Present:Mr a Nelson, Mr N Uppal, Mr K Webb and Ms H Haigh

Confirmed Minutes

Present:Mr A Nelson, Mr N Uppal, Mr K Webb and Ms H Haigh

In attendance:Mr A Shaw, Mr A McCulloch (Tiaa Representative) and Ms Z Shackleton for agenda item 4 only.

Clerk: Mrs C Coupland.

1. Apologies for Absence/ Declaration of Interest

There were no apologies to record. There were no declarations of interest.

Mr Nelson advised the Committee that Mr Craik will no longer serve on the Audit Committee. The Committee wished to record their thanks to Mr Craik for his time spent as a co-opted member.

Ms Shackleton was welcomed to the Committee.

2.Minutes from Meeting held on14th June 2016

Resolved:

• That these be accepted as a correct record, subject to one minor typographical amendment.

1. Matters arising

BAF Assurance Reviews: Loss/Damage of College Data or Network Connectivity / Failure to respond to premises fire / flood or similar disaster recovery incident.

The Clerk confirmed that the Master BAF had been updated to confirm that green assurance was awarded to both risks.

Self assessment of Committee work:

Mr Nelson reminded members that at the Corporation Meeting in June 2016 the Committee’s terms of reference were amended to take into account the revised membership criteria as stipulated by the Joint Audit Code of Practice (JACOP):

• a minimum membership of three, a majority of whom must be governors, but must not include the Chair of the Corporation or the Principal.
• a responsibility to maintain its independence in appointing members (so must not appoint serving F&R members)
• a responsibility to include individuals with an appropriate mix of skills and experience to allow it to discharge its duties effectively. Collectively, members of the committee should have recent relevant experience in risk management, finance and audit and assurance.

1. BAF Initial Assurance Review: Failure to appoint, develop, maintain and motivate effective staff to help lead the college’s improving standards agenda.

Mr Nelson advised the Committee that this specific risk was last reviewed in September 2015. Members therefore welcomed the opportunity to hear the developments made to date by the college in continuing to mitigate against the risk.

Members probed further to better understand the approach taken by the college in respect of the research bursaries for teaching staff. Members noted that these roles had previously been judged as a very cost effective way of developing large numbers of staff in a positive and role focussed manner and were therefore unsure as to why further bursaries had not been awarded. Ms Shackleton confirmed that one bursary is to continue into 2016/17 as there is further work to be done on disseminating the research to staff. The decision to not award bursaries at this moment in time is to enable new staffing changes to have impact on the Teaching, Learning and Assessment process. Organisational changes have included the Director of CPD taking on enhanced responsibilities and the appointment of a TLA Quality Manager to lead the TLA review process. The College IP system is also in development to support the observation of teaching and learning and to better link the outcomes of observation with the college’s performance review arrangements for teaching staff.Governors were satisfied by Ms Shackleton’s response.

The Committee welcomed the news that the Staff Voice group created in 2014/15 continues on an ongoing basis in order to allow for staff engagement in the development of the culture, practices and relations with in the staff as a whole. Ms Shackleton explained that a staff wellbeing group has also been established to work on health and wellbeing initiatives for staff and to contribute to the Workplace Wellbeing Charter Standard (awarded in February 2016).

The Committee commended Ms Shackleton forher detailed report. It was agreed that the breadth of information included had provided members with the necessary assurance that the existing controls in place remain adequate and effective and were in proportion to the individual risk being managed. Members, in particular, noted the wealth and breadth of independent assurance sources cited within the report. The Committee asked when the College was to be reassessed for Gold in Investors in People Award. Ms Shackleton was unsure but agreed to ask Ms Eccles (The Director of CPD) to follow this up with the relevant awarding body and confirm this back to the committee.

Resolved:

• To continue to assign Green Overall assurance to the risk
• For the Clerk to update the Master BAF.
• Ms Eccles to confirm to the Clerk when the College is to be reassessed for Gold in the Investors in People Award.

(Ms Shackleton left the meeting).

1. Risk Register & Board Assurance Framework: A Review

Mr Shaw presented the report to the Committee. The current position of all risks were considered.

The Committee was of the opinion that at present some of the scores assigned to the risks identified may not accurately reflect the changes in significance ofcurrent key local and national pressures imposed on the college. It was also noted that full details forrisk 7 and the newly created risk 8 were outstanding. Members were therefore unclear as to how the college is currently managing the separate risks and asked for assurance that the risk register is to be updated as soon as practically possible by the staff member responsible in order that the Board Assurance Framework can also be updated. Mr Shaw agreed to report this back to the Risk Management Group.

