2022-23 Audited Annual Accounts – Charitable Trusts
Argyll and Bute Council · 26 September 2024
Back to Argyll and Bute Council — 26 September 2024 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
ARGYLL AND BUTE COUNCIL COUNCIL FINANCIAL SERVICES 26 SEPTEMBER 2024 2022-23 AUDITED ANNUAL ACCOUNTS – CHARITABLE TRUSTS 1. INTRODUCTION 1.1 Mazars have now completed their audit of the Charitable Trust Accounts for the year to 31 March 2023 and have issued an audit certificate containing no qualifications. They were able to conclude that the Accounts present a true and fair view of the financial position as at 31 March 2023. 2. RECOMMENDATIONS 2.1 Note that an unqualified certificate has been issued for the 2022-23 Charitable Trusts Accounts. 2.2 Approve for signature the Charitable Trust Accounts for 2022-23 and the ISA 580 letter of representation. 2.3 Consider Mazar’s Annual Audit Report for 2022-23. 3. DETAIL 3.1 Despite significant delays Mazars have now completed their audit of the Charitable Trust Accounts for the year to 31 March 2023 and have issued an audit certificate containing no qualifications. They were able to conclude that the Accounts present a true and fair view of the financial position as at 31 March 2023. The Audited Charitable Trusts Accounts are attached at appendix 1. 3.2 The accounts of the Charitable Trusts were completed and submitted by the statutory date of 30 June 2023. 3.3 Mazars have issued the 2022-23 Annual Audit Report and this is attached at appendix 2. The External Auditors Report is positive and contains a number of key messages including: No evidence was found of management override of controls. Accounting policies and disclosures comply with the Charities Statement of Recommended Practice (SoRP) and Financial Reporting Standards. Only one recommendation relating to internal control was identified in relation to dormant charities which will be considered by officers.
Page 2
3.4 There were two adjustments to the accounts as part of the audit process as summarised below: Reclassification of amounts held by Argyll and Bute Council on the Trusts’ behalf from Cash and Bank balances to Debtors. Explanation added to Section 3 Structure and Governance to report the deregistration of Oban Common Good fund from the Scottish Charity Register noting that there is no requirement to include their figures in the charity accounts for 2022-23. Presentational change to add totals to the tables on the report to help aid understanding and ease of use. 3.5 There was one unadjusted possible misstatement noted by Mazars of £0.781m, which results from there being a difference between the CCLA provided valuation at 31 March 2023 and third party (Financial times) valuation data available on the same date. CCLA manage the investments of the Charitable Trusts and the difference can result from timing between the two sets of data. Mazars are content that the information displayed in the accounts was that provided by CCLA and are therefore satisfied that no adjustment is required. 4. CONCLUSION 4.1 This report advises Members on the conclusion of the audit of the Charitable Trusts for 2022-23. The external auditors opinion is unqualified and minimal adjustments were made to the accounts during the audit process. Mazars have issued their annual report for 2022-23 which is predominantly positive. 5. IMPLICATIONS 5.1 Policy – None. 5.2 Financial - Compliance with CIPFA Code of Practice on Local Authority Accounting in the United Kingdom 2022-23. Failure to adhere to deadlines from OSCR. 5.3 Legal - Not expected to be any legal issues. 5.4 HR - Delays have resulted in further pressure upon staff who are trying to focus on budget work and the 2023-24 audit process. 5.5 Fairer Scotland Duty - None. 5.5.1 Equalities - None 5.5.2 Socio-Economic - None 5.5.3 Islands Duty - None 5.6 5.7 Climate Change - Risk - None. None. 5.8 Customer Service - None. 5.9 The Rights of the Child (UNCRC) - None. Kirsty Flanagan
Page 3
Executive Director/Section 95 Officer 18 September 2024 Councillor Ross Moreland - Policy Lead for Finance and Commercial Services Appendix 1 – Charitable Trusts Audited Annual Accounts 2022-23 Appendix 2 – Mazars Audit Report and ISA 580 letter of Representation For further information contact Anne Blue, Interim Head of Financial Services anne.blue@argyll-bute.gov.uk
Page 4
1 Argyll and Bute Council Comhairle Earra Ghàidheal agus Bhòid Argyll and Bute OSCR Trusts AUDITED Annual Report and Financial Statements 2022-2023 For the Year ended 31 March 2023 APPENDIX 1
Page 5
Trust Funds Contents 2 Trustees’ Annual Report 3 Independent Auditors Report 12 Statement of Financial Activities for Year Ended 31 March 2023 16 Statement of Balances as at 31 March 2023 18 Notes to the Financial Statements 20
Page 6
Trust Funds Trustees’ Annual Report 3 1. INTRODUCTION The Trustees present the annual report together with the financial statements and the Auditor’s Report for the year ended 31 March 2023. ADMINISTRATION INFORMATION Charity Number Charity Name SC019599 Mccaig Trust SC019607 Third Marquess Of Bute's Silver Wedding Dowry SC013578 Baillie Gillies Bequest SC013600 Kidston Park Trust SC018697 Miss Annie Dickson Burgh Bequest SC018698 Logie Baird Prize Fund SC020382 County of Argyll Educational Trust Scheme, 1960 Contact Address Argyll and Bute Council Kilmory Lochgilphead Argyll PA31 8RT Appointment of Trustees The trustees of these charities are the elected members (councillors) of Argyll and Bute Council. Trustees are appointed through their election to Argyll and Bute Council. Current Trustees Previous Trustees Councillor Donald Kelly Councillor Tommy MacPherson from May 22 Councillor John Armour Councillor Douglas Philand Councillor Garret Corner from May 22 Councillor Jan Brown Councillor Robin Currie Councillor Kieron Green Councillor Amanda Hampsey from May 22 Councillor Julie McKenzie Councillor Luna Martin – from 22 Councillor Andrew Kain – from 22 Councillor Willie Hume – from 22 Councillor Reeni Kennedy-Boyle from May 22 Councillor Peter Wallace from May 22 Councillor Paul Collins December 21 to May 22 Councillor James Anderson to May 22 Councillor Rory Colville to May 22 Councillor Donald MacMillan to May 22 Councillor Alexander Taylor to May 22 Councillor Roderick Mccuish to May 22 Councillor Elaine Robertson to May 22 Councillor Mary-Jean Devon to May 22 Councillor David Kinniburgh to May 22 Councillor Aileen Morton to May 22 Councillor George Freeman to May 22 Councillor Richard Trail to May 22 Councillor Anne Horn to May 22 Councillor James McGrigor to May 22 Councillor Jean Moffat to May 22
Page 7
