DRAFT Minutes of the AUDIT COMMITTEE meeting held on Monday 3 June 2013 at 4.30pm in Meeting Room 1 Members Mr Andy Walmsley* (Chair) Mrs Jill Baker* Ms Claire Kenny* Mr Roger Montgomery* Mr Clive Johnson (Co-opted) Mr Ieuan Blackmore* (Co-opted) * Present In Attendance Mr Richard Bateman Vice Principal Finance and Resources Mr Paul Foster Baker Tilly UK Audit LLP Mr Ray Goy Principal (agenda item no. 7/2/13 only) Mr Martin Harrington Finance and Administration Manager Ms Jenny Leeson Parkhill Consultancy Mrs Elise Scotford Clerk 1/2/13 Apologies Apologies were received from Clive Johnson (holiday). 2/2/13 Declarations of Interest There were no declarations of interest. 3/2/13 Minutes of the Last Meeting (DOCUMENT 1) The minutes of the previous meeting held on 11 February 2013 were agreed as a true and accurate record of the meeting and were signed by the Chair. 4/2/13 Matters Arising 4/1/13 8/4/12 College s Draft Financial Accounts for Year Ended 31 July 13 ACTION Clerk to follow up the information requested regarding an up-to-date split between support and lecturing staff and their areas of work. Clerk 12/1/13 Any Other Business Lee Glover and Parkhill internal auditors The Vice Principal, Finance and Resources, confirmed he had met with Lee Glover directly after the meeting to discuss concerns regarding the Macintosh HD:Users:paultonks:Desktop:elise:Audit Minutes 3 June 2013 - FOR PUBLICATION.doc Page 1 of 6
potential new arrangement. All issues had been addressed to the satisfaction of the Vice Principal, Finance and Resources. The accounts of Gateway Assure had been received and reviewed therefore due diligence had been undertaken. The Vice Principal, Finance and Resources, confirmed he had received a letter of notification from the Chief Executive of Parkhill regarding the changes. The Vice Principal, Finance and Resources to write to both Gateway and Parkhill to confirm the College s wish to remain with Lee Glover, and therefore Gateway Assure, for continuity reasons. VP, Fin & Res 5/2/13 Outstanding Items from Previous Audits (DOCUMENT 2) The Clerk presented a report showing outstanding recommendations from previous audits. There were a total of 2 merits attention recommendations that had been under review: Gifts and Hospitality Register Reporting An annual report to be made to the Audit Committee with a suggested date of June. Deferment requested to report this in September to tie in with the cycle of annual returns. Agreed. Members agreed to defer the annual Gifts and Hospitality report to September. Starter Induction Packs A copy of the Anti-Bribery Policy and the Public Interest Disclosure Whistleblowing Policy to be included in the Starter Induction Pack. Excerpts from the Financial Regulations also to be included that relate specifically to gifts and hospitality. Actioned. The Anti-Bribery Policy, Public Interest Disclosure Whistleblowing Policy and excerpts from the Financial Regulations relating specifically to gifts and hospitality are now included in Starter Induction Packs and acknowledged by new staff members. Members received and noted the report on outstanding recommendations. 6/2/13 Internal Audit Report (DOCUMENT 3) Auditors joined the meeting. Jenny Leeson, Parkhill Consultancy, presented the Block 2 2012/13 internal audit report. All areas audited had received substantial levels of assurance. There were 6 recommendations in total: - Executive summary key financial controls ensure asset register review is undertaken due to the building works. - Student systems the valid to date had passed for work instructions for enrolment forms and should be updated. Macintosh HD:Users:paultonks:Desktop:elise:Audit Minutes 3 June 2013 - FOR PUBLICATION.doc Page 2 of 6
- Campus management H&S Health Check: - The AIMS system should be updated with all accidents which have taken place - An analysis should be undertaken to identify any trends and lessons learnt from accidents and incidents. - PEET testing system to be established to monitor and track when electrical equipment is due for testing. The auditor confirmed that this related to a couple of computers and a fridge. All other items are systematically tested. - Enhance visitor awareness by issuing H&S leaflet to college visitors. Typographical errors were pointed out by Governors for correction: Page 9 the contractors name should read Jones Lang LaSalle. Page 21 lessons learnt target date should read January 2014 not 2013 Internal Auditor to correct. Int Auditor Members received and noted the Block 2 Internal Audit Report. 7/2/13 Risk Register (DOCUMENT 4) Members received the Risk Management Plan 2013. The Principal explained that this had been presented to the full Corporation in May before first coming to Audit Committee because of the urgency created by City College s Grade 4 Ofsted result. The Risk Management Plan for 2013/14 was presented. This was much the same as the previous year with the main risks remaining as standard: - Not enough students - Insufficient finances - Weak Ofsted result Particular attention is being paid to: - embedding new performance management of teaching departments. The Principal confirmed this is to be carried out via a series of meetings on a regular basis between the Vice Principal, Standards and Learning, Heads of Department and Departmental Managers. - a solution to the impact of City College s Grade 4 Ofsted result. The College: - has increased positive messages about the quality of HCC s offer. - highlights where job vacancies are likely to lie in Coventry and Warwickshire over the next 3-5 year period. Macintosh HD:Users:paultonks:Desktop:elise:Audit Minutes 3 June 2013 - FOR PUBLICATION.doc Page 3 of 6
