3 Annual Audit Report 2023-24 Coats Observatory Trust
Renfrewshire Council · 24 October 2024
Back to Council — 24 October 2024 and its agenda
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1 ___________________________________________________________________ To: Council On: 24 October 2024 ___________________________________________________________________ Report by: Director of Finance and Resources ___________________________________________________________________ Heading: Azets Report to those charged with governance - Coats Observatory Trust Annual Accounts 2023/24 ___________________________________________________________________ 1. Summary 1.1 Each year the Council’s appointed external auditors carry out an audit of the financial statements of the Coats Observatory Trust, controlled by Renfrewshire Council, and provide an opinion as to whether those statements provide a true and fair view of the financial position of the charity and its income and expenditure for the year; and also whether they have been prepared in accordance with the relevant regulations. 1.2 In accordance with International Auditing Standards (ISA260), the external auditor, Azets, is obliged to report to those charged with the governance of the organisation matters which have arisen in the course of the audit. 1.3 The attached ISA260 report from Azets outlines their findings from the audit of the 2023/24 Coats Observatory Trust accounts. 1.4 Under the Local Authority Accounts (Scotland) Regulations 2014, the Council must meet to consider the Annual Accounts and aim to approve those accounts for signature no later than 30 September. 1.5 Azets officers will attend the meeting to present their reports. ________________________________________________________________ 2. Recommendations 2.1 Members are requested to consider the attached report from Azets. ___________________________________________________________________
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2 Implications of the Report 1. Financial The 2023/24 Annual Accounts demonstrate that the Council continues to administer the trust in line with the relevant legislation. 2. HR & Organisational Development There are no direct implications arising from the recommendations in this report. 3. Community/Council Planning There are no direct implications arising from the recommendations in this report. 4. Legal An audit opinion free from qualification demonstrates the Council’s compliance with the statutory accounting requirements set out in the Local Government (Scotland) Act 1973 and the Local Government in Scotland Act 2003. 5. Property/Assets The Coats Observatory is currently undergoing refurbishment work as part of the Paisley Museum Reimagined project, however there are no direct property implications arising from the recommendations in this report. 6. Information Technology There are no direct implications arising from the recommendations in this report. 7. Equality & Human Rights There are no direct implications arising from the recommendations in this report. 8. Health & Safety There are no direct implications arising from the recommendations in this report. 9. Procurement There are no direct implications arising from the recommendations in this report. 10. Risk There are no direct implications arising from the recommendations in this report.
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3 11. Privacy Impact There are no direct implications arising from the recommendations in this report. 12. Cosla Policy Position There are no direct implications arising from the recommendations in this report. 13. Children’s Rights There are no direct implications arising from the recommendations in this report. 14. Climate Change There are no direct implications arising from the recommendations in this report. ___________________________________________________________________ Author: Christine McCourt, Head of Finance and Procurement
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Coats Observatory Trust Fund 2023/24 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission September 2024
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Coats Observatory Trust Fund: 2023/24 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission 2 Table of Contents Key messages 3 Introduction 4 Annual accounts audit 6 Appendices 16
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Coats Observatory Trust Fund: 2023/24 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission 3 Key messages Financial statements audit Audit opinion The annual accounts are due to be considered by the Audit, Risk and Scrutiny Board on 22 October 2024 and approved upon completion of the audit. We anticipate our independent auditor’s report to be unqualified. Key audit findings The Trust had appropriate administrative processes in place to prepare the annual accounts and the supporting working papers. We have obtained adequate evidence in relation to the key audit risks identified in our audit plan. The accounting policies used to prepare the financial statements are considered appropriate. We are satisfied with the appropriateness of the accounting estimates and judgements used in the preparation of the financial statements. All material disclosures required by relevant legislation and applicable accounting standards have been made appropriately. This is subject to the completion of the final audit senior management review. Audit adjustments The financial statements have been updated for all the potential audit adjustments identified during the audit process. We also identified some disclosure and presentational adjustments during our audit. As part of our completion procedures, we will confirm these have been reflected in the final set of financial statements. Accounting systems and internal controls We have applied a risk-based methodology to the audit. This approach requires us to document, evaluate and assess The Trust’s processes and internal controls relating to the financial reporting process. Our audit is not designed to test all internal controls or identify all areas of control weakness. However, where, as part of our testing, we identify any control weaknesses, we include these in this report. We consider the control environment within The Trust to be satisfactory.