Trust Funds Trustees’ Annual Report 4 Councillor Liz McCabe Councillor Gordon Blair Councillor Daniel Hampsey from May 22 Councillor William Sinclair from May 22 Councillor Math Campbell-Sturgess from May 22 Councillor Ian MacQuire from May 22 Councillor Gemma Penfold Councillor Fiona Howard from May 22 Councillor Gary Mulvaney Councillor Maurice Corry from May 22 Councillor Mark Irvine from May 22 Councillor Paul Donald Kennedy from May 22 Councillor Dougie McFadzean from May 22 Councillor Andrew Vennard Councillor Jim Lynch Councillor Yvonne McNeilly Councillor Audrey Forrest Councillor Graham Archibald Hardie Councillor Shonny Iain Paterson Councillor Ross Moreland from May 22 Councillor Alastair Redman from September 22 Councillor James Findlay to May 22 Councillor Bobby Good to May 22 Councillor Alan Reid to May 22 Councillor Lorna Douglas to May 22 Councillor Alastair Redman to May 22 Councillor John McAlpine from May to July 22 Honorary Secretary Douglas Hendry Executive Director Argyll and Bute Council Honorary Treasurer Kirsty Flanagan FCCA,CPFA,ACIBS Section 95 Officer Argyll and Bute Council Auditor Mark Outterside Audit Director 26 Mosley Street Newcastle upon Tyne NE1 1DF
Page 8
Trust Funds Trustees’ Annual Report 5 Governing Documents Charity Name Description McCaig Trust The town council shall in the building proposed to be erected by them at Corran Parks, Oban, accommodation for the McCaig Memorial Institute including accommodation for a reference library, lending library, reading room and museum and shall equip and furnish said accommodation all to the satisfaction of the governing body Third Marquess of Bute Silver Wedding Dowry £1,000 was given by John Patrick Crichton-Stuart, 3rd Marquess of Bute, on 12 April 1897 (the date of his silver wedding) to Rothesay Town Council. Noted in the Rothesay Town Council Minutes 12th April 1897 and 10th May 1897 Baillie Gillies Bequest The charity was ‘inherited’ from Bute County Council. William Gillies, Cooper and Fish curer in Rothesay, and at some time a Baillie and Chief Magistrate of that Burgh, bequeathed £200 for the benefit of the poor of Rothesay. He was elected to the Town Council in 1812 and retired in 1835. Mrs Margaret Stevenson, or Lochhead, died circa 1947. Bequest of £50 to Rothesay Town Council, the income of which is to provide coals for the deserving poor of the Burgh. Archibald Brown, Clerk in the Bute Savings Bank Rothesay, died 1903. Will confirmed and recorded in 1903, detailing bequest of £100. The interest to be divided annually at Candlemas among the deserving old and infirm poor of Rothesay. James Duncan, Merchant in Valparaiso, Chile, thereafter residing in Rothesay died in 1874. He bequeathed £2,000 to Rothesay Town Council. Noted in the Minute Book of the Charity, 1875-1894 in the District Archives. The income was to be distributed half yearly to 10 older women of good character and honest repute, over 60 years of age and not in parochial relief, whose parents as well as themselves have been born in Rothesay or the Island of Bute. Misses Gibson, Ardmory, Rothesay. Janet Gibson died in 1893 her will was confirmed and recorded in 1894 with a bequest of £200 to the Minister of the Parish of Rothesay and to Rothesay Town Council. The interest was to be paid out at Candlemas to the most deserving of the poor and each recipient was to get 25 pence. Mrs Ann Taylor, or Jackson, residing at Easterhouse, Baillieston, died 1892 and her will was confirmed and recorded 1892. She made a bequest of £100, the annual income of which was to be expended from time to time providing coals for the poor persons of the name Taylor residing in Rothesay and who were born in Skipness (Kintyre) or Rothesay. Minute Book of the Bequest 1892-94 in District Archives. Annie McMillan - Minutes of Rothesay Town Council 28th November 1947, a bequest of £100 to Rothesay Town Council to provide coals for the deserving poor of Rothesay. Jane Paterson of Whinny Brae, Rothesay, died 1902. Will confirmed and recorded in
Page 9
Trust Funds Trustees’ Annual Report 6 1903 with a bequest of £300 made to Rothesay Town Council. The income from the bequest was to be divided at Candlemas among the old and infirm poor of Rothesay. Kidston Park Trust A bequest of £1,000 was made by William Kidston towards the upkeep of Kidston Park (formerly Cairndow or Cairndhu Park) in April 1889. It was noted in the minutes of a meeting of the Town Council of the Burgh of Helensburgh Miss Annie Dickson Bequest A bequest by Miss Mary Ann Dickson dated 4th April, 1927 to the Town Council of the Burgh of Helensburgh. Noted in an Excerpt from Copy Will and Codicils. Miss LA Colvil’s bequest - A Legacy of £200 was passed by Mr J Percival Agnew to the Town Council to perpetuate his cousin’s name in Helensburgh by means of a fund for necessitous cases. Noted in the minutes of a meeting of the Finance Committee of Helensburgh Town Council on 22nd December 1969. Logie Baird Prize Fund Ex-Bailie J. Arnold Fleming of Locksley, Helensburgh, invested the sum of £200 in the names of the Provost, Magistrates and Councillors of the Burgh of Helensburgh, for the Logie Baird Prize Fund. Noted in the minutes of the Town Council of Helensburgh, January 1956. Argyll Education Trust The Trust is a scheme under the Education (Scotland) Acts, 1939 to 1956, for the future government and management of certain educational endowments in the County of Argyll. Formed by the amalgamation of fourteen individual endowments and approved by His Late Majesty King George V in Council on 24th July, 1933. Robert MacFie of Airds and Oban, Sugar Refiner in Liverpool, died 1899. His will confirmed and recorded in 1899 a bequest of £150 2. OBJECTIVES AND ACTIVITIES The objectives of each trust are as follows: Charity Name Purpose Mccaig Trust To contribute towards the cost of a library and institute in Oban. Third Marquess Of Bute's Silver Wedding Dowry To provide a donation to one or two girls from the poorer classes on their wedding Baillie Gillies Bequest Various funds make up the Baillie Gillies fund • Baillie Gillies Bequest - Prevention and relief of poverty in Rothesay. • Margaret Lochhead Bequest - Prevention and relief of poverty in Rothesay through grants to individuals for purchase of coals.
Page 10
Trust Funds Trustees’ Annual Report 7 • Archibald Brown Bequest - The interest is to be divided annually at Candlemas among the deserving old and infirm poor of Rothesay • James Duncan Bequest - Prevention and relief of poverty in Rothesay through distribution to ten old women whose parents as well as themselves were born in Rothesay • Janet Gibson Bequest - Prevention and relief of poverty in Rothesay. • Ann Jackson Bequest - Prevention and relief of poverty in Rothesay, by providing coals for poor persons of the name Taylor residing in Rothesay who were born in Skipness (Kintyre) or Rothesay. • Annie McMillan Bequest - Prevention and relief of poverty in Rothesay through grants to individuals for coal. • Jane Paterson Bequest - The objective of the fund is for the prevention and relief of poverty in Rothesay Kidston Park Trust To provide a public park, or recreation ground for the inhabitants of Helensburgh and for the purposes of boating and bathing in the Gareloch Miss Annie Dickson Burgh Bequest The relief of distress in the Burgh of Helensburgh. Logie Baird Prize Fund The advancement of education by providing an annual prize to a pupil at Hermitage Academy, Helensburgh County of Argyll Educational Trust Scheme, 1960 The objective of the fund is for the advancement of education for children and young people within the former County of Argyll. This objective is met by the issuing of grants to individuals and organisations.
