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4 » Z A\/AZETS Coats Observatory Trust Fund 2024/25 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission October 2025

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Coats Observatory Trust Fund: 2024/25 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission| Azets

Table of Contents

Key messages Introduction Annual Accounts Audit Appendices

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Key messages

Financial statements audit

The Charities Accounts (Scotland) Regulations 2006 outline the accounting and auditing requirements for charitable bodies. The Regulations require an auditor to prepare a report to the charity trustees where an audit is required by any other enactment.

The Trust is Renfrewshire Council’s charitable trust and is covered by the requirements of section 106 of the Local Government (Scotland) Act 1973 and consequently require a full audit. Each registered charitable trust has required a full audit since 2013/14. Coats Observatory Trust Fund is a registered charity preparing its accounts on an accruals basis.

The annual accounts are due to be considered by the Audit, Risk and Scrutiny Board on 20 October 2025 and approved upon completion of the audit.

We anticipate our independent auditor’s report to be unqualified subject to the following concluding procedures:

Audit opinion

Our audit approach has been based on gaining a thorough understanding of the Trust Fund’s control environment and has been risk based. This included:

Audit approach

We have not altered our audit plan.

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Key audit findings The Trust Fund had reasonable administrative processes in
place to prepare the annual accounts and the supporting
working papers.
We obtained adequate evidence in relation to the significant
audit risks identified in our audit plan.
The accounting policies used to prepare the financial
statements are considered appropriate. We are satisfied with
the appropriateness of the accounting estimates and
judgements used in the preparation of the financial
statements. All material disclosures required by relevant
legislation and applicable accounting standards have been
made appropriately.
Audit adjustments No adjustments have been identified and made through the
course of the audit.
Internal controls The purpose of the audit was for us to express an opinion on
the financial statements. The audit included consideration of
internal controls relevant to the preparation of the financial
statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of internal control.
Our audit is, therefore, not designed to identify all control
weaknesses.
No material weaknesses or significant deficiencies were noted.

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Introduction

Scope of audit

The annual audit comprises the audit of the financial statements. We outlined the scope of our audit in our External Audit Plan for Renfrewshire Council (“the Council”), which we presented to the Audit, Risk and Scrutiny Board at the outset of our audit. We have not made any subsequent changes to the risks outlined in that plan.

Responsibilities

The Trustees are responsible for preparing its annual accounts, including financial statements which properly present the receipts and payments, and for implementing appropriate internal control systems. The weaknesses or risks identified in this report are only those that have come to our attention during our normal audit work and may not be all that exist. Communication in this report of matters arising from the audit or of risks or weaknesses does not absolve management from its responsibility to address the issues raised and to maintain an adequate system of control.

We do not accept any responsibility for any loss occasioned to any third party acting, or refraining from acting on, the basis of the content of this report, as this report was not prepared for, nor intended for, any other purpose.

We would like to thank all management and staff for their co-operation and assistance during our audit.

Auditor independence

International Standards on Auditing in the UK (ISAs (UK)) require us to communicate on a timely basis all facts and matters that may have a bearing on our independence.

We confirm that we complied with the Financial Reporting Board’s (FRC) Ethical Standard. In our professional judgement, we remained independent, and our objectivity has not been compromised in any way.

We set out in Appendix 1 our assessment and confirmation of independence.

Adding value

All of our clients quite rightly demand of us a positive contribution to meeting their everchanging business needs. We add value by being constructive and forward looking, by identifying areas of improvement and by recommending and encouraging good practice. In this way we aim to promote improved standards of governance, better management and decision making and more effective use of public money.

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Any comments you may have on the service we provide would be greatly appreciated. Comments can be reported directly to any member of your audit team or to Audit Scotland.

Openness and transparency

This report will be published on Audit Scotland’s website www.audit-scotland.gov.uk.

