in particular to:

• observe the Accounts Direction issued by the Secretary of State, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis

• make judgements and estimates on a reasonable basis

• state whether applicable accounting standards, as set out in the government’s Financial Reporting Manual, have been followed, and disclose and explain any material departures in the financial statements

• prepare the financial statements on a going concern basis

• confirm that the Annual Report and Accounts as a whole is fair, balanced and understandable and take personal responsibility for the Annual Report and Accounts and the judgements required for determining that it is fair, balanced and understandable

The accounting officer for the Department for Business, Energy and Industrial Strategy (BEIS) has designated the chief executive as accounting officer of the Coal Authority. The responsibilities of an accounting officer, including responsibility for the propriety and regularity of the public finances for which the accounting officer is answerable, for keeping proper records and for safeguarding the Coal Authority’s assets, are set out in Managing Public Money published by HM Treasury.

As accounting officer, I have taken all the steps that I ought to have taken to make myself aware of any relevant audit information and to establish that the Coal Authority’s auditors are aware of that information. So far as I am aware, there is no relevant audit information of which the auditors are unaware.

6. Governance statement

Our governance statement explains the governance, risk management and control arrangements we have in place to ensure achievement of the Coal Authority’s objectives. It concludes that these remain effective and that the Coal Authority continues to develop and manage its risks so that we can continue to make a better future for people and the environment in mining areas.

6.1 The Coal Authority’s governance framework

We are committed to high standards of corporate governance. We work within a framework document that is reviewed and agreed periodically with BEIS.

View the latest version of the framework document. It sets out the purpose of the Coal Authority, the core elements of our relationship with BEIS and the framework within which we operate.

The Coal Authority has an established governance framework supported by an appropriate organisational culture. This is summarised below and explained in this statement.

6.2 1. The board and its committees

1.1 Board of directors

The Coal Authority has an established governance framework supported by a board of directors. The board sets and communicates strategic intent and direction, makes strategic decisions that cannot be delegated and monitors and challenges corporate business performance.

Throughout 2021 to 2022 the Coal Authority had 7 directors (4 non-executive and 3 statutory executive).

In February 2022 David Brooks was appointed to succeed Gemma Pearce as non-executive director and chair of the HR and remuneration committee. David’s formal tenure begins on 1 April 2022 and he attended the February and March 2022 meetings of the board as an observer. Non-executive directors are recruited and appointed to the board by the Secretary of State for BEIS. Statutory executive directors are recruited to their posts by the board and appointed to the board by the Secretary of State for BEIS.

As COVID-19 restrictions have lifted we have moved to an approach with some board and committee meetings held in person and some by use of video-conferencing, using our learnings from the period of COVID-19 restrictions to obtain the benefits from a hybrid approach.

Number of meetings held and attended by non-executive and statutory executive directors

Attendee	Position	Board (10)	ARAC (5)	HR and remuneration (4)	SHE (3)
Jeff Halliwell	Chair of board	10	N/A[footnote 1]	4	3
Gemma Pearce	Chair of HR and remuneration committee	10	5	4	2
Steve Wilson	Chair of SHE committee	8	5	4	3
Jayne Scott	Chair of audit and risk assurance committee	9	5	3	3
Lisa Pinney MBE	Chief executive	10	5[footnote 2]	4	2
Paul Frammingham	Chief finance and information officer	9	5[footnote 2]	2[footnote 2]	N/A [footnote 1]
Carl Banton	Operations director	10	N/A[footnote 1]	3[footnote 2]	3

The innovation and engagement director, people and resource director, community and emergency response director (who joined the Coal Authority in November 2021) and head of legal and governance attended the board by invitation. Other senior managers attend the board and/or committees in order to present papers and join strategic discussions and to support their learning and development.

1.2 Board performance

Compliance with the corporate governance code

We comply with the corporate governance code in central government departments and government guidance in so far as is relevant and practical for an arm’s length body of our size and complexity. In line with our BEIS framework document:

• the board monitors the Coal Authority’s performance in an effective manner including playing an active role in managing stakeholder relationships

• the board constructively challenges and helps to develop strategy, supported by the effective leadership of the chair who oversees a high standard of discussion and debate at meetings

• the board receives accurate, timely and clear information to support its decision making which is concise and fit for purpose – this includes frequent updates on the Coal Authority’s financial position, and a corporate scorecard showing achievement against corporate objectives

• the board ensures that a balanced and reasonable assessment of performance is reported to BEIS and regularly debates the main risks facing the Coal Authority – through its audit and risk assurance committee the board maintains sound risk management and internal control systems

• the board annually reviews the Coal Authority’s corporate governance documentation and the terms of reference for the board’s sub-committees

• the board has an appropriate balance of skills and experience to enable it to discharge its responsibilities effectively

• the HR and remuneration committee agrees executive remuneration within the guidelines set by HM Treasury and BEIS. Non-executive remuneration is set by BEIS and reviewed annually

Board performance and effectiveness review

The board undertakes regular evaluation of its own performance and that of its directors. All board members’ performance is appraised annually.

The board undertakes regular development sessions outside of formal board meetings to reflect on key aspects of its work. Where appropriate and when restrictions have allowed individual board members have made COVID-19-secure site visits. During 2022 to 2023 periodic, structured board site visits will recommence at our sites across the nations we serve.

In October 2021, the board held strategy sessions at its Mansfield office to review progress against its business plan and review the organisation’s strategic priorities for the next business planning period.

During April 2021, a session was run with an external facilitator to examine how the change of chair may affect the board’s balance of work preferences and collective strengths. A similar review is planned for autumn 2022 following the change of a non-executive director.

The board considers that it has substantively achieved its objectives and has continued to operate effectively during 2021-22 and sees value in regular reviews of its performance and objectives which ensures that they remain current and up to date.

During April 2022, Cabinet Office published guidance on arm’s-length body board effectiveness reviews and the principles contained within this will inform our future programme or reviews.

Audit and risk assurance committee (ARAC)

The Coal Authority’s ARAC is chaired by Jayne Scott, Non-Executive Director, who has recent, relevant financial experience.

