UNIVERSITY OF ST MARK & ST JOHN BOARD OF GOVERNORS - AUDIT COMMITTEE APPROVED MINUTES

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1 UNIVERSITY OF ST MARK & ST JOHN BOARD OF GOVERNORS - AUDIT COMMITTEE Thursday 16 October 2015 AT am IN THE BOARDROOM APPROVED MINUTES Present: Mr Michael Lincoln (Chair) Independent Governor ML Ms Linda Brightman Independent Governor LB Mr Nigel Rowe Independent Governor NR Mrs Emma Van der Lugt Co-opted Member EVL In attendance: MS Vicky Sewell KPMG VS Mr Richard Shaw KPMG RS Mrs Heather Ancient PriceWaterhouseCooper HA Dr Karen Cook Deputy Vice-Chancellor Mr Richard Watson Head of Financial Planning & Facilities Management RW Miss Lauren Scott Committee s Administrator LS 1. Apologies Apologies were received from Dr Nigel Williams and the Vice Chancellor 2. Declarations of Interest None declared. 3. Minutes of the Audit Committee meeting held on 13 February 2015 The minutes were approved subject to the following amendments: minute 4.1: to read The audit plan monitoring timetable for will be considered at the next Audit Committee meeting following a meeting between HA and ; minute 5: the action should be Unity Stuart (not HA ); minute 5.b.: to read HA noted that the Corporate Risk Register providing risk management is good and has been recently updated minute 5. Staff utilisation: to read Processes to utilise staff more effectively such as optimisation of shift patterns require discussion with the GMB. The CUC University Code had been omitted from the agenda (minute 4.3) and would be included on the agenda for the meeting on Friday 4 March Action: LS The Action Log was helpful but could be improved by referencing the action against the minute. 4. Matters Arising Further to minute 7: PWC could not undertake the external governance review as HEFCE had requested that this be carried Page 1

2 out by an independent body., the specification be reviewed and the proposed recommendations circulated to the Chair and the Chair of Finance and Resources Committee. The current Chair of Governors had resigned and the recruitment process was currently in progress. It was agreed with HEFCE that the start of the review be delayed until the new Chair had been appointed. ITEMS FOR DISCUSSION 5. Audit Committee-Terms of Reference The Terms of Reference were unchanged but should be checked to ensure compliance with the CUC Code before being considered for approval by the Board of Governors. Action: JP 6. List of Outstanding Internal Audit Recommendations Extended deadlines for items EES/14-15/02 and FU/14-15/02 were agreed. Discussion of the exclusivity of service with each member of academic staff had been completed; similar discussions with professional service would be undertaken. The review of the Food and beverages department had gone to consultation with GMB. 7. KPMG Audit highlights memorandum and management letter The following updates were noted: page 3: the Audit has gone more smoothly this year; the outstanding items, the FTE head count and the tuition fees review, had now been resolved; page 4,Audit adjustments identified: the income has been recognised in the period with creditor balances included. Inconsistencies in reporting in Appendix 3 should be addressed. MSW I/C have small balance with more significant adjustments. MSW had ceased trading and IC had been written off. The balances should be retained to make it clearer; page 5, Independence: there will be an audit of additional fees and grant claims;. page 7: Pensions: this was based on an assumption and should be checked against the benchmark. The changes have had an impact on the income, liability and the assets for the University. Information was given that the value of assets of the LPFA had reduced due to the Ministry of Justice withdrawing from the scheme. page 7, Overall financial position, going concern and bank covenants: both results for the year are higher than anticipated. Confirmation of agreement relating to the previous years covenant position has been received from the bank and shared with KPMG. page 11, Risk 2: Finance team to understand how the decision was made. Reviews have been completed and a formal sign off was not required. It was noted that it would be helpful to have an audit trail; page 11, Risk 3: It was suggested that when systems ask for users to change passwords, that this action is carried out; page 12, Risk 1: the risks identified had been addressed; page 12, Risk 2: it was noted that within itrent changes can be functionally monitored on a regular basis. There was a query about whether the report would satisfy the needs of the Audit Team. to follow up on the report, with more information for more reassurance. page 13: the two misstatements, relating to debtors and interest not being calculated properly, which had been corrected by management but which could have been left unadjusted. the purpose of FRS1O was to provide assurance to Audit Committee; Page 2

