We have audited the financial statements of the University of Cambridge for the year ended 31 July 2006 which comprise the statement of principal accounting policies, the consolidated income and expenditure account, the consolidated statement of total recognised gains and losses, the balance sheets, the consolidated cash flow statement and the related notes 1 to 35. These financial statements have been prepared under the accounting policies set out therein.
This report is made solely to the Council, as a body, in accordance with the 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 any responsibility to anyone other than the Council and the Council's members as a body, for our audit work, for this report, or for the opinions we have formed.
As described in the statement of the responsibilities of the Council, the Council is responsible for the preparation of the financial statements in accordance with the University's Statute, the Statement of Recommended Practice on Accounting for Further and Higher Education and other applicable United Kingdom law and accounting standards (United Kingdom Generally Accepted Accounting Practice).
Our responsibility is to audit the financial statements in accordance with relevant United Kingdom legal and regulatory requirements and International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the Statement of Recommended Practice on Accounting for Further and Higher Education. We also report whether, in all material respects, income from funding bodies, grants and income for specific purposes and from other restricted funds administered by the University of Cambridge have been properly applied only for the purposes for which they were received and whether income has been applied in accordance with the Statutes and Ordinances and, where appropriate, with the Financial Memorandum with the Higher Education Funding Council for England and the Training and Development Agency for Schools.
We also report to you if, in our opinion, the Financial Review is not consistent with the financial statements, if the Group has not kept proper accounting records, the accounting records do not agree with the financial statements or if we have not received all the information and explanations we require for our audit.
We read the other information contained in the Financial Review, 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 or material inconsistencies with the financial statements.
We conducted our audit in accordance with International Standards on Auditing 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 are appropriate to the Group's circumstances, 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.
In our opinion:
| (a) | the financial statements give a true and fair view of the state of affairs of the University and the Group as at 31 July 2006 and of the surplus of the Group for the year then ended and have been properly prepared in accordance with the Statement of Recommended Practice on Accounting for Further and Higher Education; |
| (b) | in all material respects income from Higher Education Funding Council for England, and from the Training and Development Agency for Schools 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 |
| (c) | in all material respects income has been applied in accordance with the University's Statutes and Ordinances, and where appropriate, with the Financial Memorandum, dated October 2003 with the Higher Education Funding Council for England and with the funding agreement with the Training and Development Agency for Schools. |
Deloitte & Touche LLP
Chartered Accountants and Registered Auditors
Cambridge
11 December 2006