Audit Committee Meeting Minutes of the Meeting held on Monday 13th March 2023 via Microsoft Teams

1.0 Apologies

056 Apologies were received from Simon Bedford and Janet Smith.

2.0 Declarations of Interest 

057 No declarations of interest were received.

3.0 Minutes of the Previous Meeting 

058 The committee resolved that the minutes of the meeting held on 29th November 2022 (distributed as AUDIT.130323.002) be approved as a true record.

4.0 Actions and Matters Arising 

4.1 Action Tracker

059 The committee reviewed the open action tracker (distributed as AUDIT.130323.003): 

20.09.21 Action 1: Environment and Sustainability to be added to the 23/24 internal audit plan. Action ongoing. 
29.11.21 Action 3: Board Policy Framework to be brought to Board in summer term. Action ongoing. 
29.11.21 Action 6: Planned sessions have taken place, follow up to Board on 27th March. Action complete. 
14.02.22 Action 5: Presentation of sustainability strategy to Board in 2023. Action ongoing. 
10.10.22 Action 1: Follow up to training on this agenda. Action complete
10.10.22 Action 2: The committee considered the purpose of the action on assurance processes in place for information shared externally. The various types and volume of information shared, the involvement of management and the adherence to GDPR requirements were noted. The committee agreed that their role was to receive assurance that relevant processes are in place. LS supported that view. The committee agreed to ensure that future consideration of policies will include a consideration of information sharing and agreed to close the action. 
29.11.22 Action 1: JW confirmed that all except one governor has supplied information requested to enable MFA use. That governor will be chased again immediately after the meeting. The Chair emphasised the need for all governors to ensure compliance is upheld. RR confirmed that MFA would be added to Decision Time after the March Board meeting. Action ongoing. 
29.11.22 Action 2: The committee received an update on the progress of the cyber security audit actions. Action complete. 
29.11.22 Action 3 Outcome of committee self-assessment is on this agenda. Action complete. 

4.2 Matters Arising 

060 There were no matters arising.

5.0 Internal Audit

061 The committee received the progress and sector update reports (distributed as AUDIT.130323.004). It was noted that there were no internal audit reports to be presented at this meeting. LS presented the progress report, due to the late release of the Provider Self-Assessment Toolkit by the ESFA the planned audit has been delayed to April 2023. Governors noted the reports scheduled to be brought to the June and September meetings. 

062 LS took governors through the update on the introduction of the new ESFA subcontracting standard, this is a significant change and is a requirement for all providers who subcontract £100k or more. Providers are required to engage the services of a reporting accountant to obtain a report that aligns to the requirements of the template report provided in the ESFA guidance. The new standard has 91 elements over 10 components, each of which must be RAG rated against evidence to demonstrate whether elements have been met. The report must then be submitted to the ESFA by 31st July. The ESFA will then consider whether the standard has been achieved and will grade the outcome from 1 to 4. Grades 1 and 2 will enable the provider to continue to subcontract. Receipt of a grade 3 or 4 is potentially a significant risk for providers as this will lead to that provider not being able to subcontract. At present the ESFA timeline to confirm the allocated grade is within 12 weeks of submission of the report. A governor queried whether the ESFA has the required capacity to review reports within the anticipated timeline. AC confirmed that he had noted potential risk of a delay in terms of the external audit process and signing off on the annual financial statements and accounts. He confirmed that he would be speaking with David Hoose at Mazars on this point. LS confirmed that RSM were considering the implications of a provider receiving a 3 or 4 in terms of regularity. She noted the potential spike in work for the ESFA but hoped that all would be dealt with in the 12 week timeframe. A governor queried whether this issue was reflected on the risk register. LS noted that one element to be tested refers to whether risks around subcontracted activity are identified and on the risk register. AC confirmed that this would be added at the next risk register review.

063 LS drew governors’ attention to the other sector updates. She highlighted the need for colleges to review their policies and financial regulations following the ONS decision. AC confirmed that further legal advice on the ONS decision would be brought to Board on 27th March.

6.0 Subcontractor

064 The committee received the subcontracting strategy (distributed as AUDIT.130323.005). It was noted that this has been reviewed by the Learning and Quality Committee and recommended to Board for approval at the next meeting. AC confirmed that this would be reviewed by RSM as part of the work detailed in the previous item.

