FES Return and Audit Guidance 2023-24

4. This is for signature by the college principal, after verification of the 2023-24 FES return, which should be completed with reference to SFC’s Credit Guidance for AY 2023-24. An example of the form for the college certificate is provided at Annex A.

5. We will use the return to inform future funding decisions. It is therefore important that your college adheres to the timetable for returns.

6. As a standard condition associated with the College Final Funding Allocations for AY 2023-24, if a college (or Regional Strategic Body) does not deliver its Outcome Agreement and the targets set out within it, SFC will consider recovery of grant and/or reductions in future funding.
7. Please therefore advise us before 4 October 2024 of any special circumstances you believe should be considered. We will contact colleges regarding any under-delivery against credit thresholds as part of the analysis of FES data but advance indication of circumstances to be considered would be helpful.

8. Colleges are required to obtain from their auditors an independent opinion on the accuracy of their FES return. Auditors must assess the adequacy of the college’s systems, procedures and controls which underpin the completion of their FES return.
9. It is the responsibility of the college’s Board of Management to appoint auditors to undertake the audit of their FES return. The auditors are required to provide college management with their opinion in the form of an ‘audit certificate’, the format of which is provided at Annex B. The college should send the signed certificate, along with their FES return signed by the Principal, to SFC by 4 October 2024.
10. In addition, auditors are required to provide college management with a formal report setting out the approach, scope and findings of their review. A written report should be completed by the auditor and presented to college It is the college’s responsibility to submit a copy of this report, incorporating the responses from college management, to SFC by 4 October 2024.
11. College management should ensure that auditors complete their reviews in time for SFC to receive the audit certificate and report by 4 October 2024. Whilst a copy of the signed audit certificate should be sent to SFC, it is acknowledged that the auditors owe SFC no duty of care in respect of their audit of the FES return. This process does not constitute the provision of third-party assurance to SFC.
12. SFC suggests that the report should include the following sections:

• The scope of the audit.
• The approach taken, including the number of days per auditor, the seniority of the auditors, and the management / quality assurance processes applied.
• The work undertaken, including the extent of the controls/substantive testing undertaken, and the size of samples examined in percentage terms.
• Details of any additional testing carried out as a result of errors found in initial sampling.
• Review of the status of prior year recommendations, highlighting any significant weaknesses that remain outstanding.
• The main findings of the audit work, including any adjustments expressed in credits and approximate equivalent monetary values.
• A summary of adjusted and unadjusted errors including number of credits and monetary values of errors found by auditors.

13. Audit certificates should only be qualified where it is considered that the college’s credit returns contain material misstatements.
14. The required wording of the audit certificate must be adhered to. Significant deviations which alter the level of assurance may lead to rejection of the certificate.
15. SFC will review the audit certificate and the auditors’ report. SFC may decide to contact the auditors directly and undertake a more detailed examination of the work undertaken if deemed necessary.

16. Auditors should familiarise themselves with SFC’s guidance notes for the collection of 2023-24 student activity data in the FES guidance issued on 12 June 2023.
17. The 2023-24 Credit guidance outlines the eligibility criteria for claiming credits for AY 2023-24.

18. This audit guidance has been written to facilitate a consistency of approach to credits auditing across the sector. It is expected that colleges’ systems, procedures and controls will be sufficiently developed to allow auditors to take a controls-based approach to the audit of the data return. In certifying the reasonableness of the credits element of the FES return, auditors should in the first instance identify, review and record the systems and procedures (e.g. Management Information Systems for recording and reporting student and course / programme information) used as the basis for the FES return, and test and assess adequacy of controls in place.
19. Detailed testing will be required as far as necessary to enable auditors adequately to assess whether the controls and procedures were working satisfactorily during the AY as contained in procedure notes. Auditors should note that the procedure for submitting FES data to SFC incorporates an automatic error/exception reporting process allowing colleges to check and/or correct highlighted entries. Understanding the effectiveness of how this process works at individual colleges should be recognised as part of the audit.
20. The compliance testing of system controls should be supplemented by an appropriate level of substantive testing of the actual credits data. The selection of samples and the determination of sample sizes should have regard to those areas of higher risk as outlined at Annex C. Auditors should use their professional judgement to determine if any misstatements they detect are ‘significant’ or ‘material’ for the relevant data.
21. Auditors should also consider, where it is appropriate, to check college returns against external data, such as information from the Scottish Qualifications Authority and Student Awards Agency Scotland.
22. The guidance in Annex C is derived from the content of auditors’ detailed reports and generic issues identified from SFC’s own cyclical reviews of colleges’ student data. It sets out the main areas of risk and suggests systems and controls colleges should have in place and audit considerations in relation to these risk areas.