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Annual Accounts audit

Our audit opinion

Opinion Basis for opinion Conclusions
Financial
statements		 We conduct our audit in
accordance with applicable
law and International
Standards on Auditing.
Our findings / conclusions to
inform our opinion are set
out in this section of our
annual audit report.		 The annual accounts are due to be
considered by the Audit, Risk and
Scrutiny Board on 20 October 2025
and approved upon completion of
the audit.
We intend to issue unqualified
opinions in our independent
auditor’s report.
We received the draft annual
accounts and supporting papers in
line with our audit timetable and
those draft accounts were of good
quality. Further information was
provided promptly where required.
Our thanks go to the Finance team
for their assistance with our work.
Going concern
basis of accounting		 In preparing the financial
statements, the trustees are
responsible for assessing
the charity'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
trustees intend to discontinue
the charity's operations, or
have no realistic alternative
but to do so.		 We have concluded that the use of
the going concern basis of
accounting in the preparation of the
financial statements is appropriate.
Opinions
prescribed by the		 We plan and perform audit
procedures to gain assurance		 We have no matters to report.

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Opinion Basis for opinion Conclusions
Accounts
Commission
On the Trustees’
Annual Report		 that information given in the
Trustees' Annual Report is
consistent with the financial
statements and that report
has been prepared in
accordance with The Charity
Accounts (Scotland)
Regulations 2006.
Matters reported
by exception		 We are required to report on
whether:
• adequate accounting
records have not been
kept; or
• the financial statements
are not in agreement with
the accounting records;
or
• we have not received all
the information and
explanations we require
for our audit.		 We have no matters to report.

An overview of the scope of our audit

The scope of our audit was detailed in our External Audit Plan for the Renfrewshire Council, which was presented to the the Audit, Risk and Scrutiny Board in March 2025. The plan explained that we follow a risk-based approach to audit planning that reflects our overall assessment of the relevant risks that apply to the Trust Fund. This ensures that our audit focuses on the areas of highest risk (the significant risk areas). Planning is a continuous process, and our audit plan is subject to review during the course of the audit to take account of developments that arise.

In our audit, we test and examine information using sampling and other audit techniques, to the extent we consider necessary to provide a reasonable basis for us to draw conclusions. This includes:

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Quality indicators

We have applied a suite of quality indicators to assess the reliability of the Board’s financial reporting and response to the audit.

Metric Grading (Mature /
developing /
significant
improvement
required)		 Commentary
Quality and timeliness of
draft financial statements		 Mature We received the unaudited financial
statements of a good standard in line
with our audit timetable.
Quality of working papers
provided and adherence to
timetable		 Mature Working papers were provided on time,
complete, of good quality, and the audit
was able to start on time as planned and
progressed at the pace required. Audit
requests / inquiries were turned around
promptly and accurately.
Timing and quality of key
accounting judgements		 Mature We did not identify any issues with the
timing and quality of key accounting
judgements_._
Access to finance team
and other key personnel		 Mature We received full access to the finance
team and other key personnel. All audit
queries and requests were responded to
in a timely manner.
Quality and timeliness of
the Annual Accounts
As well as the quality and
timeliness of supporting
working papers for those
statements.		 Mature We did not identify any issues with
quality and timeliness of the audited part
of the Annual Accounts.

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Metric Grading (Mature /
developing /
significant
improvement
required)		 Commentary
Volume and magnitude of
identified errors		 Mature We did not identify any audit
adjustments in year.

Significant risk areas and key audit

Significant risks are defined by auditing standards as risks that, in the judgement of the auditor, require special audit consideration. In identifying risks, we consider the nature of the risk, the potential magnitude of misstatement, and its likelihood. Significant risks are those risks that have a higher risk of material misstatement. Audit procedures are designed to mitigate these risks.

As required by the Code of Audit Practice and the planning guidance issued by Audit Scotland, we considered the significant risks for the audit that had the greatest effect on our audit strategy, the allocation of resources in the audit and directing the efforts of the audit team (the ‘Key Audit Matters’), as detailed in the tables below.

Our audit procedures relating to these matters were designed in the context of our audit of the annual report and accounts as a whole, and not to express an opinion on individual accounts or disclosures.

Our opinion on the accounts is not modified with respect to any of the risks described below. The table below summarises each significant risk. Detail behind each risk and the work undertaken is set out on the following pages.

