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Audit Committee


									                          Fifth Annual Report of the Audit Committee

1. Establishment and membership of the Committee
The terms of reference of the Audit Committee were agreed by the Houses of the Oireachtas Commission
on 11 March 2004, and subsequently amended on 20 October 2005.
The Committee comprises at least six members as follows:
(1) an external Chairman, who is professionally qualified in accountancy or finance, and is experienced in
(2) 3 members of the Houses of the Oireachtas, one from each House, of whom at least one shall be a
    member of the Commission, and of whom at least one shall be drawn from the Government side and
    one from the non-Government side;
(3) 1 member of the staff of the Office of the Houses of the Oireachtas, other than the Director in charge of
    Finance, allowing for the substitution of the staff member in the event of unavailability of this member
    to attend Audit Committee meetings; and
(4) one or more external persons who are professionally qualified in accountancy or finance, or is
    experienced in auditing.
The current members of the Committee, appointed on 21 November 2007, are Mr. Tom O'Higgins (Chairman,
external member), Mr. Greg Sparks (external member), Deputy Tom Hayes (Commission member), Senator Jim
Walsh (Commission member), Senator Dominic Hannigan (Oireachtas member) and Mr. Art O'Leary (Director
of Committees, Information and Communications, staff member).

2. Role of the Audit Committee

The primary role of the Audit Committee is to oversee, and to advise the Secretary General on, risk
management, internal controls (including the internal audit function and issues identified by external audit),
and value for money issues. The work of the Committee can be broken down into four principal areas of

(1) general oversight of the work of internal audit, including consideration of the annual work programme
    prior to its submission to the Secretary General;
(2) advising the Secretary General, as required, in the exercise of his or her responsibilities as accountable
    person under the Houses of the Oireachtas Commission Acts 2003 and 2006;
(3) examining and monitoring the implementation of the risk management strategy of the Office of the
    Houses of the Oireachtas; and
(4) reviewing the format of the annual account of the Commission and recommending any changes to the
    Commission for onward submission to the Minister for Finance under section 14 of the Houses of the
    Oireachtas Commission Acts.

3. Meetings of the Committee

The Audit Committee met four times since the adoption of the last Annual Report.

       26 June 2008
       30 September 2008
       2 December 2008
       10 March 2009

4. Internal Audit

(a) Internal Audit Work Programme and resourcing

   The Committee noted an Internal Audit work programme for 2008-10 and the specific audit plan for 2009.
   The Committee also noted a paper on internal audit resourcing in the Office and the proposed outsourcing
   of reports to Mazars in 2008 as an interim measure pending a more long-term solution. Subsequently the
   Committee was advised that a qualified internal auditor, who will be supported by in-house resources on a
   part-time basis, took up duty in January 2009 on a 12 month secondment following a competitive tendering

(b) Internal audit reports

   The Committee considered the following Internal Audit Reports and agreed to notify the recommendations
   and opinions to the Secretary General and the Management Advisory Committee:

   (i)    Pensions Review - The Committee considered the report on the pensions section at its meeting on
          26th June , which was compiled by Mazars as part of the 2008 outsourcing arrangement. After
          discussion, the recommendations were adopted, subject to management reviewing the details of
          recommendations 5 and 6 in relation to annual declarations and checks for duplications. It was agreed
          that the Committee would receive a report on the implementation of the recommendations in
          approximately 6 months. The Committee noted that overall the audit found that the arrangements in
          place are adequate. Many strong controls were found to be in place and substantive testing of pension
          calculations and records did not reveal any significant discrepancies.
   (ii)   ICT Security & Data Security Review - The Committee considered the report on 30th September
          which was compiled by Mazars as part of the 2008 outsourcing arrangement. The report
          recommendations were adopted, other than recommendation 3.3.4 in relation to user account naming
          conventions. The Committee agreed that a summary of the high priority issues in the report be
          presented to the Commission and noted that the implementation of the recommendations in the report
          will be progressed by management, through the Joint Administration Committee as appropriate.
   (iii) Internal Audit of payroll processes - Mazars presented the findings of the internal audit on
          payroll processes to the Committee on 2nd December. The Committee, in noting the findings,
          agreed that the report be developed further to include; (1) a process review of the payroll
          section with regard to the use of staff resources, and (2) the management of overtime in the
          Office from a value for money perspective. The further report will be presented to the Audit
          Committee on these topics. The Committee subsequently received information notes on overtime in
          the Office and the processes in place for leavers.

   (iv)   Reviews of previous audits - The Committee, in noting the progress made on implementation of the
          recommendations of the webcasting audit in 2007, requested additional information on back-up
          systems and was advised that redundant power supplies have been installed to ensure that the
          Webcasting and IPTV systems will continue to function in the event of a power cut. The backup
          systems will provide power instantly in the event of a power cut, and can continue to provide power
          for up to three hours if required. On-site generators as also available to provide power, if necessary.

