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City of Glasgow College: 2019/20 Annual Audit Report to the Board and the Auditor General for Scotland

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City of Glasgow College: 2019/20 Annual Audit Report to the Board and the Auditor General for Scotland City of Glasgow College: 2019/20 Annual Audit Report to the Board and the Auditor General for Scotland City of Glasgow College 2019/20 Annual Audit Report to the Board and the Auditor General for Scotland November 2020 1 City of Glasgow College: 2019/20 Annual Audit Report to the Board and the Auditor General for Scotland Table of Contents Key messages 3 Introduction 6 Annual report and accounts 9 Financial sustainability 20 Financial management 26 Governance and transparency 34 Value for money 37 Appendices 42 2 City of Glasgow College: 2019/20 Annual Audit Report to the Board and the Auditor General for Scotland Key messages This report concludes our audit of the City of Glasgow College for 2019/20. This section summarises the key findings and conclusions from our audit. 3 City of Glasgow College: 2019/20 Annual Audit Report to the Board and the Auditor General for Scotland The annual report and accounts for the year ended 31 July 2020 were approved by the City of Glasgow College on 16 December 2020. Annual report We report within our independent auditor’s report an unqualified opinion on and accounts the financial statements, the regularity of transactions and other prescribed matters. We are also satisfied that there are no matters which we are required to report by exception. The next two financial years will be extremely challenging for the College. The College is forecasting underlying operating deficit position in the next financial year of £3.090million. The forecast underlying operating position is improved for 2021/22 with a smaller underlying operating deficit of £0.499million and a small surplus is forecast for 2022/23 of £0.104million. Financial The College has incorporated the financial impact of the COVID-19 Sustainability pandemic into its financial forecasts and continues to monitor the overall impact on its financial position. The College manages its finances well overall, but needs to do more to better integrate the finance function with other College departments and to align its activities more clearly with the College’s strategic objectives. The College reports an operating deficit of £5.474million for the year. The adjusted underlying operating deficit for the year was £0.306million. Financial Management To achieve ongoing improvement in structure, process and performance an IT service improvement plan should be developed by the College to address the recommendations our ‘Review of IT effectiveness’ report.’ Governance arrangements at the College were found to be satisfactory and appropriate, including throughout the COVID-19 pandemic to date. Governance Effective arrangements are in place regarding financial control, prevention & and detection of fraud and irregularity, and standards of conduct. Transparency The College has appropriate performance management processes in place that support the achievement of value for money. Performance in 2019/20 has improved from the previous year. Value for Money Work has begun by the College to develop a new Strategic Plan 2020/25. 4 City of Glasgow College: 2019/20 Annual Audit Report to the Board and the Auditor General for Scotland Conclusion This report concludes our audit for 2019/20. Our work has been performed in accordance with the Audit Scotland Code of Audit Practice, International Standards on Auditing (UK) and Ethical Standards. Azets November 2020 5 City of Glasgow College: 2019/20 Annual Audit Report to the Board and the Auditor General for Scotland Introduction This report is presented to those charged with governance and the Auditor General for Scotland and concludes our audit of the College for 2019/20. We carried out our audit in accordance with Audit Scotland’s Code of Audit Practice (May 2016). This report also fulfils the requirements of International Standards on Auditing (ISA) 260: Communication with those charged with governance. At the College, we have designated the Audit Committee as “those charged with governance”. 6 City of Glasgow College: 2019/20 Annual Audit Report to the Board and the Auditor General for Scotland Introduction 1. This report summarises the findings consideration of the wider from our 2019/20 audit of the City of dimensions of public audit work, as Glasgow College (“the College”). set out in Exhibit 1; monitoring the College’s 2. We outlined the scope of our audit in participation in the National Fraud our External Audit Plan, which we Initiative (NFI); and presented to the Audit and Assurance any other work requested by Audit Committee at the outset of our audit. Scotland. The core elements of our work include: an audit of the 2019/20 annual report and accounts and related matters; Exhibit 1: Audit dimensions within the Code of Audit Practice Financial Financial sustainability management Best Value Value for money Governance and transparency matters arising from the