23
City of Glasgow College Annual Report & Accounts 2019-20
External Audit
The External Auditor's (EA) report for 2018-19 was
presented to the Committee in November 2019, for the
year ended 31 July 2019, and was included in the College's
Annual Report 2018-19. The report provided an unqualified
audit opinion on the financial statements, and on the
regularity of transactions, as well as "other prescribed
matters" as required under the Public Finance and
Accountability (Scotland) Act 2000.
The Wider Scope Audit within the report noted the following:
• Financial Sustainability "The College is one of the few
colleges in the sector forecasting a small operating
surplus position in each of the next 5 years." While
all such reporting in the sector is superseded by the
coronavirus crisis, this at least demonstrates the relative
strength of the College leading into the crisis period.
• Financial Management - The Report highlighted
theunderlying operating surplus of £1.2 million with
significant cash balances, which provide a level of
sustainability not typical within the sector. The report also
indicated the fraud which the College had identified to a
value of £517k (excl. VAT).
• Governance and Transparency - While acknowledging
delays in reporting of the fraud to the Executive
Leadership Team, the report points out that "The College
is considered well managed and well governed overall."
• Value for Money - "The College has a framework in place
to ensure value for money is achieved."
The Report makes several references to the fraud, however,
the Report also concludes that: "Whilst any fraud in a
public body is serious, for the purposes of the annual
accounts audit we note that the value of the identified fraud
is not material in the year under audit or in total. We have
confirmed that the college has made adequate disclosures
within the annual report and accounts to ensure reporting of
fraud issues are sufficiently transparent. As a result, we have
not modified our audit report in respect of the matter."
(EA Annual Audit Report 18-19; p9)
External Audit 2019-20
The External Auditor's report for 2019-20 is presented at
section below (p42)
Other Audit Committee Activities
In addition to the work of the Internal and External Auditors,
In addition to the work of the Internal and External Auditors,
the Committee considered a range of other matters
including:
• Fraud
In 2018-19, the College had identified an extensive fraud,
which was the subject of a series of investigations and
reviews throughout 2019-20, as well as a full police
investigation (current as at June 2020). The internal auditor
undertook a forensic investigation following the discovery of
the fraud, and provided a detailed report to the Committee,
with the GCRB Audit Chair in attendance. A number
of recommendations were provided, all of which were
actioned. All available steps were taken to recover losses
incurred, with progress ongoing. The Principal provided
regular reports on the progress of investigations, reviews,
and recovery, including the External Audit 'fit for purpose'
reviews of Finance and IT.
• Auditor General Report: Section 22
The Committee noted that an Auditor General Section
22 Report had been received in relation to the fraud
investigation. The report noted that for the purposes of
the annual accounts audit, the value of the identified fraud
is not material in the year under audit or in total. The
subsequent review and actions taken by the College were
also recognised.
The External Auditor informed the Committee that the matter
will be kept under review and a further report is anticipated
once legal proceedings are concluded. A copy of the
Internal Audit forensic report has been provided to Audit
Scotland. Further detail is provided in the Accountability
Report below.
• Asset Verification
The Committee received a report on the asset verification
conducted over the summer 2019 period. It was noted
that a comprehensive single asset register has now been
produced and all relevant processes and internal controls
have been
reviewed. Some weaknesses were identified with various
changes implemented. Physical verification of all College
assets is to be conducted annually with local managers
additionally verifying assets within their responsibility at least
twice a year.
• Assurance Framework
A new Assurance Framework was agreed by the
Committee. This includes a grid, mapping all College
assurances within the Three Lines of Defence Model, and
the College's Strategic Themes. These in turn are mapped
against the College's strategic risks. This provides a
coherent and complete reference point for the Committee
to assess assurance strengths and areas for further
development.
• Committee Development
Committee members attended an all-day training event
for Audit Committee members in December 2019, which
included guidance on the development and implementation
of an Assurance Framework, as per the recommendation
from the External Audit Report for 2018-19.
• Terms of Reference
The Committee Terms of Reference were updated in