Springboard Opportunities Limited Audit conclusions period ended 31[st] March 2023
## **Contents**
|**1**|**Introduction ......................................................................................................................... 2**|**Introduction ......................................................................................................................... 2**|
|---|---|---|
||1.1|Overview ................................................................................................................................. 2|
||1.2|Audit Fieldwork ....................................................................................................................... 3|
|**2**|**Audit and system objectives and summary of observations ................................................... 4**||
||2.1|Corporate Governance ............................................................................................................ 4|
||2.2|Monthly reporting ................................................................................................................... 5|
||2.3|Income, credit control and debtors ........................................................................................ 6|
||2.4|Procurement, payments and creditors ................................................................................... 7|
||2.5|Banking .................................................................................................................................... 8|
||2.6|Payroll ..................................................................................................................................... 9|
||2.7|Fixed assets ........................................................................................................................... 10|
|**3**|**Other areas ........................................................................................................................ 11**||
|**4**|**Management report ........................................................................................................... 12**||
|**5**|**Springboard Opportunities schedule of adjusted errors ....................................................... 16**||
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1 **Introduction**
## **1.1** _**Overview**_
The Board of Directors of Springboard Opportunities Limited (Springboard) have engaged Finegan Gibson Ltd to provide an annual audit service and a report on our findings. This report outlines tests, findings and recommendations in light of our audit.
Finegan Gibson performed the audit fieldwork in July 2023.
The staff who participated in the 2023 audit were: Conor Dolan (Partner) Courtney Mills (Manager) James Taggart (Senior) John Morrow (Junior) Katie Magill (Junior)
The purpose of this report is to outline our audit fieldwork and set out the matters that came to our attention during the course of our audit conducted in connection with Springboard Opportunities Limited for the period ended 31 March 2023. Our objective is to use our knowledge of the Charity gained during our audit work to make useful comments and suggestions for you to consider. However, you will appreciate that our routine audit work is designed to enable us to form an opinion on the financial statements of the companies concerned and it should not be relied upon to disclose all irregularities that may exist nor to disclose errors that are not material in relation to those financial statements.
Our report is designed to include useful recommendations that may help improve performance and avoid weaknesses that could lead to material loss or misstatement and should not be construed as a criticism of any individual.
The reports are provided on the basis that it is for the information of the Board of Directors of Springboard Opportunities Limited; that it will not be quoted or referred to, in whole or in part, without our prior written consent; and that we accept no responsibility to any third party in relation to it.
The report details our main observations and recommendations. We also note examples of perceived risks which may arise from the observations. These risks should act only as a guide for areas which could be reviewed and do not represent the actual risks currently faced by the organisation. These matters have been discussed with finance staff and we have included their responses where appropriate, together with a summary of the agreed action plan, which may be useful as a checklist.
We would like to take this opportunity to acknowledge the courtesy and assistance extended to us by Springboard Opportunities personnel during the course of our audit.
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## **1.2** _**Audit Fieldwork**_
At our visit we began preliminary audit work, and a systems review was performed, looking at the various controls in place and assessing the risk of material misstatement. Auditing standards require us to consider the areas with the financial statements that are at greater risk of misstatement and focus our testing on those areas. The high-risk areas highlighted within Springboard Opportunities at the planning stage of the audit were:
1. **Income** – due to its materiality and revenue recognition issues; and
2. **Payroll** – due to its materiality and the volume of transactions.
It should be noted that audit testing identified no significant weaknesses in both these areas.
Throughout the audit process, further systems work took place, period-end Statement of Financial Position (‘SOFP’) and the Statement of Financial Activities (‘SOFA’) values were audited. A full audit of each category of the SOFP was performed, whilst the SOFA was tested mainly on a sample basis.
The audit covered the following areas in detail:
- General corporate governance procedures
- Monthly reporting
- Income, credit control and debtors
- Procurement, payments, and creditors
- Banking
- Payroll
- Fixed assets
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2 **Audit and system objectives and summary of observations**
## **2.1** _**Corporate Governance**_
## _**Objective**_
To ensure that corporate governance arrangements are adequate.