The ARAC members comprise of all the non-executive directors other than the chair of the board. The chief executive, the chief finance and information officer and the head of finance attend meetings by invitation. Other senior managers attend the committee in order to present papers and join discussions. In addition one committee meeting was observed separately by a member of the BEIS ARAC.

The committee ensures that we operate effective and integrated risk management and control systems to ensure the overall level of assurance is adequate. It reviews external audit strategy and outcomes, recommends the approval of the annual report and accounts, and oversees the internal audit function provided by the Government Internal Audit Agency (GIAA). The committee met 5 times during the year and held 2 additional workshops which focused on the Authority’s capital investment programme for its mine-water treatment programme and the detailed assumptions used to generate its financial provision.

During the year the committee:

• continued to focus on financial reporting risk and reviewed our accounting policies, including review of significant judgements made in preparing the accounts and assumptions underlying our provisions balance

• received regular updates on the risk management and assurance framework, fraud prevention strategy and the Coal Authority’s work to manage cyber risk

• reviewed internal audit reviews undertaken by GIAA including:

  • recruitment and retention
  • key financial controls
  • risk management and assurance mapping
  • mine water projects
  • customer service standards

The internal audit opinion for 2021 to 2022 offered management a ‘moderate’ level of assurance over the adequacy and effectiveness of the framework of governance, risk management and internal controls of the organisation with no high risk recommendations identified from the internal audit reviews during the year.

Recommendations to enhance controls in specific areas have been adopted as appropriate.

The human resources (HR) and remuneration committee

Membership of the HR and remuneration committee comprises all 4 non-executive directors and the chief executive. During 2021 to 2022 the committee was chaired by Gemma Pearce. The people and resources director, and other members of the executive leadership team attend meetings by invitation.

The HR and remuneration committee has met 4 times within the year and has continued to support the Coal Authority in improving organisational capability to meet future business requirements.

During the year the committee:

• reviewed performance and development review (PDR) distribution for 2020-21 to ensure the equitable distribution of performance related pay

• reviewed the pay remit principles prior to submission to government

• discussed the approach to manage the diversity pay gap and associated reporting

• commenced a review of the authority’s HR policies

• discussed and agreed the publication of the organisation’s ‘Great Place to Work for All’ strategy

• discussed and reviewed proposals for the introduction of a hybrid model and framework for new ways of working

• reviewed people related management information and analytics for areas such as absence, employee retention, recruitment and EDI

• discussed the ongoing development of the organisation’s learning and development programme

Safety, health and environment (SHE) committee

The SHE committee is chaired by Steve Wilson. Membership of the committee includes all of the non-executive directors of the board; chief executive; operations director; people and resources director; head of health, safety, wellbeing and facilities; sustainability manager; head of people and organisation development and chair (or alternate member) of the staff safety, health, environment and wellbeing (SHEW) group.

The committee’s main responsibilities are to provide oversight of the Coal Authority’s health, safety and wellbeing plan and sustainability plan, ensure a positive health and safety culture is embedded throughout the organisation and advise the board on SHE matters to support the business plan. The SHE committee review detailed information on health, safety, and wellbeing and on environmental and sustainability performance to gain assurance on how the organisation is performing and to set the priorities.

The committee has met 3 times during the year, with one meeting including a site visit to Cwm Rheidol a metal mine complex in Ceredigion, Wales. The committee has considered:

• the annual management review which provides assurance on the suitability, adequacy and effectiveness of the SHE management system and proposed future objectives to enable continued improvement

• mental health and wellbeing review

• an operations risk deep dive

• Mining regulations and their application to the authority’s activities

• the authority’s future approach to environmental compliance

• progress against the previous sustainability strategy and the development of our new sustainability plan including priorities for 2022 to 2023

Performance management – executive leadership team

The executive leadership team (ELT) comprises the chief executive, the chief finance and information officer, the operations director, the people and resources director, the innovation and engagement director and the community and emergency response director (from November 2021) all of whom report directly to the chief executive, as well as the head of legal and governance who reports to the chief finance and information officer.

In addition, during the period September 2021 to January 2022, a supplementary operations director role was created and joined the ELT to enable a greater focus on the remediation activities following the flooding incident at Skewen, Wales in January 2021.

All of the directors are responsible for the leadership and delivery of their directorates, and are also collectively responsible for leadership and delivery across the organisation. ELT is joined by 2 heads of department who attend meetings as a development opportunity on a 6 monthly rota.

Fortnightly business meetings, held by video-conference during 2021 to 2022 have a formalised rolling agenda which considers all aspects of the organisation’s work. In addition the meeting considers the chief executive’s monthly update report which provides a high level oversight of how the business is performing as a whole and normally includes:

• updates from each directorate

• a review of organisational performance

• a financial summary report

• a review of movements against the Coal Authority’s corporate risk

• information on our people and the health, safety and wellbeing of our people, suppliers and the public

The ELT periodically hold less formal meetings with a strategic focus. These were held in person from September.

6.3 2. Financial control

The Coal Authority has a strong system of financial control based on well defined levels of delegated authority and a clear budgetary framework. This system remains effective with no control issues of note identified by internal or external audit during the year.

Matters reserved for the board are clearly set out in the framework of strategic control with further detailed guidance in respect of policies, procedures and delegated authority levels published and available to staff.

The investment and opportunities board is an important part of our financial controls framework and has delegated authority from the chief executive to approve capital expenditure, key programmes, projects and commercial opportunities provided they are:

• in line with the Coal Authority’s strategy as set out in its 5 year business plan agreed by the board

• within the board’s risk appetite

• not a matter reserved to a government department

• in line with other government guidance relevant to the Coal Authority

Once programmes and projects have been approved by the investment and opportunities board they are overseen by a relevant programme board with the investment and opportunities board receiving regular updates and providing further oversight as required.

As part of our financial control framework we undertake an annual detailed review of our provisions for liability arising from past coal mining. Our business teams validate key assumptions and revise estimates that feed into this balance based on latest information.

This is followed by comprehensive review and challenge by our finance team and members of the ELT and analysis of drivers behind our provisions balance and key movements are presented to the audit and risk assurance committee.

