AUDIT COMMITTEE
Minutes of a Meeting
10.00am on Tuesday 24th September 2013
Gordon Canning Room
Present: / Mr Bob Barnett (RB) (Chairman)Mr D Clegg (DC)
Mr Paul Reynaert (PR)
In Attendance: / Mr Graham Ledden (GL)
Dr Lawrence Ware (LW)
Mr Russell Marchant (RM)
Mr Paul Putnam– Grant Thornton (JG)
Mr Chris Mundy-BDO (CM)
Mr Richard Weighell-BDO (RW)
Apologies: / Councillor Tony Hicks
Mr David Seymour
Minutes: / Mr Rob Lee
/ ACTION / ACTION
DATE /
1. / Apologies
Apologies were received from Councillor Hicks and Mr Seymour.
2. / Declaration of Interest – Paper A02/09/13
The Clerk advised that member’s interests would be taken as those disclosed in the Register of Members Interests. There were no further declarations of members interests for agenda items.
3. / Minutes of the Last Meeting – Paper A03/09/13
Minutes of the meeting held on the 14th May 2013 were agreed to be a true and accurate record and signed by the Chair.
4. / Matters Arising
4.1. (6.1.) Update on Risk Assessments for compliance to Bribery Act.
The Clerk advised that the list of areas to be risk assessed had been agreed and in response to RB the Clerk confirmed that he did not foresee any problems.
4.2. (6.3.) Update on Novation for Limbury Ltd.
GL advised that he was still awaiting a response from Lloyds/TSB
4.3. (7.1 and 7.2.) Confirmation that future Audit Reports will note the amount of time taken for each audit and contain useful background information uncovered in an audit in the conclusions and recommendations.
CM confirmed that this was in the new year’s programme.
5. / Discuss and Approve Internal Audit Plan 2013/2016. Paper A05/09/13
CM outlined the process that had taken place since the Plan had been discussed at the May Meeting. Input to the plan had been sought and given by Members and meetings had taken place with the Chair, Principal and GL. Clear priorities had been agreed for the first year of the three year plan. It is proposed that the Corporate Risk Areas to be audited next year are the implementation of the new Finance System, Capital Project Management and Facilities income generation and CM referred Members to the outline scopes suggested for these areas. In response to RB CM confirmed that more detailed scopes would be proposed before each audit and these would be sent to the Chair for his approval. RB believed there should be more detailed discussion than has previously taken place before the scope is agreed. GL advised that there would need to be a quick turn round on these scopes so as not to hold up the audits. GL outlined the timescale of the implementation of the new Finance System which would become live from 1st March 2014. GL had discussed with CM the structure of the programme pre and post implementation. In response to RM CM confirmed that there would be a split audit to cover both before and after implementation. In response to RB PP advised that this was an important programme and whilst not replicating the work of BDO they will look the value for money it gives at the end of the project. In response to RB GL confirmed that there was a contractor involved who had been selected through a tendering process. The second priority item was Capital Project Management. DC believed that it was imperative we had a rigorous post project evaluation process and CM agreed that the audit would look to see if the project was giving the payback on investment. The third priority area was facilities income generation. RM believed that this would help support the capital project management and CM agreed that work will be carried out prior to the November Meeting. CM advised that the rest of the plan was as outlined in May except Catering where the benefits of the actions that were put in place after the last audit will now be reviewed in 2014. RB believed that our audit work was being constrained by the number of days allocated and this should be discussed as part of next year’s plan. CM referred Members to those areas that were not being audited in the three year cycle but agreed they will be kept in view with College Management.
The Audit Plan for 2013-2016 was approved.
6. / Discuss and Approve Annual Internal Audit Report 2012/2013. Paper A06/09/13
RW introduced the Internal Audit Annual Report which was a summary of the years’ work and outcomes which feeds in to statement of Governance and internal controls. RW confirmed that the plan for the year was fully delivered with the exception of the agreed deferral of the planned follow up of Catering but this was not significant. RW further confirmed that no major control failures were identified and no areas reviewed were assessed as less than substantially meeting expectations. RW advised that only one high priority recommendation was made from within the year from their reviews and this concerned IT Disaster Recovery. In response to RB as to how long it would take us to recover the system if major problem RM advised that as our site was spread out we had servers in several different locations which makes it more positive. RM also advised that one of the major pieces of work undertaken this summer was the completion of a ring main which would also limit impact of major disruption. RW confirmed that based upon the audit work carried out in their opinion the governance, risk management and control arrangements within the College substantially meet expectations and operate effectively.
