Reclassification of Incorporated Colleges
Issue date:
10 December 2013
Reference:
Communication Number 10
Summary:
This communication provides details of the different or additional disclosures that
will be required in colleges’ financial statements in order to comply with the
Government Financial Reporting Manual (FReM) following the reclassification of
colleges as public bodies from 1 April 2014. The Funding Council would welcome
feedback from colleges on any aspect of this report.
For the
attention of:
Principals, Chairs and Finance Directors of Scotland’s colleges; College regional
leads. Please note that the contents are largely technical and therefore of most
interest to Finance Directors.
Contact for further information:
Contact: Andrew Millar / Peter Ward
Job title: Senior Financial Analyst / Financial Analyst
Department: Learning, Governance and Sustainability
Tel: 0131 313 6538 / 0131 313 6667
Email: amillar@sfc.ac.uk / pward@sfc.ac.uk
Email address for all enquires relating to the project: ONS-Reclassification@sfc.ac.uk
All project documents can be found on the dedicated section of our website:
Reclassification of incorporated colleges
Scottish Funding Council
Apex 2
97 Haymarket Terrace
Edinburgh
EH12 5HD
T 0131 313 6500
F 0131 313 6501
www.sfc.ac.uk
Government Financial Reporting Manual (FReM) disclosures in colleges’ financial
statements from 1 April 2014
Purpose
1. This communication provides details of the different or additional disclosures
that will be required in colleges’ financial statements in order to comply with
the Government Financial Reporting Manual (FReM) following the
reclassification of colleges as public bodies from 1 April 2014. The Funding
Council would welcome feedback from colleges on any aspect of this report.
Background
FReM
2. The decision by the Office for National Statistics to reclassify colleges as
public bodies means that colleges will be required to comply with the FReM
from 1 April 2014. The FReM is produced by HM Treasury and is IFRS
compliant. This means that colleges will be required to provide some
additional disclosures and restatements within their financial statements for
2014-15 and beyond.
HE/FE Statement of Recommended Practice (SORP)
3. Colleges currently report under the HE/FE SORP and it is expected that
colleges will continue to report under the SORP from 1 April 2014. The
current SORP is based on UK GAAP but work on a new IFRS-based SORP is
currently under development. The new IFRS-based SORP is not due to
become effective until 2015-16.
Interaction between the SORP and the FReM
4. While colleges will be required to use the FReM from 2014-15 onwards, the
SORP is still in place and takes precedence over the FReM with the possible
exception regarding assets held at historic cost noted below.
Pilot Exercise
5. Henderson Loggie were engaged to review the impact of the FReM on college
accounts, Aberdeen College agreed to be the pilot for the exercise. The
College’s financial statements for the year ending 31 July 2012 have been
restated as a worked example of how the additional disclosures,
restatements and presentations might work in practice.
1
Conclusions
6. The report produced by Henderson Loggie concluded that there is no
requirement to change the accounting treatment of any items with the
possible exception regarding assets held at historic cost noted below and that
the primary statements remain the same. Some additional disclosure is
required and the suggested changes are highlighted in the College’s accounts
shown in Appendix 1.
7. The one outstanding issue that may affect 2014-15 regards assets held at
historic cost. This is currently under discussion and the Funding Council will
provide an update to colleges once this matter is concluded.
8. The immediate workload to comply with the FReM is not significant with the
most onerous additional information required being for the Remuneration
Report, Estates Strategy and Resource Outturn information that are new
requirements for the Operating and Financial Review.
9. For the introduction of the new SORP in 2015-16, further guidance will be
issued once the SORP has been finalised.
10. The Henderson Loggie report is attached including the restated Aberdeen
College accounts.
Next steps
11. The Council would welcome feedback from colleges on any aspect of this
report. It would be helpful if any responses could be provided by 10 January
2014. Further guidance may be issued later in January dependent on the
type of issues raised during the feedback process.
2
Aberdeen College
FReM Pilot
Draft Issued: 1 November 2013
5 December 2013
Final Issued: 5 December 2013
Contents
Page
Section 1
Summary
•
•
•
•
Section 2
FReM Pilot
2
2
3
3
Main Report
•
•
•
•
•
•
•
Appendix 1
Scope and Objectives
Approach
Conclusions
Acknowledgements
1 Introduction
2 Comparison of FReM and Education SORP 2007
3 Changes to Accounts After 1 April 2014
4 Areas for Consultation
5 Other Issues to Consider
6 2015/16 SORP
7 Workload
2011-12 Accounts – As Revised for FReM Additional Disclosures
4
4-5
6
6
7
8
8
1. Summary
Scope and objectives
We were engaged to undertake a review of the impact of the Government Financial Reporting Manual
(the FReM) on the College accounts following the reclassification of colleges as Central Government
Bodies with effect from 1 April 2014. The overall objective is to identify different or additional
disclosures required in College accounts to comply with the FReM. A revised set of draft accounts
was produced based on the Aberdeen College accounts of 2011/12 (see Appendix 1).
The scope covers:
•
Review of the 2013-14 FReM to identify differences from the current (2007) Statement of
Recommended Practice: Accounting for Further and Higher Education (the SORP).
•
Discussion of the identified items with College staff to establish work requirements to comply
with the new arrangements.
•
Identification of items where the SORP may take precedence for 2013/14.
•
Where appropriate drafting of new wording and information layouts.
•
Restatement of the Aberdeen College 2012 accounts to show the changes (Appendix 1).
•
Consideration of the workload for 2014/15.
This report summarises the review findings. Aberdeen College merged with Banff and Buchan
College on 1 November 2013, at which date Aberdeen College changed its name to North East
Scotland College. This report does not address any additional disclosures required as a result of the
merger.
We understand that the findings may be used by the SFC as a basis for training and advice to all
Scottish colleges. Prior to issuing any guidance we expect them to use our findings in conjunction
with other work undertaken on this subject which they have access to, and which was discussed
during the scoping of this work.
A new SORP is currently being consulted on, with the expectation that it will be finalised in 2014. This
will apply from accounting years 2015/16 onwards. It will incorporate International Financial Reporting
Standards and further consideration of its impact on college accounts will be needed once it is
finalised.
Approach
We compared the requirements of the current FReM (2013-14) with the current SORP (2007) and
considered what items would be different or what additional requirements would be needed in the year
end accounts as these currently stand. Staff at Aberdeen College provided additional information to
allow the amended accounts at Appendix 1 to be produced. These have been prepared on the basis
that the SORP takes precedence over the FReM and therefore only issues in the FReM that are not
already addressed by the SORP have been amended.
FReM Pilot
2
1. Summary
Conclusions
These conclusions assume no change in the FReM for 2014/15 which has yet to be published
From 1 April 2014, colleges will be required to use the FReM for accounts production. However, at
present, the SORP is also still in place and takes precedence over the FReM. As a result there is no
requirement to change accounting treatment of any items with the possible exception noted
below and the primary accounting statements remain the same. Some additional disclosure is
required and suggested changes are highlighted in the accounts shown in Appendix 1. (The changes
appear on pages 1, 6, 8, 11, 12, 16, 19, 20, 34, 35 and 37).
There is one outstanding issue that may affect 2014/15 regarding assets held at historic cost. This is
currently under discussion and the Scottish Funding Council will provide an update to colleges once
these are concluded.
For the introduction of the new SORP in 2015/16 further guidance will be issued once the SORP is
finalised.
There are a number of areas where the FReM will require Colleges to consult with the SFC as the
relevant authorities to establish the impact on budgets or expenditure. These are listed at 4.1.
A number of other issues to be considered by the SFC and Colleges are noted in section 5. Changes
to accounting policies as a result of these considerations may increase the workload for some
colleges.
The immediate workload to comply with the FReM is not great, with the most onerous additional
information required being for the Remuneration Report and Estates Strategy information that are new
requirements for the Operating Financial Review (OFR).
The workload for restating the 2014/15 accounts and opening balances at 1 April 2014 can only be
considered once the new SORP has been finalised.
Acknowledgements
We should like to take this opportunity to thank the staff at Aberdeen College and the Scottish Funding
Council who helped us during the course of our work.
FReM Pilot
3
2. Main Report
1
Introduction
1.1
Scotland’s colleges have been reclassified as public bodies from 1 April 2014 and will be
required to use the FReM for accounts production after that date. The Education SORP 2007
is still applicable and takes precedence over the FReM.
2
Comparison of FReM and Education SORP 2007
2.1
It is important to note that the key statements within College year end accounts for the
2013/14 period and 2014/15 year remain unchanged:
Income and Expenditure Account
Balance Sheet
Cashflow Statement
Statement of Historical Cost Surpluses/(Deficits)
Statement of Total Recognised Gains and Losses
2.2
The following table notes key areas where the FReM and SORP take different approaches.
We have not amended the revised accounts included at Appendix 1 on the basis that the
SORP takes precedence in most cases.
2.3
As noted above, there is one outstanding issue that may affect 2014/15 regarding assets held
at historic cost. This is currently under discussion and the Scottish Funding Council will
provide an update to colleges once concluded
Area
Grant
Income
2013-14 FReM
11.2.5 (6.2.7d) Funding from grants and
grants-in-aid should not be accounted
for as income through the income
and expenditure account but as
financing
from
controlling
parties
through
the
Statement
of
Comprehensive
Net
Expenditure
(SCNE which is the equivalent of the
current STRGL).
Education SORP 2007
Page 22 Paragraph 52 – revenue
based grants from government and
other bodies should be passed
through
the
income
and
expenditure account when the
conditions relating to the grant have
been satisfied.
Grant
Income
11.2.5 (6.2.7d) Grant in aid is provided
to match the recipient’s cash needs and
is to be accounted for on a cash
basis. Any exceptions to this treatment
must be agreed with the relevant
authority.
Page 22 Paragraphs 53 – Grants and
other
contributions
should
be
accounted for on an accruals
basis and recognised in the
accounts when the conditions for
their receipt have been complied with
and there is reasonable assurance
that the grant will be received.
Grant
Income
6.2.71c, (Linked to 6.2.71b) if a grant,
contribution or donation is received
subject to a condition that it be returned
to the transferor if a specified future
event does or does not occur. In those
cases, a return obligation does not arise
until such time as it is expected that the
condition will be breached and a liability
is not recognised until that time. Such
conditions do not prevent the grant
being recognised as income in the
Statement of Comprehensive Net
Expenditure (SCNE which is the
equivalent of the current STRGL).
FReM Pilot
4
2. Main Report
2
Comparison of FReM and Education SORP 2007 (Continued)
Area
Deferred
Capital
Grants
2013-14 FReM
6.2.71b The option to defer grant
income relating to an asset is restricted
to income where the funder imposes
a condition.
Education SORP 2007
In order to defer grant income relating to
an asset, there must be a requirement
that the future economic benefits
embodied in the grant/donation are
consumed
as
specified
by the
grant/donor or returned to them.
Deferred
Capital
Grants
6.2.71b Where assets are financed by a
government grant, the funding element
is recognised as income and taken
through
the
Statement
of
Comprehensive
Net
Expenditure
(SCNE which is the equivalent of the
current STRGL).
Page 22 Paragraph 54 – where an
institution receives a grant to finance
or partly finance the purchase,
construction or development of an
asset, and the asset is capitalised,
the grant should be credited to
deferred capital grants and an
annual transfer made to the
income and expenditure account
over the useful economic life of
the asset at the same rate as the
depreciation charge on the asset for
which the grant was awarded.
Pensions
IAS 19
Page 47 Paragraph 177 - FRS 17
‘Retirement Benefits’ applies in full.
FReM Pilot
5
2. Main Report
3
Changes to Accounts after 1 April 2014
3.1
The changes that will be needed have been identified and highlighted in a restatement of the
Aberdeen College 2011/12 Accounts in Appendix 1. The changes all relate to disclosure
requirements. We have not amended the audit report on the understanding that a new
standardised audit report will be issued by Audit Scotland in due course.
3.2
Several of the changes are straightforward and information to incorporate them should be
readily available.
3.3
The most onerous changes relate to the information required and disclosed in the Estates
Strategy and Remuneration Report. Both statements are included in the OFR.
4
Areas for Consultation
4.1
There are a number of areas where the FReM requires Colleges to consult with the relevant
authorities to establish the impact on budgets or expenditure. Initial discussions have already
been held with College Finance Directors/Managers to highlight these areas but the key points
are:
FReM
Reference
2.3.3
Action to be taken
Any prior year adjustments to accounting policies or material errors should be
agreed with the relevant authority to ensure that Budgeting and Estimates
implications are considered.
