Report of the comptroller and auditor general on the 2010/11 accounts of the Science and Technology Facilities Council

20 December 2011

Amyas Morse, the Comptroller and Auditor General, has limited the scope of his audit opinion on the 2010-11 accounts of the Science and Technology Facilities Council (STFC). The scope limitation is in relation to the Council's interest in its joint venture, the Institut Laue-Langevin (ILL), a research centre in France.

The limitation of scope has arisen because the Council has not been able to provide sufficient evidence on the appropriateness of the investment balance recorded in its accounts of £26.87 million.

The Council has derived the balance of £26.87 million from the net asset value of the ILL's balance sheet, within the audited accounts for the ILL for 2010, as no better information is reasonably available to the Council. However, these accounts do not provide a robust and reliable basis to support the amount recorded in the Council's accounts.

The ILL's accounts are prepared in accordance with French accounting principles which differ from the International Financial Reporting Standards (IFRS) under which the Council's accounts are prepared. Neither the ILL nor the Council currently has adequate information to assess the significance of the impact this has on the value of the investment in the ILL reflected in the Council's accounts. The Council has requested appropriate information to allow it to include its investment on an IFRS basis for 2011-12.

The ILL's accounts were qualified in 2009-10 by its own auditor because the fixed asset value included was not supported by a robust inventory, and guidance used by the ILL on fixed assets was not fully applied. Therefore there may have been significant misstatements of the valuations included. The ILL completed remedial work to improve the recording of assets in 2010. As a result some 84 million euros have been removed from the fixed asset valuations for the year ended December 2010. In addition ILL undertook a review of its fixed asset guidance. As a result the ILL received an unqualified opinion for 2010 from its auditor. Therefore weaknesses in fixed assets recording now affect only the prior year figures incorporated into the 2009-10 STFC financial statements.

Notes for Editors

The Science and Technology Facilities Council (STFC), a non-departmental public body of the Department for Business, Innovation and Skills, supports research, innovation and skills for the UK by supporting a broad portfolio of research and providing large scale scientific facilities. As part of its remit, the Council provides funding (referred to as subscriptions) for a number of international scientific collaborations.

One of these is the Institut Laue-Langevin (ILL), which is a research centre located in France, that makes use of subatomic particles to study the structure and behavior of all kinds of materials in microscopic detail. Funding from the Council to the ILL in 2010-11 amounted to £13.66 million. The Council has a 33 per cent interest in the Institute, alongside partners in France and Germany.

Download the full report - 'Report of the Comptroller and Auditor General on the 2010-11 accounts of the Science and Technology Facilities Council' - here:

http://www.nao.org.uk/publications/1012/stfc_accounts.aspx

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