Minutes of the Audit Committee Meeting held on Tuesday 29th November 2022 via Microsoft Teams

Pre-meeting with the Auditors

029 The committee met with RSM and Mazars in private to discuss the recent audit work undertaken with the college.

1.0 Apologies

030 Apologies were received from Janet Smith and Jo Welham due to the Ofsted inspection.

2.0 Declarations of interest

031 No declarations of interest were received.

3.0 Minutes of the Previous Meeting

032 The committee resolved that the non-confidential and confidential minutes of the meeting held on 10th October 2022 (distributed as AUDIT.291122.002) be approved as a true record.

4.0 Actions and Matters Arising

4.1 Action Tracker

033 The committee reviewed the open action tracker (distributed as AUDIT.291122.003): 
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: Work to agree policies to come to Board and committees to be completed in spring term. Action ongoing. 
29.11.21 Action 6: Risk appetite session for Board planned for January Strategy Day. Action ongoing. 
14.03.22 Action 4: Update on sustainability strategy progress on this agenda. Action complete. 
14.02.22 Action 5: Presentation of sustainability strategy to Board in 2023. Action ongoing. 
10.10.22 Action 1: Date for committee to review risk and training to be planned for February 2022. Action ongoing.
10.10.22 Action 2: Assurance processes for information shared to college to be considered at March meeting. Action ongoing. 

4.2 Matters arising 

034 There were no matters arising.

5.0 Internal Audit

5.1 Cyber Security 

035 LS confirmed that all dates for fieldwork in 22/23 are agreed. She advised that she has regular catch up meetings with AC and that they consider any need to adapt the plan for the year at that those meetings. 036 The committee received the internal audit report (distributed as AUDIT.291122.004). LS confirmed that this was an advisory report and therefore did not include any formal conclusions. The fieldwork was undertaken by RSM’s technical risk assurance with the relevant technical expertise. A governor queried why the college continues to endeavour to progress cyber essentials. LS confirmed that working towards achievement of cyber essentials is a requirement of the funding agreement for colleges. She noted that the requirements within the accreditation were reviewed and updated in January 2022 and are likely to be updated again in January 2023, the impact of this is that many colleges are not able to achieve the accreditation but continue to fulfil the requirement of ‘working towards’. 037 LS confirmed that cyber essentials require colleges to self-assess against the criteria, RSM had reviewed the college’s self-assessment and undertaken a verification exercise. She advised that none of the findings raised were a surprise to the college with plans already in place to progress these areas to the position required by cyber essentials. LS explained the key findings.

038 RW confirmed that this had been an extremely useful review and that there were plans already in place to move towards as many of the requirements as is possible. As reflected by LS, RW noted that it was unlikely that the college would achieve cyber essentials accreditation but that continuing to progress the requirements was required by the funding agreement and the college’s cyber insurance. A governor asked if the plan to progress to towards accreditation is reviewed by governors, RW confirmed that Finance & Assets Committee review the IT Strategy action plan at every meeting and that this includes working towards cyber essentials. A governor queried which of the findings the college has identified as having priority and is planning to address in the next 12 to 18 months. RW highlighted the key areas being progressed. A governor noted that some of actions within RSM’s report have a December deadline, he queried if this is achievable. RW noted that these centre around the completion of the action plan and communications rather than the implementation of the plan and are therefore achievable. Discussion took place on the implementation of multifactor access for governors, it was agreed that this would be completed by all by the end of February. Governors asked for an update on progress of the actions to the next meeting. 

Action: RW and RR to liaise to progress MFA for governors 

Action: RW to bring a progress report against the action plan to the next meeting.

5.2 Learner Journey 

039 The committee received the report (distributed as AUDIT.291122.005). LS confirmed that overall outcome of the report was ‘reasonable assurance’ with 2 medium and 2 low recommendations raised and accepted by management. Governors reviewed the recommendations. A governor queried whether the training planned in response to the recommendation placed on the 6 week review is happening at the right time in the academic year. AC confirmed that the review period was complete for 22/23 and that to ensure improvements were in place for 23/24 the training would be taken by March, with appropriate reminders ahead of the review period in 23/24. The Chair noted the overall positive outcome of the audit and looked forward to the review of implementation of the recommendations at subsequent meetings. 

5.3 Sector Update 

040 The committee received the report (distributed as AUDIT.291122.006). The Chair highlighted the value of the sector update report, AC confirmed that these were shared with college leaders and managers to ensure a wider understanding and knowledge of the issues raised. It was noted that the outcome of the ONS review had been published earlier in the day with reclassification to the public sector.

6.0 Financial Statements and Regularity

6.1 Going Concern 

041 AC presented the report (distributed as AUDIT.291122.007). He confirmed that the annual accounts and financial statements have been prepared on a going concern basis and explained the reasons behind that conclusion. 

