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220609 Audit mins

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MINUTES OF A MEETING OF THE AUDIT COMMITTEE HELD ON MONDAY 22 JUNE 2009 AT 8.00am PRESENT: Trevor Cooper – Chair Nigel Hallam Ralph Tonge IN ATTENDANCE: Julie Ashton – Deputy Principal David White – Interim Vice Principal Corporate Val Mattinson – Director of External and Corporate Affairs Ian Falconer – Grant Thornton Will Simpson – Grant Thornton Andy Bush – KPMG Mike Rowley - KMPG Claire Kay - Clerk to the Corporation The Chair welcomed Nigel Hallam to his first meeting. 1. MEETING WITH AUDITORS WITHOUT MANAGEMENT PRESENT The members used this time to consult with auditors on issues arising from the agenda. There were no issues or concerns raised which auditors would not discuss with management present. It was agreed that these confidential sessions would be scheduled for less time in future and consideration should be given as to whether they were on every agenda. Members of College management joined the meeting at 8.10 am. Mike Motley joined the meeting to discuss item 6. 2. APOLOGIES FOR ABSENCE Apologies for absence had been received from Tony Grady, Graham Charlton and Andrew Hartley. 3. DECLARATIONS OF PERSONAL INTEREST IN AGENDA ITEMS There were no declarations of interest recorded. Members of the audit firms were asked to leave the meeting prior to agenda item 13. 4. MINUTES The minutes of the meeting held on 10 March 2009 were confirmed and signed. 5. MATTERS ARISING The Clerk updated members on ...

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management

risk management

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Publié par	Ussu
Nombre de lectures	32
Langue	English

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MINUTES OF A MEETING OF THE AUDIT COMMITTEE

HELD ON MONDAY 22 JUNE 2009 AT 8.00am

PRESENT:

Trevor Cooper – Chair

Nigel Hallam

Ralph Tonge

IN ATTENDANCE:

Julie Ashton – Deputy Principal

David White – Interim Vice Principal Corporate

Val Mattinson – Director of External and Corporate Affairs

Ian Falconer – Grant Thornton

Will Simpson – Grant Thornton

Andy Bush – KPMG

Mike Rowley - KMPG

Claire Kay - Clerk to the Corporation

The Chair welcomed Nigel Hallam to his first meeting.

MEETING WITH AUDITORS WITHOUT MANAGEMENT PRESENT

The members used this time to consult with auditors on issues arising from the agenda.

There were no issues or concerns raised which auditors would not discuss with

management present.

It was agreed that these confidential sessions would be scheduled

for less time in future and consideration should be given as to whether they were on every

agenda.

Members of College management joined the meeting at 8.10 am.

Mike Motley joined the

meeting to discuss item 6.

APOLOGIES FOR ABSENCE

Apologies for absence had been received from Tony Grady, Graham Charlton and Andrew

Hartley.

DECLARATIONS OF PERSONAL INTEREST IN AGENDA ITEMS

There were no declarations of interest recorded.

Members of the audit firms were asked to

leave the meeting prior to agenda item 13.

MINUTES

The minutes of the meeting held on 10 March 2009

were confirmed and signed.

MATTERS ARISING

The Clerk updated members on the progress of the report due to be submitted by the

Student Union at this meeting.

The content of the report had not been appropriate for

consideration by the Audit Committee without initial discussions at Directorate.

The report

would be scheduled for the next meeting.

LSC: T2G GUIDANCE ON INAPPROPRIATE PROVIDER BEHAVIOUR

MM outlined the background to the guidance issued by the LSC and the report considered

the practices of NCN compared to the guidance.

Members gained assurance from the

report that cash incentives were not provided to employers.

Any payments made to

employers were legitimately for the provision of services i.e. assessors, under a Service

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Created by Claire Kay

Level Agreement (SLA).

Members also gained assurance with respect to the eligibility of

learners by the independent audit function undertaken on all contract delivery.

IAS

supported this assurance through the IAS report on contract management to be considered

later on the agenda.

Members enquired as to the process for bring to the LSC’s attention any provider who was

engaging in inappropriate behaviour and were satisfied that opportunities were available

and had been taken, by colleges and the LSC to address such behaviour.