Page 11
Trust Funds Trustees’ Annual Report 8 Robert MacFie - The objective of the fund is for the advancement of education by providing a gold Dux medal to Oban High School. 3. STRUCTURE AND GOVERNANCE Argyll and Bute Council Trust Funds are registered with the Office of the Scottish Charity Regulator (OSCR). The trustees of all of the charities are the elected members of Argyll and Bute Council. The Chief Financial Officer is the designated officer within Argyll and Bute Council with responsibility for the proper administration of the charitable trust’s financial affairs. The Chief Financial Officer is responsible for keeping proper accounting records that are up to date and which ensure that financial statements comply with the Charities Accounts (Scotland) Regulations 2006. Organisational Structure The trustees (as the elected members of the council) meet once a year at the Annual General Meeting (AGM) to consider and approve the annual report and financial statements and any other business such as future plans and the reorganisation of trust funds. The trustees delegate the day to day administration of the charities to officers of the Council. The Council has established a range of committees with delegated powers to allow it to discharge its business effectively. This includes the management of charities. The Council has an approved constitution that governs the conduct of business by the Council and covers standing orders for meetings, a scheme of administration and delegation, financial and security regulations, contract standing orders and an ethical framework. Related Parties Trustees hold this position because they are elected members of Argyll and Bute Council. Argyll and Bute Council provides administration services to the Charity at no cost to the Trusts. Risk Management The Section 95 Officer of Argyll and Bute Council has taken the steps required by trustees to consider the major risks to which the charity is exposed, in particular those related to its operation and finance, and to be satisfied that systems are in place to mitigate the exposure to the major risks. Removal of Oban Common Good In the 2021-22 OSCR Charity Accounts published by Argyll and Bute Council, Oban Common Good had been reported as one of the charities having considered it to have met the criteria to be treated as such since it was accepted onto the Charity Register on 1 April 2006. However, the Council received notification from the Office of the Scottish Charity Regulator (OSCR) on 9 December 2022 advising of the intention to remove the Charity from the Scottish Charity Register. A further
Page 12
Trust Funds Trustees’ Annual Report 9 notification on 31 March 2023 confirmed the removal of Oban Common Good Fund from the Scottish Charity Register on 31 March 2023. Section 19 of the 2005 Act provides for the protection of assets held by a body immediately prior to it’s removal from the Register but because OSCR have concluded that the Common Good Fund is not a ‘body’, the provisions of Section 19 do not apply to it. Oban Common Good Fund will not be under duty to account to OSCR and OSCR will not monitor the use of assets once removed from the Register. Argyll and Bute Council was advised the OSCR did not require the Charity to provide final accounts for the financial year ending 31 March 2023 and as such, Oban Common Good no longer appears within this document which collates the financial statement information for the Argyll and Bute Council Charities. 4. MANAGEMENT OF FUNDS AND INVESTMENT POLICY The trustees rely on the expertise of Argyll and Bute Council to manage the investments to ensure the maximum return at the least risk to each charity. In this way, the income stream for the future benefit of each charity is protected. The Section 95 Officer of the Council is responsible for securing the proper management of the investments of the Charity. The day-to-day management of investments is performed by external investment managers under a discretionary agreement. 5. PERFORMANCE Income comes from investment returns and any donations. Awards totalling £19,831 were made during the year to 31 March 2023, awards were disbursed as follows: Charity Name Awards Distributed during the year to the 31 March 2023 Mccaig Trust £2,400 Third Marquess Of Bute's Silver Wedding Dowry £500 Kidston Park Trust £131 County of Argyll Educational Trust Scheme, 1960 £16,800 Total £19,831 6. FINANCIAL REVIEW Overview The following charities are dormant: Baillie Gillies Bequest
Page 13
Trust Funds Trustees’ Annual Report 10 Miss Anne Dickson Burgh Bequest In the year to 31 March 2023, Trust funds received income and held cash and bank balances within the Council’s Loans Fund (recorded as a debtor in the financial statements) as follows: Charity Name Income from Investments £ Income from Donations £ Cash and Bank Balance £ Mccaig Trust 1,546 0 73,329 Third Marquess Of Bute's Silver Wedding Dowry 189 0 6,958 Baillie Gillies Bequest 198 0 10,189 Kidston Park Trust 70 0 3,538 Miss Annie Dickson Burgh Bequest 83 0 4,284 Logie Baird Prize Fund 38 0 1,952 County of Argyll Educational Trust Scheme, 1960 17,449 0 179,086 Total 19,573 0 279,336 Investments and Reserves The overall funds decreased by £19,080. The reserves of the trusts at 31 March 2023 amount to £767,964. There is £246,050 in unrestricted (revenue) funds and £521,914 in endowment (capital) funds. These funds are invested as follows: 31-Mar-22 31-Mar-23 £ £ Investments (CCLA/Local Government Bonds) 507,450 488,628 Cash and Bank held by Argyll and Bute Council 279,594 279,336 787,044 767,964 Assets in Restricted Funds 540,736 521,914 Assets in Unrestricted Funds 246,308 246,050 Total Funds 787,044 767,964
Page 14
Trust Funds Trustees’ Annual Report 11 Reserves Policy Reserves are held by Argyll and Bute Council on behalf of each Trust and revenue income, generated from capital that has not been disbursed at 31 March each year, is invested in Argyll and Bute Council’s Loans Fund. Trustees’ Responsibilities Statement The trustees are responsible for preparing the trustees' report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards. The law applicable to charities in Scotland requires the charity trustees to prepare financial statements for each year which give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources, of the charity for that period. In preparing these financial statements, the trustees are required to: o select suitable accounting policies and then apply them consistently; o observe the methods and principles in the applicable Charities SORP; o make judgments and accounting estimates on a reasonable basis; o state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; o prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in business. 7. CONCLUSION The reserves of all the Trust Funds decreased by £19,080 in the year. In 22-23 the total value of grants awarded from Trust Funds amounted to £19,831. Since 2013-14 an audit is required to be carried out by the appointed auditor of Argyll and Bute Council in accordance with the requirements of the Local Government (Scotland) Act 1973. From 2022-23 these accounts are prepared as one group set of accounts following the guidance set out in OSCRs Guidance, A Guide to Charity Accounts Part 1 – The Overview, which states in Section 9 - Connected Charities’ that a single set of accounts can be prepared rather than individual ones where charities are connected by having a common controlling body or administration. The appointed auditor of Argyll and Bute Council is Mazars and the Trustees would like to thank them for undertaking this task. 8. DECLARATION This report was signed on behalf of the Trustees on 26 September 2024 by: Councillor J Lynch Trustee Kirsty Flanagan Section 95 Officer
Page 15
Trust Funds Independent Auditors Report 12 Independent auditor’s report to the Trustees of Argyll and Bute OSCR Trusts and the Accounts Commission Report on the audit of the financial statements Opinion We certify that we have audited the financial statements in the statement of accounts of Argyll and Bute OSCR Trusts (“the charities”) for the year ended 31 March 2023 under Part VII of the Local Government (Scotland) Act 1973 and section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005. The financial statements comprise the Statement of Financial Activities, the Balance Sheet, and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and the United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion the accompanying financial statements: • give a true and fair view of the state of affairs of the charities as at 31 March 2023 and of their incoming resources and application of resources 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 Charities and Trustee Investment (Scotland) Act 2005, and regulation 8 of The Charities Accounts (Scotland) Regulations 2006. Basis for opinion We conducted our audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Accounts Commission for Scotland. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the charities in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Conclusions relating to going concern basis of accounting We have concluded that the use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Page 16
Trust Funds Independent Auditors Report 13 Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charities’ ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from when the financial statements are authorised for issue. Responsibilities of the trustees for the financial statements The trustees are responsible for the preparation of financial statements that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the trustees determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the trustees are responsible for assessing the charities’ ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees intend to discontinue the charities’ operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial statements 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, the Charities and Trustee Investment (Scotland) Act 2005, and The Charities Accounts (Scotland) Regulations 2006 are significant in the context of the charities; • inquiring of the Trustees as to other laws or regulations that may be expected to have a fundamental effect on the operations of the charities. • inquiring of the Trustees concerning the charities’ 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.