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Coats Observatory Trust Fund: 2023/24 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission 4 Introduction The annual audit comprises the audit of the financial statements. We outlined the scope of our audit in our External Audit Plan for Renfrewshire Council (“the Council”), which we presented to the Board at the outset of our audit. We have not made any subsequent changes to the risks outlined in that plan. Responsibilities The Charities Accounts (Scotland) Regulations 2006 outline the accounting and auditing requirements for charitable bodies. The Regulations require an auditor to prepare a report to the charity trustees where an audit is required by any other enactment. The Trust is Renfrewshire Council’s charitable trust and is covered by the requirements of section 106 of the Local Government (Scotland) Act 1973 and consequently require a full audit. Each registered charitable trust has required a full audit since 2013/14. Coats Observatory Trust Fund is a registered charity preparing its accounts on an accruals basis. The Trustees are responsible for preparing its annual accounts, including financial statements which properly present the receipts and payments, and for implementing appropriate internal control systems. The weaknesses or risks identified in this report are only those that have come to our attention during our normal audit work and may not be all that exist. Communication in this report of matters arising from the audit or of risks or weaknesses does not absolve management from its responsibility to address the issues raised and to maintain an adequate system of control. We do not accept any responsibility for any loss occasioned to any third party acting, or refraining from acting on, the basis of the content of this report, as this report was not prepared for, nor intended for, any other purpose. We would like to thank all management and staff for their co-operation and assistance during our audit. Auditor independence International Standards on Auditing in the UK (ISAs (UK)) require us to communicate on a timely basis all facts and matters that may have a bearing on our independence. We confirm that we complied with the Financial Reporting Council’s (FRC) Ethical Standard. In our professional judgement, we remained independent, and our objectivity has not been compromised in any way.
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Coats Observatory Trust Fund: 2023/24 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission 5 We set out in Appendix 1 our assessment and confirmation of independence. Adding value All of our clients quite rightly demand of us a positive contribution to meeting their ever-changing business needs. We add value by being constructive and forward looking, by identifying areas of improvement and by recommending and encouraging good practice. In this way we aim to promote improved standards of governance, better management and decision making and more effective use of public money. Any comments you may have on the service we provide would be greatly appreciated. Comments can be reported directly to any member of your audit team. Openness and transparency This report will be published on Audit Scotland’s website www.audit-scotland.gov.uk.
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Coats Observatory Trust Fund: 2023/24 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission 6 Annual accounts audit Our audit opinion Opinion Basis for opinion Conclusions Financial statements We conduct our audit in accordance with applicable law and International Standards on Auditing. Our findings / conclusions to inform our opinion are set out in this section of our annual report. We expect to issue an unqualified audit opinion on the annual accounts. We identified material adjustment during our audit of the financial statements, as set out in Appendix 2. Management agreed to amend the draft financial statements for this change and related presentational points we identified. We received the draft annual accounts and supporting papers in line with our audit timetable and those draft accounts were of good quality. Further information and revisions were provided promptly where required. Our thanks go to the Finance team for their assistance with our work. Opinions prescribed by the by the Accounts Commission on the Trustees’ Annual Report We plan and perform audit procedures to gain assurance that the information given in the Trustees' Annual Report is consistent with the financial statements and that report has been prepared in accordance with The Charity Accounts (Scotland) Regulations 2006. We have no matters to report.
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Coats Observatory Trust Fund: 2023/24 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission 7 Opinion Basis for opinion Conclusions Matters reported by exception We are required by The Charity Accounts (Scotland) Regulations 2006 to report to you if, in our opinion: • adequate accounting records have not been kept; or • the financial statements are not in agreement with the accounting records; or • we have not received all the information and explanations we require for our audit. We have no matters to report. An overview of the scope of our audit The scope of our audit was detailed in our External Audit Plan for the Renfrewshire Council, which was presented to the Audit, Risk and Scrutiny Board in March 2024. The plan explained that we follow a risk-based approach to audit planning that reflects our overall assessment of the relevant risks that apply to The Trust. This ensures that our audit focuses on the areas of highest risk (the significant risk areas). Planning is a continuous process, and our audit plan is subject to review during the course of the audit to take account of developments that arise. At the planning stage, we identified the significant risks that had the greatest effect on our audit. Audit procedures were then designed to mitigate these risks. In our audit, we test and examine information using sampling and other audit techniques, to the extent we consider necessary to provide a reasonable basis for us to draw conclusions. We obtain evidence through performing a review of the significant accounting systems, substantive procedures and detailed analytical procedures.
