Environment

STATEMENT OF INTERNAL CONTROL

The University’s Council acknowledges its responsibility for ensuring that an effective system of internal financial control is maintained and operated by Buckinghamshire New University and the University’s Council confirms it has reviewed the effectiveness of these arrangements.

The system of internal financial control is based on a framework of regular management information, administrative procedures including the segregation of duties and a system of delegation and accountability.

The following processes are established to review the adequacy and effectiveness of the University’s system of internal control:

• KCG provides internal audit services for the University. KCG provides an annual opinion on the adequacy and the effectiveness of internal controls and risk management across the University, in accordance with the CUC Higher Education Audit

Committees Code of Practice.

• The Audit Committee receives regular reports from the internal audit service, including its independent opinion on the adequacy and effectiveness of the University’s system of internal control, together with recommendations for improvement. • Council receives regular reports from the Audit Committee on internal control and the business of the Committee.

• There is a comprehensive budgeting system with an annual and fiveyear budget which is reviewed and agreed by Council. These arrangements also allow for the University to ensure propriety and regularity in the use of public funding. This is achieved through the operation of frameworks and policies, including Financial Regulations, which are underpinned by linked policies, such as the Expenses Policy, and procedures in relation to procurement.

The key elements of the University’s system of internal control, which is designed to support the Council in carrying out its responsibilities, include: • Clear definitions of the responsibilities of, and the authority delegated to, senior officers of the University • A comprehensive annual planning process, supplemented by detailed annual income, expenditure, capital and cash flow budgets. • A regular review of institutional performance and of financial results, involving variance reporting and updates of forecast out-turns. • Clearly defined and formalised requirements for approval and control of expenditure • Procedures for the management of investment and risk

• A professional internal audit service delivered under terms of reference which reflect guidance issued by

CUC, and whose annual programme is approved by the Audit Committee The University's Council has established the processes for the identification, evaluation and management of risks that the University faces.

The University’s Council has responsibility for maintaining a sound system of internal control that supports the achievement of policies, aims and objectives, while safeguarding the public and other funds and assets for which it is responsible.

This is in accordance with the responsibilities assigned to the governing body in the Instrument and Articles of Government and the Terms and Conditions of funding for higher education institutions with the OfS.

The system of internal control is designed to manage rather than eliminate the risk of failure to achieve policies, aims and objectives. It can therefore only provide reasonable and not absolute assurance of effectiveness. is based on an ongoing process designed to identify the principal risks to the achievement of policies, aims and objectives, to evaluate the nature and extent of those risks and to manage them efficiently, effectively and economically.

More specifically:

• The Audit Committee provides an oversight of risk management. • Regular meetings between senior managers and Service Leaders to review progress and issues arising from operational activities, and similar meetings with Heads of School in relation to academic developments. • Oversight by Resources Committee of matters relating to resource allocation, forward planning, effectiveness and value for money. • The University’s Council receives periodic reports from the Chair of the Audit Committee concerning internal control and requires regular reports from managers on the steps they are taking to manage risks in their areas of responsibility, including progress reports on key projects. • A robust risk prioritisation methodology based on risk ranking and cost-benefit analysis has been established and an organisation wide risk register is maintained. • Clear definitions of the responsibilities of, and the authority delegated to, senior officers of the University. • Internal Audit during 2020-21 carried out eight Audit Assignments and no significant internal control weaknesses were identified.

• External Auditors, in their audit for the year ending 31 July 2021, included consideration of internal control relevant to the preparation of the

Financial Statements, the external audit finding no significant deficiencies.