6.2.8a
Any changes to useful lives of assets or asset categories must be discussed
with the relevant authority to ensure that Budgeting implications are considered.
6.2.8b
Any changes to capitalisation thresholds or asset measurement methods must
be discussed with the relevant authority to ensure that Budgeting implications
are considered.
10.2.15
In making major changes to the method of calculating a provision, discussion
with the relevant authority is required to establish whether there is a significant
impact on expenditure control.
FReM Pilot
6
2. Main Report
5
Other Issues to Consider
Other issues identified which merit consideration are:
FReM
Reference
4.2.5
Issues for Colleges
Subsidiary accounting reference dates should be changed to be coterminous
with the College parent.
Under current UK Accounting Standards, where accounting reference dates of
subsidiary and parent are not coterminous, the subsidiary should, where
possible, prepare an additional set of accounts as at the date of the parent’s
accounts for consolidation purposes. The audit impact of this needs to be
considered as it may mean that the subsidiary accounts included in the College
consolidated accounts require an audit in order that the auditors of the College
parent will sign off the consolidated accounts audit report. The additional period
to take the subsidiary’s results up to it’s actual accounting reference date may
then also require to be audited in order to produce audited accounts for lodging
with the appropriate body ie. Companies House, OSCR, etc. This may effectively
increase the number of audits required by a subsidiary to two per year.
Where it is not possible for a subsidiary to prepare accounts at the date of the
parent’s accounts, but the subsidiary’s year end is within three months of the
year end of the parent, those year end accounts may be incorporated as if they
ended co-terminously. Any material transactions or events which have affected
the subsidiary in any gap period must be taken into account by adjusting on
consolidation. It should be borne in mind that most subsidiaries currently
have a July accounting reference date and Colleges are moving to a March
accounting reference date (for 2013/14) which is a four month gap and so
this paragraph would not apply.
5.1.13
The format and content of accounts is not prescribed by the FReM but is
included in the new proposed SORP (and FRS102) applicable for periods
beginning on or after 1 January 2015 ie. 2015/16 accounts.
6.2.7
The frequency of property valuations needs to be decided ie. annual, rolling
programme, quinnenial.
11.4.4
A deferred tax liability arising from the revaluation of a non-depreciable asset
should be measured on the basis of the tax consequences that would follow from
recovery of the carrying amount of that asset through sale, regardless of the
basis of measuring the carrying value of the asset.
This would apply to subsidiaries which own properties (properties tend to be the
main class of non-depreciable assets) and so subsidiaries would need to apply
deferred tax on those assets.
The SFC will continue to produce Accounts Directions but a copy of the Accounts
Direction page should be appended to the accounts.
FReM Pilot
7
2. Main Report
6
2015/16 SORP
The new Education SORP is due to be finalised in 2014 and will impact the 2015/16 accounts
and comparatives, although the full extent of its impact is as yet unknown.
7
Workload
7.1
We have noted above that for 2013/14 and 2014/15, the changes required will be
presentational and that the most onerous element will be the addition of the Remuneration
Report and information on the Estates Strategy in the OFR.
7.2
For the 2015/16 accounts there will be additional work required to restate the 2014/15
comparative figures and opening balances at 1 April 2014. The extent of this work can be
determined once the new SORP is published.
FReM Pilot
8
FINANCIAL STATEMENTS
for the Year to 31 July 2012
Additional disclosures to reflect FReM requirements for period from 1 April 2014
Charity Number: SCO21174
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Index
Page
Operating Financial Review by the Board of Management
2–9
Remuneration Report
10 - 11
Statement of Corporate Governance and Internal Control
12 – 14
Statement of the Board of Management’s Responsibilities
15
Auditor’s Report
16 – 17
Statement of Accounting Policies
18 – 21
Consolidated Income and Expenditure Account
22
Consolidated Statement of Historical Cost Surpluses and Deficits
23
Statement of Total Recognised Gains and Losses
24
Balance Sheets
25
Consolidated Cash Flow Statement
26
Notes to the Accounts
27 – 45
1
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Operating and Financial Review by the Board of Management of Aberdeen College
Introduction
The Board of Management of Aberdeen College presents the financial statements of the College and its
wholly owned subsidiaries for the year to 31 July 2012.
Legal Status
The College is incorporated under the Further and Higher Education (Scotland) Act 1992. The College is a
Scottish charity and is registered with the Office of the Scottish Charities Regulator and is exempt from
corporation tax and capital gains tax. The College receives no similar exemption in respect of Value Added
Tax.
Scope of the Financial Statements
The Board presents the consolidated financial statements of the College and its subsidiary companies.
These subsidiary companies are: Aberdeen Skills and Enterprise Training Limited (ASET) (a company
engaged in the provision of education and training) and Clinterty Estates Limited (a company that ceased to
trade in April 1998). ASET passes the majority of its taxable profits to the College by way of Gift Aid in order
to mitigate the tax liability of the Company and to maximise its financial contribution to the College.
Mission
The College’s mission is, ‘to deliver, in partnership with other providers, a high quality education and
training service, appropriate to the lifelong learning needs and aspirations of its clients, in a diverse range of
settings’.
College Ethos
The College ethos seeks to help establish a context for enlightened and effective management, and to help
build an appropriate working and learning environment for the College community.
It seeks to ensure that students are treated as mature individuals and are allocated as much responsibility
as is possible and practicable, including an active role in decisions that affect them.
In addition to being provided with the best possible learning experiences, students are to be given every
opportunity to develop personal and social skills and, generally, to derive the maximum benefits from their
College experience.
Principal Objectives
In meeting the educational needs of the community and within the context of the College’s mission
statement, the strategic aims for 2011-12 were:
A Governance and Management
To continue to strengthen the governance and management of the College and to ensure that the major
educational policy objectives of the Scottish Executive and national agenda are met at a local level in an
open and transparent way.
B Finance and Related Issues
As a minimum, taking one year with another to operate a balanced budget by matching operational income
and expenditure, whilst taking opportunities to augment the financial reserves of the College subject to the
availability of funding.
C Estates and Environment
To review and amend as necessary, the College’s Estates Strategy, taking account of changes in funding
and local circumstances and to conduct College business in a manner that promotes positive action and
respect for the environment.
D Equal Opportunities
To continue to promote equality of opportunity for students and staff in all aspects of College life, in relation
to gender, race, disability, religion or belief, sexual orientation and age, and to promote positively race
equality, gender equality and disability equality to ensure a learning and working environment free from
discrimination.
2
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Operating and Financial Review by the Board of Management of Aberdeen College (Continued)
E Quality and Excellence
To promote a high quality experience for all students, offering varied and stimulating opportunities for
learning, which incorporate new technologies and flexible modes of delivery where appropriate, and high
quality support services, underpinned by effective quality management systems and professional
development arrangements for staff.
F Wider Access and Participation
To continue to promote education and training opportunities for individuals, communities and employers by
offering flexible and up-to-date courses and incorporate new technologies and flexible modes of delivery
where appropriate; to work with others to increase access to lifelong learning opportunities; and promote
social inclusion by removing barriers to learning.
G Progression and Articulation
To work with schools, universities and other providers to foster easier and faster progression and
articulation of students to and within further education and between further and higher education, including
the provision of appropriate vocational courses for school pupils.
H Local Skills Base
To contribute to the development of the local skills base and to address local skills requirements and
shortages by collaborating with and responding to employers, other training providers and agencies and to
foster employability and enterprise skills, as well as vocationally specific skills, where relevant and
appropriate.
I
Collaboration and Partnerships
To continue to strengthen communication and collaboration with public, private and voluntary sector
partners and other providers in the compulsory, further and higher education sectors by contributing to
community planning and promoting a coherent approach to the delivery of education and training services.
J Inclusive Curriculum
To work with others to improve access to College services by researching, exploring and anticipating the
needs of individuals and providing a range of services to support students with additional requirements,
thereby promoting social inclusion and social justice in all areas served by the College.
K Learner Progress and Achievement
To ensure that high quality tuition and support is provided to students to help them achieve their potential in
terms of qualifications and vocational, employability, citizenship and personal and social skills.
Main Achievements
This year was one of continuing success for the College and for the people it exists to serve – its students
and employer clients. As one of the largest of Scotland’s further education colleges, like others, Aberdeen
College is funded each year to deliver an agreed level of service. In 2011-12, it, once again, delivered its
targeted level.
The College’s service was provided at a high level of quality, as attested by the many audits and
inspections undertaken, providing objective measures of the various aspects of the standard of service it
provides. The College was subject to a full four yearly review by Education Scotland in November 2011.
The report was published in February 2012 and is available on the Education Scotland website
at:www.educationscotland.gov.uk. The review was an excellent one. The College received four unqualified
confidence statements and there were no main points for action. Inspectors identified two examples of
Sector Leading and Innovative Practice and two examples of excellent practice.
There were 58 external verification checks carried out by the Scottish Qualifications Authority (SQA) and
other awarding bodies. The College was found to comply with the requirements of the various awarding
bodies with the exception of one sanction placed on certification, however this was subsequently rectified
and the sanction was lifted.
Aberdeen College has, for many years, actively sought external accreditation and has applied for many
national standards and competitions as a means of identifying quality improvement measures. External
accreditation by respected national bodies also gives our students, employer clients and the general public
the assurance that as a publicly-funded body, the College meets a wide range of recognised quality
standards.
3
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Operating and Financial Review by the Board of Management of Aberdeen College (Continued)
In 2011-12 The College achieved a number of standards, namely:
Investors in People Gold Status
Scotland’s Healthy Working Lives – Mental Health and Well-0being Commendation Award
Royal Society for the Prevention of Accidents (RoSPA) Gold Medal Award
Customer Service Excellence Standard (formerly Charter Mark)
BS OHSAS 18001: Standard for Effective Management Systems of Health and Safety
ISO14001 Environmental Management Standard
Aberdeen Civic Society Award 2011, commendation for the new building at Altens Centre
As in previous years, the College ended this review period in a financially robust position, recording a
respectable cash operating surplus, while retaining the highest gradings for financial health and security.
Benchmarking studies undertaken by the Scottish Funding Council (SFC) confirmed the College’s
continuing low unit costs of operation.
Financial objectives
The College’s financial objectives are:
• To operate a balance between operating income and expenditure and, where possible, achieve a
modest operating surplus;
• To exploit alternative sources of income to reduce reliance on the public purse;
• To generate sufficient funds to support the College’s aims and objectives.
Performance Indicators:
(i)
Level of Student Activity
2011-12
WSUMs
146,075
2010-11
155,070
2009-10
160,047
2011-12
16,485
6,050
10,435
2010-11
23,896
5,848
18,048
2009-10
28,973
5,623
23,350
2011-12
16,131
2010-11
20,629
2009-10
23,801
2011-12
20%
37%
21%
22%
2010-11
19%
31%
21%
29%
2009-10
20%
28%
21%
31%
2011-12
62%
38%
2010-11
63%
37%
2009-10
63%
37%
Ethnic/Racial Origin
2011-12
White
95%
Other
5%
2010-11
95%
5%
2009-10
95%
5%
2010-11
44%
32%
24%
2009-10
45%
29%
26%
(ii)
Enrolments
All
Full-time
Part-time
(iii)
Headcount
Students
(iii)
Age Structure
Under 18
18-25
26-40
Over 40
(iv)
Gender Mix
Female
Male
(v)
(vii)
Student Origins
Aberdeen City
Aberdeenshire
Other
2011-12
44%
30%
26%
4
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Operating and Financial Review by the Board of Management of Aberdeen College (Continued)
(viii) Student Retention Rates
Full-Time
Part-Time
All
(ix)
2011-12
82%
93%
89%
2010-11
81%
87%
87%
2009-10
81%
90%
88%
2011-12
61%
6%
15%
18%
3,622
2009-10
67%
9%
24%
2008-09
72%
7%
20%
2,712
2,283
Student Destination
Further Education / Higher Education
Employed
Unplaced
Unable to Contact
Respondents (full-time students)
(x)
Staff Employment Levels 2011-12
Type of Contract
Number of Staff (Headcount)
Number of Staff (FTE’s)
Teaching
NonTeaching
(Support)
Total
Teaching
NonTeaching
(Support)
Total
College Payroll Staff
231
240
471
187.99
197.65
385.64
Non-College Payroll Staff
109
0
109
26.64
0
26.64
Total
340
240
580
214.63
197.65
412.28
(xi)
Staff Sickness Absence Levels 2011-12
Year
2011-12
Average No. of days per employee
3.84
(xii)
2010-11
6.48
2009-10
6.60
2010-11
8.3%
25.1%
2009-10
7.1%
11.7%
Staff Turnover Levels 2011-12
Lecturers
Support
2011-12
13%
14.7%
The buoyant local economy with 2% unemployment and the significantly higher salary levels in the oil and
gas industry are major contributory factors in the higher turnover levels in support staff posts compared with
other parts of Scotland. A voluntary severance scheme operated in 2011-12, as it had in 2010-11, to
reduce the cost base of the College. The operation of these schemes had an effect on rates of turnover. In
2011-12 a number of staff who accepted voluntary severance were removed, and coupled with the
involuntary leavers the turnover rates for 2011-12 would be 5.3% for lecturers and 7.1% for support staff.