## _**Approach**_
- Review of policies and procedures for assurance that the Charity is in compliance with SORP requirements
- Companies House checks
- Review of prior period management reports
- Review and discuss any litigation with management
- Review board meeting and committee meeting minutes
- Enquire on fraud issues and non-compliance with laws and regulations
- Review hospitality register
- Review financial procedures manual
## _**Observations**_
- No observations noted.
## _**Recommendations post audit**_
No recommendations made.
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## **2.2** _**Monthly reporting**_
## _**Objective**_
To ensure that monthly reporting is accurate and complete.
## _**Approach**_
- Review of monthly management accounts
- Review of board meeting minutes
## _**Observations**_
- No observations noted.
## _**Recommendations post audit**_
No recommendations made.
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## **2.3** _**Income, credit control and debtors**_
## _**Objective**_
To ensure an adequate system exists where all monies received by the Charity are accurately recorded, receipted and lodged to the bank, adequate credit control procedures are in place and the period end debtors are accurate.
## _**Approach**_
- Review of a sample of 2023 letters of offer and agreements;
- Trace a large sample of income from letters of offer to the remittance advice slips and bank statements;
- Substantive testing of trading income, vouching to bank and remittance;
- Sample test credit notes for correctness;
- Trace a sample of lodgements from cash received slips to bank statements;
- Trace a sample of income remittance to Sage and Springboard system;
- Review of segregation of duties in handling income;
- Credit control procedures were reviewed for adequacy;
- Review and testing of period end debtors report balances;
- Perform cut off testing at period end;
- Perform recalculation of prepayments and accrued income;
- Discuss long outstanding debtors with management; and
- Analyse any credit balances in debtors’ ledger.
- We attended out on site to discuss debtor balances before finalisation of Sage.
## _**Observations**_
- During testing of debtors it was noted one debtor was not accounted for.
- During testing of income, it was noted there was one income stream which related to the next financial year included in the current year.
## _**Recommendations post audit**_
See management report points 1 & 2.
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## **2.4** _**Procurement, payments and creditors**_
## _**Objective**_
To ensure the procurement system provides a transparent, fair and effective means of buying goods and/or services consistent with achieving value for money and creditor balances at the period end are accurate.
## _**Approach**_
- Substantive testing of invoices for purchase orders, goods received notes and tenders;
- Sample testing of invoices for payment and correct entry onto Sage and Springboard system;
- Enquire of and test segregation of duties;
- Review of supplier statements reconciliations;
- Review and testing period end creditor control account balances;
- Cut off testing and unrecorded liability testing at period end;
- Recalculate accruals and deferred income; and
- Review of hire purchase agreements to ensure correct accounting treatment;
## _**Observations**_
- No observations noted.
## _**Recommendations post audit**_
No recommendations made.
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## **2.5** _**Banking**_
## _**Objective**_
To ensure appropriate systems and procedures are in place covering lodgements, withdrawals and administration of the bank accounts.
## _**Approach**_
- Sample test bank reconciliations for completeness and review;
- Review bank reconciliations for old outstanding amounts;
- Check bank facility letters for correct signatories and facilities;
- Review petty cash records; and
- Agree bank balances at period end to bank audit letter.
## _**Observations**_
- During testing of the bank mandate, it was noted that one individual is included on the mandate who is no longer a trustee.
- During testing of the bank accounts, it was noted free cash reserves are not held in a high interest deposit account and potentially losing out on interest income.
## _**Recommendations post audit**_
See management report points 3 & 4.
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## **2.6** _**Payroll**_
## _**Objective**_
To ensure bona fide employees are remunerated at agreed levels within agreed timescales and that the administration and recording of payroll is performed efficiently and effectively.
