2022 Annual Report

Independent Auditor’s Report to the Council of the University of Derby

Opinion on the financial statements

In our opinion, the financial statements:


We have audited the financial statements of the University of Derby (“the University”) and its subsidiaries (the “Group”) for the year ended 31st July 2022 which comprise the Consolidated Statement of Comprehensive Income and Expenditure, the Statement of Changes in Reserves, the Statements of Financial Position and the Consolidated Cash Flow Statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and 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).


Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) “ISAs (UK)”) and applicable law. 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Independence

We are independent of the Group and the University in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. 

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Council Members’ 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 Group and the University’s ability 
to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the Council Members with respect to going concern are described in the relevant sections of this report.

Other information

The Governing Council is responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

Other Companies Act 2006 reporting

In our opinion, based on the work undertaken in the course of the audit:


In the light of the knowledge and understanding of the Group and the University and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the report of the governing council.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


Opinion on other matters required by the Office for Students (“OfS”), UK Research and Innovation (including Research England), the Education and Skills Finding Agency (“ESFA”), and the Department for Education 
In our opinion, in all material respects:


We have nothing to report in respect of the following matters in relation to which the OfS requires us to report to you if, in our opinion:


Responsibilities of the Governing Council

As explained more fully in the statement of financial responsibilities, the Council Members (who are also the directors of the University for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the council members determine 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 Council Members are responsible for assessing the Group and the University’s 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 Council Members either intend to liquidate the Group or the University or to cease 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.


Extent to which the audit was capable of detecting irregularities, including fraud

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. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Based on our understanding of the Group and the sector in which it operates, we identified that the principal risks  of non-compliance with laws and regulations are related to their registration with the Office for Students (“OfS”)  and their ongoing conditions of registration, and we considered the extent to which non-compliance might have a  material effect on the Group financial statements or their continued operation. We also considered those laws and  regulations that have a direct impact on the financial statements such as compliance with the Companies Act, OfS  Accounts Direction and tax legislation. 


We considered management’s incentives and opportunities for fraudulent manipulation of the financial statements  (including revenue recognition and the risk of override of controls) and determined that the principal risks were  related to posting inappropriate journal entries to manipulate financial results and management bias in accounting estimates.


Audit response to risks identified

We designed and executed procedures in line with our responsibilities to detect material misstatements in respect  of irregularities, including fraud. These procedures, together with the extent to which they are capable of detecting  irregularities, including fraud, are detailed below:

Our audit procedures were designed to respond to risks of material misstatement in the financial statements,  recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting  one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations  or through collusion. In order to help identify instances of non-compliance with other laws and regulations that may  have a material effect on the financial statements, we made enquiries of management and those charged with  governance about whether the entity is in compliance with such laws and regulations and we inspected any relevant regulatory and legal correspondence. 


A further description of our responsibilities for the audit of the financial statements is located on the Financial  Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

In addition, we also report to you whether income from funding bodies, grants and income for specific purposes and from other restricted funds administered by the University have been properly applied only for the purposes for which they were received and whether income has been applied in accordance with the Statutes and, where appropriate, with the Terms and Conditions of Funding with the OfS and UK Research and Innovation (including Research England), the Education and Skills Funding Agency and the Department for Education.

Use of our report

This report is made solely to the Council Members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the University’s Governing Council those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the University and the council members as a body, for our audit work, for this report, or for the opinions we have formed.

Samantha Lifford (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor 
Birmingham, UK
20 December 2022
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127)