Outputs from the provisions model feed into our annual financial statements as well as providing a framework for our detailed budget setting and medium term business planning.

3. Risk management

3.1 Embedded risk management and culture

We have continued to make substantial progress in improving our risk management and assurance processes, promoting a strong risk management culture supported by the risk management and assurance framework (RMAF) to promote real time reporting and conversations across all levels of the organisation.

The RMAF is embedded across all directorates and supported by our risk and assurance manager.

Evidence of our embedded risk management culture includes:

• while COVID-19 has continued to impact the organisation we have proactively managed and mitigated throughout the year to ensure we continue to deliver our statutory duties and monitor the health, safety and wellbeing of our employees

• continued board and ELT focus on strategy and key risks

• ongoing, live interaction between our managers, ELT members and board members that promotes an understanding of the board’s risk appetite and risk management good practice

• continued explicit incorporation of risk appetite into our discussions and decision making through the investment and opportunities board framework

• processes that ensure, in line with our framework of strategic control, any issue or project that falls outside the board’s risk appetite is considered by the board

• a risk register that is live, regularly updated and subject to quarterly management sign off, periodic audit committee, ELT and business team review

• a risk management survey to determine a baseline of the risk culture and risk management maturity of the organisation, supported by a prioritised plan of activities to drive continuous improvement

• Ongoing communication of the RMAF, increased engagement and high levels of engagement at risk management workshops

3.2 Information assurance and cyber security

The Coal Authority does not hold top secret or secret information and the inherent information risk posed to government through the Coal Authority is relatively low. The senior information risk owner (the chief finance and information officer) is a board member and ensures that proportionate controls are implemented to manage information risk in line with the board’s risk appetite.

Whilst the impact of COVID-19 has seen no material change to the organisation’s residual information security risk assessment, the current global issues have led to a heightened cyber security threat being declared by the National Cyber Security Centre (NCSC).

We recognise that a positive cyber security culture is key to maintaining an effective defence. Over the year we’ve undertaken a range of communications which have continued to improve information security awareness and improved our staffs’ understanding of cyber risks through ongoing cyber awareness training, blogs and phishing campaigns to ensure that staff can recognise threats.

We have an appropriate risk assessment, information risk management and data protection policy and an information asset register. We have increased our proactive monitoring of the threat landscape and promote awareness of threats to our supply chain.

We continue to manage our overall information risk using appropriate technical controls, processes, procedures and training. We continually improve our technical controls and a technical security strategy of strength through depth has been effective in trapping threats. We’re not aware of any significant breaches of security or policy or loss of personal protected information during the year.

3.3 Risk assessment

As part of the 3 year business planning process the board and ELT with business managers have undertaken horizon scanning activity to identified the key threats and opportunities which could potentially impact achieving our objectives. Further explanation of the risks and control measures is provided in the strategic risks section of the performance report.

We do not attempt to eliminate risk but pursue opportunities to make a better future for people and the environment by ensuring risk is considered and managed. Explicit reference to risk appetite allows us to adopt a common language across the Coal Authority and provides a framework for managers to confidently make risk based decisions.

4 Other considerations

4.1 Alexander tax review

The Coal Authority has complied with the Alexander tax review off-payroll procedures as per HM Treasury requirements to ensure any off-payroll staff are paying the appropriate income tax and national insurance.

4.2 Counter fraud (including anti-bribery and anti-corruption) and whistleblowing

We are committed to creating a transparent environment and have a robust policy framework including clear policies for counter-fraud (incorporating bribery and corruption) and whistleblowing. Each policy provides guidance to staff and is part of the induction process. These policies are reviewed on an annual basis for relevance and clarity, before being briefed to staff and published on our intranet.

Assessment of activity and feedback confirms that policies are well understood, effective and easy to use. The board is particularly committed to ensuring that staff feel empowered, supported and protected should they need to raise any areas of concern.

4.3 Preventing modern slavery

We have strengthened our assessment and approach to tackling modern slavery within our supply chain and have published our first Modern Slavery statement.

5 Robust and continually improving control environment

As outlined in the performance report, our organisation has continued to grow and change as we manage larger and more complex programmes of work to keep people safe, provide peace of mind and protect and enhance the environment.

Through 2021 to 2022 we have continued to manage the emergency incident at Skewen, and have implemented our learnings from this and other large incidents to create a community and emergency response directorate.

During the year we have continued to embed our new risk management and assurance framework which is promoting an even stronger risk management culture, improve our counter fraud awareness and develop our action plan, and strengthened cyber risk policies and controls.

We have also continued to improve the consistency of project management across the organisation to ensure it is flexible, dynamic and can flex based on scale and risk.

As COVID-19 restrictions have lifted we have implemented a structured hybrid working approach that builds on our learnings from the lockdown period and best enables us to provide our services across the nations we serve.

Despite changes in the way the organisation has worked over the last 2 years during and following COVID-19 restrictions, systems and governance processes have consistently remained effective and the Coal Authority’s critical activities have continued to be delivered well.

We will continue to review and evolve our control environment to ensure that it stays proportionate and effective as the external environment and our organisation change.

6. Effectiveness of control environment

The system of governance, risk management and control is designed to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives. It can therefore only provide reasonable and not absolute assurance of effectiveness.

The system of internal control has been in place in the Coal Authority for the year ended 31 March 2022 and, as illustrated, up to the date of approval of the annual report and accounts, in accordance with HM Treasury guidance.

Based on all of the elements of the Coal Authority governance framework, I am satisfied that the Coal Authority’s governance, risk management and internal control arrangements continue to be proportionate, fit for purpose and working as intended.

We recognise that governance, risk and internal control will always require continuous improvement and we will continue to evolve and develop in line with best practice in the year ahead.

7. Remuneration and staff report

7.1 Introduction

This report has been prepared in accordance with the government’s Financial Reporting Manual. The report is made by the accounting officer on behalf of the board on the recommendations of the HR and remuneration committee.

As part of the accountability report, the remuneration and staff report details key information relating to salaries and other payments, any exit payments or other significant awards to current or former senior managers. It also contains certain policies on both pay and wider issues, and statutory disclosure relating to such issues as fair pay and off-payroll engagements.