Continuing Professional Development
The College’s Professional Development Strategy covers initial and post-initial teacher training as well as
training for instructors and professional training for specified groups of staff. Two qualified professional
development tutors work with lecturers, instructors, temporary lecturers and flexible learning tutors, and
support them to gain the professional qualifications required by the College.
In 2011-12, 8 lecturers joined the TQFE programme, and by the end of the academic year 90% of the
lecturers employed in the College either held a TQFE or equivalent teaching qualification. Of the 10% of
lecturers who did not hold a recognised teaching qualification 4% were working towards one. Of the
lecturers waiting to commence TQFE all will have completed New to Further Education. In addition, 4% of
staff held the PDA Teaching in Further Education: An Introduction or the PDA Unit Teaching Children and
Young People. 2% are due to start either the PDA or TQFE during 2011-12. Of the remaining 2%, two
members of staff left without qualifying.
5
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Operating and Financial Review by the Board of Management of Aberdeen College (Continued)
Employer Engagement
As an organisation which has always been principally in the business of vocational education and skills
training it has been relatively easy for Aberdeen College to respond positively to the government's renewed
emphasis on skills (the 'skills agenda'). Our service to individuals in employment and to employers in the
private, public and third sectors consists of a wide range of training opportunities provided in the College's
own premises (where the service is subsumed in the wider work of the organisation), an extensive workbased training and assessment service provided by Business Solutions and Part Time Learning, which was
formed in 2011 to bring together programmes for business solutions and distance learning. Programmes
were delivered mainly in the North-East of Scotland in partnership with local and national employers and
private providers. In 2011-12, most vocational qualifications were in the subject areas of management,
construction and care – key areas of skills shortage in Scotland. In addition assessor and verifier awards
were delivered along with an extensive programme of short certificated programmes in health and safety
related topics such as first aid and object handling.
Further information is available in the College’s Annual Review 2012.
Review of Financial Outturn for the Reporting Period
The Income and Expenditure account for the year showed a historical cost surplus on continuing operations
after disposals of assets and taxation of £1,565,000 (FY2010-11: surplus of £1,064,000). After adjusting for
the effect of depreciation on re-valued assets, and the realisation of property revaluation gains of previous
years, the surplus for the year was £1,374,000 (FY2010-11: surplus of £791,000). Of the total income of
the College, 30% (FY2010-11: 25%) was received from non-SFC sources.
The accumulated surplus on the Income and Expenditure Account at 31 July 2012 was £22,515,000 (31
July 2011: £20,950,000). The College has made provision for future pension costs arising from early
retirement of former staff and the equalisation of pension contributions under the Local Government
Pension Scheme. The amount of this provision at 31 July 2012 was £5,435,000 (31 July 2011:
£5,249,000).
The College’s cash and liquid resources position at the end of the period was £18,796,000 (31 July 2011:
£19,350,000), this equates to the College having 156 days of cash on hand. The majority of these funds
are held at the year end to meet the Board’s planned capital spending in the financial year to 31 July 2013.
The table below shows the actual resource requirement for the year against the Group’s forecast:
Year ended
31 July 2012
£’000
Budgeted resource
Actual resource
Saving/(excess)
The outturn is better than forecast as a result of …………….
[MAIN REASONS FOR VARIANCES]
Non cash items are not paid out by the College or the Scottish Government but the College is expected
to have resource budget cover for these items.
FReM 2.4.5
Physical Developments
In the reporting period the College spent £4,436,000 improving accommodation. Projects included: the
completion of work to create a new facility for construction training at Altens Centre, the alteration of
teaching accommodation and public areas at Altens and Gallowgate Centre to create more appropriate
learning spaces, the refurbishment of part of the basement area at Gallowgate Centre (previously occupied
by construction training activities relocated Altens Centre) and a variety of other works to improve the
physical environment of the College for students and staff.
Investment continued in equipment. In the period, the College invested £717,000 in a broad range of
equipment for teaching and support functions. Specialist simulator equipment was updated to support the
provision of training to engineering students.
6
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Operating and Financial Review by the Board of Management of Aberdeen College (Continued)
Taxation Status
The College has been entered into the Scottish Charity Register and is entitled, in accordance with section
13(1) of the Charities and Trustee Investment (Scotland) Act 2005, to refer to itself as a Charity registered
in Scotland. The College is recognised by HM Revenue & Customs as a charity for the purposes of section
505, Income and Corporation Taxes Act 1988 and is exempt from corporation tax on its charitable activities.
The College receives no similar exemption in respect of Value Added Tax.
Treasury Policies and Objectives
Treasury management is the management of the College’s cash flows, its banking, money market and
capital market transactions; the effective control of the risks associated with those activities; and the pursuit
of optimum performance consistent with those risks. The College’s treasury management arrangements are
governed by the College’s financial regulations.
Borrowing is undertaken in accordance with the College’s Borrowing Policy and the Financial Memorandum
with the SFC.
Cash Flows
The College reduced its cash balance by £554,000 in the year (2010-11 – decrease of £580,000),
operating cash inflow was £3,215,000 (2010-11 – inflow £3,098,000).
Liquidity
The College maintains its reserves in accordance with its Reserves Policy. The Board of Management shall
hold reserves to: support the achievement of its strategic aims; provide protection from unplanned changes
in the financial environment; and, to fund, in part, the progression of the Board’s estates development
strategy, which is estimated to cost a total of £22 million. At the year-end, a number of capital and other
commitments exist which fall to be met from these reserves. These are described elsewhere in these
financial statements.
The Board of Management has established plans to spend reserves of £10.5 million on the next stages of
the Board’s estates development strategy, which will address the refurbishment of the Gallowgate Centre.
The Board of Management is in a unique position in Scotland in that it can, from its own resources, fund the
progression of its estates development strategy. The Board designated £10,500,000 of its reserves at 31
July 2011 as a ‘Capital Development Reserve’, of which £6,400,000 had been authorised to be committed
to recladding the Tower and East Blocks at Gallowgate Centre. The College’s remaining reserves are
required to provide underpin to the College’s operations and represent approximately 3 month’s running
costs.
Supplier Payment
The College complies where appropriate with the CBI prompt payment code and has a policy of paying its
suppliers within 30 days of invoice unless the invoice is contested. All disputes are handled as quickly as
possible. Supplier invoices were paid in 13 days in the year to 31 July 2012 (26 days in the year to 31 July
2011).
Interest paid under Late Payments of Commercial Debts (Interest) Act amounted to £nil during the year (31
July 2011 - £nil).
Current and Future Developments and Performance
Outcome Agreement with the Scottish Funding Council
The data available to the College at the time of writing indicates that it is reasonable to expect that the
College will meet the commitments set out in the outcome agreement for the academic year 2012-13 that
has been agreed with the SFC.
Curriculum Developments
The College will ensure that high quality tuition and support is provided to students to help them achieve
their potential in terms of qualifications and vocational, employability, citizenship and personal and social
skills by promoting a high quality experience for all students, offering varied and stimulating opportunities
for learning, which incorporate new technologies and flexible modes of delivery where appropriate, and high
quality support services, underpinned by effective quality management systems and professional
development arrangements for staff.
7
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Operating and Financial Review by the Board of Management of Aberdeen College (Continued)
Payment Performance
The College continues to comply where appropriate with the CBI prompt payment code. At the time of
writing, no interest has been paid under the Late Payments of Commercial Debts (Interest) Act.
Post Balance Sheet Events
The Board of Management and the Board of Management of Banff and Buchan College met in October
2012. The Boards decided to progress an options appraisal to consider the possible models for the
development of further education in the Aberdeen City and Aberdeenshire region. It is intended that the
outcomes of the appraisal will be available in December 2012 for consideration by the Boards. The
outcomes will be implemented by a Partnership Board comprising the Regional Lead (appointed by the
Scottish Government), who will act as Chair, and equal numbers of Board Members from each College.
In September 2012, the College opened a new training facility at its Gallowgate Centre, Aberdeen. The
project is an important step in the progression of the Board’s estates development strategy. The
refurbished area provides facilities to allow the co-location of education and training in the Creative
Industries and Hairdressing and Beauty Therapy.
The College is seeking permission from the Scottish Further and Higher Education Funding Council to sell
the former Balgownie Centre and retain the proceeds to fund the planned refurbishment of the Gallowgate
Centre.
The College, in common with other Scottish further education colleges experienced high levels of demand
for its services at the beginning of academic year 2012-13. The College has acted to address the resource
implications of that situation and to achieve the planned operational outcomes for the year 2012-13.
Estates Strategy
The College Estates Strategy is evidence based and allows the College to continue with its programme of
aligning its estate to the emerging needs of students and curriculum delivery requirements going forward.
The strategy allows for a comprehensive upgrade of the Gallowgate Centre in order to underscore its
position as the College’s flagship site. Phasing is designed to allow the College to carefully consider all of
the factors that need further consideration before a decision is made on the remaining two sites (Gordon
Centre and Clinterty Centre).
Future Development of the College Estate
Good progress was made during the period in progressing the second phase of the Board’s estates
development strategy. The project to re-clad the exterior and re-roof the Tower and East Blocks of the
Gallowgate Centre has begun with the appointment of a project design. The progression of the
refurbishment of the rest of the Gallowgate Centre is dependent on permission being granted by the SFC to
retain the proceeds of property disposals. The Board of Management considers it unlikely that significant
funding support will be available from the SFC or from other sources such as borrowing for the foreseeable
future and plans to fund the next phase of its estates development from its own resources.
Work will continue in financial year 2012-13 to improve the College estate. Planned maintenance
programmes will be progressed at a budgeted cost of £545,000. Investment will continue to improve the
College estate and capital works the value of £5,033,000 are planned to take place in the year 2012-13, of
which £3,933,000 will be spent on re-cladding the Tower and East Blocks at Gallowgate Centre.
Resources
The College has net assets of £63,792,000 (31 July 2011 - £62,259,000). The current asset to current
liabilities ratio is 2.9:1 (31 July 2011: 2.8:1), with the gearing on long term liabilities being 0.173:1 (31 July
2011: 0.117:1).
Principal Risks and Uncertainties
The principal risks faced by the College are recorded in the College’s risk register, which is reviewed
biannually. Mitigating actions are in place to address risk. The most significant risk faced by the College is
the loss of income that might arise if the SFC changed the basis on which colleges are funded or from the
loss of major customer contracts.
8
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Operating and Financial Review by the Board of Management of Aberdeen College (Continued)
Stakeholder Relationships
The College has links with many organisations. These include:
Students – prospective, current and graduands
Local communities
Colleges and Universities
Employers and Employer organisations and associations
Charity and Voluntary organisations
Sector Skills Councils
Government and other central authorities
Local authorities
Emergency services
Awarding bodies
NDPBs
Community and economic development organisations
Equality and Diversity
Aberdeen College is committed to promoting equality of opportunity for all its students and staff in all
aspects of College life to ensure that no-one is discriminated against on the grounds of race, colour,
religion, sex, marital status, disability, age, social position or sexual orientation.
The College’s Equality and Diversity Policy, Inclusiveness Policy, Accessibility Statement, Dignity at Work
Policy, Gender Equality Policy, Race Equality Policy and Disability Equality Scheme are published on the
College intranet.
Disability Statement
Aberdeen College is committed to ensuring that people with disabilities and people with learning difficulties
are treated fairly. We will, therefore, make reasonable adjustments to ensure that students with disabilities
are not substantially disadvantaged.
Disclosure of Information to Auditors
The Members of the Board of Management who held office at the date of approval of this report confirm
that, so far as they are each aware, there is no relevant audit information of which the College’s auditors
are unaware; and each Member has taken all the steps that he or she ought to have taken to be aware of
any relevant audit information and to establish that the College’s auditors are aware of that information.