MM was asked if NCN had offered cash incentives in the past, MM assured the Committee

that he had found no evidence of this type of activity.

Members noted the report.

MM left the meeting.

AUDIT AND RISK MANAGEMENT GROUP

The ARM Group had met twice since the last Audit Committee and the work of the Group

was reviewed.

Members noted the summary data of audit recommendations and reviewed

the 7 overdue recommendations.

VM updated members that she had further assurance

that one of these recommendations was now completed and an updated report would be

shared with members outside of the meeting.

The risk management processes had been reviewed by ARM Group and the outcomes of

the review were to be presented under item 8.

Members noted the report.

RISK MANAGEMENT

Annual Review

The 2008/09 risks had been reviewed and all changes in year noted as having been

reported to the Audit Committee with the exception of the risk identified at the March

Corporation meeting around the development of the College Foundation.

Risks had been

monitored appropriately by the Corporation and its Committees and members supported

the continuation of the risk management strategy into 2009/10.

Risk Strategy and register for 2009/10

Following the Audit Committee’s comments in March, development work had been

undertaken on the scoring and presentation of the risk register.

Members reviewed the

changes and supported the inclusion of completion dates for actions needed to mitigate

risks and also a direction of travel of the risk score between reports.

It was considered

these additional developments would help crystalise the impact of mitigating actions.

Members welcomed the new features of the risk strategy, especially the numeric scoring of

the risk.

The Committee agreed to receive a summary report of the high level risks at each

meeting and for the report to include any changes to the overall risk register.

The full report

would be reviewed annually.

The Committee passed the following resolution:

The Committee recommend the Risk Management Strategy 2009/10 and the

Risk Register 2009/10 to the Corporation for approval.

INTERNAL AUDIT REPORT

The Committee reviewed 7 internal audit reports from the audit work-plan.

Budgetary Control

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The review indicated there was good integration between the Finance Department and

budget holders.

The report included 2 low priority recommendations but concluded the

controls were suitably designed and operating with sufficient effectiveness to achieve the

objectives of the College.

Staff Utilisation

The review was considered appropriate given the background of potential merger and the

economic climate.

The review focused on the systems for monitoring the utilisation of staff

to ensure a consistent approach to the management of staff.

The report included 12

recommendations, 2 high level recommendations and 8 medium level recommendations.

was recommended that Schools monitor actual timetabled hours against delivered hours on

a weekly basis and a robust management information reporting system be developed.

Improvements in register inputting was recommended to ensure the integrity and accuracy

of staff utilisation reports.

Management recognised the work required in this area and welcomed the

recommendations resulting from the IAS review.

The systems development work was

substantial and would take time to implement and IAS supported the inclusion of realistic

timescales during 2009/10.

Members requested an action plan with agreed timescales be

reported to the next meeting and this action plan be monitored during the next 12 months

by the Audit Committee to ensure the issues raised are addressed.

Members recognised the proportion of staffing expenditure was above the sector average

and due to the significant proportion of overall expenditure, required monitoring

appropriately and consistently across the College.

IAS concluded the systems were not

suitably designed to achieve the objectives required by management.

Online Examinations

The audit was commissioned due to the increased proportion of exams being completed

online and to ensure hardware and software systems were robust enough to support this

move and that the system was secure.

The report included 2 medium priority

recommendations but concluded the controls were suitably designed and operating with

sufficient effectiveness to achieve the objectives of the College.

Contract Management

The audit work was around the contract arrangements for delivering Train 2 Gain (T2G)

provision, as this had been identified as a high risk area.

IAS gave assurance that the

independent quality assessors were working well to provide additional assurance to the

College and 3 recommendations were made, 1 medium, 2 low.

IAS reported the College’s

systems included several areas of good practice and concluded the controls were suitably

designed and operating with sufficient effectiveness to achieve the objectives of the

College.

Follow up

The annual review of the systems in place to track progress against recommendations in

year found a robust system of controls and concluded the controls were suitably designed

and operating with sufficient effectiveness to achieve the objectives of the College.