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Coats Observatory Trust Fund: 2023/24 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission 8 Significant risk areas and key audit matters Significant risks are defined by auditing standards as risks that, in the judgement of the auditor, require special audit consideration. In identifying risks, we consider the nature of the risk, the potential magnitude of misstatement, and its likelihood. Significant risks are those risks that have a higher risk of material misstatement. Audit procedures are designed to mitigate these risks. As required by the Code of Audit Practice and the planning guidance issued by Audit Scotland, we consider the significant risks for the audit that had the greatest effect on our audit strategy, the allocation of resources in the audit and directing the efforts of the audit team (the ‘Key Audit Matters’), as detailed in the tables below. Our audit procedures relating to these matters were designed in the context of our audit of the annual accounts as a whole, and not to express an opinion on individual accounts or disclosures. Our anticipated opinion on the annual accounts is not modified with respect to any of the risks described below.
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Coats Observatory Trust Fund: 2023/24 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission 9 Significant risks at the financial statement level These risks are considered to have a pervasive impact on the financial statements as a whole and potentially affect many assertions for classes of transaction, account balances and disclosures. Risk area Management override of controls Significant risk description Management of any entity is in a unique position to perpetrate fraud because of their ability to manipulate accounting records and prepare fraudulent financial statements by overriding controls that otherwise appear to be operating effectively. Although the level of risk will vary from entity to entity, this risk is nevertheless present in all entities. Due to the unpredictable way in which such override could occur, it is a risk of material misstatement due to fraud and thus a significant risk on all audits. This was considered to be a significant risk and Key Audit Matter for the audit. Inherent risk of material misstatement: Very High How the scope of our audit responded to the significant risk Key judgement There is the potential for management to use their judgement to influence the financial statements as well as the potential to override controls for specific transactions. Audit procedures • Documented our understanding of the journals posting process and evaluated the design effectiveness of management controls over journals. • Analysed the journals listing and determined criteria for selecting high risk and / or unusual journals. • Tested high risk and / or unusual journals posted during the year and after the unaudited financial statements stage back to supporting documentation for appropriateness, corroboration and ensured approval has been undertaken in line with the Board’s journals policy. • Gained an understanding of the accounting estimates and critical judgements made by management. We
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Coats Observatory Trust Fund: 2023/24 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission 10 Risk area Management override of controls challenged key assumptions and considered the reasonableness and indicators of management bias which could result in material misstatement due to fraud. • Evaluated the rationale for any changes in accounting policies, estimates or significant unusual transactions. Key observations We did not identify any indication of management override of controls in the year.
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Coats Observatory Trust Fund: 2023/24 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission 11 Significant risks at the assertion level for classes of transaction, account balances and disclosures Key risk area Valuation of the Trust land and buildings Significant risk description The valuation of Coats Observatory land and buildings is based on fair value, determined as the market value that would be paid for the asset in its current use. Valuation is provided by the Council Valuer and updated as a minimum every five years. The latest valuation of the office was 31 March 2022 and Coats Observatory building was 31 March 2021. Inherent risk of material misstatement: Assets (valuation): High How the scope of our audit responded to the significant risk Key judgements There is a significant degree of subjectivity in the measurement and valuation of land and buildings. This subjectivity and the material nature of the Trust’s asset base represents an increased risk of misstatement in the annual accounts. Audit procedures Procedures performed to mitigate risks of material misstatement in this area will include: • Evaluating the competence, capabilities and objectivity of the valuation expert. • Considering the basis on which the valuation is carried out and the challenge in the key assumptions applied. • Testing the information used by the valuer to ensure it is complete and consistent with our understanding. If there have been any specific changes to the assets in the year, we will ensure these have been communicated to the valuer Key observations The assets have been completely refurbished and became unusable since the construction has commenced. According to the Local Authority Capital Accounting Manual, the Trust might consider transferring the value previously held under operational property, plant and
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Coats Observatory Trust Fund: 2023/24 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission 12 Key risk area Valuation of the Trust land and buildings equipment to assets under construction. The Trust has decided to use this option. As the assets are classified as assets under construction, they will be measured at historical cost. Prior year and current year figures have been adjusted to show the latest valuation amount, including construction spend. We are satisfied that we have obtained reasonable assurance over the classification in the financial statements relating to the asset.