9
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Operating and Financial Review by the Board of Management of Aberdeen College (Continued)
PROFESSIONAL ADVISERS
External auditor:
Anne MacDonald
Senior Audit Manager
Audit Scotland
rd
Business Hub 16, 3 Floor West
Marischal College, Broad Street
Aberdeen AB10 1AB
Internal auditors:
Wylie and Bisset
168 Bath Street
Glasgow
G2 4TP
Bankers:
Clydesdale Bank
56 Carden Place
Aberdeen
AB10 1UP
Solicitors:
Paull and Williamsons
Union Plaza
1 Union Wynd
Aberdeen
AB10 1DQ
Simpson & Marwick W.S.
4 Carden Terrace
Aberdeen AB10 1US
Iain Smith and Company
18 Queens Road
Aberdeen AB15 4ZT
10
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Operating and Financial Review by the Board of Management of Aberdeen College (Continued)
Remuneration report (FReM 5.2.2/5.2.20)
Introduction
The College is required to prepare and publish within its financial statements an annual Remuneration
Report under the 2013-14 Government Financial Reporting Model (FReM) issued by the Scottish
Government, which came into force for the period ending 31 March 2014.
The report sets out the remuneration and accrued pension benefits of the Senior Management Team
members of the College.
The report also provides information on the number of College employees (including Senior Management
Team members) whose total actual remuneration was £50,000 or more, this information being disclosed in
salary bandings of £5,000 above £50,000. The following report has been prepared in accordance with the
aforementioned Regulations.
The College’s External Auditor is required to audit certain parts of the Remuneration Report and give a
separate opinion in his report on the Statement of Accounts as to whether the Remuneration Report has
been properly prepared in accordance with the Regulations. All the tables in this report are subject to audit
except those relating to Staff Members Allowances and Expenses.
Remuneration arrangements
Senior Management Team
The Remuneration Committee makes recommendations to the Board of Management on the service
arrangements and remuneration of the Principal and determines the service arrangements and
remuneration of the other senior post holders.
Remuneration of the Senior Management Team is as set out in note 6 to the financial statements.
The Regulations require information to be published on the total number of College employees (including
Senior Management Team members) whose total actual remuneration was £50,000 or more. This
information is to be disclosed in salary bandings of £5,000 above £50,000 and is shown in the following
table:
2011/12
2010/11
College
ASET
College
ASET
Number
Number
Number
Number
45-50k
18
10
50-55k
6
6
55-60k
1
60-65k
4
65-70k
1
105-110k
1
110-115k
1
130-135k
1
======
======
======
======
During the year, the College made no payments for compensation on early retirement or for loss of office
(2010-11 - £Nil).
During the year, the College made no non-cash benefits available to staff (2010-11 – None).
Median Remuneration:
Median Remuneration
Mid Point of Banded Remuneration of
Highest Paid Official
51,330
50,440
132,500
======
67,500
======
======
======
11
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Operating and Financial Review by the Board of Management of Aberdeen College (Continued)
Remuneration report (Continued)
Accrued pension benefits
Pension benefits for Employees are provided through the Scottish Teacher’s Superannuation Scheme
(STSS), a defined benefit scheme, which is externally funded and contracted out of State Earnings-Related
Pension Scheme and the Local Government Pension Scheme (LGPS), North East Scotland Pension Fund
(NESPF).
Both STSS and LGPS are final salary pension schemes. This means that pension benefits are based on
the final year’s pay and the number years that the person has been a member of the scheme.
The scheme’s normal retirement age is 65.
Contribution rates are set annually for all employees and can be found in note 29.
There is no automatic entitlement to a lump sum. Members may opt to give up (commute) pension for lump
sum up to the limit set by the Finance Act 2004. The accrual rate guarantees a pension based on final
pensionable salary and years of pensionable service.
Senior Management Team Pension
Pension benefits are provided to Senior Management Team on the same basis as all other staff. The
accrued pension benefits for Senior Management Team members are set out in the table below, together
with the pension contributions made by the College:
Name
Salary
2011-12
£’000
Salary
2010-11
£’000
Pension
Contribution
2011-12
£’000
Pension
Contribution
2010-11
£’000
Pension at
31 July 2012
£’000
Lump sum at
31 July 2012
£’000
======
======
======
======
======
======
It is important to note that individuals have to authorise the inclusion of their salary information in
the above table.
Assumptions and Contextual Information
The value of the accrued pension benefits has been calculated on the basis of the age at which the person
will first become entitled to receive a pension on retirement without reduction on account of its payment at
that age; without exercising any option to commute pension entitlement into a lump sum; and without any
adjustment for the effects of future inflation. The pension figures shown relate to the benefits that the
person has accrued as a consequence of their total Local Government service and not just their current
appointment.
In considering the accrued pension benefits figures the following contextual information should be taken
into account:
(i) the figures for pension and lump sum are illustrative only in light of the assumptions set out above and
do not necessarily reflect the actual benefits that any individual may receive upon retirement.
(ii) the accrued benefits figures are reflective of the pension contributions that both the employer and the
scheme member have made over a period of time.
Approved by order of the Members of the Board of Management on 10 December 2012 and signed
on its behalf by:
Doug Duthie
Chair of the Board of Management
12
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Statement of Corporate Governance and Internal Control
Introduction
The College is committed to exhibiting best practice in all aspects of corporate governance. This summary
describes the manner in which the College has applied the principles set out in the 2010 UK Corporate
Governance Code issued by the London Stock Exchange. Its purpose is to help the reader of the financial
statements understand how the principles have been applied.
Statement of full UK Corporate Governance Code compliance
In the opinion of the Board of Management, the College complies with all the provisions of the UK
Corporate Governance Code in so far as they apply to the further education sector, and it has complied
throughout the year ended 31 July 2012.
Membership of the Board of Management
The undernoted individuals were Members of the Board of Management during the reporting period:
Ms. L Baird (Students Association representative)
Mr D. Cobban
Mr. B Dunn (lecturing staff representative)
Mr. D Duthie
Mr. I Gossip
Prof J Harper
Dr. I Heywood
Ms. K Hilton (support staff representative)
Prof M Melvin
Ms. D Michie
Mr. K Milroy (resigned 4 September 2012)
Mr. P Murray (resigned 18 November 2012)
Mr. A Smith
Mrs. K Stewart
Mr. R Wallen (Principal and Chief Executive)
Committees of the Board of Management
The Board of Management has formally constituted several committees with terms of reference. These
committees act with delegated authority. Information on the Board’s Committees is given below, together
with details of membership of key committees during the year to 31 July 2012.
Key Committees:
•
Audit Committee
Members – Mr. D Duthie, Ms. K Hilton, Prof. J Harper, Prof. M Melvin, Mr. P Murray, Mr A. Smith.
•
Course Provision and Student Services Committee
Members – Ms. L Baird, Mr. B Dunn, Mr, D Duthie, Prof, J Harper, Dr, I Heywood, Ms. K Hilton, Ms. D
Michie, Prof. M Melvin, Mr K. Milroy, Mr. P Murray, Mr. A Smith and Principal R Wallen.
•
Finance and General Purposes Committee
Members – Ms. L Baird, Mr. D Cobban, Mr. B Dunn, Mr. I Gossip, Dr. I Heywood, Ms. D Michie, Mr. K
Milroy, Mrs. K Stewart and Principal R Wallen.
•
Human Resources Committee
Members – Ms. L Baird, Mr. D Cobban, Mr. B Dunn, Mr. D Duthie, Mr. I Gossip, Dr. I Heywood, Ms. K
Hilton, Prof. M Melvin, Ms. D Michie, Mr. P Murray, Mr. A Smith and Principal R Wallen.
•
Remuneration Committee
Members – Mr. D Duthie, Dr I Heywood, Mr. K Milroy and Mrs. K Stewart.
•
Membership Committee
Members – Mr. D Cobban, Mr. D Duthie, Mr. I Gossip, Prof. J Harper, Dr. I Heywood, Prof. M Melvin,
Ms. D Michie, Mr. K Milroy, Mr. P Murray, Mrs. K Stewart and Mr. A Smith.
13
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Statement of Corporate Governance and Internal Control (Continued)
Other Committees
• Accommodation Committee
• Contracts Committee
• Investment and Project Committee
• Premature Retirement Committee
The College’s Board of Management meets six times in the year and has several committees through
which it conducts its business. Each committee has formally constituted terms of reference. These
committees include: the Accommodation Committee, Audit Committee, Contracts Committee, Course
Provision and Student Services Committee, Finance and General Purposes Committee, Human Resources
Committee, Investment and Project Committee, Membership Committee and the Remuneration Committee.
The Finance and General Purposes Committee, among other business, sets the College’s annual revenue
and capital budgets and monitors performance in relation to approved budgets.
The Membership Committee was established by the Board of Management to advise on the selection of
new Members of the Board. The Committee provides a forum for discussion on the selection of Members
to serve on the Board.
The Board has established arrangements that ensure that a process is in place to ensure appropriate
training is given to Board of Management members as required.
The Remuneration Committee makes recommendations to the Board of Management on the service
arrangements and remuneration of the Principal and determines the service arrangements and
remuneration of the other senior post holders. Details of senior post-holders for the year ended 31 July
2012 are set out in note 6 to the financial statements.
The Audit Committee meets six times a year, with the College’s external and internal auditors in attendance
as required. The Audit Committee advises the College on the appointment of the internal auditor and the
auditors’ remuneration.
The College’s internal auditor monitors the systems of internal control, risk management controls and
governance processes in accordance with an agreed plan of input, and reports their findings to
management and the Audit Committee. Management is responsible for the implementation of agreed audit
recommendations and internal auditors undertake periodic follow-up reviews to ensure that such
recommendations have been implemented. The Audit Committee considers detailed reports together with
recommendations for the improvement of the College’s systems of internal control and management’s
responses and implementation plans. It also receives and considers reports from the Scottish Further and
Higher Education Funding Council as they affect the College’s business and monitors adherence to the
regulatory requirements.
Whilst senior staff of the College attends meetings of the Audit Committee as necessary, they are not
members of the Committee.
Corporate Strategy
In respect of its strategic and development responsibilities, the Board of Management meets on three
occasions to consider establishment of the College’s strategic plan.
14
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Statement of Corporate Governance and Internal Control (Continued)
Board’s statement on internal control
The College’s Board of Management is ultimately responsible for the College’s system of internal control
and for reviewing its effectiveness. Such a system is designed to manage rather than eliminate the risk of
failure to achieve business objectives and can only provide reasonable and not absolute assurance against
material misstatement or loss.
The Board’s standing committees and senior management team receive reports setting out key
performance and risk indicators and considers possible control issues brought to their attention by early
warning mechanisms which are embedded within the College’s academic sectors and teams and reinforced
by risk awareness training. The senior management team and the Audit Committee also receive regular
reports from internal audit that include recommendations for improvement.
The Audit Committee’s role in this area is confined to a high level review of the arrangements for internal
control.
The Board of Management’s agenda includes a regular item for consideration of risk and control and
receives reports thereon from the senior management team and the Audit Committee. The emphasis is on
obtaining the relevant degree of assurance and not merely reporting by exception. At its meeting on 2
October 2012, the Board of Management carried out the annual assessment for the year ended 31 July
2012 by considering documentation from the Audit Committee taking account of events since 31 July 2012.
The Board of Management is of a view that there is an ongoing process for identifying, evaluating and
managing the College’s significant risks that has been in place throughout the year ended 31 July 2012 and
up to the date of approval of the annual report and accounts. The Board of Management regularly review
this process, which accords with the Turnbull guidance on internal control, as applicable to the further
education sector.
A programme of internal audit work has been undertaken and the results have provided evidence that the
Board has strong controls in all areas under review, which were: corporate governance; risk management;
procurement; information technology security; and, non-SFC income. Assurance was also obtained that
recommendations from previous internal audit reviews had been acted upon.
Going Concern
The Board of Management considers that the College has adequate resources to continue in operational
existence for the foreseeable future. For this reason, the Board continues to adopt the going concern basis
in preparing the financial statements.
Approved by the Board of Management and signed on its behalf by:
Doug Duthie
Chair of the Board of Management
10 December 2012
Rob Wallen
Principal and Chief Executive
15
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Statement of the Responsibilities of the Board of Management
The Board of Management are required to present audited financial statements for each financial year. In
accordance with the Further and Higher Education (Scotland) Act 1992 (the Act) the Board of Management is
responsible for the administration and management of the College’s affairs, including ensuring an effective
system of financial control, and is required to present audited financial statements for each financial year.