Page 17
Trust Funds Independent Auditors Report 14 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 charities’ 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 skillfulness 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. Reporting on other requirements Other information The trustees are responsible for the other information in the statement of accounts. The other information comprises the Trustees’ Annual Report. Our responsibility is to read all the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements, or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon except on the Trustees’ Annual Report to the extent explicitly stated in the following opinion prescribed by the Accounts Commission. Opinions prescribed by the Accounts Commission on the Trustees’ Annual Report In our opinion, based on the work undertaken in the course of the audit, the information given in the Trustees' Annual Report for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Charities SORP (FRS 102). Matters on which we are required to report by exception We are required by The Charity Accounts (Scotland) Regulations 2006 to report to you if, in our opinion: • proper accounting records have not been kept; or
Page 18
Trust Funds Independent Auditors Report 15 • 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 nothing to report in respect of these matters. Use of our report This report is made solely to the parties to whom it is addressed in accordance with Part VII of the Local Government (Scotland) Act 1973 and for no other purpose. In accordance with paragraph 108 of the Code of Audit Practice, we do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties. Signed: Mark Outterside (Director) for and on behalf of Forvis Mazars LLP Chartered Accountants and Statutory Auditor 26 Mosley Street Newcastle Upon Tyne Newcastle NE1 1DF United Kingdom
Page 19
Trust Funds Statement of Financial Activities 16 STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDING 31 MARCH 2023 McCaig Trust Third Marquess Of Bute's Silver Wedding Dowry Baillie Gillies Bequest Kidston Park Trust Miss Annie Dickson Burgh Bequest Logie Baird Prize Fund County of Argyll Educational Trust Scheme, 1960 Total Funds 2023 Total Funds 2023 Total Funds 2023 Total Funds 2023 Total Funds 2023 Total Funds 2023 Total Funds 2023 Total £ £ £ £ £ £ £ £ INCOMING RESCOURCES Investment income from managed funds - Unrestricted 5 77 45 - - - - 13,915 14,037 Interest from short-term deposits - Unrestricted 1,469 144 198 70 83 38 3,534 5,536 Donated Services (Audit) 6 667 79 87 30 36 17 5,584 6,500 Total Incoming Resources 2,213 268 285 100 119 55 23,033 26,073 RESOURCES EXPENDED Costs of generating funds: Investment management costs - - - - - - - Audit fee 6 667 79 87 30 36 17 5,584 6,500 Charitable Activities: Grants awarded 7 2,400 500 - 131 - - 16,800 19,831 Total Resources Expended 3,067 579 87 161 36 17 22,384 26,331 Net Incoming/(Outgoing) Resources before Other Recognised Gains/(Losses) (854) (311) 198 (61) 83 38 649 (258) OTHER RECOGNISED GAINS AND (LOSSES) Unrealised gains/(losses) - Permanent Endowment - - - - - - (18,822) (18,822) Total Gains and (Losses) on Investment Assets - - - - - - (18,822) (18,822) Net Movement in Funds (854) (311) 198 (61) 83 38 (18,173) (19,080) Total funds brought forward - Unrestricted 46,645 8,669 6,991 2,599 1,253 1,714 178,437 246,308 Total funds brought forward - Permanent Endowment 35,138 1,000 3,050 1,000 2,948 200 497,400 540,736 Total funds brought forward 10 81,783 9,669 10,041 3,599 4,201 1,914 675,837 787,044 Funds Carried Forward - Unrestricted 45,791 8,358 7,189 2,538 1,336 1,752 179,086 246,050 Funds Carried Forward - Permanent Endowment 35,138 1,000 3,050 1,000 2,948 200 478,578 521,914 Total funds carried forward 10 80,929 9,358 10,239 3,538 4,284 1,952 657,664 767,964
Page 20
Trust Funds Statement of Financial Activities 17 STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDING 31 MARCH 2022 McCaig Trust Third Marquess Of Bute's Silver Wedding Dowry Baillie Gillies Bequest Kidston Park Trust Miss Annie Dickson Burgh Bequest Logie Baird Prize Fund County of Argyll Educational Trust Scheme, 1960 Total Funds 2022 Total Funds 2022 Total Funds 2022 Total Funds 2022 Total Funds 2022 Total Funds 2022 Total Funds 2022 Total £ £ £ £ £ £ £ £ INCOMING RESOURCES Investment income from managed funds - Unrestricted 5 95 30 1 - - - 13,643 13,769 Interest from short-term deposits - Unrestricted 7 5 1 1 - - 14 Donated Services (Audit) 6 45 5 5 2 2 1 368 428 Total Incoming Resources 147 40 7 3 2 1 14,011 14,211 RESOURCES EXPENDED Costs of generating funds: Audit fee 6 45 5 5 2 2 1 368 428 Charitable Activities: Grants awarded 7 803 - - - - 30 2,850 3,683 Total Resources Expended 848 5 5 2 2 31 3,218 4,111 Net Incoming/(Outgoing) Resources before Other Recognised Gains/(Losses) (701) 35 2 1 - (30) 10,793 10,100 OTHER RECOGNISED GAINS AND (LOSSES) Unrealised gains/(losses) - Permanent Endowment - - - - - - 39,516 39,516 Total Gains and (Losses) on Investment Assets - - - - - - 39,516 39,516 Net Movement in Funds (701) 35 2 1 - (30) 50,309 49,616 Total funds brought forward - Unrestricted 47,346 8,634 6,989 2,599 1,253 1,744 167,644 236,209 Total funds brought forward - Permanent Endowment 35,138 1,000 3,050 1,000 2,948 200 457,884 501,220 Total funds brought forward 82,484 9,634 10,039 3,599 4,201 1,944 625,528 737,429 Funds Carried Forward - Unrestricted 46,645 8,669 6,991 2,599 1,253 1,714 178,437 246,308 Funds Carried Forward - Permanent Endowment 35,138 1,000 3,050 1,000 2,948 200 497,400 540,736 Total funds carried forward 10 81,783 9,669 10,041 3,599 4,201 1,914 675,837 787,044 All incoming resources and resources expended derive from continuing activities. The notes on pages 19 to 26 form an integral part of these financial statement
Page 21
Trust Funds Balance Sheet 18 Balance Sheet as at 31 March 2023 McCaig Trust Third Marquess Of Bute's Silver Wedding Dowry Baillie Gillies Bequest Kidston Park Trust Miss Annie Dickson Burgh Bequest Logie Baird Prize Fund County of Argyll Education al Trust Scheme, 1960 Note Total Total Total Total Total Total Total Total £ £ £ £ £ £ £ £ Fixed Assets Investments - Unrestricted 8 - 2,400 50 - - - 2,450 Investments - Permanent Endowment Funds 8 7,600 - - - - - 478,578 486,178 Total Fixed Assets 7,600 2,400 50 - - - 478,578 488,628 Current Assets Debtor (Cash at Bank and at Hand) - Unrestricted 9 45,791 5,958 7,139 2,538 1,336 1,752 179,086 243,600 Debtor (Cash at Bank and at Hand) - Permanent Endowment 9 27,538 1,000 3,050 1,000 2,948 200 35,736 Total Current Assets 73,329 6,958 10,189 3,538 4,284 1,952 179,086 279,336 Current Liabilities Net Current Assets or Liabilities 73,329 6,958 10,189 3,538 4,284 1,952 179,086 279,336 Total Assets 80,929 9,358 10,239 3,538 4,284 1,952 657,664 767,964 Funds of the Charity Unrestricted Funds 45,791 8,358 7,189 2,538 1,336 1,752 179,086 246,050 Endowment Funds 35,138 1,000 3,050 1,000 2,948 200 478,578 521,914 Total Charity Funds 80,929 9,358 10,239 3,538 4,284 1,952 657,664 767,964
Page 22
Trust Funds Balance Sheet 19 Balance Sheet as at 31 March 2022 McCaig Trust Third Marquess Of Bute's Silver Wedding Dowry Baillie Gillies Bequest Kidston Park Trust Miss Annie Dickson Burgh Bequest Logie Baird Prize Fund County of Argyll Education al Trust Scheme, 1960 Note Total Total Total Total Total Total Total Total £ £ £ £ £ £ £ £ Fixed Assets Investments - Unrestricted 8 - 2,400 50 - - - 2,450 Investments - Permanent Endowment Funds 8 7,600 - - - - - 497,400 505,000 Total Fixed Assets 7,600 2,400 50 - - - 497,400 507,450 Current Assets Debtor (Cash at Bank and at Hand) - Unrestricted 9 46,645 6,269 6,941 2,599 1,253 1,714 178,437 243,858 Debtor (Cash at Bank and at Hand) - Permanent Endowment 9 27,538 1,000 3,050 1,000 2,948 200 - 35,736 Total Current Assets 74,183 7,269 9,991 3,599 4,201 1,914 178,437 279,594 Current Liabilities Net Current Assets or Liabilities 74,183 7,269 9,991 3,599 4,201 1,914 178,437 279,594 Total Assets 81,783 9,669 10,041 3,599 4,201 1,914 675,837 787,044 Funds of the Charity Unrestricted Funds 46,645 8,669 6,991 2,599 1,253 1,714 178,437 246,308 Endowment Funds 35,138 1,000 3,050 1,000 2,948 200 497,400 540,736 Total Charity Funds 81,783 9,669 10,041 3,599 4,201 1,914 675,837 787,044
Page 23
Trust Funds Notes to the Financial Statements 20 1. Basis of Preparation The principal accounting policies are summarised below. The accounting policies have been applied consistently throughout the year and the preceding year. 1.1. Basis of Accounting The financial statements are prepared under the historic cost convention and in accordance with: a) Accounting and Reporting by Charities – Statement of Recommended Practice (SORP 2019 - 2nd Edition); and the Financial Reporting Standard for Smaller Entities FRS102 b) The Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006 (as amended). 2. Accounting Policies 2.1. Form of Financial Statements a) Unrestricted funds are those that may be used at the discretion of the trustees in the furtherance of the objects of the charity. b) The permanent endowment funds are invested in perpetuity and derive an annual investment income which is available for distribution. 2.2. Incoming Resources a) All incoming resources are recognised and included in the Statement of Financial Activities when the charity becomes entitled to the resources; the trustees are virtually certain they will receive the resources and the monetary value can be measured with sufficient reliability. The following specific policies are applied to particular categories of income. b) Income from investments is included in the year to which it relates. c) Investments gains and losses includes any gain or loss on the sale of investments and any gain or loss resulting from revaluing investments to market value at the end of the year. d) The value of the services provided free of charge by Argyll and Bute Council has not been included in the accounts but is described in the trustees’ annual report.