3 8. Statutory Financial Accounts KPMG The committee reviewed the accounts page by page and the following comments were noted: page 2: the first line of the sentence should be amended to read The names of the persons who at any time during the year at the date of signing ; the Clerk to Governors should check the declarations of interest; Action: JP the wording of the report should be checked to ensure compliance with the terminology in the CUC Code and the HEFCE Assurance Report page 18: the cash situation was good; page 20: the small increase in debtors due to internal student debts; pages 32 and 33: the omission of dashes from the table page 34: typos to be corrected; page 41: RW briefed the committee about the new mezzanine floor project. It was agreed that the accounts be updated as above and recirculated, before being presented to the Board of Governors. /KPMG 9. Financial Statements representation letter Noted. 10. PWC Reports 10 a 2014/15 Internal Audit Monitoring Table It was noted that all work had been completed and that the penetrations testing report would be considered at the next meeting. 10 b 2014/15 Internal Audit report Strategic Planning The report is only advisory: the proposed approach was to talk to a smaller group of, senior academic or academic staff, rather than a larger population It was noted that feedback following this process was positive and it has been very beneficial. The following updates to the report were received: page 7: the existing process is being updated; the next stage is to hold staff meetings about implementation of the strategy;. page 9: a balanced score card approach could be used to chart progress against objectives; page 10: the new Academic Development Process enabled staff to identify their personal objectives with an enhanced appraisal system in the context of the strategic plan and new job descriptions. 10 c 2014/15 Internal Audit Draft Annual Report (Higher Education) The report provided a summary of work completed through the year; the Committee noted that the new scale was more user-friendly. Good progress in relation to the conduct of follow-up work was noted. It was agreed that despite the delay in the governance audit an unqualified opinion could be provided by the IA service. Report to be finalised and recirculated by PWC. Action: PwC 11. Annual report on data Quality The report included an internal review on self-assessments; no material concerns had been raised by Page 3

4 HEFCE. The KIS action plan has been completed. The recent internal audit on the management accounts are still outstanding but there are no issues in relation to the data. This report was accepted by the committee. 12 Data Assurance Policy The policy was approved. 13. Risk Management Policy A revised template has been added for longer and shorter term risk planning. The full risk registers will be considered by the Board of Governors at the meeting in November. Two changes have been made in relation to the NSS and applications: to circulate the revised risk registers to the committee. The policy was approved for onward circulation to the Board, subject to checking for university college as opposed to University. 14. Value for Money report The clarification in relation to para.7.3, that generated saving of 20K through the use of consortia such as SUPC is an individual purchasing saving was noted. RW to update the report appropriately and insert page number before it is considered by the Board. Action: RW 5. Auditors Tender The omission of page number from the documentation was noted and should be rectified. The two options in relation to procurement were noted: either to send the document to known organisations or select from the top of the list. Good working relations have been established with the current auditors. The SUPC advantage was discussed and adjudged to be minimal and limited. It was agreed the list of regional, national and local organisations be reviewed. The committee agreed the process and charged RW to progress to tender. Action: RW ITEMS TO NOTE 16. Questions for HE audit committees (PwC publication) It was noted that a business continuity plan was in place. Consideration should be given To the University undertaking a simulation exercise to ensure the effectiveness of the plan. 17. Fraudulent Incidents report None. 18. Any Other Business HEFCE Assurance Report to be circulated back to and ML. 19. Date of the next meeting Friday 4th March 2016, in the Boardroom Page 4

5 Audit committee Action Log Minute Point Action By whom Deadline 3 The CUC University Code had been omitted from the agenda (minute 4.3) and would be LS included on the agenda for the meeting on Friday 4 March TOR to be checked to ensure compliance with JP the CUC code before approval by the Board 7 to follow up on the Audit report to satisfy the audit committee, with more information for more reassurance Check declarations of Interest. JP 8 The wording of the Stat accounts should be checked to ensure compliance with the terminology in the CUC Code and the HEFCE Assurance Report. 8 the accounts be updated and recirculated, before being presented to the Board of Governors /KPMG Before 18 th November 11 Finalise and recirculate Annual report PWC ASAP 13 Circulate round the new risk management policy after the 2 updates from NSS and applications. 14 Update the value for money report before it goes to the Board. RW 15 Progress tender for auditors RW 16 Consideration of a simulation for exercise for the emergency plan. Page 5