Audit Committee Meeting Minutes of the Meeting held on Monday 18th September 2023 via Microsoft Teams

Prior to the meeting the committee held a private meeting with the internal auditor.

1.0 Apologies 

001 HS welcomed all to the meeting. She thanked ST for her chairing of the committee for the previous two years. Apologies were received from Janet Smith. David Hoose also sent apologies as Mazars do not have any items on the agenda at this meeting.

2.0 Declarations of Interest

002 No declarations of interest were received.

3.0 Committee Vice Chair 23/24 

003 The Committee resolved to appoint SB as Vice Chair of the Committee for 23/24.

4.0 Minutes of the Previous Meeting 

004 The committee resolved that the minutes of the meeting held on 12th June 2023 (distributed as AUDIT.180923.002) be approved as a true record.

5.0 Actions and Matters Arising 

4.1 Action Tracker

005 The committee reviewed the open action tracker (distributed as AUDIT.180923.003): 
29.11.21 Action 3: Board Policy Framework shared. It was noted that further work to refine policies/procedures that required governor approval was underway. Action complete. 
14.03.22 Action 5: Presentation of sustainability strategy to Board in 23/24, to be aligned to the outcome of the planned internal audit. Action ongoing. 
13.03.23 Action 1: JH now co-opted to the committee and SA a new member. Action complete. 
12.06.23 Action 1 – Governors considered the debtors reconciliation update report and raised questions on the information shared around the value of the aged debt, how this is reported through to governors, how the reported position will compare to the year-end position and the processes in place to resolve the current position. DN confirmed that aged debt is reported within the management accounts. He noted the ongoing work internally between the finance and MIS teams to resolve the position and the anticipated impact of the introduction of the new finance system. AC confirmed that new processes are in place to ensure that errors and duplications are picked up. The committee agreed to close the open action. A new action (DN) was placed to bring an update on the position to the next committee meeting and to track this issue through the F&A Committee’s review of management accounts. LS confirmed the issue would be picked up under the planned follow up work in-year. A governor queried materiality. AC confirmed that from an accounting perspective the issue is minimal. 
12.06.23 Action 2 – ONS reclassification bitesize guides available via links in resources area of Decision Time. Action complete.

5.2 Matters arising 

006 There were no matters arising.

6.0 Internal Audit (IA) 

6.1 ESFA Funding Rules Compliance 

007 The committee received the IA report on ESFA Funding Rules Compliance (distributed as AUDIT.180923.004). LS advised that no formal opinion is provided for such reviews due to the volume of data in the ILR and the relatively small sample size required. A sample size of 30 apprentice learner files was used in accordance with ESFA assurance methodology. LS highlighted the key findings from the work, noting the recommendations and the well manged controls in place relating to the Apprenticeship Accountability Framework. Governors questioned whether the number of actions highlighted was usual for the sector. LS noted that the sampling was not focussed and as such the sheer volume of data involved implied that actions would be identified. She noted that the issues identified were commonly found with other providers and that no fundamental issues had been revealed, but that actions needed to be progressed. A governor queried how the college intended to address the actions. LW confirmed that a change programme was being implemented through a steering group and that actions would be robustly progressed. The committee resolved to accept the report.

6.2 Integrated Reporting 

008 The committee received the IA report on Integrated Reporting (distributed as AUDIT.180923.005). LM took governors through the report, this provided reasonable assurance with 2 medium and 2 low management actions. She confirmed that the college had implemented multiple elements of good practice. The committee resolved to accept the report. 

6.3 Follow Up 

009 The committee received the Follow Up Review (distributed as AUDIT.180923.006). LM highlighted that the report identified reasonable progress in implementing agreed management actions; 12 out of the 14 management actions within the review had been implemented. New actions with new deadlines have been agreed for the remaining 2 actions. The committee resolved to accept the report. 

6.4 IA Annual Report 22/23 

010 The committee reviewed the IA Annual Report for 22/23 (distributed as AUDIT.180923.007). LS confirmed that the report was in draft at this point to ensure that governors were comfortable. The report includes the Head of Internal Audit opinion as ‘ The organisation has an adequate and effective framework for risk management, governance and internal control. However, our work has identified further enhancements to the framework of risk management, governance and internal control to ensure that it remains adequate and effective.’ The committee resolved to recommend the report to the Board for approval. 

6.5 Progress Report 

011 The committee noted and accepted the content of the progress report detailing the planning underway for IA reports in 23/24 (AUDIT.180923.008).