audit or of Responsibilities risks or weaknesses does not absolve management from its responsibility to 3. The College is responsible for address the issues raised and to preparing an annual report and maintain an adequate system of accounts which show a true and fair control. view and for implementing appropriate internal control systems. The 4. We would like to thank all weaknesses or risks identified in this management and staff for their co- report are only those that have come operation and assistance during our to our attention during our normal audit. audit work and may not be all that exist. Communication in this report of 7 City of Glasgow College: 2019/20 Annual Audit Report to the Board and the Auditor General for Scotland Auditor independence Openness and transparency 5. International Standards on Auditing in 10. This report will be published on Audit the UK (ISAs (UK)) require us to Scotland’s website: www.audit- communicate on a timely basis all scotland.gov.uk. facts and matters that may have a bearing on our independence. 6. We confirm that we complied with the Financial Reporting Council’s (FRC) Ethical Standards. In our professional judgement, we remained independent and our objectivity has not been compromised in any way. 7. We set out in Appendix 1 our assessment and confirmation of independence. Adding value through the audit 8. All of our clients demand of us a positive contribution to meeting their ever-changing business needs. Our aim is to add value to the College through our external audit work by being constructive and forward looking, by identifying areas of improvement and by recommending and encouraging good practice. In this way, we aim to help the College promote improved standards of governance, better management and decision making and more effective use of resources. Feedback 9. Any comments you may have on the service we provide, the quality of our work and our reports would be greatly appreciated at any time. Comments can be reported directly to any member of your audit team. 8 City of Glasgow College: 2019/20 Annual Audit Report to the Board and the Auditor General for Scotland Annual report and accounts The College’s annual report and accounts are the principal means of accounting for the stewardship of its resources and its performance in the use of those resources. In this section we summarise the findings from our audit of the 2019/20 annual report and accounts. 9 City of Glasgow College: 2019/20 Annual Audit Report to the Board and the Auditor General for Scotland Annual report and accounts Unqualified audit opinion on the annual report and accounts The annual report and accounts for the year ended 31 July 2020 were approved by the Board on 16 December 2020. We report unqualified opinions within our independent auditor’s report. We did not identify any significant adjustments to the unaudited annual report and accounts. The College has appropriate administrative processes in place to prepare the annual report and accounts and the required supporting working papers. 13. The assessed risks of material Overall conclusion misstatement described in the table below are those that had the greatest 11. Our independent auditor’s report effect on our audit strategy, the includes: allocation of resources in the audit and An unqualified opinion on the directing the efforts of the audit team. financial statements; Our audit procedures relating to these matters were designed in the context An unqualified opinion on of our audit of the annual report and regularity; and accounts as a whole, and not to express an opinion on individual An unqualified opinion on other accounts or disclosures. Our opinion prescribed matters. on the annual report and accounts is 12. We are also satisfied that there are no not modified with respect to any of the matters which we are required to risks described below. report by exception. Our assessment of risks of material misstatement 10 City of Glasgow College: 2019/20 Annual Audit Report to the Board and the Auditor General for Scotland Our assessment of risks of material misstatement and how the scope of our audit responded to those risks Management override In any organisation, there exists a risk that management have the ability to process transactions or make adjustments to the financial records outside the normal financial control processes. Such issues could lead to a material misstatement in the financial statements. This is treated as a presumed risk area in accordance with ISA (UK) 240 - The auditor's responsibilities relating to fraud in an audit of financial statements. Noted in the 2019/20 External Audit Plan 14. We have not identified any indication of management override in the year. We have reviewed the College’s accounting records and obtained evidence to ensure that transactions were valid and accounted for correctly. We have also reviewed management estimates and the journal entries processed in the period and around the year end. We did not identify any areas of bias in key judgements made by management and judgements were consistent with prior years.
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