The Internal Audit Plan is recommended for approval by the Corporation. / Clerk / 05/12/13
7. / Discuss and Approve Audit Approach Memorandum 2012/2013. Paper A07/09/13
PP introduced his Audit Plan outlining the key aspects of the 2013 audit and confirmed that the process was in accordance with international standards. PP outlined the strategic, operational and financial opportunities and challenges that the College faces and each area was discussed and the College response reviewed. PP explained that they proposed to undertake a risk based audit which focuses effort on those areas that they have identified as a risk of material misstatement in the accounts. PP advised that through this scheme two significant risks were identified, the revenue cycle includes fraudulent transactions and management override of controls and these together with pension scheme key assumptions will form part of a substantive audit. Other reasonably possible risks relating to employee remuneration and purchasing and creditors have been identified and this will also be audited. PP outlined the fees and GL advised that the fee relating to Limbury Ltd was still under discussion.
The Audit Plan for the year ended 31st July 2013 was approved.
8. / Discuss and Approve Internal Audit Reports
8.1. Follow Up Report 2012/2013. Paper A08.1/09/13
CM advised that a short two day review had been made looking at the recommendations from audits throughout the year and whether they had been actioned. CM explained that this included follow up review of outstanding recommendations raised by the previous internal auditors. CM advised that they had reviewed in detail eight of the recommendations noted as complete. CM advised that six were completed but two of the recommendations had not been fully addressed and these should be re-instated on the Progress Report. These two recommendations relating to leavers checklists and payroll checks with HR were discussed with proposed actions.
The Internal Audit Follow-up Report was approved.
9. / Discuss progress on recommendations from Internal Audit Reports. Paper A09/09/13
GL advised that the Report shows the progress on each of the recommendations from the audit reports. GL confirmed that the two recommendations discussed in the previous item had been entered back into the Report and were now complete. RM advised that we were closely monitoring the throughput of the “new look” Refectory and early indications were positive. RM advised that Penfolds has been re-branded and discussions were taking place with several well-known coffee franchises with a view to set up an operation in this outlet.
10. / Risk Management
10.1. Discuss and approve amendments to Risk Management Register. Paper A10.1/09/13
GL advised that the Register had been updated after review by the Risk Management Group. GL further advised that new or amended risks were on the Register in red and risks to be removed were struck through. GL wanted Members to note that the score for the risk relating to our agreement with UWE had been increased due to our move towards TDAP. RM advised that our discussions with UWE were very positive and they were supportive in what we are doing to gain degree awarding status. GL wanted Members to note that a majority of the new risks relate to links to our strategy.
The Risk Management Register was noted
10.2. Review Top 10 College Risks. Paper A10.2/09/13
GL advised that two new risks had entered our top 10 and these related to the discussions we had just had on UWE and our application for TDAP.
The College Top 10 risks were noted.
10.3. Note minutes of Risk Management Group 12th September 2013. Paper A10.3/09/13
The minutes of the Risk Management Group Meeting were noted.
11. / Review Purchase Order Compliance. Paper A11/09/13
GL advised that there were a number of orders that were not compliant as we had not obtained the necessary three quotations. This was for work that we had to do over the summer and most were contracted to suppliers we had used before. RM accepted some responsibility for this as he had put pressure on for the work to be completed before the start of the new academic year.
12. / Any Other Business
There was no other business.
13. / Dates of future meetings all at 10.00pm on a Tuesday unless stated.
Friday 22nd November 2013 (14.00-17.00)
Thursday 10th April 2014 (14.00-17.00)
Tuesday 23rd September 2014
Tuesday 18th November 2014
Tuesday 12th May 2015
Tuesday 15th September 2015
Tuesday 17th November 2015
Mr Bob Barnett 22nd November 2013
Chairman Audit Committee
Minutes of the Audit Committee Page 2 of 5