Risk area Financial
stateme
nt /
Assertio
n level
risk		 Frau
d risk		 Planned
approach to
controls		 Level of
judgement /
estimation
uncertainty		 Outcome of work
Management
override of
controls		 Financial
stateme
nt		 Yes Assess design
&		 Very High No indication of
management

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Risk area Financial
stateme
nt /
Assertio
n level
risk		 Frau
d risk		 Planned
approach to
controls		 Level of
judgement /
estimation
uncertainty		 Outcome of work
implementati
on		 override of controls in
the year

Significant risks at the financial statement level

These risks are considered to have a pervasive impact on the financial statements as a whole and potentially affect many assertions for classes of transaction, account balances and disclosures.

Risk area Management override of controls
Significant risk
description		 Management of any entity is in a unique position to perpetrate
fraud because of their ability to manipulate accounting records
and prepare fraudulent financial statements by overriding
controls that otherwise appear to be operating effectively.
Although the level of risk will vary from entity to entity, this risk
is nevertheless present in all entities. Due to the unpredictable
way in which such override could occur, it is a risk of material
misstatement due to fraud and thus a significant risk on all
audits.
This was considered to be a significant risk and Key Audit Matter
for the audit.
Risk of material misstatement: Very High
How the scope of our
audit responded to the
significant risk		 Key judgement
There is the potential for management to use their judgement to
influence the financial statements as well as the potential to
override controls for specific transactions.
Audit procedures

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Risk area Management override of controls
• Documented our understanding of the journals posting
process and evaluated the design effectiveness of
management controls over journals.
• Analysed the journals listing and determined criteria for
selecting high risk and / or unusual journals.
• Tested high risk and / or unusual journals posted during the
year and after the unaudited annual accounts stage back to
supporting documentation for appropriateness,
corroboration and ensured approval has been undertaken in
line with the Trust Fund’s journals policy.
• Gained an understanding of the accounting estimates and
critical judgements made by management. We challenged
key assumptions and considered the reasonableness and
indicators of management bias which could result in material
misstatement due to fraud.
• Evaluated the rationale for any changes in accounting
policies, estimates or significant unusual transactions.
Key observations We did not identify any indication of management override of
controls in the year. We did not identify any areas of bias in key
judgements made by management and judgements were
consistent with prior years.

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Materiality

Materiality is an expression of the relative significance of a matter in the context of the financial statements as a whole. A matter is material if its omission or misstatement would reasonably influence the decisions of an addressee of the auditor’s report. The assessment of what is material is a matter of professional judgement and is affected by our assessment of the risk profile of the Board and the needs of users. We reviewed our assessment of materiality throughout the audit.

Whilst our audit procedures are designed to identify misstatements which are material to our audit opinion, we also report any uncorrected misstatements of lower value errors to the extent that our audit identifies these.

Our initial assessment of materiality was £45,000. On receipt of the 2024/25 unaudited financial statements, we reassessed materiality and updated it from our initial assessment to £55,000. We consider that our updated assessment has remained appropriate throughout our audit.

Materiality
£
Overall materiality for the financial statements £55,000
Performance materiality (75% of materiality) £41,000
Trivial threshold £3,000
Materiality Our assessment is made with reference to the Trust Fund’s gross
expenditure. We consider this to be the principal consideration for
users of the financial statements when assessing financial performance.
Our assessment of materiality equates to approximately 3% of net
assets as disclosed in the 2024/25 unaudited annual accounts.
We perform audit procedures on all transactions, or groups of
transactions, and balances that exceed our materiality levels set. We
perform a greater level of testing on the areas deemed to be at
significant risk of material misstatement.

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Performance materiality is the working level of materiality used throughout the audit. We use performance materiality to determine the nature, timing and extent of audit procedures carried out. We perform audit procedures on all transactions, or groups of transactions, and balances that exceed our performance materiality. This means that Performance we perform a greater level of testing on the areas deemed to be at materiality significant risk of material misstatement. Performance materiality is set at a value less than overall materiality for the financial statements as a whole to reduce to an appropriately low level the probability that the aggregate of the uncorrected and undetected misstatements exceed overall materiality. Trivial misstatements are matters that are clearly inconsequential, Trivial whether taken individually or in aggregate and whether judged by any misstatements quantitative or qualitative criteria.

