ACCOUNTANT IN BANKRUPTCY
AUDIT COMMITTEE
MINUTES OF MEETING
Wednesday 26 November 2014 at Kilwinning
Present: / Jeremy Brettell / Non-Executive Board Member (Chair)Lee Shedden / Independent External Committee Member
In attendance: / Rosemary Winter-Scott / Chief Executive
John Cook / Executive Director – Case Operations
Graeme Watson / Executive Director of Corporate Services
Rebecca Crook / Head of Finance
Gordon McAllister / Audit Scotland
Adrian Kolodziej / Audit Scotland
Stuart Riddell / Business Support Manager (Secretary)
Apologies: / Kate Dunlop / Non-Executive Board Member
Billy Wilkie / SG Internal Audit
Asif Haseeb / Audit Scotland
Welcome, introduction, apologies and acceptance of previous minutes and matters arising from previous minutes
1. The Chair welcomed everyone to the meeting, noting a quorum was present.
2. The minutes from the previous meeting were accepted.
3. There were no conflicts of interest.
Updates on the previous action points were provided as follows:
Action point 2: John Cook confirmed that the penetration testing had been contracted out and that a full report would be provided annually. The next report is expected in January and will be presented to the first available AC once in hand.
Action point 3: Graeme Watson is to revisit the questionnaire on the effectiveness of the AC and results are expected in February.
All other actions were complete.
AiB Update
4. Rosemary Winter-Scott advised the AC that on top of the Investors in People gold award, that AiB has now been awarded the Healthy Working Lives Gold Award. She notified that AiB had been affected by ‘Druple’ and that the DAS website had had to be taken down for one week during November. This did not affect the ability of people to access DAS and the website had now been fully rebuilt. It would be subject to the regular penetration testing. There had been no loss of information. It was noted that the DAS system is non-transactional and the risk was in protection of log-in details and redirection links. It was further noted that ISIS resolved the issue ahead of schedule. RWS informed that all other areas were going well.
Management Letter: Managing ICT Contracts AC(14-15)18
5. Gordon McAllister talked through the paper on the AS review of the Case Information System (CIS) Project. Substantial assurance was given that the project was being well managed and was on course to meet timescales for completion. Of note were that effective risk management and governance arrangements were in place, established project management frameworks were being followed, performance management arrangements had been developed and appropriate progress reporting was taking place, and that there was a good mix of skills and suitably qualified staff. It was noted that a second Gateway review was scheduled for January 2015 which would provide further assurance on the status of the project. RWS noted that the intelligence and expertise within AiB was substantially more than when MIDAS was introduced as the current CIS, and gave credit to the testers and business analysts involved in the current project.
6. AS noted that their costs had increased for the first time in four years. It was requested that AS provide more detail on how the costs were calculated given the reduced time resource for the audit process.
7. Adrian Kolodziej informed that changes in procurement legislation were scheduled to commence around December 2015 and that the threshold for tenders would be £50k with the requirement to advertise across the EU.
ACTION POINT: Asif Haseeb to provide letter to AC to elaborate on the increase in audit costs
Internal Audit Briefing Update Paper AC(14-15)19
8. The internal audit briefing paper was acknowledged as read by all. Concern was raised over the level of detail contained in paragraph 4 on the 2014/15 audit programme for Contract Management and PTD Supervision, in particular that there appears to have been no progress with the audit programme with the business shortly entering the final quarter of the reporting year. AC wished to know the level of resource required and the expected timescales for the audit. A written update is to be requested from internal audit. There was also concern that there was no representative at the AC from internal audit who, should be motioned to ensure representation at future meetings. The Chair will be available at any time should internal audit wish to discuss further. It was noted that the end of the audit year is 31 May 2015 and not the end of the calendar year 2014 as had been previously thought.
ACTION POINT: Graeme Watson to request an update from internal audit on the audit programme.
Finance Monitoring Report AC(14-15)20
9. Rebecca Crook led discussion on the report. She noted that overall AiB was within budget. There was a YTD surplus with income being higher than budgeted due to more cases closing and a resultant increase to the public purse. It was difficult to predict closure levels and , mainly due to PPI payments, there has also been an increase in re-opened cases with their associated costs. It was noted by John Cook that cases were only re-opened where it was cost effective and costs could be recovered. A perceived lack of knowledge by debtors on how PPI vests in their bankruptcy will be made much clearer by BADA(S). Discussion was held over timings of repayments to the public purse.
10. RWS noted that the SG was running a voluntary exit programme and that there had been some interest from within AiB. Any packages would come from AiB’s budget. Further expense of £8k was noted from a 2 year old invoice that was received from ICAS.
11. Lee Shedden noted that the report made it difficult to compare forecasts with budget. It was confirmed that forecasts did not include year to date surpluses or contingency. It was recommended that the report provide more detail on how AiB intended to spend/not spend its contingency. Further group discussion was held over budget allocation and outstanding debt. It was mooted that outstanding debt could be reported in the Annual Report and Accounts. Rebecca Crook confirmed that she would adjust future reports to improve the clarity of information provided.
Quarterly Fraud Update AC(14-15)21
12. There were no incidents of fraud reported since the previous AC. Internal training had been conducted for all staff and it was noted that this should be run on an annual basis. Rebecca Crook and Lee Shedden to look at possibility of sharing training between agencies. The Chair enquired about NHS counter fraud services but it was noted that such information is not generally circulated.
Corporate Risk Register AC(14-15)22
13. The register was noted as looking very safe, however RWS noted that AiB had strong capability to successfully deal with the identified risks and this is why they appear as such. Reductions were noted for risks 2 and 5. Risk 2 was down as per normal for the time of year. Risk 5 was reduced as legislation was now in place, the Scottish Financial Health Service (FHS) website was moving forward positively and there has been no significant opposition. The Fraser Figure had requested an additional risk be added, however this has been dropped following no change with the re-appointment of AiB’s Cabinet Secretary and Minister. It was noted that first results from the Smith Commission were expected in December. AC asked if AiB had a current Risk Management Policy and whether this needed to be agreed at Board/AC.
ACTION POINT: Graeme Watson to confirm risk management policy in advance of next AC and to provide this to the AC for their information.
AOB, Actions, Next meeting and Thanks
14. Although assumed to be lifted directly from the Audit Scotland handbook, it was requested to look at the possible rewording of the AC meeting timetable to make it more relevant to AiB.
ACTION POINT: Graeme Watson to examine the AC meeting timetable
15. There was no further business. Thanks were extended to all attended. The next meeting is scheduled for 3 March 2015.
Stuart Riddell
Secretary
26 November 2014
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