Mr Shaw also presented the BAF operational process for 2016/17 as proposed by the Risk Management Group and endorsed by the Senior Leadership Team. The Committee was satisfied that the approach to be taken by the college will ensure that the major risks impacting upon the strategic objectives of the college remain subject to timely assurance reviews. Members however recognised that the nature and seriousness of individual risks remain subject to continual change; and that significant changes to risk profiles may therefore necessitate earlier assurance reviews at the Risk Management Groups request.

The Committee remained satisfied that the Board Assurance Framework, in its entirety continues to provide an adequate and effective framework for risk management. Mr Nelson acknowledged the shared journey made to date by staff and governors on continuing torefine the Board Assurance Framework to ensure it remains fit for purpose.

In the spirit of continual development a few updates to the BAF Overview were requested by the Committee in order to better provide members with the necessary information and required assurance needed at a glance when undertaking full reviews. The changes requested were:

i)to list likelihood and impact scores for both inherent and residual risk scores

ii)to include a column to identifythe date the risk was last reviewed by risk owner /RMG

iii)visual to show if risk scores have increased /decreased /stayed same since the last review(simple arrow signs)

iv)explanation for any directional changes to risk scores to be included by risk owner / RMG in events log.

Members were of the opinion that these minor amendments to the BAF Overview will enable the Committee to better understand how current the individually assigned risk scores are and also be able to track any directional changes to risk profiles, however small.

The Committee recorded their thanks to staff and SLT for their continued positive engagement in this process.

Members also asked for the full Board Assurance Framework to be made accessible to all Governors via Moodle

Resolved:

• That the Risk Register / Board Assurance Framework be received.
• For Mr Shaw to provide feedback to the RMG on the key areas raised by the Committee
• For the Clerk to make the necessary changes to the BAF Overview
• That an updated copy of the Master BAF be posted on Moodle.

1. Recommendation tracking

Mr Shaw presented his report to the Committee.

He explained that all audits undertaken earlier in 2016, will be followed up by the Internal Auditors in 2016-17 and will therefore continue to appear on the tracker document until confirmed as completed by the follow up review.

All other recommendations from previous audits, confirmed as completed by IAS in June 2016, have now been removed from the tracker documents.

Resolved:

• That the report be received.

1. Internal Audit Annual Report for 2015-16

Mr McCulloch presented the Annual Internal Audit Report for work undertaken in 2015-16. It was noted that for the 12 months ended on 31st July 2016, Tiaa is satisfied that for the areas reviewed during the year that HNC has reasonable and effective risk management, control and governance processes in place. Also that there was evidence to support the College’s achievement of value for money with regard to economy, efficiency or effectiveness of the systems reviewed.

Mr McCulloch noted that this opinion is based solely on the matters that came to the attention of TIAA during the course of the internal audit reviews carried out during the academic year and is therefore not an opinion on all elements of the College’s risk management, control and governance processes or the ongoing financial viability which must be obtained by the College from other various sources of assurance such as the Board Assurance Framework.

Governors were very satisfied by the audit findings.

Resolved:

• To receive the report
• To congratulate all staff on the positive audit findings
• That the overall opinion of Tiaa be used by the Corporation in the preparation of the 2015/16 Statement.

1. Internal Audit Strategy for 2016-17

Mr McCullochadvised the Committee that the Internal Audit Plan for 2016/17 had been drafted with Mr Shaw (Assistant Principal – Finance) and Ms Pryce (Director to SLT – MIS, Planning and Student Services). The College Senior Leadership Team has also considered, and is in agreement with the proposed audit plan.

Mr McCulloch drew members’ attention to the one proposed change to the Annual Plan from the Internal Audit Strategy as agreed in 2015/16; which was to postpone the SEND review and replace with an ICT High Level Health Check Assurance Audit. The rationale for the change was that the college recently received substantial external assurance in regard to the College’s SEND procedures and practices and as there has been an increase in cyber-crime activity across many sectors; it would be more beneficial at this moment in time to test that the Colleges ICT networks remain robust and secure. The Committee was satisfied with the reasons provided and asked for the rationale for change to be better captured in the Internal Audit Annual Plan.

