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INDEPENDENT AUDITORS' REPORT TO THE COUNCIL

We have audited the financial statements of the University of Cambridge for the year ended 31 July 2005 which comprise the consolidated income and expenditure account, the balance sheets, the consolidated cash flow statement, the statement of total recognised gains and losses, the Statement of Principal Accounting Policies and the related notes 1 to 33. These financial statements have been prepared under the accounting policies set out in the Statement of Principal Accounting Policies.

This report is made solely to the Council, as a body, in accordance with the University's financial memorandum effective from 1 October 2003. Our audit work has been undertaken so that we might state to the Council those matters we are required to state to them in an auditors' 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 as a body, for our audit work, for this report, or for the opinions we have formed.

Respective Responsibilities of the Council and independent auditors

The responsibilities of the Council under the University Statutes with respect to the preparation of financial statements are set out in the Statement of Responsibilities of the Council. In fulfilling those responsibilities, the Council has determined what shall be included in the financial statements of the University and of the Group, which do not include Cambridge University Press, a constituent part of the corporation, as stated in the Statement of Principal Accounting Policies.

Our responsibility is to audit the financial statements in accordance with relevant United Kingdom legal and regulatory requirements, United Kingdom auditing standards and the requirements of the Audit Code of Practice issued by the Higher Education Funding Council for England.

We report to you our opinion as to whether the financial statements are properly prepared in accordance with the accounting policies set out in the Statement of Principal Accounting Policies and with the University's Statutes and Ordinances. We also report to you whether, in all material respects, income from the Higher Education Funding Council for England and from the Teacher Training Agency and grants and income for specific purposes and from other restricted funds administered by the University have been applied only for the purposes for which they were received, and whether, in all material respects, income has been applied in accordance with the University's Statutes and Ordinances and where appropriate with the financial memorandum effective from 1 October 2003 with the Higher Education Funding Council for England and with the Funding Agreement with the Teacher Training Agency.

We also report to you if, in our opinion, the Treasurer's Report is not consistent with the financial statements, if the University has not kept proper accounting records or if we have not received all the information and explanations that we require for our audit.

We read the other information contained in the Treasurer's Report, the Corporate Governance Statement, the Statement of Internal Control and the Statement of Responsibilities of the Council and consider the implications for our report if we become aware of any apparent misstatements within them.

Basis of Audit Opinion

We conducted our audit in accordance with United Kingdom auditing standards issued by the Auditing Practices Board and the Audit Code of Practice issued by the Higher Education Funding Council for England. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the Council in the preparation of the financial statements, and of whether the accounting policies selected by the Council are appropriate to the circumstances of the University and the group, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.

Basis of preparation of the financial statements

In forming our opinion, we have considered the appropriateness of the accounting policies adopted by the Council, which are disclosed in the Statement of Principal Accounting Policies. In fulfilment of its responsibility under the University Statutes to prepare and to publish an abstract of the annual accounts of the University, the Council has drawn up financial statements showing the state of affairs and deficit of the University's and group's activities, excluding those of Cambridge University Press. The Council has adopted accounting policies, as required by the Statutes or which the Council has determined appropriate. These policies do not permit the financial statements to comply with applicable United Kingdom accounting standards, in that as set out in the Statement of Principal Accounting Policies, Cambridge University Press has not been included. Our engagement requires us to report only on whether the financial statements comply with the accounting policies determined by the Council of the University and disclosed therein.

Opinion

In our opinion:

(i) the financial statements have been properly prepared in accordance with the accounting policies set out in the Statement of Principal Accounting Policies and with the University's Statutes and Ordinances;
(ii) in all material respects, income from the Higher Education Funding Council for England and from the Teacher Training Agency and grants and income for specific purposes and from other restricted funds administered by the University have been applied for the purposes for which they were received; and
(iii) in all material respects, income has been applied in accordance with the University's Statutes and Ordinances and where appropriate with the financial memorandum effective from 1 October 2003 with the Higher Education Funding Council for England for England and with the Funding Agreement with the Teacher Training Agency.

Deloitte & Touche LLP
Chartered Accountants and Registered Auditors
Cambridge
12 December 2005


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Cambridge University Reporter 16 December 2005
Copyright © 2005 The Chancellor, Masters and Scholars of the University of Cambridge.