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Coats Observatory Trust Fund: 2023/24 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission 13 Materiality Materiality is an expression of the relative significance of a matter in the context of the financial statements as a whole. A matter is material if its omission or misstatement would reasonably influence the decisions of an addressee of the auditor’s report. The assessment of what is material is a matter of professional judgement and is affected by our assessment of the risk profile of PHS and the needs of users. We review our assessment of materiality throughout the audit. Whilst our audit procedures are designed to identify misstatements which are material to our audit opinion, we also report to PHS and management any uncorrected misstatements of lower value errors to the extent that our audit identifies these. Our initial assessment of materiality for the financial statements was £20,300. On receipt of the 2023/24 unaudited financial statements, we reassessed materiality and kept it at the same level as our initial assessment. We consider that our updated assessment has remained appropriate throughout our audit. £ Overall materiality for the financial statements 20,300 Performance materiality (75% of materiality) 15,200 Trivial threshold 1,000 Materiality Our assessment is made with reference to The Trust’s gross expenditure. We consider this to be the principal consideration for the users of the annual accounts when assessing financial performance of The Trust. Our assessment of materiality equates to approximately 3% of gross assets as disclosed in the 2023/24 unaudited annual accounts. We perform audit procedures on all transactions, or groups of transactions, and balances that exceed our materiality levels set. We perform a greater level of testing on the areas deemed to be at significant risk of material misstatement.
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Coats Observatory Trust Fund: 2023/24 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission 14 Performance materiality Performance materiality is the working level of materiality used throughout the audit. We use performance materiality to determine the nature, timing and extent of audit procedures carried out. Performance materiality is set at a value less than overall materiality for the financial statements as a whole to reduce to an appropriately low level the probability that the aggregate of the uncorrected and undetected misstatements exceeds overall materiality. Trivial misstatements Trivial misstatements are matters that are clearly inconsequential, whether taken individually or in aggregate and whether judged by any quantitative or qualitative criteria. Audit differences We identified a significant change to the draft financial statements during our audit, relating to the disclosure of capital spend on the Trust assets. This affected the prior year as well as 2023/24, and is set out in more detail in Appendix 2. Management agreed to amend the financial statements for this adjustment. The overall impact of the adjustments made on the financial statements of the Trust was: • £839,198 increase to reserve • £839,198 increase to net assets We also identified disclosure and presentational adjustments during our audit which have been reflected in the final set of financial statements and are disclosed in Appendix 2. Internal controls As part of our work, we considered internal controls relevant to the preparation of the financial statements such that we were able to design appropriate audit procedures. Our audit is not designed to test all internal controls or identify all areas of control weakness. However, where, as part of our testing, we identify any control weaknesses, we report these to the Audit, Risk and Scrutiny Board. These matters are limited to those which we have concluded are of sufficient importance to merit being reported. We did not identify any significant control weaknesses during our audit.
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Coats Observatory Trust Fund: 2023/24 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission 15 Other communications Accounting policies, presentation and disclosures Our work included a review of the adequacy of disclosures in the financial statements and consideration of the appropriateness of the accounting policies adopted by The Trust. The accounting policies, which are disclosed in the financial statements are considered appropriate. The accounting policies used in preparing the financial statements are unchanged from the previous year. There are no significant financial statements disclosures that we consider should be brought to the attention of The Trust. All the disclosures required by relevant legislation and applicable accounting standards have been made appropriately. Overall, we found the disclosed accounting policies, and the overall disclosures and presentation to be appropriate. Fraud and suspected fraud We have previously discussed the risk of fraud with management and the Audit, Risk and Scrutiny Board. We have not been made aware of any incidents in the period nor have any incidents come to our attention as a result of our audit testing. Our work as auditor is not intended to identify any instances of fraud of a non- material nature and should not be relied upon for this purpose. Non-compliance with laws and regulations As part of our standard audit testing, we have reviewed the laws and regulations impacting The Trust. There are no indications from this work of any significant incidences of non-compliance or material breaches of laws and regulations. Written representations We requested written representations from management, and these have been shared with the Audit, Risk and Scrutiny Board alongside this report, and are due to be approved and signed alongside the financial statements upon completion. Related parties We are not aware of any related party transactions which have not been disclosed.
