PUBLIC BOARD OF GOVERNORS AUDIT COMMITTEE Minutes of the meeting held on 12 September 2016 Present Lisa Greenhalgh Independent member Committee Chair Lesley Munro Clerk to the Board Clive Edwards Louise Robinson Independent member Independent member Chris Paisley KPMG External Audit representative Jennifer Finlay PwC Internal Audit representative Jane Forbes PwC Internal Audit representative Officers in attendance John Cater Ann Collins Carl Gibson Vice-Chancellor Director of Human Resources Director of Finance (for agenda item 09 i) Apologies Craig Hutchinson-Howorth Director of Strategic Planning Steve Igoe Deputy Vice-Chancellor Clare Partridge KPMG External Audit representative Simon Pope Independent member AC.16.001 In-camera meeting Prior to the commencement of scheduled business, Independent members held a private meeting with the Internal and External Auditors who confirmed there were no issues to bring to the attention of the committee. 1
AC.16.002 Declarations of Interest There were no Declarations of Interest specific to the meeting. AC.16.003 Chair s Announcements There were no Chair s Announcements. AC.16.004 Chair s Action There was no Chair s Action to report. AC.16.005 Minutes of the previous meeting Document AC/001/16 The minutes of the meeting held on 6 June 2016 were agreed and signed by the Chair as a correct record. Clerk s Note: The minutes were amended to show Jennifer Finlay present as a PwC representative and not Emma Mackrell. AC.16.006 Action Log Document AC/002/16 Members received the Action Log noting that KPMG had provided what information was available in relation to historic NCTL audits, legal advice had confirmed the terms of the contract with the University s insurers would not support any insurance claim in relation to historic NCTL submissions and PwC had shared information arising from an audit covering vendor accounts with the Director of Finance. AC.16.007 Matters Arising There were no matters arising. SECTION A ITEMS There were no Section A items. 2
SECTION B ITEMS AC.16.008 Committee Evaluation Document AC/003/16 The Clerk introduced the documentation and it was noted that member attendance levels had been exemplary over the previous year which had included two additional meetings called to consider reports to HEFCE in relation to an ongoing data investigation. Attendance was particularly important for this committee in order to maintain quoracy and, in discussion of membership numbers, it was felt that this would be alleviated by the allocation of the two newly appointed independent members to the committee. This would also allow for the transfer out of one member (CE) to Resources Committee which would promote a sharing of expertise within the Board. Action: Clerk The review of business transacted over the previous year had been in line with the terms of reference of the committee and the schedule of business for 2016/17 did not suggest any changes were necessary. The committee had been heavily involved in an ongoing serious fraud case which was the subject of criminal proceedings and a current data investigation. It was noted that a number of actions had already been implemented in relation to these issues but it was agreed that a full review to identify lessons learned would be appropriate when matters were concluded. Action: Chair/Clerk Noting the Board s discussions in relation to the need to monitor consideration of ethical and equality and diversity aspects as they affected policy and decision-making, it was agreed that these should be incorporated into the internal audit process for individual areas as appropriate. Action: PwC Concluding discussion, it was agreed that the committee had operated effectively over the last twelve months. 3
AC.16.009 Internal Audit Reports Document AC/004/16.01 Performance Management (Considered at the start of the meeting) The Director of Human Resources introduced the report which had been commissioned by the Department to support the development and improvement of the current system with a view to achieving a more streamlined process which better aligned with the University s Strategic Plan. The PwC representative (JF) reported that the review had been undertaken by HR specialists. Overall, the Performance Review (PR) scheme was found to be well documented and embedded with high completion rates. A number of recommendations had been suggested and these had been incorporated into an Action Plan which was being implemented with a training programme in place for managers. Progress would be monitored through the Internal Audit follow-up process. In discussion, it was noted that the use of grades within PR might not be appropriate to the culture of the organisation. It was also noted that, given the fast pace of change in the HE environment, alignment of individual PR objectives should generally be restricted to the high level objectives of the University s Strategic Plan. In response to a member s question, it was noted that Performance Review was conducted between a member of staff and their line manager whereas the staff survey was conducted anonymously providing a different source of feedback to the University. The report was received..02 Faculty Review: Arts and Sciences The Internal Audit representative (JFi) introduced this report which was undertaken to assess the effectiveness of the Faculty in complying with University regulations and procedures. It was noted that this was the second of three Faculty Reviews designed to provide additional assurance in relation to compliance 4
with central university processes. Good practice was identified in student number monitoring and planning, budget management with the appropriate segregation of duties and the accessibility of policies and procedures. Overall, the Audit was classified as low risk, providing substantial assurance with one low risk recommendation relating to the use of the sticker system to identify fixed assets in the Faculty and an advisory recommendation relating to the development of a faculty expenses log. It was further noted that a number of expenses claims had been submitted outside the required timescales but that this aspect of the process was currently under review by the Central Finance team in any event. It was noted that the recommendations had been agreed by the University and implementation was in train. In discussion, it was recognised that Arts and Science was a large and complex area of the University and the Vice-Chancellor commended the excellent outcome. Whilst the recommendation to develop a faculty expenses log was agreed, there was consensus that receipts should be held by the Central Finance team. The report on the Arts and Science Faculty Review was received..03 Follow-up The Internal Audit representative (JFi) introduced this report which had been undertaken to ensure appropriate progress in the implementation of recommendations from reports over the last twelve months. Of the seventeen recommendations made all had been implemented with the exception of one related to the Audit of Corporate Governance which was not yet due. Concerning this recommendation, the Clerk indicated that a report would be made to the next meeting of the Audit Committee. The Follow-up report was received..04 Internal Audit Annual Report 2015/16 The Internal Audit representative (JF) introduced the report drawing attention to the auditor s opinion of satisfactory (the best rating available) in relation to the University s governance, risk management and control and value for money arrangements. 5
The opinion was based on the audit work undertaken during the year and the Follow-up action in relation to previous audits. It was noted as a good outcome with no issues arising. The Internal Audit Annual Report 2015/16 was received. AC.16.010 Data Returns Investigation Update (Reserved item) The Vice-Chancellor provided an update. AC.16.011 Fraud and Irregularity/Serious Incident Statement (Reserved item) The Vice-Chancellor provided an update. SECTION C AC.16.012 Any other Business There was no other business. AC.16.013 Date and time of next meeting The next meeting of the Committee is scheduled for 7 November 2016. 6