The following tables and sections within this report are subject to audit:

• non-executive directors’ remuneration
• executive directors’ remuneration
• executive directors’ pension entitlements
• average numbers of persons employed
• staff and related costs
• reporting of civil service and other compensation schemes
• pay multiples

7.2 The HR and remuneration committee

As explained in the governance statement, the Coal Authority has an established HR and remuneration committee. This determines and keeps under review the pay and reward strategy for all staff of the Coal Authority and approves the principles of the pay remit for submission to the Secretary of State for BEIS.

The committee’s terms of reference prescribe that the chief executive shall not be present when their remuneration and conditions of employment are being considered.

7.3 Remuneration policy for the executive directors

Executive directors’ remuneration follows senior civil service guidance. The HR and remuneration committee reviews and makes recommendations about the remuneration of the executive directors including the chief executive, which is formally determined by BEIS. Following senior civil service guidance, no pay award was made to executive directors or staff in 2021 to 2022.

7.4 The Trade Union (Facility Time Publication Requirements)

Under the above regulations the Coal Authority is required to provide details of Trade Union Time. For 2021 to 2022, there is no activity to report.

7.5 Staff turnover

31 employees left the organisation during the year, a percentage of 10.33%, compared to a percentage of 8.34% in 2020 to 2021. It is difficult to draw conclusions in these years as both are likely to have been influenced by COVID-19 and associated restrictions. As highlighted in the performance report, our COVID-19 response in both years focused heavily on employee health and wellbeing.

7.6 Staff sickness absence

Overall average working days lost per staff year was 5.6 days as against 3.2 days for 2020-21. This increase is attributed to a number of cases of COVID-19 and other infectious diseases like cold and influenza as government lockdown restrictions were lifted. We continue to encourage colleagues not to work if they are ill and not to attend the office if they may be contagious.

Colleagues who have extended periods of absence are supported in their return to work through occupational health assessments and the use of our Employee Assistance Programme.

7.7 Performance development reviews (PDR)

The executive directors participate in our PDR process. Individual assessments are made by the chief executive and reviewed by the chair and the HR and remuneration committee. The chief executive’s assessment is made by the chair and reviewed by the HR and remuneration committee. Appraisal of individual performance is based on the achievement of defined objectives and behaviours assessed against 4 performance scores.

7.8 Performance related pay (PRP)

PRP is non-contractual and non-pensionable and is subject to obtaining annual approval via the pay remit process from BEIS. The pay remit for 2021 to 2022 was approved by BEIS in January 2022.

PRP is earned based on a corporate award so that it reflects both corporate and individual performance against objectives. Corporate performance for 2021 to 2022 has been assessed by the board at 100% and PRP has been awarded accordingly.

7.9 Executive directors’ contracts

It’s our policy that executive directors should have employment contracts with an indefinite term providing for 6 months’ notice.

The details of the executive directors’ employment contracts are shown below:

Executive director	Date of continuous service	Notice entitlement to be given by the Coal Authority
Lisa Pinney MBE	1 June 2018	6 months
Paul Frammingham	6 May 2008	6 months
Carl Banton	5 January 2004	6 months

The notice period to be given by a director to the Coal Authority is: 6 months by the chief executive and 3 months by the remaining executive directors.

7.10 Non-executive directors’ remuneration

Non-executive directors have been appointed by BEIS in line with the code of practice issued by the Commissioner for Public Appointments.

Their terms of engagement and remuneration are determined by BEIS. They are not eligible to participate in the pension schemes or to receive PRP.

The fees paid to the non-executive directors are shown below:

Non-executive director	Contract end date	2021 to 2022 £	2020 to 2021 £
Jeff Halliwell[footnote 3]	31 March 2024	27,050	2,818
Gemma Pearce	31 March 2022	11,666	11,666
Steve Wilson	31 March 2023	11,666	11,666
Jayne Scott	31 March 2025	11,666	11,666
David Brooks[footnote 4]	31 March 2025	1,944	-
Stephen Dingle	31 March 2021	-	27,050

7.11 Executive directors’ remuneration

Executive director	Salary (£000s) in 2021 to 2022	Salary (£000s) in 2020-21	Allowance (£000s) in 2021 to 2022	Allowance (£000s) in 2020 to 2021	PRP (£000s) in 2021 to 2222	PRP (£000s) in 2020 to 2021	Pension (£000s) in 2021 to 2022	Pension (£000s) in 2020 to 2021	Total (£000s) in 2021 to 2022	Total (£000s) in 2020 to 2021
Lisa Pinney MBE	135-140	135-140	-	-	15-20	15-20	54	54	210-215	210-215
Paul Frammingham	90-95	90-95	10-15	10-15	10-15	10-15	39	39	160-165	155-160
Carl Banton[footnote 5]	80-85	0-5	5-10	0-5	5-10	0-5	98	2	195-200	5-10

Executive directors’ remuneration includes salary, non-consolidated performance related pay earned in the year under the PDR process (non-contractual), certain allowances and the value of pension benefits accrued during the year.

Allowances include car and responsibility allowances in both years for Paul Frammingham and a responsibility allowance in both years for Carl Banton.

PRP is based on performance levels attained and is made as part of the performance review process. PRP relates to the performance in the year in which it becomes payable to the individual.

We also participate in a HMRC approved cycle to work scheme. Carl Banton has participated in this scheme in 2021 to 2022.

No executive directors received any benefits in kind during 2021 to 2022 or 2020 to 2021.

7.12 Executive directors’ pension entitlements

Executive director	Accrued pension at pension age at 31 March 2022 and related lump sum £000	Real increase in pension and related lump sum at pension age £000	CETV at 31 March 2022 £000	CETV at 31 March 2021 £000	Real increase in CETV £000
Lisa Pinney MBE	10-15	2.5-5	135	97	25
Paul Frammingham	30-35	0-2.5	391	353	20
Carl Banton[footnote 6]	25-30	5-7.5	552	425	97

7.13 Cash equivalent transfer values (CETV)

A CETV is the actuarially assessed capitalised value of the pension scheme benefits accrued by a member at a particular point in time.