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Coats Observatory Trust Fund: 2023/24 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission 16 Appendices Appendix 1: Responsibilities of The Trust and the Auditor 17 Appendix 2: Audit differences identified during the audit 21
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Coats Observatory Trust Fund: 2023/24 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission 17 Appendix 1: Responsibilities of The Trust and the Auditor The Trust’s responsibilities The Council is required to make arrangements for the proper administration of its financial affairs and to secure that one of its officers has responsibility for the administration of those affairs. The Director of Finance and Resources has been designated as that officer in Renfrewshire Council. They manage the affairs of the Council to secure the economic, efficient and effective use of resources and safeguard its assets and those of any charitable trust it controls. Area The Trust’s responsibilities Corporate governance The Director of Finance and Resources has responsibility for ensuring that an effective system of internal financial control is maintained and operated. This system of internal financial control can only provide reasonable and not absolute assurance that assets are safeguarded, transactions are recorded and properly authorised, and that material errors or irregularities are either prevented, or detected within a timely period. The system of internal financial control is based on a framework of regular management information, financial regulations, administrative procedures and a system of delegation and accountability. The Director of Finance and Resources is responsible for keeping proper accounting records that are up to date and ensure that the financial statements comply with the Charities Accounts (Scotland) Regulations 2006 (as amended) and Accounting and Reporting by Charities: Statement of Recommended Practice (SoRP) applicable to charities preparing their accounts in accordance with the Financial Reporting Standard for Smaller Entities published on 16 July 2014. Decisions regarding the operation, assets, processes or policies of the Trust Fund are delegated by the Council to the Finance, Resources and Customer Services Policy Board (FRCSPB). Internal Control The Trustees have overall responsibility for the Trust Funds’ system of internal control. This system is designed by senior management to ensure effective and efficient operation, including financial reporting and compliance with laws and regulations. The Trustees acknowledge that 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.
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Coats Observatory Trust Fund: 2023/24 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission 18 Area The Trust’s responsibilities Standards of conduct for prevention and detection of fraud and error The Trust is responsible for establishing arrangements to prevent and detect fraud, error and irregularities, bribery and corruption and to ensure that its affairs are managed in accordance with proper standards of conduct. Auditor responsibilities Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities outlined above to detect material misstatements in respect of irregularities, including fraud. Procedures include: • using our understanding of the local government sector and charity sector to identify that the Local Government (Scotland) Act 1973, Charities and Trustee Investment (Scotland) Act 2005 and The Charities Accounts (Scotland) Regulations 2006 are significant in the context of the charity; • inquiring of the Trustees as to other laws or regulations that may be expected to have a fundamental effect on the operations of the charity/charities; • inquiring of the Trustees concerning the charity’s policies and procedures regarding compliance with the applicable legal and regulatory framework; • discussions among our audit team on the susceptibility of the financial statements to material misstatement, including how fraud might occur; and • considering whether the audit team collectively has the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations.
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Coats Observatory Trust Fund: 2023/24 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission 19 The extent to which our procedures are capable of detecting irregularities, including fraud, is affected by the inherent difficulty in detecting irregularities, the effectiveness of the charity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud are inherently more difficult to detect than irregularities that result from error as fraud may involve collusion, intentional omissions, misrepresentations, or the override of internal control. The capability of the audit to detect fraud and other irregularities depends on factors such as the skilfulness of the perpetrator, the frequency and extent of manipulation, the degree of collusion involved, the relative size of individual amounts manipulated, and the seniority of those individuals involved. A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. Audit quality The Auditor General and the Accounts Commission require assurance on the quality of public audit in Scotland through comprehensive audit quality arrangements that apply to all audit work and providers. These arrangements recognise the importance of audit quality to the Auditor General and the Accounts Commission and provide regular reporting on audit quality and performance. Audit Scotland maintains and delivers an Audit Quality Framework. The most recent audit quality report can be found at Quality of public audit in Scotland: Annual report 2023/24 Independence The Ethical Standards and ISA (UK) 260 require us to give The Trust and fair disclosure of matters relating to our independence. In accordance with our profession’s ethical guidance and further to our External Audit Annual Plan issued confirming audit arrangements we have no matters to bring to the Audit, Risk and Scrutiny Board’s attention. We confirm that Azets Audit Services and the engagement team complied with the FRC’s Ethical Standard. We confirm that all threats to our independence have been properly addressed through appropriate safeguards and that we are independent and able to express an objective opinion on the financial statements. Our period of total uninterrupted appointment as at the end of 31 March 2024 was two years.