7.0 Subcontracting

012 The committee received the Assessment against the ESFA Subcontracting Standard: funding year 2022/23 report from RSM (distributed as AUDIT.180923.009). LS noted the lengthy nature of the report but confirmed that this reflected the format of the review stipulated by the new Subcontracting Standard introduced by the ESFA; providers must be RAG rated on each of the 91 subsections of Subcontracting Standard. Governors considered the outcome of the report and the action plan shared. Governors queried whether the required dispute resolution process was now in place and what had been required. LW confirmed that previous contract terms had required amendment and that the action placed was now complete. A governor questioned the processes in place to ensure that subcontractors were accountable for KPIs. LW confirmed that contracts have been updated and that qualitative data would now be used. A governor queried the PO approval process. AC explained the process now in place. Governors noted that the report had been submitted to the ESFA by the deadline and that the response to confirm whether the college have met the required standard is now awaited. The committee resolved to accept the report and the action plan. 

013 LW updated the committee on subcontracting contracts for 23/24 following the approval of allocation of contracts by the Board. Discussion on this item is minuted as confidential. 

DM left the meeting.

8.0 Recommendation Tracking

014 AC presented the recommendation tracker (distributed as AUDIT.180923.010). Governors noted the position on the 12 actions brought forward from the report reviewed at the last meeting, 7 are ongoing and will be carried forward to the next meeting along with the actions identified in the reports presented at this meeting. The committee resolved to accept the report.

9.0 Risk Management

9.1 Strategic Risk Register 

015 AC confirmed that the strategic risk register (distributed as AUDIT.180923.011) has been further revised following the feedback from governors at the last meeting in June and from the Board meeting in July. He also confirmed that from this term the strategic risk register will be reviewed monthly at ELT meetings and taken to both Audit Committee and Board. Governors considered the request to increase the risk appetite in relation to risk 1. The committee considered that the risk appetite was set by the Board and that the decision should be taken through to Board for consideration. The committee noted that at present mitigations are reported by reference to the operational risk registers; to ensure clarity and to enable the strategic risk register to be reviewed by Board without sight of the operational risk registers, the addition of a column summarising mitigations was requested. Subject to that amendment and to Board considering the risk appetite question the committee resolved to recommend the updated strategic risk register to the Board for approval. 

9.2 Operational Risk Register 

016 The committee reviewed and agreed to accept the operational risk register (distributed as AUDIT.180923.012). 

9.3 Deep Dive Presentation – Business Continuity 

017 The committee received the first of the agreed deep dive presentations, this presentation on Business Continuity was given by the Director of Estates (presentation slides shared and added to the resources section on Decision Time). A governor queried the difference between business continuity and crisis response. GM confirmed that the focus of activity is on events that are considered more likely to occur and to ensuring that any resulting disruption is as short term as possible. The Chair thanked GM for the useful presentation.

10.0 Regularity SAQ 

018 DN presented the Regularity Audit SAQ (distributed as AUDIT.180923.014). He highlighted the changes from previous years to reflect the additional accountability requirements on colleges of Managing Public Money following the ONS reclassification decision. LS highlighted the need to re-word reference to the ‘Assessment against the ESFA Subcontracting Standard: funding year 2022/23’ on page 2. Subject to the amendment the committee resolved to recommend the SAQ to Board for approval.

11.0 Annual Reports

11.1 Date Protection and Information Compliance Report 22/23 

019 JW, the college Data Protection Officer, presented the report (distributed as AUDIT.180923.015). It was noted that the data breach numbers were back up to a ‘normal’ level suggesting that breaches were being reported as needed. The committee resolved to accept the report. 

11.2 Procurement Report 

020 DN presented the report (distributed as AUDIT.180923.016). The committee resolved to accept the report. 

11.3 Register of Interests 

021 RR presented the report (distributed as AUDIT.1809923.017) noting that this information is collected annually from all governors and SPHs but that the register had not previously been formally shared. The external governance review has highlighted this as good practice. The committee resolved to accept the report.

12.0 Fraud Bribery, Irregularity and Legal Claims Report

022 The committee reviewed the report (distributed as AUDIT.180923.018). AC confirmed that no instances of fraud, bribery, irregularity or whistleblowing have occurred since the last meeting. A payment has been received from insurers in respect of the potential fraud issue highlighted at the last meeting. AC also updated the committee in detail on current employment related claims.

13.0 Policy review

023 The committee reviewed the updated Incident Management and Business Continuity Plan (distributed as AUDIT.180923.019). AC advised that a review and rewrite of more complex policies was underway to simplify the policy statement and provide clearer operational instructions. Governors queried how the policy would be tested. AC confirmed that tests in respect of various situations were planned. A governor queried the review schedule for the policy. AC confirmed that where lessons learnt necessitated changes these would be to the underlying procedures not to the overarching policy statement. A governor queried if there would be training for governors (Action AC). The committee resolved to recommend the plan to the Board for approval.

14.0 AOB 

024 None

15.0 Date of the Next Meeting 

025 The next scheduled meeting of the committee will take place on Monday 4th December 2023 in person at the City Hub.