CENTRAL COLLEGE
DUE DILIGENCE
2 EXECUTIVE SUMMARY
2.1 Overall summary
2.1.1 Based on our brief review of the areas contained within this report it appears
that CC is a reasonably run college which has generated a small surplus in
each of the years from 2007 to 2009.
2.1.2 CC's key strengths appear to be in the following areas:
a) CC has demonstrated an ability to generate small surpluses over the years
and despite having a SSAP 24 pension provision of £1,402K has a surplus
on Income and Expenditure account of £1,372k as at 31st July 2009. It
should be noted, however, that this is before any FRS17 provision is
included in respect of the Strathclyde Pension Fund;
b) CC has a reasonably strong balance sheet with cash at bank of £2,004k
which could be utilised for future projects, if required;
c) CC appears to have appropriate overall controls and committee structures
based on our review which could be of benefit to a combined college in
the future;
d) CC is a recognised leader in the provision of Business and Management
and Computing courses in colleges throughout Scotland.
e) CC has recently undertaken an EFQM assessment which has resulted in a
5 star recognition for excellence.
2.1.3 CC's key areas of weakness appear to be as follows:
a) Although CC generated a surplus of £50k in 2009 it has very high staff
costs of approximately 74% against the sector average of 67%. In spite of
the high staff costs CC does not over-deliver on its SUMs target. This
may be an issue that College management should be aware of in the
current economic climate.
b) CC's small surplus of £50k in 2009 could be impacted upon by the
following:
� Any income and expenditure adjustments for FRS17;
� A reduction in SFC funding;
� Increased pension costs;
� Increased land and building depreciation if the merged college
adopts different depreciation rates;
� Increased land and building depreciation if the buildings are
revalued.
51
Appendix 5: Due Diligence Executive Summaries