Court Minutes 13 December 2023

The Chair welcomed members to the extraordinary meeting of the University Court. The meeting had been convened to present for members’ consideration and approval the Strategic Report and Financial Statements for the year ended 31 July 2023, and supporting papers as set out below (minute 2 refers).

Apologies were noted as having been received from Karen Cullen, Dr Maria Giatsi-Clausen and Elizabeth Porter.

A number of papers had been brought forward from the meeting of the Court held on Wednesday, 6 December, for discussion and approval:

· Strategic Report and Financial Statements (paper Court (23) 41)

· Draft Letter of Representations to Ernst and Young (paper Court (23) 42)

· Ernst and Young Audit Results Report (paper Court (23) 43)

· Annual Report of the Audit and Risk Committee (paper Court (23) 46)

Pamela Woodburn (Chair) Janet Archer Jay Brown Professor Richard Butt Julie Churchill Louise Ford Sir Paul Grice Professor John Harper Steven Hendry Dr Kavi Jagadamma Dr Arturo Langa James Miller Melanie Moreland Jacqueline Morrison Robert Pattullo Carol Sinclair Guy Smith Bill Stronach

The Strategic Report and Financial Statements, listed as ‘to follow’ on the agenda for the Court meeting on 6 December, had not been circulated with the papers for that meeting as discussion with the University’s external auditors Ernst and Young regarding the final wording within specific sections of the report and statements had not concluded in time for that meeting (minute 7.1, Court Minutes of 6 December 2023 refers).

Introducing the Strategic Report and Financial Statements, the Director of Finance directed members to the amendments introduced to the document following detailed discussion with Ernst and Young. In the interests of transparency, members had been provided with a marked-up version of the document, with accompanying commentary and rationale for the textual changes, under separate cover.

Members’ attention was directed firstly to a correction to the unfunded pensions liability, which was advised as an accounting adjustment with no financial impact. The amendment was noted.

Members’ attention was drawn thereafter to updated wording relating to the preparation of the Financial Statements on the basis of ‘going concern’ under the Statement of Principal Accounting Policies section of the Financial Statements, and the Letter of Representations to Ernst and Young. The amendments were reflected also within the Ernst and Young Audit Result report (page 31 refers).

Members were advised that the revised wording presented reflected the outcome of discussion on a number of iterations, and was acceptable to the University, the Auditors, and the Ernst and Young Technical Team.

In discussion, members suggested that, on the basis of the range of plausible scenarios modelled by the University, supported by reasonable mitigating actions, the position represented by the wording presented, was extreme. Nonetheless, given the extent of the discussion and the technical rationale provided for the wording by Ernst and Young, it was unlikely at this stage that agreement on alternative wording would be reached.

Reflecting on the position, members agreed that it would be important, in accepting the wording presented, to provide appropriate and necessary nuanced commentary around the statements, including in discussion with the Scottish Funding Council. Importantly, many of the adverse factors contributing to the scenario modelling exercise were applicable to the wider sector, including the cash-terms reduction in Scottish Funding Council grants and the impact of inflation.

In response to a query, the Principal confirmed that, subject to the Court’s approval, the Strategic Report and Financial Statements would be submitted to the Scottish Funding Council (SFC). The Senior Leadership Team would engage proactively with the SFC regarding the wording of the Statement of Principal Accounting Policies section.

Having considered the evidence provided, Court APPROVED the Strategic Report and Financial Statements for the year ended 31 July 2023. Members endorsed the accounting policies used in preparing the financial statements, noting that the accounting policies replicated those in place in previous years.

Members were advised that, on the basis of the expected approval of the Strategic Report and Financial Statements, the Convener of the Audit and Risk Committee had confirmed agreement of the Committee’s annual report as presented to the meeting

(paper Court (23) 46). Ernst and Young would now proceed to finalise its audit report (paper Court (23) 43 refers, minute 7, 6 December 2023)

In discussion, members commented variously on the importance of the university leading future audit discussion, and on the importance of providing a balanced narrative in the Strategic Report and Financial Statements around the re-financing of the Barclay’s loan. Members were provided with assurance that appropriate ‘lessons learned’ would be discussed with the external auditors.

The Chair extended her thanks to the Chief Operations Officer and Director of Finance, and to the Chairs of the Audit and Risk and Finance and Estates Committees for their important contributions to getting the documents presented ‘over the line’. Thanks were also extended to the wider Senior Leadership Team, and to all Court members for their continued oversight and engagement.

The University Court would meet on the following dates in Academic Session 2023-24:

Wednesday, 21 February 2024 at 3.00 pm

Wednesday, 17 April 2024: Strategy Day (full day)

Wednesday, 19 June 2024 at 3.00 pm

The Chair took the opportunity to wish members an enjoyable and restful holiday over the festive period and extended her good wishes for a happy new year