Page 24
Trust Funds Notes to the Financial Statements 21 2.3. Resources Expended a) All expenditure is included in the Statement of Financial Activities on an accrual basis and is recognised when there is a legal or constructive obligation to pay out resources. 2.4. Cash and Bank Balances a) During the year the above short term deposits were held by Argyll and Bute Council, which manages the administration of the funds on behalf of the Trustees. The Council also acts as the banker for the charity and, as detailed below, all transactions incoming and outgoing are made via the Council’s accounts. No costs were incurred by the trust for this work. The balances are repayable on demand. Interest is payable on balances. b) As cash and bank balances are held as short term deposits with Argyll and Bute Council and are not in a standalone bank account, they appear on the Balance Sheet as a debtor. c) The debtor balance is split between those funds deemed to be unrestricted and those deemed to be permanent endowment. The unrestricted funds are available to be used for the charitable activities of the trust and the permanent endowment funds are held to generate income for the charitable activities. 3. Taxation The charity is not liable to income or capital gains tax on its charitable activities. Irrecoverable VAT is included in the expense to which it relates. 4. Trustee Remuneration, Expenses and Related Party Transactions (a) No remuneration or expenses were paid to charity trustees or persons connected to a trustee during the year (2021-22 - £0). (b) The trust received interest of £5,536 (2021-22 £14) from Argyll and Bute Council on unrestricted reserves placed on short-term deposits and also from interest on investments of £14,037 (2021-22 - £13,769). All transactions incoming and outgoing are made via the Council’s accounts. (c) There were no other transactions between the charity and any trustee or any connected person during the year (2021-22 - £0).
Page 25
Trust Funds Notes to the Financial Statements 22 5. Investment Income McCaig Trust Third Marquess Of Bute's Silver Wedding Dowry Baillie Gillies Bequest Kidston Park Trust Income from Investments Interest on Short-term deposits - Argyll and Bute Council Total Income from Investments Interest on Short-term deposits - Argyll and Bute Council Total Income from Investments Interest on Short- term deposits - Argyll and Bute Council Total Income from Investments Interest on Short-term deposits - Argyll and Bute Council Total 2022 95 7 102 30 5 35 1 1 2 - 1 1 Unrestricted 77 1,469 1,546 45 144 189 - 198 198 - 70 70 Permanent Endowment - - - - - - - - - - - - 2023 77 1,469 1,546 45 144 189 1 199 200 - 70 70 Miss Annie Dickson Burgh Bequest Logie Baird Prize Fund County of Argyll Educational Trust Scheme, 1960 Income from Investments Interest on Short-term deposits - Argyll and Bute Council Total Income from Investments Interest on Short-term deposits - Argyll and Bute Council Total Income from Investments Interest on Short- term deposits - Argyll and Bute Council Total Totals 2022 - - - - - - 13,643 - 13,643 13,783 Unrestricted - 83 83 - 38 38 13,915 3,534 17,449 19,573 Permanent Endowment - - - - - - - - - 2023 - 83 83 - 38 38 13,915 3,534 17,449 19,575
Page 26
Trust Funds Notes to the Financial Statements 23 6. Audit Fees The independent auditor’s fee is a donated service amounting to £6500 (2021-22 - £428). 7. Grants Awarded Charity Name Grants Awarded in year to 31 March 2023 Number of Grants awarded McCaig Trust £ 2,400 1 Third Marquess Of Bute's Silver Wedding Dowry £ 500 1 Baillie Gillies Bequest £ 0 0 Kidston Park Trust £ 131 1 Miss Annie Dickson Burgh Bequest £ 0 0 Logie Baird Prize Fund £ 0 0 County of Argyll Educational Trust Scheme 1960 £ 16,800 29 Total £19,831 32
Page 27
Trust Funds Notes to the Financial Statements 24 8. Fixed Asset Investments Mccaig Trust Third Marquess Of Bute's Silver Wedding Dowry Baillie Gillies Bequest Kidston Park Trust Miss Annie Dickson Burgh Bequest Logie Baird Prize Fund County of Argyll Educational Trust Scheme, 1960 Total £ £ £ £ £ £ £ £ Carrying (market) value at 1 April 2022 7,600 2400 50 497,400 507,450 Add: additions to investments at cost - - - - - - - Less: disposals at carrying value - - - - - - - Add/(deduct): net gain/loss on revaluation - - - - - - (18,822) (18,822) Carrying (market) value at 31 March 2023 7,600 2,400 50 - - - 478,578 488,628 Analysis of Investments CCLA Investments - - - - - - 478,578 478,578 Local Government Bonds 7,600 2,400 50 - - - - 10,050 Total 7,600 2,400 50 - - - 478,578 488,628 9. Cash and Bank Balances During the year the above short term deposits were held by Argyll and Bute Council, which manages the administration of the funds on behalf of the Trustees. The Council also acts as the banker for the charity and, as detailed below, all transactions incoming and outgoing are made via the Council’s accounts. No costs were incurred by the trust for this work. The balances are repayable on demand. Interest is payable on balances.
Page 28
Trust Funds Notes to the Financial Statements 25 McCaig Trust Third Marquess Of Bute's Silver Wedding Dowry Baillie Gillies Bequest Kidston Park Trust Unrestricted Permanent Endowment Total Funds Unrestricted Permanent Endowment Total Funds Unrestricted Permanent Endowment Total Funds Unrestricted Permanent Endowment Total Funds Short-term deposits with Argyll and Bute Council: £ £ £ £ £ £ £ £ £ £ £ £ Carrying value at 1 April 2022 46,645 27,538 74,183 6,269 1,000 7,269 6,941 3,050 9,991 2,599 1,000 3,599 Add: lodgements during year 1,546 - 1,546 189 - 189 198 - 198 70 - 70 (Less): withdrawals during year (2,400) - - 2,400 (500) - - 500 0 - - (131) - - 131 Gains/losses - - - - - - - - - - - - *Cash and Bank at 31 March 2023 45,791 27,538 73,329 5,958 1,000 6,958 7,139 3,050 10,189 2,538 1,000 3,538 Miss Annie Dickson Burgh Bequest Logie Baird Prize Fund County of Argyll Educational Trust Scheme, 1960 Unrestricted Permanent Endowment Total Funds Unrestricted Permanent Endowment Total Funds Unrestricted Permanent Endowment Total Funds Totals Short-term deposits with Argyll and Bute Council: £ £ £ £ £ £ £ £ £ £ Carrying value at 1 April 2022 1,253 2,948 4,201 1,714 200 1,914 178,437 - 178,437 279,594 Add: lodgements during year 83 - 83 38 - 38 17,449 - 17,449 19,573 (Less): withdrawals during year 0 - - 0 - - (16,800) - - 16,800 (19,831) Gains/losses - - - - - - - - - *Cash and Bank at 31 March 2023 1,336 2,948 4,284 1,752 200 1,952 179,086 - 179,086 279,336 *Cash and bank on above tables recorded as a debtor on the balance sheet
Page 29
Trust Funds Notes to the Financial Statements 26 10. Movement in Funds McCaig Trust Third Marquess Of Bute's Silver Wedding Dowry Baillie Gillies Bequest Kidston Park Trust Unrestricted Revenue Permanent Endowment Total Funds Unrestricted Revenue Permanent Endowment Total Funds Unrestricted Revenue Permanent Endowment Total Funds Unrestricted Revenue Permanent Endowment Total Funds At 1 April 2022 46,645 35,138 81,783 8,669 1,000 9,669 6,991 3,050 10,041 2,599 1,000 3,599 Incoming Resources 2,213 - 2,213 268 - 268 285 - 285 100 - 100 Outgoing Resources 3,067 - 3,067 579 - 579 87 - 87 161 - 161 Gains/ Losses - - - - - - - - - - - - At 31 March 2023 45,791 35,138 80,929 8,358 1,000 9,358 7,189 3,050 10,239 2,538 1,000 3,538 Miss Annie Dickson Burgh Bequest Logie Baird Prize Fund County of Argyll Educational Trust Scheme, 1960 Unrestricted Revenue Permanent Endowment Total Funds Unrestricted Revenue Permanent Endowment Total Funds Unrestricted Revenue Permanent Endowment Total Funds Totals At 1 April 2022 1,253 2,948 4,201 1,714 200 1,914 178,437 497,400 675,837 787,044 Incoming Resources 119 - 119 55 - 55 23,033 - 23,033 26,073 Outgoing Resources 36 - 36 17 - 17 22,384 - 22,384 26,331 Gains/ Losses - - - - - - - (18,822) (18,822) (18,822) At 31 March 2023 1,336 2,948 4,284 1,752 200 1,952 179,086 478,578 657,664 767,964
Page 30
Audit Completion Report Argyll and Bute OSCR Trusts Year ended 31 March 2023 Strictly private and confidential APPENDIX 2
Page 31
The Trustees Argyll and Bute Council OSCR Trusts Kilmory Lochgilphead Argyll PA31 8RT September 2024 Dear Sirs / Madams Audit Completion Report – Year ended 31 March 2023 We are pleased to present our Audit Completion Report for the year ended 31 March 2023 for Argyll and Bute OSCR Trusts. The purpose of this document is to summarise our audit conclusions. The scope of our work, including identified significant audit risks and other areas of management judgement, was outlined in our audit planning processes. We have reviewed our audit strategy and concluded that the original significant audit risks and other areas of management judgement remain appropriate. We would like to express our thanks for the assistance of your team during our audit. If you would like to discuss any matters in more detail then please do not hesitate to contact me on 07813752053. Yours faithfully Mark Outterside Audit Director Forvis Mazars LLP
Page 32
3 Contents Executive summary Status of the audit Significant findings Internal control conclusions Summary of misstatements Appendix A: Draft management representation letter Appendix B: Draft audit report Appendix C: Confirmation of our independence Appendix D: Other communications 01 02 03 04 05 A This document is to be regarded as confidential to the Argyll and Bute OSCR Trusts. It has been prepared for the sole use of the Board of Trustees. No responsibility is accepted to any other person in respect of the whole or part of its contents. Our written consent must first be obtained before this document, or any part of it, is disclosed to a third party.