23. A review of the auditors’ reports for previous years showed common areas of weakness were:

• Incorrect course superclass classification and mapping to Price Group.
• Inconsistency between the number of credits claimed and the number of units / subjects reported within the FES student record.
• Attendance registers for off-campus learning activity not available for audit and not matching systems data.
• Withdrawals not being recorded correctly and reconciled with the student’s last date of attendance in college. Note: this requirement does not apply to the on-going payment of Student Support Funds (SSF) therefore please refer to the separate SSF guidance for specific guidance.
• Incorrect calculation of credit values, particularly in relation to:
  • Infill students.
  • Claims for non-Scottish UK students (note the change in status for EU students from 2021-22).
• Lack of evidence for:
  • The hours claimed in relation to students on work-based learning courses.
  • The hours claimed in relation to students on non-accredited (subject-based) work experience/placements.
  • Time-related milestones and progression for students on open/distance learning courses.
  • Entitlement to fee waiver claims.

24. Colleges are therefore reminded of:

• The importance of having appropriate controls in place, including effective operation of these controls, during the AY. This will ensure that data in the system is accurate, as these feed directly into the FES return.
• The need to ensure attendance registers are accessible and being completed accurately, and that procedures are in place to record withdrawals accurately and timeously.
• The importance of categorising and recording work-based learning activity fully and accurately according to the guidance.
• The need to maintain evidence to support credits claimed for work-based learning, open/distance learning and Price Group 5.

25. In the event of any problems arising with college systems, the auditors should, in the first instance, attempt to resolve matters with the college and perform sufficient work to ensure that the data on the return is reliable.
26. If it appears that the auditors will be unable to sign the report by the due date, then college management should notify SFC at once so that a course of action can be agreed with both the college and the auditors.
27. If a difficulty arises in relation to interpretation of SFC’s instructions or guidance, or if the college and the auditors interpret these differently, then the auditors may consult SFC for advice.

28. For further information please note the following contacts.

FES return

29. Steve Riddell, Senior Policy Analysis Officer, Policy, Insight & Analytics, tel: 0131 313 6685, email: sriddell@sfc.ac.uk or Michelle McNeill, Policy Analysis Officer, Policy, Insight & Analytics, tel: 0131 313 6662, email: mmcneill@sfc.ac.uk.

Credit guidance

30. Gordon McBride, Assistant Director, Finance, tel: 0131 313 6575, email: gmcbride@sfc.ac.uk.

Audit matters

31. Steve Keightley, Senior Financial Analyst, Institutional Sustainability & Governance, tel: 0131 313 6587, email: skeightley@sfc.ac.uk.

Richard Maconachie FCCA
Director of Finance

College certificate

Scottish Funding Council
Apex 2
97 Haymarket Terrace
Edinburgh
EH12 5HD

I confirm that the FES return contains details of all Credits claimed in respect of fundable programmes relating to college activity in AY 2023-24.

I also confirm that I am satisfied that the information supplied in the FES return is free from material misstatement.

I confirm that the figures include, where appropriate, any adjustments identified from our auditors’ review.

The total number of credits claimed is as follows:

College name: ………………………………………………………………………………….

College Principal’s signature: …………………….………………………………………

Date: …………………………………………………………..……………………………………

Please return your completed form to:

SFC Data Returns – email: datareturns@sfc.ac.uk – by 4 October 2024.

Format for credits audit certificate for AY 2023-24

Auditor’s report to members of College Board of Management

I/We have audited the FES return which has been prepared by ____________________College under SFC’s Credit Guidance for colleges issued 12th June 2023 and which has been confirmed as being free from material misstatement by the College’s Principal in his/her Certificate dated __________________.

I/We conducted our audit in accordance with the 2023-24 audit guidance for colleges. The audit included an examination of the procedures and controls relevant to the collection and recording of student data. I/We evaluated the adequacy of these controls in ensuring the accuracy of the data. It also included examination of evidence relevant to the figures recorded in the student data returns. I/We obtained sufficient evidence to give us reasonable assurance that the returns are free from material misstatements.

In my/our opinion:

• The student data returns have been compiled in accordance with all relevant guidance.
• Adequate procedures are in place to ensure the accurate collection and recording of the data.
• [Subject to the exceptions given below] we can provide reasonable assurance that the FES return is free from material misstatements.

Signature:

Date:

Name of audit firm:

Contact name:

Contact telephone number:

Date FES returned:

A qualified audit would require different wording and the subject matter referred to in square brackets of the third bullet point would be expanded.

Please return your completed form to:

SFC Data Returns (datareturns@sfc.ac.uk) by 4 October 2024.