## _**Approach**_
- Test payroll for correct review and authorisation;
- Review and test pay scales and approval of increases;
- Sample test employee personnel files for prior employment P45s, binding contracts and security clearance etc;
- Reconcile hours worked to hours paid;
- Sample test joiners and leavers for completeness and accuracy;
- Review timesheets for signatures and approval;
- Review expense claims for completeness;
- Review and test overtime and bonus payments;
- Sample test mileage claims, ensure mileage is appropriately taxed;
- Agree PAYE payments to bank and revenue documentation;
- Recalculate payslip PAYE and NIC;
- Discuss benefit in kind taxation with management;
- Recalculate wages accrual;
- Vouch period end PAYE to records and bank; and
- Reconcile period end payroll records to Sage and Springboard system.
## _**Observations**_
- No observations noted.
## _**Recommendations post audit**_
No recommendations made.
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## **2.7** _**Fixed assets**_
## _**Objective**_
To ensure fixed assets are secure, identifiable, insured and accounted for appropriately.
## _**Approach**_
- Review fixed asset register for completeness;
- Recalculate depreciation;
- Review lease treatments for correct accounting treatment;
- Consider building valuation;
- Consider building classification;
- Review repairs and maintenance accounts for additional fixed asset additions;
- Review additions invoices for capital expenditure; and
- Review additions for compliance with procurement procedures.
## _**Observations**_
- It was noted during testing of fixed assets, the fixed asset register does not agree to the nominal codes on the Sage Accounting system.
## _**Recommendations post audit**_
See management report point 5.
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## 3 **Other areas**
## _**Audit opinion**_
The results of our audit work indicate that the financial statements presented are free of material misstatements and are represented fairly in accordance with Generally Accepted Accounting Principles (GAAP) applicable to the entity. Thus we have issued an unqualified audit report on the financial statements.
## _**Going concern**_
During the course of the audit, we did not identify or become aware of any events or conditions that may cast a significant doubt on the entity’s ability to continue as a going concern. As a result, we concur with your assessment that the use of the going concern assumption is appropriate in the preparation and presentation of the financial statements.
## _**Fraud**_
Auditing standards require us to report any identified frauds, indications of fraud or any other relevant matters related to fraud. We have nothing to report in this regard.
## _**Laws and regulations**_
No matters involving non-compliance with laws and regulations came to our attention during the course of the audit.
## _**Misstatements**_
During the course of the audit, a number of misstatements were identified. These have been recorded within Springboard schedule of recorded errors.
## _**Related parties**_
You have confirmed to us your knowledge of related party transactions and we have nothing further to report in this regard.
## _**Subsequent events**_
We performed procedures designed to obtain sufficient appropriate audit evidence that all events occurring between the date of the financial statements and the date of the audit report that require adjustment, or disclosure in, the financial statements have been identified. Audit procedures identified no such subsequent events.
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4 **Management report**
In light of the preceding observations, Finegan Gibson has developed the following management report.
This report highlights control weaknesses and recommendations in Springboard which came to our attention during the audit fieldwork performed. The information is only provided for the attention of the Board.
On our Management Report, we have graded our observations:
- Grade 1 - An issue which requires urgent management decision and action without which there is a substantial risk to the achievement of key objectives, or to the reputation of the organisation.
- Grade 2 - An issue which requires prompt attention, as failure to do so could lead to a more serious risk exposure.
- Grade 3 - Improvements that will enhance the existing control framework and/or represent best practice.
We can confirm a total of 5 recommendations within this report, which include no grade one observations, 4 grade two observations and 1 grade three observations .
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Ref Observation Recommendation Management response Action
Issue Risk Grade Responsibility Deadline
Income, credit control and debtors
1. During testing of debtors Increased risk of 2 Debtor control account Noted: invoice will be generated Senior Finance
it was noted one debtor misappropriation reconciliations should be before year end. Officer
was not accounted for. of funds. performed on a monthly
Material basis and reviewed by
management.
misstatement as
there is a
possibility of
duplication.
2. During testing of income, Increased risk of 2 Income should be With Finegan Gibsons support Senior Finance
deferred income code to be set
it was noted there was misappropriation accounted for in the Officer
one income stream which of funds. financial year which it up and then we understand any
related to the next relates to. If income is amounts will need to be
Material
financial year included in received in advance, it released to the relevant financial
misstatement as
the current year. should be accounted for as
there is a year.
deferred income.
possibility of
duplication.