Page 33
01Executive Summary
Page 34
5 Executive summary Principal conclusions and significant findings We have been engaged to audit the financial statements of Argyll and Bute OSCR Trusts for the year ended 31 March 2023 which are prepared in accordance with the Charities Statement of Recommended Practice (SoRP), Financial Reporting Standard 102 (FRS 102) and Companies Act 2006. As outlined during our planning processes, our audit has been conducted in accordance with International Standards on Auditing (UK), the relevant ethical and professional standards and the terms of our engagement, and means we focus on audit risks that we have assessed as resulting in a higher risk of material misstatement. In the section titled ‘Significant findings’ in this report we have set out our conclusions and significant findings from our audit. This section includes our conclusions on the audit risks and areas of management judgement. The matters that were of most significance in our audit of the financial statements were: Significant risks:- • Management Override of Controls Key management judgements:- • Valuation of investments Misstatement and internal control recommendations The section titled ‘Internal control recommendations’ sets out internal control recommendations and the section titled ‘Summary of misstatements’ sets out audit misstatements. Materiality Our materiality for Argyll and Bute OSCR Trusts is set based on a benchmark of 2% of total assets. Status and audit opinion We have substantially completed our audit in respect of the financial statements for year ended 31 March 2023. At the time of preparing this report, the following matters remain outstanding: • Final Director review and quality procedures; • Review of final annual report and accounts; and • Post balance sheet events review until date of audit sign off. At the time of issuing this report and subject to the satisfactory conclusion of the remaining audit work, we anticipate issuing an unqualified opinion, without modification.
Page 35
02Status of the Audit
Page 36
7 Status of our audit Status Our audit work is substantially complete and there are currently no matters of which we are aware that would require modification of our audit opinion, subject to the satisfactory resolution of the outstanding matters set out below: • Final Director review and quality procedures; • Review of final annual report and accounts; and; and • Post balance sheet events review until date of audit sign off. None of the remaining areas are considered likely to result in a material adjustment or a change to disclosures in the financial statements.
Page 37
03Significant findings
Page 38
9 Significant findings Significant findings, including key areas of management judgement The significant findings from our audit include: • our audit conclusions regarding significant risks and key areas of management judgement; • our comments in respect of the accounting policies and disclosures that you have adopted in the financial statements; and • any significant difficulties we experienced during the audit.
Page 39
10 Significant findings Management override of controls ] Description of the risk Management at various levels within an organisation are 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. Due to the unpredictable way in which such override could occur there is a risk of material misstatement due to fraud on all audits. How we addressed this risk We addressed this risk through performing audit work over: • Accounting estimates impacting amounts included in the financial statements; • Consideration of identified significant transactions outside the normal course of business; and • Journal entries recorded in the general ledger and other adjustments made in preparation of the financial statements. Audit conclusion From the work completed to date, we did not identify any evidence of management override of controls.
Page 40
11 Significant findings Qualitative aspects of the entity’s accounting practices We have reviewed the charitable trusts' accounting policies and disclosures and concluded that they comply with the Charities Statement of Recommended Practice (SoRP), Financial Reporting Standard 102 (FRS 102) and Companies Act 2006. Significant matters discussed with management Previously the Oban Common Good Funds were classified as a Charitable Trust. In December 2022, the Council received notification from OSCR, advising that this fund, was no longer a registered charity and was not required to provide financial statements for the financial year ending on 31 March 2023. No other significant matters have been identified to be discussed. Significant difficulties during the audit During the course of the audit, we did not encounter any significant difficulties and we have had the full co-operation of management. We would like to pass on our thanks to the finance team for their co-operation and assistance with the audit process.
Page 41
04Internal control conclusions
Page 42
13 Internal control conclusions Overview of engagement As part of our audit of the financial statements, we obtained an understanding of internal controls sufficient to plan our audit and determine the nature, timing and extent of testing performed. Although our audit was not designed to express an opinion on the effectiveness of internal control, we are required to communicate to the Board of Trustees any significant deficiencies identified during the course of our work. The purpose of our audit was to express an opinion on the financial statements. As part of our audit we have considered the internal controls in place relevant to the preparation of the financial statements in order to design audit procedures to allow us to express an opinion on the financial statements but not for the purpose of expressing an opinion on the effectiveness of internal control or to identify any significant deficiencies in their design or operation. The matters reported are limited to those deficiencies and other control recommendations that we have identified during our normal audit procedures and that we consider to be of sufficient importance to merit being reported. If we had performed more extensive procedures on internal control we might have identified more deficiencies to be reported or concluded that some of the reported deficiencies need not in fact have been reported. Our comments should not be regarded as a comprehensive record of all deficiencies that may exist or improvements that could be made. Our findings and recommendations are set out below. We have assigned priority rankings to each of them to reflect the importance that we consider each poses to your organisation and, hence, our recommendation in terms of the urgency of required action. In summary, the matters arising fall into the following categories: One internal control recommendation has been noted during our audit of Argyll and Bute OSCR Trusts for the year ended 31 March 2023. See next page. Priority ranking Description Number of issues 1 (high) In our view, there is potential for financial loss, damage to reputation or loss of information. This may have implications for the achievement of strategic objectives. The recommendation should be taken into consideration by management immediately. - 2 (medium) In our view, there is a need to strengthen internal control or enhance efficiency. The recommendations should be actioned in the near future. - 3 (low) In our view, internal control should be strengthened in these additional areas when practicable. 1
Page 43
14 Internal control conclusions Other recommendations in internal control In our view, internal control should be strengthened in these additional areas when practicable. Description of deficiency We noted that the Argyll and Bute Council administers more than 5 charitable trusts. Of these, two, namely the Bailey Gilles Bequest and Miss Anne Dixon Burgh Bequest were dormant during the period. Potential effects Administering several charities could pose an extended administrative burden on the Council’s staff. Recommendation We recommend that Argyll and Bute OSCR Trust Trustees consider some of the available proposals for the simplification of accounting for charitable trusts for example: • Reorganise their charities through merging or winding them up, particularly when they appear to be failing to meet their charitable aims (e.g. by not disbursing funds) • Consider appointing an external trustee as this would remove the charity from the scope of section 106. Management response A number of reorganisations of the Charitable Trusts have taken place over the years to reduce the number of Trusts and allow for increased disbursements of funds, however there are a number of legal constraints within the governing documents of the trusts that prevent us from taking this as far as we would like. Financial Services will continue to work with Legal Services to identify if there are any further opportunities in this area, noting that the 2023-24 financial year is complete therefore any action in relation to this will occur from 2024-25 onwards.