5. Risk management

(a) Risk Register 2008

   The Committee discussed the revised risk register 2008. It was noted that the request to provide alternative
   evacuation arrangements for the crèche had been actioned. It was agreed that the document is to be
   continuously reviewed in the light of ongoing developments and risk materialisation reports. It was further
   agreed to incorporate graphic representation of risks for enhanced comprehension. The Committee noted
   risk management documents as follows:

      Risk materialisation report 2008
      A note on movement of risks 2007-8
      Review of risk monitoring procedures

   The Committee welcomed the quality of risk documents and the assurance which they provide. The
   Committee also emphasised the need to keep strong risk identification systems in place in the Office and to
   ensure that controls underlying high risk areas are tested annually as part of the systematic internal audit

(b) IT Business Continuity / Disaster Recovery Plan

   The Committee was briefed on the Business Continuity/Disaster Recovery Plan for the Office in the event
   of a disaster affecting the ability of either/both Houses to sit in the Leinster House complex. It was noted as
   work in progress and will be reported back to the Committee.

(c) Update on Garda Security Review

   The Committee was updated on the review of security, which is being undertaken by An Garda Síochána. It
   was noted that the Joint Administration Committee had approved the scope of the review and will consider
   the outcome of the report when received.

6. Accounts

(a) Management Letter

   The Committee considered the management letter on the 2007 accounts and management’s response to the
   issues raised in that letter. In the course of discussion, the following issues were raised:

      The adequacy of the processes in place regarding leavers e.g. security passes, remote access to PCs etc.
       [This issue was subsequently incorporated into the internal audit on payroll processes].
      The current position regarding the assets register. The Committee was advised that there will be a full
       assets register in place for the 2008 accounts. [An assets system audit is on the 2009 work programme
       of internal audit].
      The inventory system for ICT equipment and associated controls;
      The number of suspense accounts in use.

   The Committee was subsequently circulated with information notes on the latter two issues.

(b) Meeting with representative of the Comptroller and Auditor General’s Office

   The Chairperson advised the Committee that the 2007 accounts had been signed off without qualification
   and that the management responses to the C&AG’s management letter addressed all of the issues raised. In
   response, the C&AG representative informed the Committee that no issues of major concern had arisen in
   the course of the interim audit on the 2008 accounts, which is nearing completion. The final audit will be
   completed in April 2009, and it was agreed that the Committee will meet with the C&AG’s Office again at
   that stage.

(c) 2007 Appropriation Accounts

   It was noted by the Committee that the 2007 Appropriation Accounts had been signed by the Secretary
   General and audited by the Office of the Comptroller and Auditor General. The Accounts, together with the
   unqualified report of the C&AG thereon, had been published in the Commission’s annual report for 2007.

(d) Revised thresholds for notes to Appropriation Accounts

   The Committee considered an information note on revised thresholds for notes to appropriation accounts, as
   issued by the Department of Finance. The changes, which supersede thresholds, originally laid down in
   1992, come into effect in respect of the 2008 accounts. In this context, the Chairman advocated the
   production of accounts in an accruals format. The Committee was advised that the Commission, as a civil
   service body, was complying with accounting practice in the civil service in producing appropriation
   accounts. This was the form of accounts approved by the Minister for Finance under section 14 of the
   Commission Acts.

(e) Capital Assets Registration policy

   The Committee noted a paper for information on the policy for the registration of capital assets. It was
   noted that the Office registers capital assets generally in accordance with the guidelines issued and amended
   from time to time by the Department of Finance and described in Public Financial Procedures but may,
   within that overall framework, depart from time to time to take local conditions and needs into account. It
   was also noted that the primary purpose of the policy is for accounting purposes; certain categories relevant
   to the Oireachtas, such as the library collection, are exempted.

7. Other issues considered

(a) Rationalisation of Allowances Review

    The Committee was updated on this issue and noted that a response is awaited from the Minister for
    Finance to the Commission’s proposals. In this context, the Committee considered reputational risk issues
    arising from adverse media reporting and the Chairman highlighted this in correspondence with the
    Secretary General. The role of the Communications Unit was also adverted to in this context and the need
    to ensure factual and balanced presentation of issues to the public.

(b) Report of Office Efficiency Savings Group

   The Committee noted the recommendations of the Efficiency Savings Group for the Office. The Committee
   further noted that as a general principle, results are more likely to be delivered where challenging targets,
   expressed as a percentage of budget are set. The Committee was advised that the circulation of the report
   was an interim assurance measure for the Audit Committee in the light of discussions at its last meeting and
   that the Secretary General had undertaken to furnish an efficiency savings report to the Commission by the
   end of 2008.

(c) Leinster House Accommodation Works

   The Committee was given an update on health and safety issues in Georgian Leinster House, in the light of
   recent media reports on the issue. The Committee noted that the major structural works had been deferred
   (due to the new form of Public Works Contracts) to July 2009, with completion in September 2010, and that
   OPW had undertaken emergency holding and remedial works in the summer recess to address priority areas
   and risks. [The works were subsequently deferred indefinitely due to the worsening economic climate].

                                                                                               Tom O’Higgins
                                                                                               September 2009


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