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Ref Observation Recommendation Management response Action
Issue Risk Grade Responsibility Deadline
Banking
3. During testing of the bank There is an 2 Bank mandates should be Noted: to be amended. Executive
mandate, it was noted increased risk of retained on file for all bank Director
that one individual is loss of funds accounts, reviewed on a
included on the mandate where signatories regular basis and kept up to
who is no longer a include individuals date.
trustee. who are no longer
working with the
organisation.
4. During testing of the bank There is a risk the 3 The organisation should
accounts, it was noted organisation could review the use of all the
free cash reserves are not be losing out on bank accounts and consider
held in a high interest potential interest opening a high interest
deposit account and income. deposit account to allow
potentially losing out on free cash reverses to earn
interest income. interest.
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Ref Observation Recommendation Management response Action
Issue Risk Grade Responsibility Deadline
Fixed Assets
5. It was noted during Misstatement of 2 The Fixed Asset Register Noted: Fixed Asset Register will Senior Finance
testing of fixed assets, asset values in should be reviewed on a be reviewed and updated as Officer
that on 2 occasions out of financial regular basis by senior required.
4 tested fixed asset statements. management.
additions were not added
Complete and The fixed asset register
to the fixed asset register.
accurate should be updated on a
management timely basis and agree to
information may the Sage Accounting
not be readily System.
available to
inform decision
making.
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5 **Springboard Opportunities schedule of adjusted errors**
## **Adjusted audit differences:**
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No. Nature/reason Account Adjusting journals Adjusted SOFA effect Adjusted B/S effect
Dr Cr £ £
1. Prepayments & Accrued Income 1103 10,679 (10,679)
Insurance 7150 3,626 (3,626)
Telephone 7300 636 (636)
Computer Maintenance 7301 5,040 (5,040)
Printing, Photocopying & Stationery 7351 244 (244)
Light & Heat 7501 384 (384)
Cleaning 7503 505 (505)
Professional Fees 7900 243 (243)
Journal to correct the reversal of the prior year prepayments.
2. Intercompany transactions 1105 1,900 1,900
Redundancy 7003 1,900 1,900
Journal to correct intercompany transactions.
3. Computer Equipment Depreciation 0031 1,907 1,907
Depreciation - Computers 8000 1,907 1,907
Journal to correct computer depreciation to agree to the FAR & write off old brought forward difference.
4. Furniture/Fixture Depreciation 0041 63 (63)
Furniture/Fixture Depreciation 8001 63 (63)
Journal to correct Fixture and Fittings depreciation to agree to FAR.
5. Accruals 2109 2,500 2,500
Keltbray Group 4125 2,500 2,500
Journal to release prior year deferred income.
6. Accruals 2109 260 260
Printing, Photocopying & Stationery 7351 260 260
Journal to write off immaterial brought forward accrual difference.
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No. Nature/reason Account Adjusting journals Adjusted SOFA effect Adjusted B/S effect
Dr Cr £ £
7. P.A.Y.E. & NIC 2210 20 (20)
Local Trainer Fees 7100 20 (20)
Journal to correct posting to incorrect nominal code.
8. Salaries 7000 19,217 (19,217)
Pension costs 7002 19,217 19,217
Journal to reallocate employee pension costs.
9. Prepayments & Accrued Income 1103 2,463 2,463
Belfast City Council B2P 4112 2,463 2,463
Journal to account for debtor at year end.
10. Accruals 2109 25,414 (25,414)
Spirit of 2012 Trust 4115 25,414 (25,414)
Journal to defer Spirit of 2012 Trust income received in advance.
11. Accruals 2109 65,644 (65,644)
Partner Payments 7266 57,621 (57,621)
Audit Fees 7901 6,226 (6,226)
Foreign Exchange Gain/Losses 7906 1,797 (1,797)
Journal to account for additional accruals.
12. Loans 2300 12,280 (12,280)
Partner Payments 7266 12,000 (12,000)
Travel – Local 7205 280 (280)
Journal to correct year end loan balance.
TOTAL AUDIT ADJUSTMENTS 142,347 142,347 (105,070) (105,070)
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