The Board of Management is responsible for keeping proper accounting records that disclose with reasonable
accuracy at any time the financial position of the College and to enable it to ensure that the financial statements
are prepared in accordance with the Further and Higher Education (Scotland) Act 1992, the 2007 Statement of
Recommended Practice Accounting for Further and Higher Education Institutions, the 2013-14 Government
Financial Reporting Model (FReM) issued by the Scottish Government (FReM 2.2.14) and other relevant
accounting standards. In addition, within the terms and conditions of the Financial Memorandum agreed
between the Scottish Funding Council and the College’s Board of Management, the Board, through its
designated office holder, is required to prepare financial statements for each financial period that give a true and
fair view of the College’s state of affairs and of the surplus or deficit and cash flows for that period.
The financial statements are prepared in accordance with the Accounts Direction issued by the Scottish Funding
Council, which brings together the provisions of the Financial Memorandum with other formal disclosures that the
Scottish Funding Council require the Board of Management to make in the financial statements and related
notes.
In preparing the financial statements, the Board of Management is required to:
•
•
•
•
select suitable accounting policies and apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether applicable Accounting Standards have been followed, subject to any material departures
disclosed and explained in the financial statements;
prepare financial statements on the going concern basis unless it is inappropriate to presume that the
College will continue in operation. The Board is satisfied that it has adequate resources to continue in
operation for the foreseeable future and for this reason the going concern basis continues to be adopted in
the preparation of the financial statements.
The Board of Management has taken reasonable steps to:
• ensure that funds from the Scottish Funding Council (SFC) are used only for the purposes that they have
been given and in accordance with the Financial Memorandum with the SFC and any other conditions which
the Funding Council may from time to time prescribe;
• ensure that there are appropriate financial and management controls in place to safeguard public funds and
funds from other sources;
• safeguard the assets of the College and prevent and detect fraud;
• secure the economical, efficient, and effective management of the College’s resources and expenditure.
The key elements of the College’s system of internal financial control, that is designed to discharge the
responsibilities set out above, include the following:
• clear definitions of responsibilities of, and the authority delegated to, heads of academic and administrative
departments;
• a comprehensive medium and short term planning process supplemented by detailed annual income,
expenditure, capital and cash flow budgets;
• regular reviews of key performance indicators and business risks and monthly financial results involving
variance reporting and updates of forecast outturns;
• clearly defined and formalised requirements for approval and control of expenditure, with investment
decisions involving capital or revenue expenditure being subject to formal detailed appraisal and review
according to approval levels set by the Board of Management;
• comprehensive Financial Regulations, detailing financial controls and procedures approved by the Audit
Committee and the Finance and General Purposes Committee;
• a professional internal audit service whose annual programme is established by the Audit Committee and
endorsed by the Board of Management and whose head provides the Board of Management with a report on
internal audit activity within the College and an opinion on the adequacy and effectiveness of the College’s
system of internal control, including internal financial control.
Any system of internal financial control can, however, only provide reasonable, but not absolute, assurance
against material misstatement or loss.
Approved by the Board of Management and signed on its behalf by:
Doug Duthie
Chair of the Board of Management
10 December 2012
16
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Independent auditor’s report to the members of the Board of Management of Aberdeen College, the
Auditor General for Scotland and the Scottish Parliament
I have audited the financial statements of Aberdeen College and its group for the year ended 31 July 2012
under the Further and Higher Education (Scotland) Act 1992 and section 44(1)(c) of the Charities and
Trustee Investment (Scotland) Act 2005. The financial statements comprise the group Consolidated
Income and Expenditure Account, Consolidated Statement of Historical Cost Surpluses and Deficits,
Statement of Total Recognised Gains and Losses, the Balance Sheet, Consolidated Cash Flow Statement,
college-only Balance Sheet and related notes. The financial reporting framework that has been applied in
their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally
Accepted Accounting Practice).
This report is made solely to the parties to whom it is addressed in accordance with the Public Finance and
Accountability (Scotland) Act 2000 and for no other purpose. In accordance with paragraph 125 of the
Code of Audit Practice approved by the Auditor General for Scotland, I do not undertake to have
responsibilities to board members or officers, in their individual capacities, or to third parties.
Respective responsibilities of the Board of Management and auditor
As explained more fully in the Statement of Responsibilities of the Board of Management, the Board of
Management is responsible for the preparation of the financial statements and for being satisfied that they
give a true and fair view, and is also responsible for ensuring the regularity of expenditure and income. My
responsibility is to audit and express an opinion on the financial statements in accordance with applicable
law and International Standards on Auditing (UK and Ireland) as required by the Code of Audit Practice
approved by the Auditor General for Scotland. Those standards require me to comply with the Auditing
Practices Board’s Ethical Standards for Auditors. I am also responsible for giving an opinion on the
regularity of expenditure and income.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts, disclosures, and regularity of expenditure and
income in the financial statements sufficient to give reasonable assurance that the financial statements are
free from material misstatement, whether caused by fraud or error. This includes an assessment of:
whether the accounting policies are appropriate to the body’s circumstances and have been consistently
applied and adequately disclosed; the reasonableness of significant accounting estimates made by the
Board of Management; and the overall presentation of the financial statements. In addition, I read all the
financial and non-financial information in the annual report to identify material inconsistencies with the
audited financial statements. If I become aware of any apparent material misstatements or inconsistencies I
consider the implications for my report.
Opinion on financial statements
In my opinion the financial statements:
•
give a true and fair view in accordance with the Further and Higher Education (Scotland) Act 1992 and
directions made thereunder by the Scottish Funding Council of the state of the affairs of the group and
of Aberdeen College as at 31 July 2012 and of the surplus of the group and the college for the year
then ended;
•
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice; and
•
have been prepared in accordance with the requirements of the Further and Higher Education
(Scotland) Act 1992 and directions made thereunder by the Scottish Funding Council, the Charities and
Trustee Investment (Scotland) Act 2005, and regulation 14 of The Charities Accounts (Scotland)
Regulations 2006.
17
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Opinion on regularity
In my opinion in all material respects the expenditure and income in the financial statements were incurred
or applied in accordance with any applicable enactments and guidance issued by the Scottish Ministers.
Opinion on other prescribed matters
In my opinion the information given in the Operating and Financial Review for the financial year for which
the financial statements are prepared is consistent with the financial statements.
Matters on which I am required to report by exception
I am required to report to you if, in my opinion:
•
adequate accounting records have not been kept; or
•
the financial statements are not in agreement with the accounting records; or
•
I have not received all the information and explanations I require for my audit; or
•
the Statement of Corporate Governance and Internal Control does not comply with Scottish Funding
Council requirements.
I have nothing to report in respect of these matters.
Anne MacDonald CA
Senior Audit Manager
Audit Scotland
Business Hub 16, 3rd Floor West
Marischal College
Broad Street
ABERDEEN
AB10 1AB
10 December 2012
Anne MacDonald is eligible to act as an auditor in terms of Section 21 of the Public Finance and
Accountability (Scotland) Act 2000.
18
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Statement of Accounting Policies
Basis of Preparation
These financial statements have been prepared in accordance with the Statement of Recommended
Accounting Practice (SORP) 2007: ‘Accounting in Further and Higher Education’ and the 2013-14
Government Financial Reporting Model (FReM) issued by the Scottish Government and in accordance with
applicable Accounting Standards. They conform to the Accounts Direction and other guidance issued by
the Scottish Funding Council. (FReM 2.2.14)
Basis of Accounting
The financial statements are prepared under the historical cost convention modified by the revaluation of
certain fixed assets and investments.
The accounting policies contained in the FReM apply International Reporting Standards as adapted or
interpreted for the public sector context. Where the FReM permits a choice of accounting policy, the
accounting policy which is judged to be most appropriate to the College for the purposes of giving a true
and fair view has been selected. The particular policies adopted by the College in dealing with items that
are considered material to the financial statements are set out. (FReM 2.2.14)
Basis of Consolidation
The consolidated financial statements include the College and its subsidiary undertakings, Aberdeen Skills
and Enterprise Training Limited and Clinterty Estates Limited. Intra-group sales and profits are eliminated
fully on consolidation. In accordance with FRS 2, the activities of the Aberdeen College Students’
Association have not been consolidated because the College does not control those activities.
Recognition of Income
Income from tuition fees is recognised in the year in which it is receivable and includes all fees chargeable
to students or their sponsors.
Income from grants, contracts and other services rendered is included to the extent of completion of the
contract or service concerned. This is generally equivalent to the sum of the relevant expenditure incurred
during the year and any related contributions towards overhead costs.
Income from specific endowments and donations is included to the extent of the relevant expenditure
incurred during the year, together with any related contributions towards overhead costs.
Income from short term deposits is credited to the income and expenditure account in the period in which it
is earned.
Recurrent grant from the Scottish Funding Council is recognised in the period in which it is receivable.
Non-recurrent grants from the Scottish Funding Council or other bodies received in respect of the
acquisition or construction of fixed assets are treated as deferred capital grants and amortised in line with
depreciation over the life of the assets.
Maintenance of Premises
The cost of maintenance is charged to the income and expenditure account in the period in which it is
incurred.
Foreign Currency Translation
Transactions denominated in foreign currencies are recorded using the rate of exchange ruling at the dates
of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into
Sterling at the rates of exchange ruling at the end of the financial period with all resulting exchange
differences being taken to the income and expenditure account in the period in that they arise.
19
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Statement of Accounting Policies (continued)
Pension Schemes
Retirement benefits to employees of the College are provided by the Teachers’ Superannuation Scheme
(Scotland) (STSS) and the Local Government Pension Scheme (LGPS). These are defined benefit
schemes, which are externally funded and contracted out of the State Earnings Related Pension Scheme.
Under the definitions set out in Financial Reporting standard 17 (Retirement Benefits), both schemes are
multi-employer pension schemes. The scheme’s actuaries had previously stated that it had been possible
to identify each employer’s share of the underlying assets and liabilities on a consistent and reasonable
basis however; subsequent enquiry has revealed that whilst liabilities can be specifically allocated, the
share of assets has been attributed on a pro-rata basis. The College has therefore decided to take
advantage of the exemption afforded by FRS 17 and has accounted for its contributions to the scheme as if
it were a defined contribution scheme. The contributions are determined by qualified actuaries on the basis
of periodic valuations using the projected unit method, and for STSS were 12.5% (2010/11 – 12.5%), and
for the LGPS were 19.3% (2010/11 – 19.3%) of pensionable payroll.
Research and Development
Research and development expenditure is written off as incurred, with the exception of development
expenditure incurred on an individual project, which is carried forward when its future recoverability can
reasonably be regarded as assured. Any expenditure carried forward is amortised in line with the expected
future sales from the related project.
Tangible Fixed Assets
(a)
Land and buildings
Land and buildings are revalued every 5 years. Properties regarded by the College as operational have
been valued on the basis of open market value for existing use or, where there is no market evidence, have
been valued on the depreciated replacement cost basis. Land and buildings acquired since incorporation
are included in the balance sheet at cost. Land associated with the buildings and undeveloped land is not
depreciated. College buildings are depreciated over a period of 50 years.
Where land and buildings are acquired with the aid of specific grants they are capitalised and depreciated
as above. The related grants are credited to a deferred capital grant account and are released to the
income and expenditure account over the expected useful economic life of the related asset on a basis
consistent with the depreciation policy.
Finance costs that are directly attributable to the construction of land and buildings are not capitalised as
part of the costs of those assets.
A review for impairment of a fixed asset is carried out if events or changes in circumstances indicate that
the carrying amount of a fixed asset may not be recoverable.
Buildings under construction are accounted for at cost, based on the value of architect’s certificates and
other direct costs incurred to 31 July. They are not depreciated until they are brought into use.
(b)
Equipment
Equipment costing less than £10,000 is written off to the income and expenditure account in the period of
acquisition. All other equipment is capitalised at cost. Equipment inherited from the local authority is
included in the balance sheet at cost.
Equipment is depreciated on a straight-line basis over its remaining useful economic life to the College as
follows:
Category
Useful Life
Motor vehicles and general equipment
5 years
Computer equipment
3 years
Where equipment is acquired, with the aid of specific grants, it is capitalised and depreciated in accordance
with the above policy, with the related grant being credited to a deferred capital grant account and released
to the income and expenditure account over the expected useful economic life of the related equipment.
Equipment is carried at depreciated historical cost, which is used as a proxy for fair value. Depreciated
historical cost is deemed to be more appropriate than revaluing for equipment as it is common for such
assets to reduce in value, rather than increase, as they are utilised by the College. FReM 6.2.7h)
20
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Statement of Accounting Policies (continued)
Revaluation Reserve
Surpluses arising on the revaluation of the College’s properties are transferred to the revaluation reserve.
Additional depreciation on the revalued amount of these assets is transferred from revaluation reserve to
Income and Expenditure Account together with any surplus or deficit on disposal.