The benefits valued are the member’s accrued benefits and any contingent spouse’s pension payable from the scheme

A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in their former scheme.

The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which disclosure applies.

The figures include the value of any pension benefit in another scheme or arrangement which the member has transferred to the Civil Service pension arrangements.

They also include any additional pension benefit accrued to the member as a result of their buying additional pension benefits at their own cost.

CETVs are worked out in accordance with The Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 and do not take account of any actual or potential reduction to benefits resulting from Lifetime Allowance Tax which may be due when pension benefits are taken.

7.14 Real increase in CETV

This reflects the increase in CETV that is funded by the employer. It does not include the increase in accrued pension due to inflation, contributions paid by the employee (including the value of any benefits transferred from another pension scheme or arrangement) and uses common market valuation factors for the start and end of the period.

7.15 Civil Service pensions

Pension benefits are provided through the Civil Service pension arrangements. From 1 April 2015 a new pension scheme for civil servants was introduced – the Civil Servants and Others Pension Scheme or alpha, which provides benefits on a career average basis with a normal pension age equal to the member’s State Pension age (or 65 if higher).

From that date all newly appointed civil servants and the majority of those already in service joined alpha. Prior to that date, civil servants participated in the Principal Civil Service Pension Scheme (PCSPS). The PCSPS has 4 sections: 3 providing benefits on a final salary basis (classic, premium or classic plus) with a normal pension age of 60; and one providing benefits on a whole career basis (nuvos) with a normal pension age of 65.

These statutory arrangements are unfunded with the cost of benefits met by monies voted by Parliament each year. Pensions payable under classic, premium, classic plus, nuvos and alpha are increased annually in line with Pensions Increase legislation.

Existing members of the PCSPS who were within 10 years of their normal pension age on 1 April 2012 remained in the PCSPS after 1 April 2015. Those who were between 10 years and 13 years and 5 months from their normal pension age on 1 April 2012 will switch into alpha sometime between 1 June 2015 and 1 February 2022.

Because the Government plans to remove discrimination identified by the courts in the way that the 2015 pension reforms were introduced for some members, it is expected that, in due course, eligible members with relevant service between 1 April 2015 and 31 March 2022 may be entitled to different pension benefits in relation to that period (and this may affect the cash equivalent transfer values shown in this report – see previous column).

All members who switch to alpha have their PCSPS benefits ‘banked’, with those with earlier benefits in one of the final salary sections of the PCSPS having those benefits based on their final salary when they leave alpha.

The pension figures quoted for officials show pension earned in PCSPS or alpha – as appropriate. Where the official has benefits in both the PCSPS and alpha the figure quoted is the combined value of their benefits in the 2 schemes.

Members joining from October 2002 may opt for either the appropriate defined benefit arrangement or a ‘money purchase’ stakeholder pension with an employer contribution (partnershippension account).

Employee contributions are salary-related and range between 4.6% and 8.05% for members of classic, premium, classic plus, nuvos and alpha. Benefits in classic accrue at the rate of 1/80th of final pensionable earnings for each year of service. In addition, a lump sum equivalent to 3 years’ initial pension is payable on retirement.

For premium, benefits accrue at the rate of 1/60th of final pensionable earnings for each year of service. Unlike classic, there is no automatic lump sum. Classic plus is essentially a hybrid with benefits for service before 1 October 2002 calculated broadly as per classic and benefits for service from October 2002 worked out as in premium.

In nuvos a member builds up a pension based on the member’s pensionable earnings during their period of scheme membership. At the end of the scheme year (31 March) the member’s earned pension account is credited with 2.3% of their pensionable earnings in that scheme year and the accrued pension is uprated in line with Pensions Increase legislation.

Benefits in alpha build up in a similar way to nuvos, except that the accrual rate is 2.32%. In all cases members may opt to give up (commute) pension for a lump sum up to the limits set by the Finance Act 2004.

The partnership pension account is a stakeholder pension arrangement. The employer makes a basic contribution of between 8% and 14.75% (depending on the age of the member) into a stakeholder pension product chosen by the employee from the appointed provider – Legal & General.

The employee does not have to contribute, but where they do make contributions, the employer will match these up to a limit of 3% of pensionable salary (in addition to the employer’s basic contribution). Employers also contribute a further 0.5% of pensionable salary to cover the cost of centrally-provided risk benefit cover (death in service and ill health retirement).

The accrued pension quoted is the pension the member is entitled to receive when they reach pension age, or immediately on ceasing to be an active member of the scheme if they are already at or over pension age. Pension age is 60 for members of classic, premium and classic plus, 65 for members of nuvos, and the higher of 65 or State Pension age for members of alpha.

The pension figures quoted for officials show pension earned in PCSPS or alpha – as appropriate. Where the official has benefits in both the PCSPS and alpha the figure quoted is the combined value of their benefits in the 2 schemes, but note that part of that pension may be payable from different ages.

Find out further details about the Civil Service pension arrangements.

The Principal Civil Service Pension Scheme (PCSPS) and the Civil Servant and Other Pension Scheme (CSOPS) – known as ‘alpha’ – are unfunded multi-employer defined benefit schemes and the Coal Authority is unable to identify its share of the underlying assets and liabilities.

A full actuarial valuation was carried out as at 31 March 2016. Details can be found in the resource accounts of the Cabinet Office: Civil Superannuation.

For 2021 to 2022, employers’ contributions of £3,162,000 were payable to the above schemes (2020 to 2021: £2,819,000) at one of 4 rates in the range 26.6% to 30.3% of pensionable pay, based on salary bands (2020 to 2021: 26.6% to 30.3%).

The scheme actuary reviews employer contributions every 4 years following a full scheme valuation. The salary bands and contribution rates are set to meet the cost of the benefits accruing during the year to be paid when the member retires and not the benefits paid during this period to existing pensioners.

Employees can opt to open a partnership pension account, a stakeholder pension with an employer contribution. 8 (2020 to 2021: 4) employees were enrolled in partnership accounts in the year and the total amount of contribution was £35,475 (2020 to 2021: £18,969).