Page 44
05Summary of misstatements
Page 45
16 Summary of misstatements-Argyll and Bute OSCR Trusts Adjusted misstatements We have not identified any adjusted misstatements, above the level of trivial to date. Unadjusted misstatements We have identified one uncertainty adjustment as shown below: Disclosure Amendments As part of our review of the financial statements, we have recommended to management (and management have effected the recommendation) to add a disclosure note explaining the cessation of reporting on Common Goods Funds as follows: In the 2021-22 OSCR Charity Accounts published by Argyll and Bute Council, Oban Common Good had been reported as one of the charities having considered it to have met the criteria to be treated as such since it was accepted onto the Charity Register on 1 April 2006. However, the Council received notification from the Office of the Scottish Charity Regulator (OSCR) on 9 December 2022 advising of the intention to remove the Charity from the Scottish Charity Register. A further notification on 31 March 2023 confirmed the removal of Oban Common Good Fund from the Scottish Charity Register on 31 March 2023. Section 19 of the 2005 Act provides for the protection of assets held by a body immediately prior to its removal from the Register but because OSCR have concluded that the Common Good Fund is not a ‘body’, the provisions of Section 19 do not apply to it. Oban Common Good Fund will not be under duty to account to OSCR and OSCR will not monitor the use of assets once removed from the Register. Argyll and Bute Council was advised the OSCR did not require the Charity to provide final accounts for the financial year ending 31 March 2023 and as such, Oban Common Good no longer appears within this document which collates the financial statement information for the Argyll and Bute Council Charities. Statement of Financial Position Statement of Financial Position Statement of Financial Activities Statement of Financial ActivitiesDetails of adjustment Cr (£ )Dr (£)Cr (£ )Dr (£)Blank 781781 Dr: Investments Cr: Statement of Financial Activities We identified an uncertainty misstatement being the difference between third party available valuation data for the investment unit price (Financial Times) and valuation provided by the Trusts.- 781781Aggregate effect of unadjusted misstatements
Page 46
17 Summary of misstatements-Argyll and Bute OSCR Trusts Disclosure Amendments (continued) We also identified a classification error on cash and bank relating to balances held on the Trusts’ behalf by Argyll and Bute Council, which has been corrected by the Trusts, as shown below: 279,336 Statement of Financial Position Statement of Financial Position Statement of Financial Activities Statement of Financial Activities Details of adjustment Cr (£)Dr (£)Cr (£ )Dr (£)Blank 279,336 Dr: Debtor - Unrestricted and Permanent Endowment Cr: Cash at Bank - Unrestricted and Permanent Endowment To reclassify amounts held on the Trusts' behalf by Argyll and Bute Council from Cash and Bank to Debtors to better reflect the nature of these balances. 279,336279,336Aggregate effect of reclassification misstatements
Page 47
AAppendices A: Draft management representation letter B: Draft Audit Report C: Independence D: Other communications
Page 48
19 Appendix A: Draft management representation letter – Argyll and Bute OSCR Trusts Argyll and Bute OSCR Trusts - Audit for Year Ended 31 March 2023 This representation letter is provided in connection with your audit of the financial statements of Argyll and Bute OSCR Trusts for the year ended 31 March 2023 for the purpose of expressing an opinion as to whether the financial statements give a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice, the Charities and Trustee Investment (Scotland) Act 2005, regulation 8 of The Charities Accounts (Scotland) Regulations 2006., and FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland. We confirm that the following representations are made on the basis of enquiries of management and staff with relevant knowledge and experience (and, where appropriate, inspection of supporting documentation) sufficient to satisfy ourselves that we can properly make each of the following representations to you. Our responsibility for the financial statements and accounting information We believe that we have fulfilled our responsibilities for the true and fair presentation and preparation of the financial statements in accordance with the Charities and Trustee Investment (Scotland) Act 2005 and relevant legislation and United Kingdom Accounting Standards. Our responsibility to provide and disclose relevant information We have provided you with: • access to all information of which we are aware that is relevant to the preparation of the financial statements such as records, documentation and other material; • additional information that you have requested from us for the purpose of the audit; and • unrestricted access to individuals within the charitable trusts you determined it was necessary to contact in order to obtain audit evidence. We confirm as trustees that we have taken all the necessary steps to make us aware, as trustees, of any relevant audit information and to establish that you, as auditors, are aware of this information. As far as we are aware there is no relevant audit information of which you, as auditors, are unaware. Accounting records We confirm that all transactions that have a material effect on the financial statements have been recorded in the accounting records and are reflected in the financial statements. All other records and related information, including minutes of all management and trustees' meetings, have been made available to you in accordance with the Charities and Trustee Investment (Scotland) Act 2005. Accounting policies We confirm that we have reviewed the accounting policies applied during the year in accordance with Section 10 of Financial Reporting Standard 102 and consider these policies appropriate to faithfully represent the effects of transactions, other events or conditions on the charitable trusts’ financial position and financial performance. Accounting estimates We confirm that the methods, significant assumptions and the data used in making the accounting estimates are appropriate to achieve recognition, measurement or disclosure that is in accordance with the applicable financial reporting framework. We confirm the appropriateness of the measurement process, including related assumptions and models, used by management in determining accounting estimates under UK GAAP, and the consistency of application of the process. We confirm that disclosures related to accounting estimates are complete and appropriate under UK GAAP. Contingencies There are no material contingent losses including pending or potential litigation that should be accrued where: • information presently available indicates that it is probable that an asset has been impaired or a liability had been incurred at the balance sheet date; and • the amount of the loss can be reasonably estimated.
Page 49
20 Appendix A: Draft management representation letter – Argyll and Bute OSCR Trusts There are no material contingent losses that should be disclosed where, although either or both the conditions specified above are not met, there is a reasonable possibility that a loss, or a loss greater than that accrued, may have been incurred at the balance sheet date. There are no contingent gains which should be disclosed. All material matters, including unasserted claims, that may result in litigation against the charitable trusts have been brought to your attention. All known actual or possible litigation and claims whose effects should be considered when preparing the financial statements have been disclosed to you and accounted for and disclosed in accordance with the Companies Act 2006 and relevant legislation and United Kingdom Accounting Standards. Laws and regulations We confirm that we have disclosed to you all those events of which we are aware which involve known or suspected non-compliance with laws and regulations, together with the actual or contingent consequences which may arise therefrom. We have complied with all aspects of contractual agreements that would have a material effect on the financial statements in the event of non-compliance. Fraud and error We acknowledge our responsibility as trustees of the charitable trusts, for the design, implementation and maintenance of internal control to prevent and detect fraud and error. We have disclosed to you: • all the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud; • all knowledge of fraud or suspected fraud affecting the charitable trusts involving: • management and those charged with governance; • employees who have significant roles in internal control; and • others where fraud could have a material effect on the financial statements. We have disclosed to you all information in relation to any allegations of fraud, or suspected fraud, affecting the charitable trusts' financial statements communicated by employees, former employees, analysts, regulators or others. Related party transactions We confirm that the charitable trusts has at no time during the year entered into any arrangement, transaction or agreement to provide credit facilities including loans, quasi-loans, credit transactions, mutually beneficial arrangements, or guarantees or security for the foregoing or assumed or assigned any such rights or liabilities for any trustees or their connected persons, except as permitted by the Companies Act 2006 and as disclosed in the financial statements. No trustee or their connected persons had a direct or indirect material interest in any other transaction or arrangement with the charitable trusts other than those disclosed in accordance with section 413 of the Companies Act 2006 or exempted from disclosure by the Act. Transactions with trustees We confirm that the charitable trusts has at no time during the year entered into any arrangement, transaction or agreement to provide credit facilities including loans, quasi-loans, credit transactions, mutually beneficial arrangements, or guarantees or security for the foregoing or assumed or assigned any such rights or liabilities for any trustees or their connected persons, except as permitted by the Companies Act 2006 and as disclosed in the financial statements. No trustee or their connected persons had a direct or indirect material interest in any other transaction or arrangement with the charitable trusts other than those disclosed in accordance with section 413 of the Companies Act 2006 or exempted from disclosure by the Act. Impairment review To the best of our knowledge, there is nothing to indicate that there is a permanent reduction in the recoverable amount of the investments below their carrying value at the balance sheet date. An impairment review is therefore not considered necessary.