Leased Assets
Costs in respect of operating leases are charged on a straight-line basis over the lease term.
Leasing agreements that transfer to the College substantially all the benefits and risks of ownership of an
asset are treated as if the asset had been purchased outright. The assets are included in fixed assets and
the capital elements of the leasing commitments are shown as obligations under finance leases. The lease
rentals are treated as consisting of capital and interest elements. The capital element is applied to reduce
the outstanding obligations and the interest element is charged to the income and expenditure account in
proportion to the reducing capital element outstanding. Assets held under finance leases are depreciated
over the shorter of the lease term or the useful economic lives of equivalent owned assets. Assets that are
held under hire purchase contracts that have the characteristics of finance leases are depreciated over their
useful lives.
Intangible Assets
Research and development expenditure is written off as incurred, with the exception of development
expenditure incurred on an individual project which is carried forward when its future recoverability can
reasonably be regarded as assured. Any expenditure carried forward is amortised in line with the expected
future sales from the related project. Amortisation commences in the year in which sales from the related
product commence. These assets have been fully depreciated since July 2010.
Investments
Fixed asset investments are carried at historical cost less any provision for a permanent impairment in their
value. Current asset investments are included in the balance sheet at the lower of their original cost and
net realisable value.
Government Social Fund Grants
Capital based Government European Social Fund grants are treated as deferred income in the balance
sheet and credited to operating profit over the estimated useful economic lives of the assets to which they
relate.
Stocks
Stocks consist of agricultural items, Ethos course materials, ECDL workbooks and tests and computer
equipment for Bursary students. The stock of computer equipment is expensed when the equipment is first
issued to students. Stocks are stated at the lower of their cost and net realisable value. Where necessary,
provision is made for obsolete, slow moving and defective stocks.
Taxation
As a registered charity the College benefits by being broadly exempt from corporation tax on income it
receives from tuition fees, interest and rents. Where appropriate, provision is made for taxation that may
arise from the commercial activities of the Board of Management.
The charge for taxation is based on net earnings derived from commercial activities for the year and takes
into account taxation deferred because of timing differences between the treatment of certain items for
taxation and accounting purposes. Provision is made for deferred tax only to the extent that it is probable
that an actual liability will crystalise.
The College is exempt from levying VAT on most of the services it provides. For this reason the College is
generally unable to recover input VAT it suffers on goods and services purchased.
Deferred Taxation
Deferred taxation is provided on timing differences, arising from the different treatment of items for
accounting and tax purposes that are expected to reverse in the future calculated at the average rates that
are expected to apply in the periods in which the timing differences are expected to reverse, based on tax
rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is
debited or credited to the income and expenditure account except when it relates to items charged or
credited directly to reserves, in which case the deferred tax is also dealt with in reserves.
21
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Statement of Accounting Policies (continued)
Provisions
Provisions are recognised when the College has a present legal or constructive obligation as a result of a
past event, it is probable that a transfer of economic benefit will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation. Where the effect of the time value of money
is significant, the estimated cash flows are discounted using the discount rate prescribed by the Scottish
Funding Council.
Agency Arrangements
The College acts as an agent in the collection and payment of certain Student Support Funds. These funds
are excluded from the College Income and Expenditure Account and movements have been disclosed in
the notes to the accounts. Where the College has more discretion in the manner in which specific funds
are disbursed, and those funds do not meet the definition of agency funds, the income and expenditure
relating to those funds are shown in the College Income and Expenditure Account.
Subsequent Expenditure on Fixed Assets
Where significant expenditure is incurred on tangible fixed assets it is charged to the income and
expenditure account in the period it is incurred, unless it meets one of the following criteria, in which case it
is capitalised and depreciated on the relevant basis:
- Where the subsequent expenditure provides an enhancement of the economic benefits of
the tangible fixed asset in excess of the previously assessed standard of performance;
- Where a component of the tangible fixed asset that has been treated separately for
depreciation purposes and depreciated over its individual useful economic life, is replaced
or restored; or
- Where the subsequent expenditure relates to a major inspection or overhaul of tangible
fixed asset that restores the economic benefits of the asset that have been consumed by
the entity and have already been reflected in depreciation.
22
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Consolidated Income and Expenditure Account
For the year ended 31 July 2012
Notes
INCOME
SFC grants
Tuition fees and education contracts
Other income
Investment income
Total expenditure
Year ended
31 July 2011
£000
27,433
10,367
915
325
30,215
8,787
980
212
39,040
40,194
5
5
7
7
7,8
17,803
1,129
16,640
2,136
18
19,806
1,674
16,215
1,688
20
7
37,726
39,403
1,314
791
60
-
1,374
791
2
3.1
3.2
4
Total income
EXPENDITURE
Staff costs
Exceptional restructuring costs
Other operating expenses
Depreciation
Interest payable
Year ended
31 July 2012
£000
Surplus on continuing operations after
depreciation of fixed assets at valuation
before tax
Gain on disposal of assets
Surplus on continuing operations after
depreciation of tangible fixed assets at
valuation and disposal of assets but before tax
Taxation
9
11
(9)
Surplus on continuing operations after
depreciation of assets at valuation, disposal
of assets and tax
10
1,385
782
The income and expenditure account is in respect of continuing activities.
In accordance with the Statement of Recommended Practice - Accounting for Further and Higher Education
Institutions, bursary and hardship funds have been excluded from the income and expenditure account.
23
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Consolidated Statement of Historical Cost Surpluses and Deficits
For the year ended 31 July 2012
Notes
Surplus on continuing operations before taxation
Year ended
31 July 2012
£000
Year ended
31 July 2011
£000
1,374
791
180
282
Historical cost surplus for the year before taxation
1,554
1,073
Historical cost surplus for the year after taxation
1,565
1,064
Difference between historical cost depreciation and
the actual charge for the year calculated on the
re-valued amount
23
24
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Statement of Total Recognised Gains and Losses
For the year ended 31 July 2012
Notes
Year ended
31 July 2012
£000
Year ended
31 July 2011
£000
Surplus on continuing operations after
depreciation of assets at valuation, disposal of
assets and taxation
23
1,385
782
Movement in prize funds
23
-
(16)
1,385
766
40,916
40,150
1,385
766
42,301
40,916
Total recognised gains relating to the financial year
Reserves reconciliation
Opening reserves
23
Total recognised gains for the year
Closing reserves
23
25
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Balance Sheets as at 31 July 2012
Notes
Group
31 July 2012
£000
Restated
Group
31 July 2011
£000
11
12
13
57,770
-
54,702
-
57,187
30
54,477
30
57,770
54,702
57,217
54,507
4
1,982
11,221
7,575
20,782
25
4,162
3,000
16,350
23,537
4
3,227
11,221
6,002
20,454
25
2,365
3,000
15,289
20,679
7,202
8,445
6,591
5,603
Net current assets
13,580
15,092
13,863
15,076
Total assets less current
liabilities
71,350
69,794
71,080
69,583
Fixed assets
Intangible assets
Tangible assets
Investments
Current assets
Stock
Debtors
Short Term Investments
Cash at bank and in hand
Creditors: amounts falling due
within one year
14
15
16
17
College
31 July 2012
£000
Restated
College
31 July 2011
£000
Creditors: amounts falling due
after more than one year
18
987
1,148
987
1,148
Deferred tax
19
15
6
-
-
Provisions for liabilities and
charges
21
6,556
6,381
6,556
6,381
63,792
62,259
63,537
62,054
NET ASSETS
Deferred capital grants
22
21,491
21,343
21,491
21,343
Reserves
Revaluation reserve
Restricted reserve
Income and expenditure account
23
23
23
19,780
6
22,515
19,960
6
20,950
19,780
6
22,260
19,960
6
20,745
Total reserves
23
42,301
40,916
40,046
40,711
63,792
62,259
63,537
62,054
TOTAL
The financial statements on pages 18 to 45 were approved and authorised for issue by the Board of Management
on 10 December 2012 and signed on its behalf by:
Doug Duthie
Chair of the Board of Management
Rob Wallen
Principal and Chief Executive
26
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
Consolidated Cash Flow Statement
For the year ended 31 July 2012
Notes
Year ended
31 July 2012
£000
Restated
Year ended
31 July 2011
£000
Net cash inflow from operating activities
24
3,215
3,098
Net cash inflow from Returns on investments and
servicing of finance
25
374
192
Net cash outflow from Capital expenditure
25
(3,982)
(3,721)
(393)
(431)
Net cash outflow before financing
Financing
25
(161)
(149)
Decrease in cash in the year
26
(554)
(580)
Decrease in cash in the year
26
(554)
(580)
Outflow from decrease in debt and lease financing
25
161
149
0
390
(393)
(41)
Reconciliation of net cash flow to movement in
net funds
New finance leases
Change in net funds in year
Net funds at beginning of year
26
18,047
18,088
Net funds at end of year
26
17,654
18,047
27
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
1.
PRIOR YEAR ADJUSTMENT
The College had been accounting for some operating leases as finance leases. The accounting treatment
for these leases was corrected and they were re-classified as operating leases during 2011/12. However,
we are required to re-state the comparative figures for 2010/11, in order that there is a like for like
comparison in the College’s accounts for these two years. The adjustment meant taking computers with a
net book value of £406k out of fixed assets, and reducing creditors (both less than one year, and more
than one year) by the same amount.
2.
SFC GRANTS
Year ended
31 July 2012
£000
SFC recurrent grant (including fee waiver)
FE childcare funds
Release of deferred capital grants
Other SFC grants
3.1
25,625
650
911
247
28,329
550
1,008
328
27,433
30,215
TUITION FEES AND EDUCATION CONTRACTS
Year ended
31 July 2012
£000
Year ended 31
July 2011
£000
FE Fees - UK & European Union
FE Fees - non European Union
HE Fees - UK & European Union
HE Fees - non European Union
Total fees paid by or on behalf of individual students
1,405
74
3,511
81
5,071
1,393
36
3,332
115
4,876
Education contracts:
Scottish Enterprise
Other tuition
468
4,828
544
3,367
5,296
3,911
10,367
8,787
Total
3.2
Year ended 31
July 2011
£000
OTHER INCOME
Year ended
31 July 2012
£000
European Union funds
Residences and catering
Farming activities
Release from deferred capital grants
Other grant income
Accommodation recharge
Other income
Year ended 31
July 2011
£000
14
97
33
13
451
307
19
68
32
20
11
382
448
915
980
28
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
4.
INVESTMENT INCOME
Year ended
31 July 2012
£000
Interest receivable
5.
Year ended 31
July 2011
£000
325
212
STAFF COSTS
Staff numbers
The average number of persons (including senior post-holders) employed by the College during the
period, expressed as full-time equivalents, was:
Year ended
Year ended
31 July 2012 31 July 2011
No.
No.
Teaching departments
Teaching support services
Administration and central services
Premises
Analysed as:
Staff on permanent contracts
Staff on temporary contracts
Staff costs for the above persons:
262
71
108
6
292
91
132
6
447
521
420
27
486
35
447
521
Year ended
31 July 2012
£000
Year ended
31 July 2011
£000
14,497
1,206
2,100
1,129
16,151
1,296
2,359
1,674
18,932
21,480
Teaching departments
Teaching support services
Administration and central services
Premises
11,180
2,676
3,841
106
11,573
3,863
4,275
95
Sub total
17,803
19,806
1,129
1,674
Total
18,932
21,480
Analysed as:
Staff on permanent contracts
Exceptional restructuring costs
17,803
1,129
19,806
1,674
18,932
21,480
Wages and salaries
Social security costs
Other pension costs
Exceptional restructuring costs
Exceptional restructuring costs
29
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
5.
STAFF COSTS (CONTINUED)
Year ended
31 July 2012
£000
Staff costs for the above persons:
Exceptional restructuring costs:
Provision for future pension costs
Restructuring costs
Year ended
31 July 2011
£000
484
645
592
1,082
1,129
1,674
Higher paid members of staff:
The number of staff, including the Principal, who received emoluments including benefits in kind and
excluding pension contributions in the following ranges was:
Year ended
Year ended
31 July 2012
31 July 2011
Number
Number
Senior post- Number other Senior postholders
staff
holders
£50,000 to £60,000
£60,001 to £70,000
£70,001 to £80,000
£80,001 to £90,000
£90,001 to £100,000
£100,001 to £110,000
£110,001 to £120,000
£120,001 to £130,000
£130,001 to £140,000
£140,001 to £150,000
6.