There were no early retirements on ill health grounds in either 2021 to 2022 or 2020 to 2021.

7.16 Average number of persons employed

Department	Staff 2021 to 2022	Other 2021 to 2022	Total 2021 to 2022	Staff 2020 to 2021	Other 2020 to 2021	Total 2020 to 2021
Development and information	64	1	65	56	1	57
Operations	109	5	114	93	2	95
Commercial and innovation	34	1	35	33	1	34
Information technology	35	2	37	32	2	34
Corporate management and services	58	2	60	50	2	52
Staff numbers	300	11	311	264	8	272

Average number of persons employed as analysed above is consistent with the Coal Authority’s organisational structure for both years and reflects growth in emergency response and externally funded work.

7.7 full time equivalent persons were charged to capital projects during 2021-22 (2020-21: 7.8).

7.17 Staff and related costs

Staff costs comprise	Staff (£000) 2021 to 2022	Other (£000) 2021 to 2022	Total (£000) 2021 to 2022	Staff (£000) 2020 to 2021	Other (£000) 2020 to 2021	Total (£000) 2020 to 2021
Wages and salaries	12,437	-	12,437	11,014	-	11,014
Social security costs	1,382	-	1,382	1,207	-	1,207
Other pension costs	3,162	-	3,162	2,819	-	2,819
Agency staff costs	-	773	773	-	773	773
Total staff costs	16,981	773	17,754	15,040	773	15,813

7.18 Staff composition

As at 31 March 2022	Non-executive directors	Executive leadership team	Senior managers	Staff	Total
Male	3	4	15	171	193
Female	2	3	6	128	139
Total	5	7	21	299	332

7.19 Disability, diversity and inclusion

We’re an inclusive employer and actively encourage and welcome applications from everyone who might have the right skills to help us make a better future for people and the environment in mining areas.

This means that we do the basics like providing reasonable adjustments for disabled and differently abled candidates at interview and help them succeed at work.

We encourage flexible working, part time and term based hours and so on but we aim to go further than this and be a more diverse and inclusive organisation – a truly ‘great place to work for everyone’.

We champion the career development, career progression and retention of all our employees. We have and are supporting and encouraging our people to establish a range of diversity networks and we try to ensure that a wide variety of voices can be heard at all levels of the organisation.

We have an equality, diversity and inclusion plan and an anti-racism plan which focus on practical steps to help us be even better and we continue to listen and learn. We know we have more to do and are committed to continuing to improve and grow.

7.20 Reporting of civil service and other compensation schemes – exit packages

2021 to 2022 (2020 to 2021 in brackets)	Number of compulsory redundancies	Number of other departures agreed	Total number of exit packages
<£10,000	0 (0)	0 (0)	0 (0)
£10,000 to £25,000	0 (0)	0 (0)	0 (0)
£25,000 to £50,000	0 (0)	0 (0)	0 (0)
£50,000 to £100,000	0 (0)	0 (0)	0 (0)
Total number of exit packages	0 (0)	0 (1)	0 (1)
Total cost (£000s)	0 (0)	0 (85-90)	0 (85-90)

During 2021 to 2022 no redundancy or other departure costs were paid (2020 to 21: £85,000 to £90,000, to a single leaver). Exit costs in 2020 to 2021 were accounted for in the year of departure and the award was determined in accordance with the provisions of the Civil Service Compensation scheme, a statutory scheme made under the Superannuation Act 1972.

There have been no further compensation schemes accrued in either 2021-22 or 2020-21.

7.21 Reporting of high paid off-payroll appointments

Number of highly paid off-payroll worker engagements as at 31 March 2021, earning £245 per day or greater:

Existing engagements as of 31 March 2022	5
Of which, have existed for (at time of reporting):
less than 1 year	4
between 1 and 2 years	-
between 2 and 3 years	1
between 3 and 4 years	-
4 or more years	-

Number of all highly paid off-payroll workers engaged at any point during the year ended 31 March 2022, earning £245 per day or greater:

Number of off-payroll workers engaged during the year ended 31 March 2022	10
Of which:
not subject to off-payroll legislation	10
subject to off-payroll legislation and determined as in-scope of IR35	-
subject to off-payroll legislation and determined as out-of-scope of IR35	-
Number of engagements reassessed for compliance or assurance purposes during the year, of which:
number of engagements that saw a change to IR35 status following the consistency review	n/a

The Coal Authority routinely performs checks on proposed roles, including HMRC’s Employment Status Service tests, to determine IR35 status prior to any offer.

Where these checks suggest that assurance as to income tax and national insurance obligations is required, contracts include the above mentioned clauses and assurance is requested from either the worker or the agent through whom they work.

Off-payroll engagements of board members, and/or, senior officials with significant financial responsibility, between 1 April 2021 and 31 March 2022 (existing engagements as of 31 March 2022):

Number of off-payroll engagements of ‘board members, and/or senior officials with significant financial responsibility’ during the financial year	-
Number of individuals that have been deemed ‘board members, and/or, senior officials with significant financial responsibility’, during the financial year. This figure includes both off-payroll and on-payroll engagements	13

Consultancy expenditure for the year was £nil (2020 to 2021: £nil).

7.22 Pay multiples

The banded remuneration of the highest paid director in the Coal Authority in the financial year 2021 to 2022 was £155,000 to £160,000 (2020 to 2021: £155,000 to £160,000).

No pay award was made in 2021 to 2022, hence there was no substantive change between the salary of the highest paid director and the employees of the entity taken as a whole.

In 2020 to 2021 the average pay award was 2.0%, for both directors and staff, and hence there was no substantive difference between that for the highest paid director and the employees of an entity taken as a whole.

The average percentage change in the performance related pay of the employees of the entity as a whole was an increase of 15%, as compared to that of the highest paid director of an increase of 11% (2020 to 2021: decrease of 11% for employees as a whole, decrease of 10% for the highest paid director). The major drivers for the differences in these ratios were:

2021-22

• a different methodology was used to award performance related pay during the COVID-19 lockdown year of 2020-21, when there was a lower assessment of organisational performance targets met.
• the performance related pay for the highest paid director is capped.

