2.5.2 Based on our review, CC appears to report appropriate, timely and accurate
financial information to the Board of Management and committees.
2.5.3 CC appears to have appropriate corporate governance structures, and
committees meet on a regular basis.
2.5.4 The key points to note are:
� The College is accounting for the Strathclyde Pension Fund as a defined
contribution scheme which is out of line with most Colleges in the
Strathclyde Pension Fund.
� We have been advised by senior management that the basis for not
accounting for FRS 17 as a defined benefit scheme was insufficient
guidance from SFC, and that the basis of the accounting has been
discussed at both Audit Committee level and Board Level.
� The College has a number of outstanding internal audit recommendations
dating back to 2006/07 and 2007/08 with thirteen recommendations not
implemented. The College has indicated that with the exception of the
eight low level recommendations relating to corporate governance, all
other audit points have been addressed.
2.6 Financial Accounting and Control Systems
2.6.1 We recommend that CC, GMC and GCNS carry out a detailed review of the
existing critical business systems to ascertain which systems would be most
appropriate for the merged college.
2.6.2 We recommend that the costs of the detailed review are built into the SFC
merger funding application.
2.7 Financial Performance
2.7.1 From our review of the performance indicators for 2008/2009 of CC against
sector average the following are the main points to note: -
a) Staff costs at CC are significantly higher than the sector average;
b) CC has an above average cash position;
c) CC has an operating surplus and reserves level which is lower than the
sector average, before applying any reduction for FRS17 in respect of the
SPF scheme;
d) CC has a higher dependency on Tuition Fees and Education Contracts than
the sector average;
e) CC has a higher dependency on European income than the sector average.
2.7.2 On benchmarking CC against GMC and GCNS for 2008/2009 the following
are the main points to note: -
Appendix 5: Due Diligence Executive Summaries
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