2
1
-
10
5
2
-
Number
other staff
2
1
-
9
5
3
-
BOARD MEMBERS AND SENIOR POST-HOLDER EMOLUMENTS
Year ended
31 July 2012
No.
The number of senior post-holders including the Principal was:
Year ended
31 July 2011
No.
3
3
The emoluments paid to Mr Robert Wallen, Principal and Chief Executive, (who is also the higher paid
senior post-holder) were £133,997 (2011: £132,755) in salary and £25,278 (2011: £25,192) in pension
contributions for the year to 31 July 2012.
The Principal is an ordinary member of the Local Government Pension Scheme. Other senior postholders are also members of that Scheme. The College's contributions to the Scheme in respect of
senior post-holders' are paid at the same rate as for other members of staff.
30
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
6.
BOARD MEMBERS AND SENIOR POST-HOLDER'S EMOLUMENTS (CONTINUED)
Board of Management
The total remuneration of the Board of Management including pension contributions, benefits in kind and bonuses
but excluding the salaries of employee Board members for normal staff duties amounted to:
Year ended
31 July 2012
£000
Fees for services as non-executive directors of subsidiary companies:
Fees paid
Expenses paid to Board members
7.
Year ended
31 July 2011
£000
32
3
35
5
35
40
ANALYSIS OF EXPENDITURE
Teaching activities
Farm
Premises
Administration
Other expenses
Agency costs
Staff costs
£000
Other
operating
expenses
£000
13,950
106
4,152
549
-
4,681
31
4,383
4,991
212
2,342
256
1,458
265
157
-
18
-
18,887
31
5,947
9,426
918
2,342
20,264
30
5,898
9,780
919
2,512
18,757
16,640
2,136
18
37,551
39,403
Depreciation
£000
Interest
payable
£000
Year ended
31 July 2012
£000
Year ended
31 July 2012
£000
Other operating expenses include:
Auditors' remuneration (including irrecoverable VAT)
- external audit services*
- internal audit services
- external audit other services
- internal audit other services
Rentals under operating leases - land and buildings
Rentals under operating leases – other
29
27
15
3
231
Year ended
31 July 2011
£000
Year ended
31 July 2011
£000
27
21
19
105
126
* includes £25,094 in respect of the College (2010/11 £23,141).
8.
INTEREST PAYABLE
Year ended
31 July 2012
£000
Year ended
31 July 2011
£000
On bank loans, overdrafts and other loans:
Repayable in more than 5 years, by instalments
18
20
On finance lease and hire purchase contracts
18
-
20
-
18
20
31
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
9.
TAXATION
Tax on profit on ordinary activities
Year ended
31 July 2012
£000
Current tax:
In respect of the year:
UK Corporation tax based on the results for the year
Prior year adjustment
Total current tax
Year ended
31 July 2011
£000
(20)
(20)
-
9
9
(11)
9
8
7
Effects of:
Capital allowances less than depreciation
Other timing differences
Expenses not deductible
Prior year adjustment
(9)
1
(20)
(9)
(1)
3
-
Current tax credit for the year
(20)
-
Deferred tax:
Increase in deferred tax liability
Tax (credit)/debit on profit on ordinary
activities
Factors affecting tax charge for the year
Profit on ordinary activities multiplied by the standard rate of
corporation tax in the UK 20% (2011 – 21%)
10.
SURPLUS ON CONTINUING OPERATIONS FOR THE YEAR
Year ended
31 July 2012
£000
Year ended
31 July 2011
£000
Surplus on continuing operations for the year is made up as follows:
College’s surplus for the year
Surplus generated by subsidiary undertakings after accounting for gift
aid £1,624,749 transferred the College (2011: £781,517) and taxation
credit of £11,227 (2011: charge £8,816)
1,335
755
50
27
1,385
782
32
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
11.
INTANGIBLE ASSETS
Group
Development
Expenditure
£000
College
Development
Expenditure
£000
Cost
At 1 August 2011
Disposals
At 31 July 2012
651
(517)
134
-
Amortisation
At 1 August 2011
Disposals
At 31 July 2012
651
(517)
134
-
Net book value
At 31 July 2012
-
-
At 31 July 2011
-
-
33
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
12.
TANGIBLE FIXED ASSETS
Assets in
Course of
Construction
Land and
Buildings
Freehold
Equipment
Restated
Computers
Total
£000
£000
£000
£000
£000
1,024
246
(1,270)
-
53,762
4,436
58,198
2,766
503
(4)
1,270
4,535
1,775
13
(10)
1,778
59,327
5,198
(14)
64,511
Depreciation
At 1 August 2011
Charge for year
Disposals
Transfer
At 31 July 2012
-
1,104
1,381
2,485
2,117
435
(4)
2,548
1,404
320
(16)
1,708
4,625
2,136
(20)
6,741
Net book value
At 31 July 2012
-
55,713
1,987
70
57,770
1,024
52,658
649
371
54,702
FReM 6.2.7g
Inherited
Financed by capital grant
Other
246
886
3,550
62
441
13
948
4,250
Total additions
246
4,436
503
13
5,198
Inherited
Financed by capital grant
Other
-
36,505
9,461
9,747
330
1,657
70
36,505
9,791
11,474
Net book value
-
55,713
1,987
70
57,770
1,024
246
(1,270)
-
53,756
4,436
58,192
1,565
2
(4)
1,270
2,833
1,663
2
(10)
1,655
58,008
4,686
(14)
62,680
Depreciation
At 1 August 2011
Charge for year
Disposals
Transfer
At 31 July 2012
-
1,098
1,381
2,479
1,057
306
(4)
1,359
1,376
295
(16)
1,655
3,531
1,982
(20)
5,493
Net book value
At 31 July 2012
-
55,713
1,474
-
57,187
1,024
52,658
508
287
54,477
Group
Cost or Valuation
At 1 August 2011
Additions
Disposals
Transfer
At 31 July 2012
At 31 July 2011
College
Cost or Valuation
At 1 August 2011
Additions
Disposals
Transfer
At 31 July 2012
At 31 July 2011
34
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
12.
TANGIBLE FIXED ASSETS (CONTINUED)
Assets in
Land and
Course of
Buildings
Construction
Freehold
FReM 6.2.7g
Inherited
Financed by capital grant
Other
£000
Equipment
Restated
Computers
Total
£000
£000
£000
£000
246
886
3,550
62
441
13
948
4,250
246
4,436
503
13
5,198
Inherited
Financed by capital grant
Other
-
36,505
9,461
9,747
330
1,144
-
36,505
9,791
10,891
Net book value
-
55,713
1,474
-
57,187
Total additions
Inherited land and buildings were independently valued for the purposes of the financial statements
by external consultants FG Burnett, Chartered Surveyors & Property Consultants. The basis of
valuation used was open market value at 31 July 2010 for existing use or depreciated replacement
cost depending on the type of asset being valued. Directly attributable acquisition costs have been
included and expected selling costs deducted.
Land and buildings with a net book value of £36,505,039 at 31 July 2012 (2011: £37,161,239) were
inherited from the local authority upon incorporation on 1 April 1993. These assets may not be
disposed of without the prior approval of the SFC. The College is obliged to use the sales proceeds
in accordance with the instructions of the SFC.
If land and buildings had not been revalued they would have been included at the following amounts:
31 July 2012
31 July
2011
£000
£000
Cost
Aggregate depreciation based on cost
43,085
7,535
38,649
6,673
Net book value based on cost
35,550
31,976
Included within land and buildings are non-depreciable assets of £3,932,439 (2011: £3,932,439).
The depreciation charge for the period is analysed as follows:
Year ended
31 July 2012
£000
Depreciation based on cost
Depreciation based on valuation
Owned assets
Year
ended
31 July
2011
£000
1,480
656
915
773
2,136
1,688
2,136
1,688
35
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
13.
INVESTMENTS
College
31 July 2012
£000
College
31 July 2011
£000
30
Investment in subsidiary undertakings
30
The College had transactions with a number of agricultural co-operatives. These organisations award
shares based on the level of trading activity undertaken. The value of these shares is not considered
material and is included in the accounts at nil value.
The Board of Management owns 100 per cent of the issued ordinary £1 shares of Aberdeen Skills and
Enterprise Training Limited, a company incorporated in Great Britain and registered in Scotland. The
principal business activity of Aberdeen Skills and Enterprise Training Limited is the provision of quality
education and training.
The Board of Management owns 100 per cent of the issued ordinary £1 shares of Clinterty Estates
Limited, a company incorporated in Great Britain and registered in Scotland. The principal business
activity of Clinterty Estates Limited is the management of the College's teaching farms. The company
ceased to trade on 30 April 1998. The company's Directors decided upon this course of action in the
light of adverse trading conditions facing the agricultural sector.
14.
STOCK
Group &
College
31 July 2012
£000
Farm crops
ECDL logbooks and tests
15.
Group &
College
31 July 2011
£000
4
10
15
4
25
DEBTORS
Group
31 July 2012
£000
Amounts falling due within one year:
Trade debtors
Prepayments and accrued income
Amounts owed by subsidiary
undertakings
Other taxation and social security
Group
31 July 2011
£000
College
31 July 2012
£000
College
31 July 2011
£000
593
1,087
3,038
886
173
1,065
391
824
302
238
1,687
302
912
238
1,982
4,162
3,227
2,365
36
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
16.
CASH AT BANK AND IN HAND
Group
31 July 2012
£000
Cash at bank and in hand
7,575
Group
31 July 2011
£000
16,350
College
31 July 2012
£000
6,002
College
31 July 2011
£000
15,289
The College receives certain Funding Council grants on an agency basis. The funds are available solely
for students and the College acts only as paying agent. The funds held in trust are reflected on the
balance sheet, as both cash at bank and as a current liability. The following agency funds are included
in cash at bank and in hand at the year end:
Cash at bank and in hand
35
35
12
12
FReM 5.4.58
17.
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Group
Revised
Group
31 July 2012 31 July 2011
£000
£000
Loans (secured) (Note 19)
Trade creditors
Other taxation and social security
Accruals and deferred income
18.
31 July 2012
£000
Revised
College
31 July 2011
£000
155
580
597
5,870
155
841
459
6,990
155
404
489
5,543
155
822
378
4,248
7,202
8,445
6,591
5,603
CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
Group
Revised
College
Group
31 July 2012 31 July 2011 31 July 2012
£000
£000
£000
Loans (secured) (Note 20)
19.
College
Revised
College
31 July 2011
£000
987
1,148
987
1,148
987
1,148
987
1,148
DEFERRED TAX
The deferred tax liability recognised in the financial statements is as follows:
Group
Group
College
31 July 2012 31 July 2011 31 July 2012
£000
£000
£000
Balance brought forward
Income and expenditure movement
arising during the year
5
(4)
9
14
9
5
College
31 July 2011
£000
-
-
-
-
-
-
The deferred tax liability consists of the tax effect of timing differences in respect of:
Taxation allowances in arrears of
depreciation of fixed assets
Other short term timing differences
15
6
(1)
14
(1)
5
-
-
37
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
20.
BORROWINGS
Loans
Group
31 July 2012
£000
Loans are repayable as follows:
In one year or less
Between one and two years
Between two and five years
Five years or more
Group
31 July 2011
£000
College
31 July 2012
£000
College
31 July 2011
£000
155
154
308
525
155
144
424
580
155
154
308
525
155
144
424
580
1,142
1,303
1,142
1,303
Loans comprise an original bank loan of £2,496,831 at 0.95% over Bank of England base rate, repayable
monthly over 19 years commencing August 2000. The Board of Management with the approval of the
former Scottish Office, has granted the Bank of Scotland a standard security over the Gordon Barracks and
Balgownie Centre, for the amount of the bank loan.
The bank facility for Aset is secured by a floating charge over the assets of that company. They are not
secured over the assets of the College.
21.
PROVISIONS FOR LIABILITIES AND CHARGES
Group
2012
Pension
costs
arising from
early
retirement
£000
At 1 August 2011
Additional/(reduced) provision
required in year
At 31 July 2012
2011
Other
£000
Total
£000
Pension
costs
arising
from early
retirement
£000
5,249
1,132
6,381
4,956
1,341
6,297
186
5,435
(11)
1,121
175
6,556
293
5,249
(209)
1,132
84
6,381
Other
£000
38
Total
£000
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
21.
PROVISIONS FOR LIABILITIES AND CHARGES (CONTINUED)
College
2012
Pension
costs
arising from
early
retirement
£000
At 1 August 2011
Additional/(reduced) provision
required in year
At 31 July 2012
2011
Other
£000
Total
£000
Pension
costs
arising
from early
retirement
£000
5,249
1,132
6,381
4,956
1,192
6,148
186
5,435
(11)
1,121
175
6,556
293
5,249
(60)
1,132
233
6,381
Other
£000
Total
£000
Mercer’s, an independent firm of actuaries at 31 July 2012, carried out a valuation of the existing pension
provision.
