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26 June 2012
Amyas Morse, the Comptroller & Auditor General, has given a qualified audit opinion on the 2011-12 accounts of the Skills Funding Agency in relation to how the Agency has accounted for further education colleges.
Further education colleges' results have not been consolidated in the Agency's financial statements. The Agency considered that it would not be cost effective to seek to consolidate the bodies as costs would be incurred by both itself and the FE sector in doing so, especially as the powers over colleges were in the process of being changed during 2011-12. These changes were confirmed by Royal Assent of the Education Act in November 2011.
The audit opinion of the C&AG is that, under International Financial Reporting Standards (IFRS), further education colleges should be treated as subsidiaries of the Agency until the date the powers changed. Therefore their financial results should have been consolidated in the Agency's statements until November 2011. The C&AG's opinion and report recognises that the Agency no longer had control over colleges at 31 March 2012.
Apart from this issue, there are no other matters that would have caused the C&AG to qualify his audit opinion on the 2011-12 accounts.