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Coats Observatory Trust Fund: 2023/24 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission 20 Audit fees The total fees charged to the entity for the provision of services in 2023/24 were as follows. Prior year charges are also shown for comparative purposes: Fee element 2023/24 2022/23 Auditor remuneration £6,300 £6,000 Total fees £6,300 £6,000 The FRC’s Ethical Standard stipulates that where an auditor undertakes non-audit work, appropriate safeguards must be applied to reduce or eliminate any threats to independence. We have not provided any non-audit services to The Trust.
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Coats Observatory Trust Fund: 2023/24 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission 21 Appendix 2: Audit differences identified during the audit We are required to inform the Board of any significant misstatements within the financial statements presented for audit that have been discovered during the course of our audit. Adjusted misstatements Details of the item corrected following discussions with management is as below. No Detail Assets Dr / (Cr) £ Liabilities Dr / (Cr) £ Reserves Dr / (Cr) £ Statement of Financial Activities Dr / (Cr) £ 1. Prior year restatement Classification of buildings to asset under construction and adjustment to the asset value base on the latest valuation date. DR Asset under construction CR Restricted Funds CR Building 628,013 (604,943) (23,070) 2. Prior year restatement Correction of total receipted and payments which represents an estimate of in-year spend on the Paisley Museum Reimagined project that relates directly to the refurbishment of the Coats Observatory and associated buildings. The spend was directly incurred by Renfrewshire
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Coats Observatory Trust Fund: 2023/24 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission 22 No Detail Assets Dr / (Cr) £ Liabilities Dr / (Cr) £ Reserves Dr / (Cr) £ Statement of Financial Activities Dr / (Cr) £ Council, but the property is owned by the Trust, so corresponding income has been disclosed as though donated to the Trust to fund the related spend. DR Asset under construction CR Restricted Funds 337,791 (337,791) 3. Correction of total receipted and payments which represents an estimate of in-year spend on the Paisley Museum Reimagined project that relates directly to the refurbishment of the Coats Observatory and associated buildings for 23/24. DR Asset under construction CR Donation from Renfrewshire Council re refurbishment of Trust assets DR Expenditure relating directly to charitable activities CR Restricted Funds 455,269 (455,269) (455,269) 455,269
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Coats Observatory Trust Fund: 2023/24 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission 23 No Detail Assets Dr / (Cr) £ Liabilities Dr / (Cr) £ Reserves Dr / (Cr) £ Statement of Financial Activities Dr / (Cr) £ 4. Depreciation to be reversed in 2023/24 due to Asset Under Construction classification DR Building CR Depreciation expense 23,068 (23,068) Net impact on reserve (839,198) Net impact on net assets 839,198 Disclosure changes Our work included a review of the adequacy of disclosures in the financial statements and consideration of the appropriateness of the accounting policies and estimation techniques adopted by the Trust. Details of disclosure changes amended by management following discussions are as below. No Detail 1. Accounting policies – asset disclosure 2. Accounting basis – The accounts have been prepared using the accruals basis whereby total income and expenditure have been recorded when they were earned or incurred. This was changed from the previous year audited
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Coats Observatory Trust Fund: 2023/24 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission 24 account which have been prepared using the cash basis as the Trust has a gross annual income over £250,000 threshold in the current year. Overall, we found the disclosed accounting policies, significant accounting estimates and the overall disclosures and presentation to be appropriate.
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We are an accounting, tax, audit, advisory and business services group that delivers a personal experience both digitally and at your door. Accounting | Tax | Audit | Advisory | Technology © Azets 2024. All rights reserved. Azets refers to Azets Audit Services Limited. Registered in England & Wales Registered No. 09652677. VAT Registration No. 219 0608 22. Registered to carry on audit work in the UK and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales.