- has had meetings with the SFA, the local authority, and the Principal and Chair of City College to express the College s interest in being part of the solution. The Board of City College and local politicians prefer a Coventry solution. - has arranged for Governors to be briefed on a potential partnership between the 2 colleges. Paul Lawrence, ex KPMG, will make a presentation at the Governors Away Day. He has much relevant experience in college mergers. - is concentrating on achieving a Grade 2, if not Grade 1, from the next Ofsted inspection. The Risk Register 2013/14 will be a substantive item on the agenda for the Corporation meeting in July. Clerk Members received and noted the Risk Management Plan for 2012/13 and the Risk Register for 2013/14. 8/2/13 External Audit Strategy (Year End) (DOCUMENT 5) RG left the meeting Apologies had been received from Paul Oxtoby, Baker Tilly. Paul Foster was in attendance on his behalf. Mr Foster explained he was an Audit Manager at the Birmingham office with responsibility for 7/8 colleges. The Audit Strategy was presented. It was similar to previous years. The following points were highlighted: - Page 1 introduction as this Strategy was being presented to the Audit Committee before the year end, any significant issues subsequently arising would be brought to Governors attention and the report would be reissued too. - Page 5 timetable initial planning for the audit has started June- September, the field work takes place in October with a report to the Committee in November/December and the accounts signed off in December. - Page 9 a 1.6% increase on last year s audit fee was suggested. Key reasons affecting the audit were highlighted as: - Income recognition affecting all colleges. - FRS17 detailed testing will be carried out by the auditors. - Capital project check if costs have been correctly recognised as capital or revenue. Significant area to be closely monitored. - Going concern key area in the sector because of funding reductions. Cashflow forecast to be reviewed to ensure sufficient funds are in place for the following 12 months. - Pages 12/13 Appendix A Baker Tilly will liaise closely with the internal auditors. Macintosh HD:Users:paultonks:Desktop:elise:Audit Minutes 3 June 2013 - FOR PUBLICATION.doc Page 4 of 6
- Fraud it is Governors responsibility to ensure auditors are advised of any instances. It is not the auditor s responsibility to check its management. - Appendix C other services provided to the College by Baker Tilly are the certification of TPS/LGPS returns. However, these do not affect the independence of the auditors therefore they are able to continue to act as auditors to the College. Members received and approved the External Audit Strategy. Members approved the 1.6% increase in audit fees. 9/2/13 Specific Items for Highlighting to the Full Corporation Members agreed to highlight: - Internal audit report - Risk Register - External audit strategy 10/2/13 Publication of Documents There were no exclusions from publication. 11/2/13 Any Other Business New Build the Vice Principal, Finance and Resources, gave a verbal update of the new build highlighting: - The Capital Project Steering Group had met twice the first meeting had gone through the plans in detail. The second meeting had received a detailed update from the External Project Manager. - There were 3 elements to the project: 1) Engineering block: - The steel frame is now up - The roof is being put on this week - On target for completion in July 2) New build at the front: - Demolition completed - Break-in followed - Major flood as a result of theft of copper pipes and brass caps - Widespread damage to: LRC, Finance and HR. Anticipated insurance claim of approximately 110k - Limited impact to students as the flood happened over the Easter break - 24-hour on-site manned security now in place - Anti-vandal paint now applied - Security cameras now trained on the area breached at all times - Outside ground works completed involving drainage, sewers, piping, re-routing of utilities. Steelwork starts this week. Macintosh HD:Users:paultonks:Desktop:elise:Audit Minutes 3 June 2013 - FOR PUBLICATION.doc Page 5 of 6
- 4 weeks behind schedule due to asbestos removal. Completion target date now end November so most likely completed by Christmas. Governors asked how crucial a 4 week delay was. The Vice Principal, Finance and Resources, said the work timetable of the construction company selected was 3 months shorter than the other tenders. It would be easier to start running the new college in the new year so this amount of delay was not felt to be a problem. 3) Cladding of the old tower block: - takes place over the summer in sections. - scaffolding in place in corridors which goes up through to the roof. Governors asked if there was any risk of rain coming through. The Vice Principal, Finance and Resources, said no as the contractors have sealed around the scaffolding. Members received and noted a verbal update on the new build. 12/2/13 Date and time of next meeting Monday 23 September 2013, 4.30pm The meeting ended at 5.20pm. Signed:.. (Chair) Date: 23 September 2013 Macintosh HD:Users:paultonks:Desktop:elise:Audit Minutes 3 June 2013 - FOR PUBLICATION.doc Page 6 of 6