STATEMENT OF RESPONSIBILITIES OF THE UNIVERSITY’S COUNCIL

The University’s Council is responsible for keeping adequate accounting records which disclose, with reasonable accuracy at any time, the financial position of the Group, and for ensuring that the financial statements are prepared in accordance with the Instrument and Articles of Government, the Statement of Recommended Practice: Accounting for Further and Higher Education and FRS102. Within the Terms and Conditions of funding for higher education institutions with the OfS and the University’s Council, through its designated accountable officer, the University is required to prepare financial statements for each financial year which give a true and fair view of the state of affairs of Buckinghamshire New University and Group and of the surplus or deficit and cash flows for that year. At Buckinghamshire New University the designated accountable officer has been identified as the Vice-Chancellor. In preparing these financial statements, the University’s Council is required to:

• Select suitable accounting policies and then apply them consistently. • Make judgements and estimates that are reasonable and prudent and state whether applicable United Kingdom Accounting

Standards have been followed, subject to any material departures disclosed and explained in the financial statements. • Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in operation.

INDEPENDENT AUDITOR'S REPORT TO THE COUNCIL OF BUCKINGHAMSHIRE NEW UNIVERSITY

Opinion

We have audited the financial statements of Buckinghamshire New University (“the University”) for the year ended 31 July 2021 which comprise the Consolidated and University Statement of Comprehensive Income and Expenditure, the Consolidated and University Statement of Changes in Reserves, Consolidated and University Balance Sheet, Consolidated Statement of Cash Flows and related notes, including the Statement of Principal Accounting Policies.

In our opinion, the financial statements:

Give a true and fair view of the state of the Group’s and the University’s affairs as at 31 July 2021, and of the Group’s and the University’s income and expenditure, gains and losses and changes in reserves, and of the Group’s cash flows, for the year then ended; and

Have been properly prepared in accordance with UK accounting standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland, and with the 2019 Statement of Recommended Practice – Accounting for Further and Higher Education;

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the group in accordance with, UK ethical requirements including the FRC Ethical Standard. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.

Going concern The Council has prepared the financial statements on the going concern basis as they do not intend to liquidate the Group or the University or to cease their operations, and as they have concluded that the Group and the University’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over their ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”).

In our evaluation of the Council’s conclusions, we considered the inherent risks to the group’s business model and analysed how those risks might affect the Group and University’s financial resources or ability to continue operations over the going concern period.

Our conclusions based on this work:

• we consider that the Council’s use of the going concern basis of accounting in the preparation of the financial statements is appropriate; • we have not identified, and concur with the Council’s assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the

Group or the University’s ability to continue as a going concern for the going concern period. • However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Group or the University will continue in operation. Fraud and breaches of laws and regulations – ability to detect To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:

• Enquiring of the Council, the Audit

Committee, internal audit and inspection of policy documentation as to the Group’s high-level policies and procedures to prevent and detect fraud, including the internal audit function, and the Group’s channel for “whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud. • Reading Council, Audit Committee,

Remuneration Committee,

Resources Committee and Student

Experience Committee minutes. • Using analytical procedures to identify any unusual or unexpected relationships. • Obtaining a copy of the

Group’s fraud register. We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit.

As required by auditing standards, and taking into account possible pressures to meet regulatory performance targets, we perform procedures to address the risk of management override of controls and the risk of fraudulent revenue recognition, in particular the risk that income from tuition fees is incorrectly recorded due to inaccuracies in the deferral of revenue relating to courses crossing the financial year and the risk that Group management may be in a position to make inappropriate accounting entries, and the risk of bias in accounting estimates and judgements such as pension assumptions.

We did not identify any additional fraud risks.

We performed procedures including:

• Identifying journal entries and other adjustments to test based on risk criteria and comparing the identified entries to supporting documentation.

These included journals with rarely used account combinations or unexpected combinations which increase the amount of cash recorded, and journals deferring tuition fee income posted outside of the usual process for these journals. • Evaluating the business purpose of significant unusual transactions. • Assessing significant accounting estimates for bias.

Identifying and responding to risks of material misstatement due to noncompliance with laws and regulations

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussion with the Council and other management (as required by auditing standards), and from inspection of the Group’s regulatory and legal correspondence and discussed with the Council and other management the policies and procedures regarding compliance with laws and regulations.

As the Group is regulated, our assessment of risks involved gaining an understanding of the control environment including the entity’s procedures for complying with regulatory requirements.