The areas to be audited in 2016/17 are:

- ICT High level Health Check

-Teaching learning and Assessment

-Payroll

-Quality Assurance

-Follow Up

Governors were of the opinion that the Strategy for Internal Audit covers the College’s key risks and current assurance needs. The Committee was therefore agreeable to the proposed internal audit plan for 2016/17 based upon 20 days of audit activity.

Resolved:

• That the Internal Audit Plan for 2016 – 2017 be approved
• For the Internal Audit Strategy 2016-17 to be shared with all Governors, once amended.

1. Teacher Pension Scheme audit year ended 1st March 2016.

The Committee received the external Auditors certificate to confirm that contributions had been made in accordance with the TPS Employer’s Guide for the year ended 31 March 2016.

Mr Shaw, on behalf of Wylie & Bisset, provided an overview of the audit procedures undertaken in relation to the Teachers’ Pension Return of the college. He explained that sufficient and reliable audit evidence had been obtained by Wylie & Bisset to enable them to express an opinion on the Teachers’ Pension Return of HNC in accordance with the guidance issued by the Pensions Trust.

Resolved:

• That the report be received.

1. Self-Assessment questionnaire (Regularity and Propriety Requirements) 2015-16

The Committee was advised that the Education Funding Agency expects all College Corporations to hold management to account by ensuring that the requirements for an audit of regularity, as set out by the framework, are undertaken.

Members were informed that the purpose of this framework is to achieve a common standard in the provision of assurance on regularity, so that corporations can be clear about the assurance they receive and the funding bodies can rely on the assurance for their own purposes.

The regularity audit framework continues to contain a self-assessment that colleges complete to assess their compliance with regularity requirements and to inform the direction and shape of the auditor’s work. The Principal as accounting officer and the Chair to the Corporation are to complete, sign and date the self-assessment. Mr Nelson confirmed that Ms Summers, the Chair of the Corporation, has had sight of the self-assessment questionnaire in advance of this meeting.

The Committee reviewed the completed Self-Assessment of Compliance for 2015/16 and was satisfied with the college’s responses. It was noted that the college had provided full responses for each area listed along with clear links to supporting evidence. Mr Nelson advised members that Ms Summers had however asked for clarity on the Corporations responsibilities on severance payments. The Clerk advised the Committee that the Corporations scheme of delegation and its Financial Regulations makes clear that the Principal is responsible for the title, appointment, assignment, grading, appraisal, suspension, dismissal and determination of pay and conditions of staff other than the holders of Senior Posts. The Clerk also confirmed that all settlements made in 2015/16 by the Principal were reported to the F&R Committee via scrutiny of the management accounts. The Committeeaccepted this; it was agreed useful however that at future Corporation Meetings any such settlements are to be clearly reported to Governors either via the F&R Chair (if F&R Minutes are available) or via the Principal.

Mr Shaw reiterated that no settlement claims had been brought by a senior post holder and that the reported terminations gave an overall payback to the college of 10 months. Mr Shaw advised members that internal guidance dictates that overall payback of any agreed settlement should be made within 12 months.

Resolved:

• That the Regularity Audit – Self Assessment be received.
• That the Chair and Principal sign the Regularity Audit – Self Assessment

1. Any other Business.

There was no other business.

1. Learner Impact Reflection

The impact of discussions and scrutiny of the Committee work in improving the outcomes and experience for all learners was considered and the following agreed:

-By appointing and retaining effective staff, HNC can continue to provide the best learning experience and enrichment opportunities for all students and thereby improve their life choices and their life chances.

-Assurance that the college has appropriately identified the major risks to the College and has the resources to continue in operational existence for the foreseeable future.

-The overall audit opinion provides assurance that the college has an adequate and effective framework for governance, risk management and internal control.

-Assurance that the college has an adequate and effective framework for governance, risk management and control

-Assurance received that the college has adequate resources to continue in operational existence for the foreseeable future delivering high quality outcomes for students.

-By receiving the TPS Audit; the Committee has assurance that the college has complied with relevant Laws and Regulations.

-Assurance received that the college remains compliant with regularity and propriety requirements as per the terms and conditions of funding.

-Effective auditing services help governors understand student experience and learning outcomes

12.Determination of confidentiality

All supporting papers for the Board Assurance Framework are to be deemed confidential.

13. Date of next meeting: 28th November 2016 from 6.15pm.

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