policies will therefore be required to be considered should the Colleges
merge.
2.9.2 CC should bear in mind that its net worth could be adversely affected by any
FRS 17 pension deficit arising in the Scottish Teachers' Superannuation
Scheme.
2.10 Cash Flows
2.10.1 The cash flows project a net cash position in 2009 and 2010 of £2,004k and
£2,366k respectively.
2.10.2 The significant point to note is as follows:
a) We have been advised by College management that current cash
resources are in the region of £2,500k.
2.11 Taxation
2.11.1 There are no significant points to note.
2.12 Pensions and Pension Accounting
2.12.1 The College has had an actuarial valuation produced by Hymans Robertson
LLP which gives a best estimate of the FRS 17 liability which would have
been disclosed had the College accounted for the Strathclyde Pension Fund
liabilities on a defined benefit basis. The report indicates that at 31 July 2009
the net liability would have been £2,208k (£1,108k at 31 July 2008). This
includes approximately £1.3 million for the SSAP 24 provision as at 31 July
2009.
2.12.2 The overall position would have to be reviewed to assess the impact on the
financial statements of CC if the SPF was accounted for as a defined benefits
scheme. This may or may not have an impact on the SSAP 24 provision
outlined at paragraph 12.1.
2.13 Risk Management
2.13.1 CC, GMC and GCNS will have to review the potential risk areas post merger.
2.13.2 We recommend that the areas highlighted in Section 13 of this report are
considered during the merger process.
2.14 Post Merger Financial & Operational Planning
2.14.1 The terms of reference included at Appendix 1 indicate that the following
areas were to be subject to review:
57
Appendix 5: Due Diligence Executive Summaries