Other provisions relate to FRS 17 Local Government pension provision.
22.
DEFERRED CAPITAL GRANTS
Land and
Buildings
£000
Altens
New Build
£000
SFC
At 1 August 2011
Cash received
Released to income and expenditure
8,881
1,049
(305)
11,778
(240)
677
62
(418)
21,336
1,111
(963)
At 31 July 2012
9,625
11,538
321
21,484
7
7
-
-
7
7
Total
At 31 July 2012
9,632
11,538
321
21,491
At 31 July 2011
8,888
11,778
677
21,343
Group and College
Scottish University for Industry
At 1 August 2011
Released to income and expenditure
At 31 July 2012
Equipment
£000
39
Total
£000
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
23.
RESERVES
Revaluation
Reserve
£000
Restricted
Reserve
£000
Income and Expenditure Account
Income and
Capital
Expenditure
Development Unrestricted
Account
Reserve
(Sub-total)
Reserve
£000
£000
£000
Total
£000
Group
At 1 August 2011
Surplus on continuing operations after
depreciation of assets at valuation and
after taxation
Transfer from revaluation reserve to
income and expenditure account in
respect of depreciation
19,960
6
10,500
10,450
20,950
40,916
-
-
-
1,385
1,385
1,385
(180)
-
-
180
180
-
At 31 July 2012
19,780
6
10,500
12,015
22,515
42,301
19,960
6
10,500
10,245
20,745
40,711
-
-
-
1,335
1,335
1,335
(180)
-
-
180
180
-
19,780
6
10,500
11,760
22,260
42,046
College
At 1 August 2011
Surplus on continuing operations after
depreciation of assets at valuation and
after taxation
Transfer from revaluation reserve to
income and expenditure account in
respect of depreciation
At 31 July 2012
Income and Expenditure Account – The Capital Development Reserve will be used to fund the College’s estates
development in 2012-13 and 2013-14. The unrestricted reserve represents approximately 3 months’ running
costs.
Restricted Reserves – This sum represents the amount the College holds in various small prize funds.
24.
RECONCILIATION OF OPERATING SURPLUS TO NET CASH
INFLOW FROM OPERATING ACTIVITIES
Year ended
31 July 2012
£000
Surplus on continuing operations after depreciation
of assets at valuation and before tax
Depreciation and amortisation
Gain on disposal of assets
Deferred capital grants released to income
Interest payable
Interest receivable
Decrease/(increase) in stocks
Decrease in debtors
(Decrease)/increase in creditors
Increase in provisions
Net cash inflow from operating activities
Revised
Year ended
31 July 2011
£000
1,374
2,136
(60)
(963)
18
(325)
21
2,113
(1,274)
175
791
1,688
(1,127)
20
(212)
(9)
1,560
303
84
3,215
3,098
40
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
25.
ANALYSIS OF GROSS CASH FLOWS FOR HEADINGS NETTED
IN CASH FLOW STATEMENT
Year ended
31 July 2012
£000
Returns on investment and servicing of finance
Interest received
Interest paid
Year ended
31 July 2011
£000
392
(18)
212
(20)
374
192
Capital expenditure and financial investment
Payments to acquire tangible fixed assets
Receipts from SFC re capital grants
Receipts from disposal of assets
(5,153)
1,111
60
(7,136)
3,415
-
Net cash outflow from capital expenditure
(3,982)
(3,721)
Financing
Movement in debt due within a year
Movement in debt due beyond a year
(161)
7
(156)
Net outflow from financing
(161)
(149)
Net cash inflow from returns on investments and servicing of finance
26.
CHANGES IN NET FUNDS
At 31 July
2011
Cash flows
Other noncash changes
At 31 July
2012
£000
£000
£000
£000
19,350
(554)
-
18,796
19,350
(554)
-
18,796
Debt due within one year
Debt due after one year
(155)
(1,148)
161
-
Total
18,047
(393)
Cash in hand and at bank
(161)
161
0
(155)
(987)
17,654
41
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
27.
CAPITAL COMMITMENTS
Group
31 July
2012
£000
Commitments authorised but not contracted for at
year end
Commitments contracted for at year end
28.
Group
31 July
2011
£000
College
31 July
2012
£000
College
31 July
2011
£000
6,975
1,170
8,552
1,579
6,975
1,155
8,097
1,579
8,145
10,131
8,130
9,676
FINANCIAL COMMITMENTS
At the year end the Group and the College had annual commitments under non-cancellable operating
leases as follows:
Land and
buildings
£000
Group
Expiring within:
One year
One and two years inclusive
Two and five years inclusive
College
Expiring within:
One year
One and two years inclusive
Two and five years inclusive
Other
£000
Total
£000
-
17
56
65
17
56
65
-
138
138
-
11
51
57
11
51
57
-
119
119
42
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
29.
STUDENT SUPPORT FUNDS
Bursaries and other student support funds
Bursary
£000
At 1 August 2011
Opening balance adjustments
Allocation received in year
Interest earned
Expenditure
Other
£000
81
-
93
420
93
246
81
-
93
420
(65)
28
5,050
583
313
253
6,199
5,805
-
-
-
-
-
-
(4,744)
-
Repaid to funding council as
clawback
-
Represented by:
Repayable to funding council as
clawback
Retained by college for students
EMA *
£000
Year
ended 31
July 2011
£000
246
Virements
At 31 July 2012
Hardship
£000
Year
ended 31
July 2012
£000
(499)
-
(313)
-
(76)
(5,632)
-
(5,700)
-
287
(64)
-
(147)
(211)
552
101
-
123
776
420
552
552
101
101
-
123
123
776
776
157
263
420
-
* EMA is the abbreviation for Education Maintenance Allowances
Funding Council grants are available solely for students, the College acting only as paying agent. The grants
and related disbursements are therefore excluded from the Income and Expenditure Account
Childcare Fund
Year ended
31 July 2012
£000
At 1 August 2011
Opening balance adjustments
Allocation received in year
Virements
Expenditure
At 31 July 2012
Represented by:
Amount to be repaid
Retained by college for students
650
(247)
Year ended
31 July 2011
£000
109
(109)
549
(287)
(262)
403
-
403
403
-
Childcare Fund transactions are included within the College Income and Expenditure Account in accordance
with the Accounts Direction issued by the Scottish Funding Council.
43
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
30.
PENSION AND SIMILAR OBLIGATIONS
Scottish Teacher’s Superannuation Scheme (STSS)
The College participates in the Scottish Teacher’s Superannuation Scheme, a defined benefit
scheme, which is externally funded and contracted out of State Earnings-Related Pension Scheme.
The assets of the scheme are in a separate trustee-administered fund. It is not possible to identify
each institution’s share of the underlying assets and liabilities of the scheme and hence contributions
to the scheme are accounted for as if it were a defined contribution scheme. The cost recognised
within the surplus for the year in the income and expenditure account being equal to the contributions
payable to the scheme for the year.
The total STSS pension cost for the College was £994,635 (2010/2011: £1,065,919). This includes
£124,517 (2010/2011: £123,435) outstanding contributions at the balance sheet date. The
contributions rate payable by the college was 12.5% from 1 October 2003.
North East Scotland Pension Fund (NESPF)
Aberdeen College participates in the Local Government Pension Scheme (LGPS). The LGPS is a
defined benefit scheme based on final pensionable salary.
As a result of the fund valuation at 31 March 2011, the contribution rates certified for Aberdeen
College at the 31 March 2011 valuation are as follows:
April 2010 to March 2011
April 2011 to March 2012
April 2012 to March 2013
April 2013 to March 2014
April 2014 to March 2015
19.2% of pensionable payroll (for comparative purposes)
19.3% of pensionable payroll
19.3% of pensionable payroll
19.3% of pensionable payroll
19.3% of pensionable payroll
The valuation revealed a shortfall of assets compared with the value of liabilities of approximately
£372million (equivalent to a past service funding level of 83%).
The pension cost is assessed every three years in accordance with the advice of a qualified
independent actuary. Liabilities are valued on an actuarial basis using the projected unit method,
which assesses the future liabilities discounted to their present value.
The total LGPS cost for the College was £1,053,872 (2010/2011: £1,244,272). This includes
£130,352 (2010/2011: £137,945) outstanding contributions at the balance sheet date. The
contribution rate payable by the College was 19.2% from 1 April 2009 to 31 March 2011 of
pensionable salaries, 19.3% from 1 April 2011 to 31 March 2012 of pensionable salaries and 22.6%
from 1 April 2012 to 31 March 2013 of pensionable salaries.
Group Personal Pension Plan
In addition the subsidiary company of Aberdeen College operates a group personal pension scheme
for employees providing benefits based on defined levels of contribution.
44
ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
31.
TRANSACTIONS WITH MEMBERS OF THE BOARD OF MANAGEMENT
Due to the nature of the College's operations and the composition of its Board of Management (being
drawn from local public and private sector organisations), it is inevitable that transactions will take place
with organisations in which a member of the College's Board of Management may have an interest. All
transactions involving organisations in which a member of the Board of Management may have a material
interest are conducted at arm's length and in accordance with normal project and procurement
procedures.
There were no transactions during the year with non-public bodies in which a member of the Board of
Management of the College has an interest and which in aggregate exceeded £5,000.
The College had transactions during the year or worked in partnership with the following publicly funded or
representative bodies in which members of the Board of Management hold or held official positions. The
only body that the College had transactions with that were over £5,000 was Aberdeen Foyer, where
Mr. K. Milroy, former chair of the Board of Management, is chief executive. The College made payments
of £223,000 (2010/11 - £134,000) and received income of £6,000 (2010/11 - £6,000) during the year.
Member
Organisation
Position
Mr. D. Duthie
Aberdeen Safer Community
Trust Ltd
The Robert Gordon University
North East Articulation Hub
Aberdeen Foyer
Transition Extreme Sports
Centre Limited
Grampian Fire and Rescue
Service
Director and Treasurer
Prof. J Harper
Mr. K Milroy
Mr. P Murray
Depute Principal
SFC Designated Co-ordinator
Chief Executive
Non-executive Director
Assistant Chief Fire Officer
In addition the undernoted individuals were Members of the Board of Management during the year and
had no significant transactions with the College: Ms. L Baird, Mr D Cobban, Mr. B Dunn, Mr. I Gossip,
Ms K. Hilton, Dr. I Heywood, Prof. M Melvin, Ms. D Michie, Mr. A Smith, Mrs. K Stewart and Principal R
Wallen.
32.
RELATED PARTY TRANSACTIONS
The Board of Management of Aberdeen College is a body incorporated under the Further and Higher
Education (Scotland) Act 1992 sponsored by the Scottish Further and Higher Education Funding Council
(SFC).
SFC is regarded as a related party. During the year Aberdeen College had various material transactions
with SFC and with other entities for which SFC is regarded as the sponsor department including Students
Awards Agency for Scotland, Skills Development Scotland and a number of other colleges and higher
education institutions.
In addition Aberdeen College and its subsidiary companies had a small number of transactions with other
Government Departments and other central government bodies.
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ABERDEENCOLLEGE
Financial Statements for the Year Ended 31 July 2012
33.
POST BALANCE SHEET EVENTS
The Board of Management and the Board of Management of Banff and Buchan College met in
October 2012. The Boards decided to progress an options appraisal to consider the possible models
for the development of further education in the Aberdeen City and Aberdeenshire region. It is
intended that the outcomes of the appraisal will be available in December 2012 for consideration by
the Boards. The outcomes will be implemented by a Partnership Board comprising the Regional
Lead (appointed by the Scottish Government), who will act as Chair, and equal numbers of Board
Members from each College.
In September 2012, the College opened a new training facility at its Gallowgate Centre, Aberdeen.
The project is an important step in the progression of the Board’s estates development strategy. The
refurbished area provides facilities to allow the co-location of education and training in the Creative
Industries and Hairdressing and Beauty Therapy.
The College is seeking permission from the Scottish Further and Higher Education Funding Council to
sell the former Balgownie Centre and retain the proceeds to fund the planned refurbishment of the
Gallowgate Centre.
The College, in common with other Scottish further education colleges experienced high levels of
demand for its services at the beginning of academic year 2012-13. The College has acted to
address the resource implications of that situation and to achieve the planned operational outcomes
for the year 2012-13.
34.
CONTINGENT LIABILITIES
There are no contingent liabilities at 31 July 2012.
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