2020-21

Performance related pay is linked to personal performance. In a year where the highest paid director is awarded a higher performance score than the average employee, the change for the highest paid director will be more beneficial, but limited by the cap mentioned above.

In 2021-22 and 2020-21, no employee received remuneration in excess of the highest paid director. Remuneration ranged from £18,182 to £160,000 (2020-21: £17,565 to £160,000).

Total remuneration includes salary, allowances and non-consolidated performance related pay. It does not include severance payments, employer pension contributions or the cash equivalent transfer value of pensions.

The ratio of the highest paid director’s remuneration to that of the employee at the 3 quartiles is as below:

Year	25th percentile	Median	75th percentile
2021 to 2022	5.0	3.6	2.9
2020 to 2021	5.1	3.7	3.0

We work hard to ensure our staff are properly rewarded for the work they do.

The figures upon which these calculations are based are:

Year	25th percentile total pay and benefits	25th percentile salary	Median total pay and benefits	Median salary	75th percentile total pay and benefits	75th percentile salary
2021-22	31,248	30,000	43,256	36,612	53,576	49,062
2020-21	30,914	29,278	42,262	40,000	52,349	45,822

8. Parliamentary accountability and audit report

As part of the accountability report, the Parliamentary accountability and audit report sets out those additional disclosures required by Parliament, if not detailed elsewhere in the annual report and accounts, and contains the external audit report.

The following sections are subject to audit.

8.1 Regularity of expenditure: losses, special payments and gifts

There have been no losses or special payments in excess of £350,000, or any gifts during 2021 to 2022.

8.2 Fees and charges

The Coal Authority complies with the cost allocation and charging requirements set out in HM Treasury’s Managing Public Money and the Office of Public Sector Information guidance.

The Coal Authority’s most significant income streams, as outlined at notes 2 and 4.1 of the financial statements, are explained below.

Commercial and innovation operating segment includes the provision of mining reports which generated income of £8,350,000 (2020 to 2021: £7,906,000), costs of £4,001,000 (2020 to 2021: £4,866,000), and a surplus of £4,349,000 (2020 to 2021: £3,040,000).

Expenditure associated with specific programmes and activities is managed and reported under the operations segment, but relates to the enhancement of data and information. Mining reports services are charged at a commercial rate.

Commercial an innovation includes the provision of advisory and technical services which generated income of £6,371,000 (2020 to 2021: £5,956,000), costs of £6,297,000 (2020 to 2021: £5,914,000) and a surplus of £74,000 (2020 to 2021: £42,000).

The financial objective for the provision of advisory and technical services is either full cost recovery. including an allowance for overhead recovery when providing services across government, or commercial rates, which reflect the increased levels of risk, when providing services into competitive markets.

The proportion of income as a result of full cost recovery is in excess of 99% for both financial years, reflecting the continued provisions of services to our customers across government as we support them in the delivery of key programmes.

Development and information includes the provision of data licensing and mining information which generated income of £1,531,000 (2020 to 2021: £1,197,000), internal recharges of £1,917,000 (2020 to 2021: £1,788,000), costs of £3,017,000 (2020 to 2021: £4,532,000) and a surplus of £431,000 (2020 to 2021: deficit of £1,547,000).

The financial objective for the provision of data licensing and mining information is full cost recovery plus an allowance for overhead recovery.

Development and information includes the provision of licensing and permissions activities which generated income of £767,000 (2020 to 2021: £769,000), costs of £1,070,000 (2020 to 2021: £934,000) and a deficit of £303,000 (2020 to 2021: deficit £165,000).

The financial objective for the provision of licensing and permissions services is full cost recovery plus an allowance for overhead recovery.

8.3 Remote contingent liabilities

Remote contingent liabilities are not required to be disclosed under International Accounting Standard (IAS) 37, but are considered here for Parliamentary reporting and accountability purposes. The Coal Authority believes that sufficient disclosure is available in note 16 to the accounts: Contingent Liabilities and in note 13 to the accounts: Provisions to give the reader a full understanding of the liabilities it faces and may face.

8.4 Going concern

This report has been created on the basis of the Coal Authority being a going concern as detailed in 1.3 of the notes to the accounts.

This accountability report has been approved by the chief executive and accounting officer, Lisa Pinney MBE, 5 July 2022

9. The certificate and report of the comptroller and auditor general to the Houses of Parliament

9.1 Opinion on financial statements

I certify that I have audited the financial statements of the Coal Authority for the year ended 31 March 2022 under the Coal Industry Act 1994.

The financial statements comprise: the Statements of Comprehensive Net Expenditure, Financial Position, Cash Flows, Changes in Taxpayers’ Equity; and the related notes, including the significant accounting policies.

These financial statements have been prepared under the accounting policies set out within them. The financial reporting framework that has been applied in their preparation is applicable law and International Accounting Standards as interpreted by HM Treasury’s Government Financial Reporting Manual.

I have also audited the information in the Accountability Report that is described in that report as having been audited.

In my opinion, the financial statements:

• give a true and fair view of the state of the Coal Authority’s affairs as at 31 March 2022 and of the Coal Authority’s net expenditure for the year then ended

• have been properly prepared in accordance with the Coal Industry Act 1994 and Secretary of State directions issued thereunder

9.2 Emphasis of matter

I draw attention to the disclosures made in notes 1.20 and 13 of the financial statements concerning the uncertainties inherent in the likely costs in respect of the Coal Authority’s liabilities for Mine Water Treatment, Public Safety and Subsidence Claims and Subsidence Pumping Stations totalling £5,379.0 million.

As set out in the notes, given the long-term nature of the liabilities management have needed to make significant judgements in estimating the provision. My opinion is not modified in respect of this matter.

9.3 Opinion on regularity

In my opinion, in all material respects, the income and expenditure recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them.

9.4 Basis for opinions

I conducted my audit in accordance with International Standards on Auditing (ISAs) (UK), applicable law and Practice Note 10 ‘Audit of Financial Statements of Public Sector Entities in the United Kingdom’. My responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of my certificate.

Those standards require me and my staff to comply with the Financial Reporting Council’s Revised Ethical Standard 2019. I have also elected to apply the ethical standards relevant to listed entities.