Page 50
21 Appendix A: Draft management representation letter – Argyll and Bute OSCR Trusts Charges on assets All the charitable trusts' assets are free from any charges exercisable by third parties except as disclosed within the financial statements. Unadjusted misstatements We confirm that the effects of the uncorrected misstatements are immaterial, both individually and in aggregate, to the financial statements as a whole. A list of the uncorrected misstatements is attached to this letter as an Appendix. Subsequent events We confirm all events subsequent to the date of the financial statements and for which the Charities and Trustee Investment (Scotland) Act 2005 and relevant legislation and United Kingdom Accounting Standards require adjustment or disclosure have been adjusted or disclosed. Should further material events occur after the date of this letter which may necessitate revision of the figures included in the financial statements or inclusion of a note thereto, we will advise you accordingly. Going concern To the best of our knowledge there is nothing to indicate that the charitable trusts will not continue as a going concern in the foreseeable future. The period to which we have paid particular attention in assessing the appropriateness of the going concern basis is not less than twelve months from the date of approval of the financial statements. Yours faithfully Trustees
Page 51
22 Appendix B: Draft Audit Report – Argyll and Bute OSCR Trusts Independent auditor’s report to the Trustees of Argyll and Bute OSCR Trusts and the Accounts Commission Opinion We certify that we have audited the financial statements in the statement of accounts of Argyll and Bute OSCR Trusts (“the charities”) for the year ended 31 March 2023 under Part VII of the Local Government (Scotland) Act 1973 and section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005. The financial statements comprise the Statement of Financial Activities, the Balance Sheet, and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and the United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion the accompanying financial statements: • give a true and fair view of the state of affairs of the charities as at 31 March 2023 and of their incoming resources and application of resources 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 Charities and Trustee Investment (Scotland) Act 2005, and regulation 8 of The Charities Accounts (Scotland) Regulations 2006. Basis for opinion We conducted our audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Accounts Commission for Scotland. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the charities in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Conclusions relating to going concern basis of accounting We have concluded that the use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charities’ ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from when the financial statements are authorised for issue. Responsibilities of the trustees for the financial statements The trustees are responsible for the preparation of financial statements that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the trustees determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the trustees are responsible for assessing the charities’ ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees intend to discontinue the charities’ operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial statements 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.
Page 52
23 Appendix B: Draft Audit Report – Argyll and Bute OSCR Trusts 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, the Charities and Trustee Investment (Scotland) Act 2005, and The Charities Accounts (Scotland) Regulations 2006 are significant in the context of the charities; • inquiring of the Trustees as to other laws or regulations that may be expected to have a fundamental effect on the operations of the charities. • inquiring of the Trustees concerning the charities’ 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. 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 charities’ 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. Reporting on other requirements Other Information The trustees are responsible for the other information in the statement of accounts. The other information comprises the Trustees’ Annual Report. Our responsibility is to read all the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements, or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon except on the Trustees’ Annual Report to the extent explicitly stated in the following opinion prescribed by the Accounts Commission. Opinions prescribed by the Accounts Commission on the Trustees’ Annual Report In our opinion, based on the work undertaken in the course of the audit, the information given in the Trustees' Annual Report for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Charities SORP (FRS 102). Matters on which we are required to report by exception We are required by The Charity Accounts (Scotland) Regulations 2006 to report to you if, in our opinion: • proper 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 nothing to report in respect of these matters.
Page 53
24 Appendix B: Draft Audit Report – Argyll and Bute OSCR Trusts Use of our report This report is made solely to the parties to whom it is addressed in accordance with Part VII of the Local Government (Scotland) Act 1973 and for no other purpose. In accordance with paragraph 108 of the Code of Audit Practice, we do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties. Signed: Mark Outterside for and on behalf of Forvis Mazars LLP Chartered Accountants and Statutory Auditor 26 Mosley Street Newcastle Upon Tyne NE1 1DF United Kingdom
Page 54
25 Appendix B: Confirmation of our independence As part of our ongoing risk assessment, we monitor our relationships with you to identify any new actual or perceived threats to our independence within the regulatory or professional requirements governing us as your auditors. We can confirm that no new threats to independence have been identified since the planning stage of the audit and therefore we remain independent.
Page 55
26 Appendix C: Other communications Other communication Response Compliance with Laws and Regulations We have not identified any significant matters involving actual or suspected non-compliance with laws and regulations. External confirmations We did not experience any issues with respect to obtaining external confirmations. Related parties We did not identify any significant matters relating to the audit of related parties. We will obtain written representations from management confirming that: a. they have disclosed to us the identity of related parties and all the related party relationships and transactions of which they are aware; and b. they have appropriately accounted for and disclosed such relationships and transactions in accordance with the requirements of the applicable financial reporting framework. Going Concern We have not identified any evidence to cause us to disagree with the Board of Trustees that Argyll and Bute OSCR Trusts will be a going concern, and therefore we consider that the use of the going concern assumption is appropriate in the preparation of the financial statements. We will obtain written representations from management, confirming that all relevant information covering a period of at least 12 months from the date of approval of the financial statements has been taken into account in assessing the appropriateness of the going concern basis of preparation of the financial statements. .
Page 56
27 Appendix D: Other communications Other communication Response Subsequent events We are required to obtain evidence about whether events occurring between the date of the financial statements and the date of the auditor’s report that require adjustment of, or disclosure in, the financial statements are appropriately reflected in those financial statements in accordance with the applicable financial reporting framework. We will obtain written representations from management that all events occurring subsequent to the date of the financial statements and for which the applicable financial reporting framework requires adjustment or disclosure have been adjusted or disclosed. Matters related to fraud We have designed our audit approach to obtain reasonable assurance whether the financial statements as a whole are free from material misstatement due to fraud. In addition to the work performed by us, we will obtain written representations from management, and where appropriate the Board of Trustees, confirming that a. they acknowledge their responsibility for the design, implementation and maintenance of internal control to prevent and detect fraud; b. they have disclosed to the auditor the results of management’s assessment of the risk that the financial statements may be materially misstated as a result of fraud; c. they have disclosed to the auditor their knowledge of fraud or suspected fraud affecting the charitable trusts involving: i. Management; ii. Employees who have significant roles in internal control; or iii. Others where the fraud could have a material effect on the financial statements; and d. they have disclosed to the auditor their knowledge of any allegations of fraud, or suspected fraud, affecting the charitable trusts' financial statements communicated by employees, former employees, analysts, regulators or others.
Page 57
28 Appendix D: Other communications Other communication Response System of Quality Management Communication regarding our system of quality management, compliant with ISQM (UK) 1, developed to support the consistent performance of quality audit engagements. To address the requirements of ISQM (UK) 1, the firm’s ISQM (UK) 1 team completes, as part of an ongoing and iterative process, a number of key steps to assess and conclude on the firm’s System of Quality Management: • Ensure there is an appropriate assignment of responsibilities under ISQM (UK) 1 and across Leadership • Establish and review quality objectives each year, ensuring ISQM (UK) 1 objectives align with the firm's strategies and priorities • Identify, review and update quality risks each quarter, taking into consideration of number of input sources (such as FRC / ICAEW review findings, AQT findings, RCA findings, etc.) • Identify, design and implement responses as part of the process to strengthen the firm's internal control environment and overall quality • Evaluate responses to identify and remediation process / control gaps We perform an evaluation of our system of quality management on an annual basis. Our first evaluation was performed as of 31 August 2023. Details of that assessment and our conclusion are set out in our 2022/2023 Transparency Report, which is available on our website here.
Page 58
Contact Forvis Mazars The contents of this document are confidential and not for distribution to anyone other than the recipients. Disclosure to third parties cannot be made without the prior written consent of Forvis Mazars LLP. Forvis Mazars LLP is the UK firm of Forvis Mazars Global, a leading global professional services network. Forvis Mazars LLP is a limited liability partnership registered in England and Wales with registered number OC308299 and with its registered office at 30 Old Bailey, London, EC4M 7AU. Registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales. Details about our audit registration can be viewed at www.auditregister.org.uk under reference number C001139861. VAT number: GB 839 8356 73 © Forvis Mazars 2024. All rights reserved. Mark Outterside Tel: +44 (0)7824 086 593 Cameron.Waddell@mazars.co.uk Mark.Outterside@mazars.co.uk 26 Mosley Street Newcastle Upon Tyne NE1 1DF United Kingdom