By Vivienne Russell | 27 June 2012
The Skills Funding Agency has had its accounts qualified for failing to include further education colleges’ financial statements.
Following the 2011 Education Act, governance arrangements for colleges changed, removing them from the purview of the Skills Funding Agency. In light of this, the agency took the view that it would not be cost-effective to consolidate the colleges’ accounts.
But the National Audit Office says this breached International Financial Reporting Standards. IAS 27 requires parent bodies to consolidate the results of bodies they control into their accounts. In the case of the Skills Funding Agency this included FE colleges for most of 2011/12.
The NAO said yesterday the agency had been premature in excluding them from its own accounts for the whole of the 2011/12 year. It should have waited until the legislation received Royal Assent in November 2011 before removing them. Last year comptroller and auditor general Amyas Morse was unable to give an audit view of the agency’s accounts for the same reason.
Apart from this, the NAO found no other matters that would have caused the comptroller and auditor general to qualify his opinion on the accounts.
The Skills Funding Agency funds and regulates adult further education and skills training. In 2011/12 it provided funding of £4.6bn to FE colleges and other training providers in England. It said: ‘The agency did not include further education colleges’ results in its financial statements as it would not have been cost -effective to do so and would have led to costs being incurred by the agency and the FE sector.
‘In the current financial climate, this would not have been acceptable, especially as the powers over colleges were in the process of being changed during 2011/12, changes which were confirmed by Royal Assent of the Education Act in November 2011.’
The Skills Funding Agency has had its accounts qualified for failing to include further education colleges’ financial statements.
Following the 2011 Education Act, governance arrangements for colleges changed, removing them from the purview of the Skills Funding Agency. In light of this, the agency took the view that it would not be cost-effective to consolidate the colleges’ accounts.
But the National Audit Office says this breached International Financial Reporting Standards. IAS 27 requires parent bodies to consolidate the results of bodies they control into their accounts. In the case of the Skills Funding Agency this included FE colleges for most of 2011/12.
The NAO said yesterday the agency had been premature in excluding them from its own accounts for the whole of the 2011/12 year. It should have waited until the legislation received Royal Assent in November 2011 before removing them. Last year comptroller and auditor general Amyas Morse was unable to give an audit view of the agency’s accounts for the same reason.
Apart from this, the NAO found no other matters that would have caused the comptroller and auditor general to qualify his opinion on the accounts.
The Skills Funding Agency funds and regulates adult further education and skills training. In 2011/12 it provided funding of £4.6bn to FE colleges and other training providers in England. It said: ‘The agency did not include further education colleges’ results in its financial statements as it would not have been cost -effective to do so and would have led to costs being incurred by the agency and the FE sector.
‘In the current financial climate, this would not have been acceptable, especially as the powers over colleges were in the process of being changed during 2011/12, changes which were confirmed by Royal Assent of the Education Act in November 2011.’