Audit differences

We did not identify any audit differences during the audit.

Internal controls

As part of our work we considered internal controls relevant to the preparation of the financial statements such that we were able to design appropriate audit procedures. Our audit is not designed to test all internal controls or identify all areas of control weakness. However, where, as part of our testing, we identify any control weaknesses, we report these to the Audit, Risk and Scrutiny Board. These matters are limited to those which we have concluded are of sufficient importance to merit being reported.

We did not identify any significant control weaknesses during our audit.

Other communications

Other areas of focus

Area of focus Audit findings and conclusion
Significant matters on which there was
disagreement with management		 There were no significant matters on which
there was disagreement with management.
Significant management judgements which
required additional audit work and / or
where there was disagreement over the		 There were no other significant management
judgements which required additional audit
work, where there was disagreement over

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Area of focus Audit findings and conclusion
judgement and / or where the judgement
is significant enough that we are required
to report it to those charged with
governance before they consider their
approval of the accounts		 the judgement or where the judgement is
significant enough that requires reporting.
Prior year adjustments identified There were no prior year adjustments
identified.
Concerns identified in the following:
• Consultation by management with
other accountants on accounting or
auditing matters
• Matters significant to the oversight of
the financial reporting process
• Adjustments / transactions identified
as having been made to meet an
agreed system position / target		 No concerns were identified in relation to
these areas.

Accounting policies

Our work included a review of the adequacy of disclosures in the financial statements and consideration of the appropriateness of the accounting policies adopted by The Trust Fund.

The accounting policies, which are disclosed in the financial statements are considered appropriate. The accounting policies used in preparing the financial statements are unchanged from the previous year.

Overall, we found the disclosed accounting policies, and the overall disclosures and presentation to be appropriate.

Presentation and disclosures

There are no significant financial statements disclosures that we consider should be brought to your attention. All the disclosures required by relevant legislation and applicable accounting standards have been made appropriately.

Key judgements and estimates

We are satisfied with the appropriateness of material accounting estimates and judgements used in the preparation of the financial statements.

Fraud and suspected fraud

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We have previously discussed the risk of fraud with management and Audit, Risk and Scrutiny Board. We have not been made aware of any incidents in the period nor have any incidents come to our attention as a result of our audit testing.

Our work as auditor is not intended to identify any instances of fraud of a non-material nature and should not be relied upon for this purpose.

Non-compliance with laws and regulations

As part of our standard audit testing, we have reviewed the laws and regulations impacting the Trust Fund. There are no indications from this work of any significant incidences of noncompliance or material breaches of laws and regulations.

Written representations

We will issue the final letter of representation to the Trust Fund to sign at the same time as the financial statements are approved.

Related parties

We are not aware of any related party transactions which have not been disclosed.

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Coats Observatory Trust Fun

Appendices

Appendix 1: Responsibilities of the Trust and Auditors Appendix 2: Audit adjustments

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Appendix 1: Responsibilities of the Trust and Auditors

The Trust’s responsibilities

The Trust is required to make arrangements for the proper administration of its financial affairs and to secure that one of its officers has responsibility for the administration of those affairs. The Director of Finance and Resources has been designated as that officer at the Trust. They manage the affairs of the Trust Fund to secure the economic, efficient and effective use of resources and safeguard its assets.

Area Trust’s responsibilities
The Director of Finance and Resources has responsibility for ensuring that
an effective system of internal financial control is maintained and
operated. This system of internal financial control can only provide
reasonable and not absolute assurance that assets are safeguarded,
transactions are recorded and properly authorised, and that material
errors or irregularities are either prevented, or detected within a timely
period. The system of internal financial control is based on a framework of
regular management information, financial regulations, administrative
Corporate procedures and a system of delegation and accountability. The Director of
governance Finance and Resources is responsible for keeping proper accounting
records that are up to date and ensure that the financial statements
comply with the Charities Accounts (Scotland) Regulations 2006 (as
amended) and Accounting and Reporting by Charities: Statement of
Recommended Practice (SoRP) applicable to charities preparing their
accounts in accordance with the Financial Reporting Standard for Smaller
Entities published on 16 July 2014. Decisions regarding the operation,
assets, processes or policies of the Trust Fund are delegated by the Council
to the Finance, Resources and Customer Services Policy Board (FRCSPB).