Anti Fraud

The annual review of fraud arrangements was undertaken and found the Policy sufficient,

comprehensive and up to date.

The review noted the fraudulent incident recorded in the

fraud register.

The report concluded the controls were suitably designed and operating with

sufficient effectiveness to achieve the objectives of the College.

Preparedness for Machinery of Government changes to funding

The work was identified as part of the risk based element of the IAS plan.

The Report

concluded that the College was well prepared for the MoG changes especially around

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funding due to the planning portal and sensitivity analysis undertaken on funding.

The

College has good relationships with the Councils and commissioning partnership and was

acting proactively. The report identified areas of good practice and concluded the controls

were suitably designed and operating with sufficient effectiveness to achieve the objectives

of the College.

All 7 IAS reports were noted by the Committee.

10.

INTERNAL AUDIT 2008/09 PROGRESS REPORT

The progress made against the audit plan for 2008/09 was presented by Grant Thornton.

There remained one report outstanding before the Annual IAS Report could be completed.

The audit opinion at 31 July would be clean with the exception of the opinion given as a

result of the work undertaken on staff utilisation.

IAS would recognise the work being

undertaken, and the additional action plan requested by the Committee under item 9 would

demonstrate positive actions going forward.

Geoff Hall joined the meeting for the remaining items.

11.

FINANCIAL STATEMENTS AUDIT STRATEGY AND PLANNING 2009/10

The Financial Statement Auditors (FSA) presented the plan for the year ended 31 July

2009.

Members’ attention was brought to the levels of materiality defined in the report and

the reliance placed by the FSA on the work of the IAS to reach their conclusions.

The

timescale for the audit had been agreed in order to meet the required reporting deadline of

31 December 2009.

Audit risks identified by the FSA included financial management, LSC income levels,

economic climate, expenditure related to capital, contract management, pension liabilities,

risk management and corporate governance arrangements tax compliance and audit of

subsidiaries.

Members welcomed the report and noted the outstanding confirmation from the LSC of the

form of the final funding statement to confirm income for the year and also the current issue

relating to the revised treatment of Land and Buildings inherited on incorporation.

The report was noted.

12.

PARTNERSHIP ARRANGMENTS

Members noted the report requested for their consideration by the Finance and Resources

Committee.

The additional audit work requested to demonstrate probity of the longstanding

contract with Nottingham Training Enterprises (NTE) was considered appropriate subject to

the financial cost of additional assurance not outweighing the financial gains of the contract

arrangements.

It was agreed that the additional work would be considered by the FSA and Director of

Funding and Finance and reported back to the committee.

Representatives of KPMG and Grant Thornton left the meeting.

13.

APPOINTMENT OF AUDIT SERVICES 2009/10 ONWARDS

The process adopted for the interview of short listed firms was reviewed and the criteria

used to score firms noted.

The process undertaken was considered robust and transparent

and the recommendation for appointment from the interview panel was Tenon as IAS and

KPMG as FSA.

The Audit Committee Chair informed members that the objective of the Committee had

been achieved, to identify the right firms for the right audit service.

The Chair requested an

update on the follow-up action from the panel in respect of meeting one of the key

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employees of Tenon who was not at the interview.

As the Director of Funding and Finance

was not at the meeting it was agreed this would be follow-up outside the meeting.

The Clerk request confirmation of the tenure of the contracts.

This was confirmed as 3

years extendable to 5 years.

The Committee passed the following resolution:

•

The Committee recommend the appointment of Tenon to provide the

College’s Internal Audit Service from 2009/10 for 3 years (extendable to

5 years).

•

The Committee recommend the appointment of KPMG to provide the

Financial Statements Audit from 2009/10 for 3 years (extendable to 5

years).

14.

CONFIDENTIALITY OF BUSINESS

The report relating to the appointment of audit firms would remain confidential as it

contained commercially sensitive information, however the minute would be open to public

scrutiny.

It was agreed that the report relating to partnership arrangements would be an

open document.

15.

DATE OF NEXT MEETING

The next scheduled meeting was 23 September 2009.

The Chair closed the meeting at 9.10am.

SIGNED: ___________________________________________________

______

DATE:

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