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Finance and Resources Director: Alastair MacArthur CPFA Renfrewshire House, Cotton Street, Paisley, PA1 1JB www.renfrewshire.gov.uk Your Ref: My Ref: AMacA/CB Contact: Alastair MacArthur Telephone Number: 0300 300 0285 Email: alastair.macarthur@renfrewshire.gov.uk Azets Audit Services Exchange Place 3 Semple Street Edinburgh EH3 8BL Dear Sirs Coats Observatory Trust Fund Financial Statements for the year ended 31 March 2024 This representation letter is provided for the purpose of expressing an opinion as to whether Coats Observatory Trust Fund’s financial statements present a true and fair view, in all material respects, in accordance with applicable law and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2023/24 (the 2023/24 Code). I confirm to the best of my knowledge and belief and having made appropriate enquiries of the Coats Observatory Trust Fund’s trustees, the following representations given to you in connection with your audit of Coats Observatory Trust Fund’s annual accounts for the year ended 31 March 2024. All representations are made to the best of our knowledge and belief. Financial Statements i. We have fulfilled our responsibilities as trustees under the Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard 102, the Charities and Trustee Investment (Scotland) Act 2005, and the Charities Accounts (Scotland) Regulations 2006,for the preparation of Coats Observatory Trust Fund’s financial statements in accordance with applicable law and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2023/24 (the 2023/24 Code), for being satisfied that they give a true and fair view and for making accurate representations to you. ii. All the transactions undertaken by Coats Observatory Trust Fund have been properly reflected and recorded in the accounting records. iii. All the accounting records have been made available to you for the purpose of your audit. I have provided you with unrestricted access to all appropriate persons within the charity, and with all other records and related information requested, including minutes of all management and trustee meetings and correspondence with the Office of the Scottish Charity Regulator.
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Finance and Resources Director: Alastair MacArthur CPFA Renfrewshire House, Cotton Street, Paisley, PA1 1JB www.renfrewshire.gov.uk iv. The financial statements are free of material misstatements, including omissions. Internal control and fraud v. I acknowledge my responsibility for the design, implementation and maintenance of internal control to prevent and detect fraud and error, and I believe that I have appropriately fulfilled these responsibilities. vi. I have disclosed to you all instances of known or suspected fraud affecting the entity involving management, employees who have a significant role in internal control or others where fraud could have a material effect on the financial statements. vii. I have also disclosed to you all information in relation to allegations of fraud or suspected fraud affecting the entity’s financial statements communicated by current or former employees, analysts, regulators or others. Assets and liabilities viii. The Trust has satisfactory title to all assets and there are no liens or encumbrances on the charity’s assets. ix. All actual liabilities, contingent liabilities and guarantees given to third parties have been recorded or disclosed as appropriate. x. Where plans or intentions that may materially alter the carrying value and, where relevant, the fair value measurements or classification of assets and liabilities, these are fully reflected in the financial statements. xi. I confirm that the valuation of the Observatory asset has been assessed for impairment and I am comfortable that the valuation remains appropriate as at 31 March 2024. The assets are currently undergoing refurbishment and will be revalued once the work is complete. Accounting estimates xii. The methods, data and significant assumptions used by us in making accounting estimates, including those measured at fair value, are appropriate to achieve recognition, measurement and disclosure that is reasonable in the context of the applicable financial reporting framework. I am satisfied that the material judgements used in the preparation of the financial statements are soundly based, in accordance with the Code and adequately disclosed in the financial statements. Legal claims xiii. I have disclosed to you all claims in connection with litigation that have been, or are expected to be, received and such matters, as appropriate, have been properly accounted for and disclosed in the financial statements. Laws and regulations xiv. I have disclosed to you all known instances of non-compliance or suspected non- compliance with laws and regulations whose effects should be considered when preparing the financial statements.
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Finance and Resources Director: Alastair MacArthur CPFA Renfrewshire House, Cotton Street, Paisley, PA1 1JB www.renfrewshire.gov.uk Related parties xv. Related party relationships and transactions have been appropriately accounted for and disclosed in the financial statements. I have disclosed to you all relevant information concerning such relationships and transactions and I am not aware of any other matters which require disclosure in order to comply with legislative and accounting standards requirements. Subsequent events xvi. All events subsequent to the date of the financial statements which require adjustment or disclosure have been properly accounted for and disclosed. Going concern i. I have assessed Coats Observatory Trust Fund’s ability to continue to use the going concern basis of accounting and have concluded that it is appropriate. I am not aware of any material uncertainties that may cast significant doubt on Coats Observatory Trust Fund’s ability to continue as a going concern. Grants and donations ii. All grants, donations and other income, the receipt of which is subject to specific terms or conditions, have been notified to you. There have been no breaches of terms or conditions in the application of such income. Approval I acknowledge our legal responsibilities regarding disclosure of information to you as auditors and confirm that so far as I am aware, there is no relevant audit information needed by you in connection with preparing your audit report of which you are unaware. The approval of this letter of representation was minuted by Coats Observatory Trust Fund at its meeting on 24 October 2024. Yours faithfully Signature:…………………………… Name: Alastair MacArthur Position: Director of Finance and Resources Date…………………………….