The Trust has responsibility for:

Area Trust’s responsibilities
Management is responsible, with the oversight of those charged with
governance, for communicating relevant information to users about the
Trust and its financial performance, including providing adequate
disclosures in accordance with the applicable financial reporting
framework. The relevant information should be communicated clearly and
concisely.
The Trustees have overall responsibility for the Trust Funds’ system of
internal control. This system is designed by senior management to ensure
Internal effective and efficient operation, including financial reporting and
Control compliance with laws and regulations. The Trustees acknowledge that such
a system is designed to manage, rather than eliminate, the risk of failure to
achieve business objectives, and can only provide reasonable and not
absolute assurance against material misstatement or loss.
Standards of The Trust is responsible for establishing arrangements to prevent and
conduct for detect fraud, error and irregularities, bribery and corruption and also to
prevention ensure that its affairs are managed in accordance with proper standards of
and detection
conduct.
of fraud and
error

Auditor responsibilities

Our responsibilities

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.

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. Procedures include:

• using our understanding of the local government sector and charity sector to identify that the Local Government (Scotland) Act 1973, Charities and Trustee Investment (Scotland) Act 2005 and The Charities Accounts (Scotland) Regulations 2006 are significant in the context of the charity;

• inquiring of management and those charged with governance as to other laws or regulations that may be expected to have a fundamental effect on the operations of the charity/charities;

• inquiring of management and those charged with governance concerning the charity’s policies and procedures regarding compliance with the applicable legal and regulatory framework;

The extent to which our procedures are capable of detecting irregularities, including fraud, is affected by the inherent difficulty in detecting irregularities, the effectiveness of the charity’s controls, and the nature, timing and extent of the audit procedures performed.

Irregularities that result from fraud are inherently more difficult to detect than irregularities that result from error as fraud may involve collusion, intentional omissions, misrepresentations, or the override of internal control. The capability of the audit to detect fraud and other irregularities depends on factors such as the skillfulness of the perpetrator, the frequency and extent of manipulation, the degree of collusion involved, the relative size of individual amounts manipulated, and the seniority of those individuals involved.

A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website

www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Audit quality

The Auditor General and the Accounts Commission require assurance on the quality of public audit in Scotland through comprehensive audit quality arrangements that apply to all audit work and providers. These arrangements recognise the importance of audit quality to the Auditor General and the Accounts Commission and provide regular reporting on audit quality and performance.

Audit Scotland maintains and delivers an Audit Quality Framework.

The most recent audit quality report can be found at Quality of public audit in Scotland: Annual report 2025

Independence and ethics

The Ethical Standards and ISA (UK) 260 require us to report full and fair disclosure of matters relating to our independence. In accordance with our profession’s ethical requirements and further to our external audit plan issued confirming audit arrangements we confirm that there are no further facts or matters that impact on our integrity, objectivity and independence as auditors that we are required or wish to draw attention to. We consider an objective, reasonable and informed third party would take the same view.

Audit fees

The total fees charged to the Trust Fund for the provision of services in 2024/25 were as follows. Prior year charges are also shown for comparative purposes:

2024/25 2023/24
Auditor remuneration (expected fee level) £6,480 £6,300
Total audit fee £6,480 £6,300

Appendix 2: Audit adjustments

We are required to report all non-trivial misstatements to those charged with governance, whether or not the financial statements have been adjusted by management

Adjusted misstatements

We can confirm there were no adjusted misstatements.

Unadjusted misstatements

We can confirm there were no unadjusted misstatements

Misclassification and disclosure changes

Our work included a review of the adequacy of disclosures in the financial statements and consideration of the appropriateness of the accounting policies and estimation techniques adopted by the Trust.

Overall, we found the disclosed accounting policies, significant accounting estimates and the overall disclosures and presentation to be appropriate

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