c) GCNS, GMC and CC prepare fully integrated financial projections
incorporating the merger cost and savings to ensure financial security can
be achieved.
2.3 History & Historic Financial Performance
2.3.1 From our brief review in this area the following are the key areas to note:
a) GCNS was formed in 1968 and has established an international
reputation as a centre for maritime studies;
b) GCNS is a recognised leader in the provision of maritime engineering
and nautical studies throughout Scotland and is renowned nationally and
internationally;
c) GCNS had an HMIe inspection in September 2006 with the main
improvement area learner retention and attainment across almost all
areas of the curriculum. Senior management have assured us that the
HMIe visit in January 2010 has had a positive outcome;
2.4 Accounting Policies
• CC is currently accounting for the SPF pension fund liability as a defined
contribution scheme whereas GMC and GCNS are accounting for the SPF
pension fund as a defined benefit scheme.
• CC has adopted the transitional provisions of FRS 15 in respect of fixed assets
which means it has not applied a revaluation to land and buildings on an
ongoing basis. Both GMC and GCNS revalue assets on a 3 year and 5 year
basis in line with FRS 15.
• The fixed assets policies vary between the various Colleges and should be
reviewed and harmonised post merger.
• There are differences in the accounting policies of each college in other areas
which should be harmonised post merger.
2.5 Audit Issues
2.5.1 The conclusion from our review of recent reports from internal and external
audit visits is that GCNS appears to have reasonable controls in all areas
reviewed.
2.5.2 Based on our review, GCNS appears to report appropriate, timely and accurate
financial information to the Board of Management and committees.
2.5.3 GCNS appear to have appropriate corporate governance structures, and
committees meet on a regular basis.
2.5.4 The key point to note is:
a) The College has implemented FRS 17 in respect of the Strathclyde
Pension Fund.
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Appendix 5: Due Diligence Executive Summaries