Audit Committee Minutes 8 November 2010

AT A MEETING of the AUDIT COMMITTEE held in the College on MONDAY 8 NOVEMBER 2010 at 5.00 pm.

Present B ALLEN in the Chair P Ball C Holliday B Guthrie and E Lugg Also in Attendance L Oliver (Clerk) A Isherwood (Principal) S Ruddock (Directorate) L Heighton (Finance Manager) and J Robson and L Spillane (KPMG).

An apology for absence was received from L Taylor (Baker Tilly).

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Declarations of Interest There were no Declarations of Interest made prior to the consideration of business.

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Minutes The Minutes of the meeting held on 5 July 2010 were confirmed as a correct record and signed by the Chair.

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Risk Management The Committee considered a report on the planned process for the management of risks to the College during 2010/11.

Attached to the report was a copy of the review Log 2009/10 and the Annual Cycle of Activities Chart for 2010/11.

The report informed that all risk reviews were completed for 2009/10 with 2010/11 reviews scheduled to commence in October 2010 with a completion date of March 2011.

The report also advised that the risk management process was now being reported through the newly established Senior Leadership Management Team.

Resolved That the planned process for the management of risks in 2010/11 be endorsed.

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Financial Management and Control Evaluation (FMCE) The Committee considered a report on the self assessment of the College financial management and control arrangements.

The report commented on the – Style of the Return The Committee’s input Summary of Grades Timetable for completion of Return The Summary of Grades showed that all areas had been classified as ‘Good’’ and the Committee discussed what actions needed to be taken to improve the grades to ‘Outstanding’.

The Committee was advised that whilst the ’Good’ grades showed an improvement as the benchmark was steadily being raised to achieve that grade the curriculum results fell short of allowing any higher grade and until they were improved it would not be possible to award the higher grade.

Actions to improve the curriculum results were contained in the College Action Plan and that the prioritising of areas for improvement would be discussed through the soon to be introduced Strategic Review process.

Resolved That the Corporation be recommended to approve the FMCE assessment.

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Financial Planning and Internal Control Arrangements The Committee did not consider the report on Financial Planning and Control arrangements as the proposed establishment of a Strategic Review process had overtaken events.

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Review of the Performance of the Internal Audit Service 2009/10 The Committee considered a report reviewing the performance of the Internal Audit Service for 2009/10.

The indicators used were those agreed at the November 2009 meeting of the Committee and were as follows – Scope of service Independence Relationships with management, other auditors and other review bodies Page 2 of 5

Staff training and development Audit strategy Management of audit assignments Reporting Quality assurance The report concluded that the College was satisfied with the internal audit service for 2009/10.

The report also recommended Annual Performance Indicators for 2009/10 and that KPMG are reappointed Internal Auditors for 2010/11.

Resolved 1.

2.

3.

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That the review of the performance of the internal audit service 2009/10 be endorsed.

That the Annual Performance Indicators for 2010/11 be those used for 2009/10 together with those used by KPMG in their internal audit annual report.

That the Corporate Board be recommended to re-appoint KPMG as Internal Auditor for 2010/11.

Internal Audit Annual Report 2009/10 The Committee considered the Annual Internal Audit Report for 2009/10 from KPMG. The report indicated that the College has adequate and effective management, control and governance processes to manage its achievement of the College’s objectives.

Resolved That the Internal Audit Report 2009/10 by KPMG be endorsed.

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External Audit Reports 2009/10 The Committee noted a report on the status of the external audit reports for the 2009/10 financial year.

The report informed that the financial statements and regularity audits would be available for the next meeting.

Baker Tilly had however indicated that there were no issues to be raised although a decision was still being awaited on how to present FRS17 Pension Fund transactions in the accounts.

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The Skills Funding Agency Audit which took place in July was satisfactory though a funding error of £50 was found and the full Audit Report was attached for the Committee’s information.

The College was not selected for an LSC Funding Audit in 2009/10 although audit for 2008/9 needed to be formally closed out. A copy of the audit was circulated to the Committee and there were no outstanding items and no repayment of funds involved.

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Annual Report and Financial Statements 2009/10 The Committee considered a report on its responsibilities in the process for the Corporation to approve the Annual Report and Financial Statements 2009/10.

Included in the report were drafts of the Statement of Responsibilities of the Members of the Corporation and Statement of Corporate Governance and Control for consideration at the 22 November 2010 meeting of the Committee.

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Draft Audit Committee Annual Report to the Corporation 2009/10 The Committee considered its draft Annual Report to the Corporation 2009/10.

The draft report detailed the following – Requirements of Report Content of Report Membership Period covered Detail of the various meetings Terms of Reference Review of Internal Audit Service and Reports Review of External Audit Service and Reports Risk Management Financial Statements 2009/10 (to be completed) Self Assessment Conclusion The final version of the report with Sections 4.1 and 4.2 completed is to be presented to the meeting of the Committee on 22 November 2010.

Resolved That the Draft Report be endorsed and submitted to the next meeting of the Committee on 22 November 2010 for final approval.

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Internal Audit Assurance Plan 2010/11 The Committee noted a report presenting the Internal Audit Assurance Plan for 2010/11.

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Audit Committee Programme 2010/11 The Committee noted a report on the Audit Committee Programme for 2009/10.

Account would however need to be taken of the new funding regimes from April 2010 and as consequence of that the programme may have to be amended.

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Dates of Next Meetings The Committee noted that its next meetings would be held on 22 November 2010 and 7 March 2011.

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