The Executive Director advised that the College Risk Management Group

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MINUTES OF THE MEETING OF THE AUDIT COMMITTEE HELD ON 7 MARCH 2012

Present

Robert Allen                 Governor
Karen Finlayson (Chair)      Governor
Gill Knight                  Governor

The quorum for the meeting was three Members.

In attendance

Ron Hill                     Clerk to the Corporation
Ann Treacy                   Executive Director (Finance and Planning)
Ian Falconer                 Internal audit service (Grant Thornton)
Jonathan Holmes              Financial statements auditors (RSM TENON)

The meeting was held at the Hub, Doncaster College and started at 5.30 pm with an informal
in camera session between Members of the Audit Committee and the internal audit service.

1.     Apologies

1.1    Apologies were received from George Trow, Principal.

1.2    Apologies were also received from Alistair Hunt (RSM TENON) and Will Simpson
       (Grant Thornton).

2.     Declarations of Interest

2.1    The Chair reminded Members to declare their interests as and when necessary on
       the agenda.

2.2    Gill Knight declared that her firm of solicitors (Atteys) has working relations with the
       audit firms currently associated with Doncaster College.

3.     Minutes of the Audit Committee held on 30 November 2011 and any matters
       arising

3.1    The minutes were agreed as a true and correct record and were duly signed by the
       Chair.

3.2    As matters arising:

          The Clerk to the Corporation reported that new Members of the Governing Body
           were expected to be appointed shortly from which new Members of the Audit
           Committee could be identified. There remained continuing interest in the
           appointment of an External Co-opted Member of the Audit Committee and a
           candidate may be identified from candidates for membership of the Governing
           Body.
          The Executive Director informed that the internal audit service plan for 2011/12
           now included a review (five audit days) of health and safety systems and controls
           in the light of a litigation case.
         The Executive Director informed that the Board’s Financial Regulations will
          include reference to the Bribery Act 2010 following recent updating. Ian Falconer
          (Grant Thornton – internal audit service) offered to review the College’s proposed
          response to the Bribery Act 2010.
         The Executive Director informed that recent efforts to recruit a Chief Accountant
          for Doncaster College Finance Department had been unsuccessful.

4.    Determination of Any Other Business

4.1   The Clerk to the Corporation was asked to brief the Audit Committee on new
      governance freedoms. This item was taken at Item 8.

5.    Audit Recommendations and Actions (Composite Report)

5.1   The Executive Director (Finance and Planning) presented the written report which
      included details of the progress of audit recommendations. There were three
      remaining audit recommendations and the Executive Director reported the
      implementation in each case. It was confirmed that the implementation would be
      followed up by the internal audit service in due course.

RESOLVED (AC 01/12)

The Audit Committee resolved to commend the College’s response to audit
recommendations and, following advice, supported the removal of all the completed
audit recommendations from the recommendations composite report.

6.    Risk Management – Status Report and Risk Management Policy

6.1   The Executive Director presented a revised version of the Risk Management Policy
      which had been updated to reflect the College’s new strategic objectives. The
      Executive Director advised that the College Risk Management Group, at its meeting
      of 21 February 2012, downgraded CR.6 Withdrawal of Transitional Protection to the
      operational risk register (financial) on the grounds of published four year plans for the
      reduction of transitional protection by the Young People’s Learning Agency.

6.2   The Executive Director referred to Appendix 3 to the report which had been formed
      from consideration of corporate risk appetite by Governors attending the Strategic
      Governor Development event on 27/28 January 2012. The pattern of Governor
      response demonstrated a varied, proportionate response to different types of risks.

6.3   Members discussed how business proposals would be considered by the Board in the
      circumstances of a variable risk appetite. It was accepted that the Board’s Financial
      Procedures currently addressed business development processes by virtue of any
      expenditure over £100k requiring the approval of the Board. However Members
      suggested that a new policy framework may be needed to guide College managers
      and support Governors to achieve confidence in appropriate and effective project
      approval.

6.4   The Executive Director referred to the recent risk audit undertaken by the College’s
      insurers – Royal Sun Alliance. The audit produced three requirements – securing the
      plant room, ensuring fire protection for the computer room, and having a tested
      business continuity plan.