6.2 Regularity Auditor’s Completion Report 

042 DH presented the report (distributed as AUDIT.291122.008) to governors. He confirmed that work was now substantially complete with little still outstanding. He highlighted that an unqualified audit opinion is anticipated, and that work will be completed in line with the usual timetable for submission of accounts to the ESFA by the end of December deadline. He noted the outstanding points and confirmed that Mazars had no issues with the accounts having been prepared on a going concern basis. DH highlighted the impact for all colleges of the outcome of the Harpur Trust vs Brazel case and noted the adjustment made by management in response to that. The internal control recommendations were noted, DH confirmed those placed in previous years were complete and he highlighted the very clean nature of the report. A governor queried whether there were any areas of material uncertainty, DH confirmed that there were not. DH thanked the college team for their support with the work undertaken. Governors noted the impact of the ONS announcement on college loans and that further detail will follow. 

043 The committee resolved to recommend the approval of the management representation letters to Board for approval.

6.3 Financial Statements and Accounts 21/22 

044 The committee reviewed the financial statements and accounts (distributed as AUDIT.291122.009). AC confirmed that Finance & Assets Committee met on 28th November and resolved to recommend approval of the accounts to the Audit Committee following their review of the reconciliation against the July management accounts. AC confirmed that the only variations are the adjustment for FRS 102 and the Harpur Trust accrual. The LGPS actuarial gain was noted. A governor queried the impact of recent market volatility on pensions. AC confirmed that the outcome of LGPS triennial review was due in 2023, this would lead to an updated contribution rate. The potential impact of the ONS review outcome was noted. AC thanked DN and the finance team for their work and Mazars for the very smooth audit process.

045 The committee resolved to recommend the approval of the annual statements and financial accounts to the Board. 

6.4 Financial Statements and Accounts 21/22 for College Subsidiaries 

046 The committee received the financial statements and accounts for Emtec and Nottingham College Services (distributed as AUDIT.291122.010). It was noted that the directors for the companies have met and approved the accounts.

7.0 Risk Management

047 The committee reviewed the update report and risk register (distributed as AUDIT.291122.012). No new risks have been added to the risk register since the last meeting. One new risk was considered, on key roles not being filled, and is now specifically referred to in an already existing risk . Governors noted the updated risk scores in financial risks due to the potential increase in cost of on going capital projects. Governors were pleased to note the overall reduction in curriculum and quality risks.

8.0 Fraud, Bribery and Irregularity 

048 The committee received the report (distributed as AUDIT.291122.013) and noted no issues had occurred in 21/22.

9.0 Whistleblowing

049 Governors received and reviewed the report (distributed as AUDIT.291122.014. It was noted that two issues had initially been raised under the Whistleblowing Policy but had been established to be grievances and had been dealt with accordingly. One whistleblowing report was raised. AC updated on the satisfactory outcome of the resulting review.

10.0 Legal Claims

050 The committee received the report (distributed as AUDIT.291122.015). It was noted that employment issues have been reported to Workforce & Development Committee. AC updated on a potential issue that has arisen in relation to the short term renewal of the existing HR and Payroll software licenses pending the implementation of the new system. Legal advice has been obtained and the matter is being progressed.

11.0 Insurance

051 The committee received a summary of cover in place for 22/23 (distributed as AUDIT.291122.016). A governor queried whether the level of cyber cover is sufficient. AC confirmed the cover taken is the maximum offered.

12.0 Audit Committee and Self Assessment Report

052 The committee considered the outcome of the self-assessment process (distributed as AUDIT.291122.017). It was noted that members considered the committee to be effective, RR confirmed that this assessment had been taken forward into the committee’s annual report to Board (item 13). It was agreed to consider any actions for development resulting for the self-assessment at the additional meeting to be arranged in February 2023. 

Action: RR to ensure that outcome from self-assessment is considered by the committee at the additional meeting in February 2023.

13.0 Audit Committee Annual Report 

053 The committee reviewed the annual report to the Board (distributed as AUDIT.291122.018). The need to amend paragraph 9.4 in light of the decision taken at item 12 was noted. RR confirmed that the committee should reflect on significant issues arising up to the date of the report and suggested that the ONS reclassification outcome and the Ofsted inspection should be included. The committee requested that the amendments discussed be made and, subject to those, resolved to approve the report for submission to the Board.

14.0 Sustainability

052 The committee received the sustainability update report (distributed as AUDIT.291122.019). AC confirmed that the sustainability strategy would be completed in spring 2023. Governors noted the potential costs anticipated in achieving net zero, AC advised that those costs are not in the current budget. A governor questioned whether the strategy would include milestones towards achieving net zero by 2030. AC confirmed that it will but highlighted the additional funding that will be needed.

15.0 Policies

053 The committee reviewed the Information Security Policy (distributed as AUDIT.291122.020) and resolved to recommend approval to the Board.

16.0 AOB 

054 None

17.0 Date of the Next Meeting

055 The next scheduled meeting of the committee will take place on Monday 13th March 2022 at 5.30 pm, an additional meeting will be arranged for February 2023. 

The Chair closed the meeting at 6.48pm