7.0 Recommendation Tracking

 065 AC presented the recommendation tracker (distributed as AUDIT.130323.006). It was noted that only one action remained outstanding, this relates to all governors having MFA. The committee agreed to extend the deadline to 27th March and requested that an update is given at the Board meeting. The committee was pleased to note the continued improvement in completing actions by the agreed due date. 

Action: RR to update Board on 27th March on progress of the outstanding action.

8.0 Risk Management 

066 The committee reviewed the risk management report (distributed as AUDIT.130323.007). AC confirmed that this report included the risk register that the committee usually received. The new strategic risk register considered at the Strategy Day will be brought back to the Board for further discussion and adoption at the meeting on 27th March. 

067 AC confirmed that one new risk was identified at the most recent meeting of the risk management group, this has been added at C&Q 8. The impact of the Ofsted good grade received in December was considered and, as a consequence, the residual risks score of some other risks identified has been reduced. The overall risk score has reduced.

068 A governor questioned if the risk in transferring to the payroll system has been reflected. AC confirmed that this is considered at Pro & Com 8. He confirmed that the implementation was progressing well and on track to go live on 1st April 2023. He also advised that agreement had been reached with the existing provider to extend the licence to the end of August, providing further mitigation. 

069 AC highlighted the increase in scoring to risk P&C 3 and directed governors to the notes on the register.

9.0 Fraud, Bribery, Irregularity and Legal Claims Report

070 The committee received the report (distributed as AUDIT.130323.008).

10.0 Committee Matters

071 RR highlighted the outcomes of the committee self-assessment process and drew governors’ attention to the committee training delivered by RSM at the start of the year (distributed as AUDIT.130323.010). She also noted the positive nature of the work and behaviours of the committee together with the inclusive nature of chairing and the active involvement of all committee members in meetings. LS confirmed that the challenge and support of the committee is appropriate, noting that points are pursued when required and that this is undertaken in a supportive manner. Governors reflected that recent training sessions for the committee and the Board had been very useful and that, at present, there were no significant development issues. The committee confirmed the actions to be followed up. 

Action: RR – to progress recruitment of new committee members including co-opted members. 

Action: AC to ensure that the committee chair attends the internal audit planning meeting 

Action: RR to add deep dive presentations from risk owners to agendas for September and November 2023. These deep dives to centre on the mitigation framework in place. Governors were asked to have a view on the areas to be selected at the June meeting. 

Action: RR to remind committee members via email ahead of the next meeting. 

072 The committee received the most recent version of the guidance for the committee from the ESFA.

11.0 Policies 

073 The committee reviewed the Business Continuity Policy as this has reached its annual review date (distributed as AUDIT.130323.011). Minor updates were noted. AC confirmed that the procedures that sit underneath the policy are updated as required operationally. He confirmed that a further review of those procedures will be undertaken in response to the recent response to the adverse weather, if additional updates are found to be required the policy will come back for further review next term. The committee resolved to recommend the updated policy to the Board for approval. 

LS left the meeting ahead of the next item.

12.0 External Auditors KPI Report

074 The committee received the report on external auditor KPIs (distributed as AUDIT.130323.012). AC confirmed that review of auditor KPIs are bought to this meeting to enable sufficient time ahead of the next academic to react if the reviews were unfavourable. The scoring in the report indicated that the external auditor was performing well and the college recommends that the contract with the external auditors continues. AC and DN reflected positively on the positive working relationship with the audit team. The committee resolved to recommend to the Board the re-appointment of Mazars to undertake the external audit services for the College and subsidiaries for the year ending 31 July 2023.

13.0 External Auditors KPI Report 

075 The committee received the report on internal auditor KPIs (distributed as AUDIT.140322.015). The internal auditor had won the contract last year for three years subject to maintaining adequate performance annually. Whilst the report reflects on the early stages of the contract AC confirmed that the internal auditor was performing well and the college recommends that the contract continues. AC and governors reflected on the positive impact made to date in 22/23 noting the value of the sector updates and perspective brought to the work of the committee. The committee resolved to recommend to the Board the re-appointment of RSM to undertake the internal audit services for the College in 23/24.

14.0 AOB

076 None

15.0 Date of the Next Meeting

077 The next scheduled meeting of the committee will take place on Monday 12 th June 2023 at 5.30 pm. 

The Chair closed the meeting at 6.55pm