Reclassification among reasons for considerably delayed college accounts

Annual financial statements should be published by January 31, but several are still yet to surface

Annual financial statements should be published by January 31, but several are still yet to surface

Unfinished audits and reclassification to the public sector are among the reasons why nine colleges have considerably missed the government’s deadline for publishing their annual accounts this year.

Education and Skills Funding Agency rules state that colleges must publish their audited accounts in an easily accessible location on their website no later than January 31 each year to “maximise transparency and to support accountability”.

However, 2022 accounts for nine of the 170-odd colleges in England are still yet to surface five months after the deadline.

Plumpton College said its delay is down to the Department for Education’s new strict arrangements for capital borrowing.

Colleges have had to gain special permission – which will only be granted in rare circumstances – to borrow commercially since November 29, 2022, when the Office for National Statistics changed their status from the private to the public sector.

The overnight ruling resulted in many colleges having to put key campus projects on hold. In response, the DfE belatedly launched its own time-limited loans scheme for college capital projects, but this process is still ongoing.

A spokesperson for Plumpton College said: “Plumpton has completed its annual report and accounts, with a clean audit and approval by the corporation in December. The college is however unable to submit signed accounts until the DfE confirm a loan to replace its commercial borrowing for a capital project completed in April 2023.

“The DfE is aware of the situation and has extended the filing deadline pending their approval of the loan facility.”

As well as new rules on borrowing, reclassification to the public sector has opened colleges up to scrutiny of “novel, contentious, or repercussive transactions” such as those that are considered to be outside of colleges’ normal sphere of business or may cause controversy or criticism.

Lincoln College Group is among the colleges that attract the largest amounts of commercial and international income and is one of the nine colleges to not have published accounts for 2022 yet.

A spokesperson for the college said: “As with a few other colleges, transfer to the public sector has led to a delay in the filing of our accounts. We are working closely with the DfE and our auditors to ensure this takes place as soon as possible.”

Two of the other colleges with late accounts said unfinished audits had caused the delay.

South Gloucestershire and Stroud College said: “The ESFA via Mazars have undertaken a funding audit of SGS college provision of which we are still awaiting the final report. College accounts cannot be signed off until this report is received. The ESFA is aware of this, and accounts will be submitted when the report is provided. SGS college remains in good financial health.”

And Hull College said: “Hull College is currently undergoing an ESFA financial audit and is unable to submit and publish accounts until that audit process has been completed. The ESFA are aware and working with us to bring the audit to a conclusion.”

Kingston Maurward College, a land-based college in Dorset, is also yet to file accounts for 2022. The college has faced financial challenges over the past few years due to a big hit on its commercial income during the pandemic and associated lockdowns.

The college received a financial notice to improve as well as an FE Commissioner visit last year.

Principal Luke Rake told FE Week the “continued financial challenge” means that whilst his college works through the details with the ESFA and FE Commissioner teams together, the board is “not yet comfortable signing off the 12-month going concerns just yet”.

“We anticipate getting this resolved fairly soon,” Rake added.

Eastleigh College – which is expected to merge with struggling City College Southampton as well as Fareham College in August 2023 to create a “financially strong network” – is also yet to file accounts for 2022.

A spokesperson for Eastleigh would only say the college has “been working to deadlines agreed by the DfE” and that it “expects to publish accounts in due course”.

The three other colleges with late 2022 accounts – South Essex College, Strode College and Wakefield College – did not respond to requests for comment.

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