6.5   The Executive Director presented the latest version of the Corporate Risk Register to
      Members.

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RESOLVED (AC 02/12)

The Audit Committee resolved:

a      to note the status report on risk management
b      to recommend the revised Risk Management Policy to the Board for approval
c      to include a risk appetite statement within the Risk Management Policy
d      to request a governance project approval policy framework to be presented to
       the next Audit Committee for consideration

7.    Internal Audit Service – Visit 1 : Reports

(a)    Project Management Review

7.1    This review was defined as ‘advisory’ ie no opinion was provided. One medium risk
       recommendation was identified which related to ‘The College does not operate an
       organisation-wide project management methodology which would formally define
       project roles, governance standards, or approval requirements. As a result a silo
       approach to managing projects within the College has developed, with different
       groups following different practices for managing projects.’

7.2    Thus, a formal project management methodology was advised for Doncaster College.

(b)    Quality of Teaching and Learning

7.3    The review achieved an audit opinion as follows:

Design effectiveness

Overall, we have concluded that, in the areas examined, the risk GREEN
management activities and controls are suitably designed to achieve the
risk management objectives required by management
Operating effectiveness

Except for the controls listed below those activities and controls that we GREEN
examined were operating with sufficient effectiveness to provide
reasonable but not absolute assurance that the related risk management
objectives were achieved during the period under review.

7.4   There were two medium recommendations and one low priority recommendation.

(c)    Financial Management Information

7.5   The review achieved an audit opinion as follows:

Design effectiveness

Overall, we have concluded that, in the areas examined, the risk GREEN
management activities and controls are suitably designed to achieve the
risk management objectives required by management.
Operating effectiveness

Those activities and controls that we examined were operating with GREEN
sufficient effectiveness to provide reasonable but not absolute assurance
that the related risk management objectives were achieved during the
period under review.

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      7.6    There were no recommendations. The Executive Director added that she was using
             financial management information to review course costing and course viability.

      (d)    Marketing

      7.7    The review achieved an audit opinion as follows

      Design effectiveness

      Overall, we have concluded that, in the areas examined, except for the AMBER
      specific weaknesses identified by our review, the risk management
      activities and controls are as suitably designed to achieve the risk
      management activities.
      The Marketing Department does not have formalised operational plans to
      ensure that the work undertaken will contribute effectively to the
      College’s overarching objectives and has not undertaken external market
      research to understand its customers’ needs and its positioning the
      market for several years.
      Operating effectiveness

      Those activities and controls that we examined, except for the specific AMBER
      weaknesses identified by our review, were operating with sufficient
      effectiveness to provide reasonable assurance that the related risk
      management objectives were achieved during the period under review.
      The work undertaken by the Marketing Department is not fully co-
      ordinated with Academies and Departments due to the lack of an
      operational plan and therefore the activities being undertaken may not be
      delivering value for money nor meeting the College’s strategic needs.

      7.8    There were six medium risk recommendations and one low risk recommendation.

      7.9    Members wished to see signs of improvement by 31 July 2012 and, considering the
             potential benefits of adopting a public value statement, believed much more co-
             ordinated marketing activities should be planned and utilised by the College.

      (e)    Progress Report

      7.10   Ian Falconer (Grant Thornton – internal audit service) reported that the Board’s
             internal audit plan for 2011/12 was on target and the Internal Audit Service Annual
             Report was on schedule for the meeting of the Audit Committee on 19 June 2012.

      RESOLVED (AC 03/12)

      The Audit Committee resolved to note the internal audit service audit reviews and to
      request all recommendations be added to the composite recommendations report.

      8.     Any Other Business : Governance ‘Freedoms’

      8.1    The Clerk to the Corporation provided a brief overview of the Modification Order in
             relation to the Instrument and Articles of Government, the Foundation Code of
             Governance, the Sharp Report, the proposed OfSTED inspection regime and
             emerging governance models regarding extending education provision in localities.

(Ian Falconer and Jonathan Holmes left the meeting at 7.25pm)


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9.     Internal Audit Service and Financial Statements Audit Service – Selection

9.1    Following discussion of the relative merits of the recent presentations from
       prospective audit service providers, Members agreed to delegate the determination of
       recommendations to the Board to the Chair of the Audit Committee.

10.    Date and Time of Next Meeting

10.1   The next meeting of the Audit Committee will be held on Tuesday 19 June 2012.

The meeting closed at 7.34pm.



Addendum to the minutes

Following the meeting the Chair of the Audit Committee, taking into account the views
of Members of the Audit Committee and the Executive Director (Finance and
Planning), determined to recommend to the Board:

a      that Grant Thornton be re-appointed to act as the Board’s internal audit service
       for an initial three period from 1 August 2012;
b      that RSM TENON be re-appointed to act as the Board’s financial statements
       auditors for an initial three year period with effect from 1 August 2012.




Ron Hill
Clerk to the Corporation
Doncaster College




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