I am independent of the Coal Authority in accordance with the ethical requirements that are relevant to my audit of the financial statements in the UK.

My staff and I have fulfilled our other ethical responsibilities in accordance with these requirements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

9.5 Conclusions relating to going concern

The Coal Authority’s use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work I have performed, I have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Coal Authority’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

My responsibilities and the responsibilities of the Board and the Accounting Officer with respect to going concern are described in the relevant sections of this certificate/report.

The going concern basis of accounting for the Coal Authority is adopted in consideration of the requirements set out in International Accounting Standards as interpreted by HM Treasury’s Government Financial Reporting Manual which require entities to adopt the going concern basis of accounting in the preparation of the financial statements where it anticipated that the services which they provide will continue into the future.

9.6 Other Information

The other information comprises information included in the annual report, but does not include the parts of the Accountability Report described in that report as having been audited, the financial statements and my auditor’s certificate thereon.

The Board and the Accounting Officer is responsible for the other information. My opinion on the financial statements does not cover the other information and except to the extent otherwise explicitly stated in my certificate, I do not express any form of assurance conclusion thereon.

In connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit or otherwise appears to be materially misstated.

If I identify such material inconsistencies or apparent material misstatements, I am required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard.

9.7 Opinion on other matters

In my opinion, based on the work undertaken in the course of the audit:

• the parts of the Accountability Report to be audited have been properly prepared in accordance with Secretary of State directions made under the Coal Industry Act 1994

• the information given in the Performance and Accountability Reports for the financial year for which the financial statements are prepared is consistent with the financial statements

9.8 Matters on which I report by exception

In the light of the knowledge and understanding of the Coal Authority and its environment obtained in the course of the audit, I have not identified material misstatements in the Performance and Accountability report. I have nothing to report in respect of the following matters which I report to you if, in my opinion:

• adequate accounting records have not been kept or returns adequate for my audit have not been received from branches not visited by my staff

• the financial statements and the parts of the Accountability Report to be audited are not in agreement with the accounting records and returns

• certain disclosures of remuneration specified by HM Treasury’s Government Financial Reporting Manual are not made

• I have not received all of the information and explanations I require for my audit

• the Governance Statement does not reflect compliance with HM Treasury’s guidance

9.9 Responsibilities of the Board and Accounting Officer for the financial statements

As explained more fully in the Statement of Accounting Officer’s Responsibilities, the Board and the Accounting Officer, is responsible for:

• the preparation of the financial statements in accordance with the applicable financial reporting framework and for being satisfied that they give a true and fair view

• internal controls as the Board and the Accounting Officer determines is necessary to enable the preparation of financial statement to be free from material misstatement, whether due to fraud or error

• assessing the Coal Authority’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board and the Accounting Officer anticipates that the services provided by the Coal Authority will not continue to be provided in the future.

9.10 Auditor’s responsibilities for the audit of the financial statements

My responsibility is to audit, certify and report on the financial statements in accordance with the Coal Authority Act 1994.

My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a certificate that includes my opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

I design procedures in line with my responsibilities, outlined above, to detect material misstatements in respect of non-compliance with laws and regulation, including fraud.

My procedures included the following:

• inquiring of management, the Coal Authority’s head of internal audit and those charged with governance, including obtaining and reviewing supporting documentation relating to the Coal Authority’s policies and procedures relating to:

  • identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance

  • detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud

  • the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations including the Coal Authority’s s controls relating to the Coal Industry Act 1994 and Managing Public Money

• discussing among the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud – as part of this discussion, I identified potential for fraud in the following areas: revenue recognition and posting of unusual journals

• obtaining an understanding of the Coal Authority’s framework of authority as well as other legal and regulatory frameworks that the Coal Authority operates in, focusing on those laws and regulations that had a direct effect on the financial statements or that had a fundamental effect on the operations of the Coal Authority – the key laws and regulations I considered in this context included Coal Industry Act 1994, Managing Public Money, Employment Law, and tax Legislation

In addition to the above, my procedures to respond to identified risks included the following:

• reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with relevant laws and regulations discussed above

• enquiring of management, the Audit Committee and in-house legal counsel concerning actual and potential litigation and claims

• reading minutes of meetings of those charged with governance and the board

• in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business

• in response to the risk of fraud in revenue recognition, performing specific procedures to gain assurance over the adequacy of controls that Coal Authority have in place, as well as specific tests of cut-off and estimated accrued income balances at year end.

I also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including internal specialists and significant component audit teams and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

A further description of my responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website. This description forms part of my certificate.

In addition, I am required to obtain evidence sufficient to give reasonable assurance that the income and expenditure reported in the financial statements have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

9.11 Report

I have no observations to make on these financial statements.

Gareth Davies, comptroller and auditor general, 13 July 2022

National Audit Office, 157-197 Buckingham Palace Road, Victoria, London, SW1W 9SP

1. The director is not a member of this committee. ↩ ↩² ↩³

2. The director is not a member of this committee but attends by invitation. ↩ ↩² ↩³ ↩⁴

3. In February 2021 our new chair, Jeff Halliwell was appointed to succeed Stephen Dingle. Jeff’s formal tenure as chair began on 1 April 2021 and he attended the February 2021 and March 2021 meetings of the board ↩

4. In February 2022 our new non-executive director, David Brooks, was appointed to succeed Gemma Pearce. David’s formal tenure begins on 1 April 2022 and he attended the February 2022 and March 2022 meetings of the board. ↩

5. Carl Banton was appointed by BEIS as a statutory director on 22 March 2021. The comparative figures stated for Carl are for the period 22 March to 31 March 2021. The full-year pension effect of Carl’s promotion to the statutory director role is expressed in the 2021-22 column as this is when it was transacted by the Civil Service pension administrator. ↩

6. Carl Banton was appointed by BEIS as a statutory director on 22 March 2021. The comparative figures stated for Carl are for the period 22 March to 31 March 2021. The full-year pension effect of Carl’s promotion to the statutory director role is expressed in the 2021-22 column as this is when it was transacted by the Civil Service pension administrator. ↩