the
COURT
AUDIT COMMITTEE
MINUTES of the second meeting of the 2011/2012 academic year held on
Monday, 14th November, 2011, in Room 084, Queen Anne Court, Greenwich Campus,
Park Row, Greenwich SE10 9LS, commencing at 5.00 pm.
Present:
Mr S Davie (Chairman)
Ms S Patel
Mr J Stoker
Mrs H Wyatt
In attendance:
Mrs T A Brighton (Minutes Clerk)
Mrs L Cording (Secretary and Registrar)
Mr R Daly (Director of Finance)
Mr L Devlin (Head of Campus Services)
Professor D Maguire (Vice-Chancellor)
Professor M Snowden (Head of School of Science)
Mr D Barnes (External Auditor)
Ms K Bleinskop (External Auditor)
Ms A Lancefield (Internal Auditor)
11/15PRIVATE MEETING
The meeting was preceded by a private meeting of the Committee Members.
11/16DECLARATION OF CONFLICTS OF INTEREST
There were no declarations of conflict of interests.
11/17MINUTES OF PREVIOUS MEETING (A 11/21)
The minutes of the meeting held on 17th October 2011 were agreed and signed as a true record subject to the following amendment to minute 11/10 on the anti-bribery policy:
“last sentence, 2nd para to read ”...... to terminate business with any suppliers, contractors and other organisations convicted of corruption or bribery, should be amended to indicate that evidence of possible corruption or bribery was sufficient to lead to termination.”
11/18MATTERS ARISING FROM THE MINUTES
18.1Finance Office Staffing
The Director of Finance reported that a new management accountant had recently been appointed and he was in the process of advertising for another. As this would create an additional position in the Finance Office, he agreed to provide an updated organisational chart to the next meeting.
18.2Membership of the Committee
The Secretary & Registrar reported that the search for an independent Member continued.
18.3Internal Audit Report on Budget Setting / Financial Forecasting
The Secretary & Registrar recalled that there had been a difference of opinion between the internal auditors and the Director of Finance about how much information ought to be recorded on the decisions and assumptions underpinning the financial forecasts. As requested by the Committee, the Vice-Chancellor’s Group had now considered the matter and had determined that the key sources of information should be set out as a short document with a few lines on each of the top 12 sources. The Internal Auditor confirmed that referencing along these lines would meet her requirements.
11/19REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
(A 11/22)
Introducing the 2010-2011 financial statements, the Director of Finance reported a final year-end surplus of £11.4m against an originalforecast surplus of £4.2m. He outlined a number of changes to the forecast which had occurred after the accounts had been reviewed by the Finance Committee in June 2011. The most significant of these had been the release of £4.6m of clawback provisions held from the 2008-09 and 2009-10 financial years.
He drew the Committee’s attention to the improved position of the balance sheet and increase in reserves and confirmed that all the key bond covenants had been met for the 2010-11 financial year.
The External Auditor presented the Key Issues Memorandum arising from the audit of the financial statements. He reported that the audit was substantially complete and he anticipated that an unqualified opinion would be given. The following matters had been identified during the audit:
idespite an overall improvement in the tuition debt position, the provisioning levels for student debtors needed to be reviewed. This had now been done and an adjustment had been posted for older debts totalling £324k;
iithe balance of uncleared, out-of-date, cheques issued by the University was increasing and many were more than three years old. A review of out-of-date cheques should be undertaken and consideration given to writing off cheques which were over seven years old;
iiialthough unidentified cash receipts were reviewed on a monthly basis in order to identify the sources of the monies, the balance was continuing to grow. At least £56k of this balance was over five years old and consideration would be given in the future to writing off some of the older balances.
The Chairman highlighted the requirement for the individual members of Court to make a declaration about the adequacy of information provided to the external auditors. He would ensure that the declaration was brought to the Court’s attention when the draft financial statements were being considered.
Subject to modifications requested in discussion, the Committee agreed to recommend to Court for approval:
ithe report by the Director of Finance on the 2010/11 financial statements
iithe draft Report and Financial Statements for the year ended 31 July 2011
afor the University of Greenwich
bfor Greenwich University Enterprises Limited
cfor Greenwich Property Limited
iiithe draft External Auditor’s Key Issues Memorandum and response from the Director of Finance
ivthe draft Directors’ Letter of Representation to the External Auditors for signature by the Vice-Chancellor and Chair of Court.
11/202010/2011 AUDIT COMMITTEE ANNUAL REPORT (A 11/23)
The Committee considered the revised draft annual report which had been updated since the last meeting. Subject to the amendments requested, the Committee agreed to recommend to Court that the 2010-2011 annual report of the Committee be approved for submission to HEFCE.
11/21VALUE FOR MONEY (VfM) (A 11/24)
21.1Value for Money Studies : Follow Up on Maintenance of the University Estate
The Committee received a progress report on implementation of the recommendations in a value for money study on Maintenance of the University Estate which it had reviewed in March 2011. Members had agreed to monitor progress every six months.
The Committee was pleased to note that good progress had been made in implementing eight of the nine recommendations. The outstanding recommendation (that a detailed cost/benefit analysis of the delivery of reactive and planned maintenance be undertaken across the institution) was due to start in early 2012. The Committee noted that progress would be reviewed again when the annual follow-up report was considered in the autumn.
11/22ASSOCIATED COMPANIES (A 11/25)
The Committee received an updated schedule detailing the University’s associated undertakings. It was agreed that:
imore up-to-date information on the Zethus Centre was needed
iicompanies which were dissolved or those which the University had no shareholding or obvious involvement in could be removed from the schedule.
11/23INTERNAL AUDIT
23.1Internal Audit Reports
The Committee considered the findings and recommendations of the following internal audit reports:
18-10-11 – School and Office Risk Management Process (A 11/26)
19-10-11 – Follow-Up – Part 3 (A 11/27)
The Management Responses for the internal audit reviews were regarded as satisfactory by the Committee and Auditors. The following issues were highlighted in discussion:
23.1.1School and Office Risk Management Process (A 11/26)
The Committee noted that the review of the arrangements for managing and monitoring risk at a local level within the University had been assessed as an amber-red level of assurance. The review had highlighted the lack of a compulsory reporting process, and the need for amplification of risk management documentation. Under the existing arrangements, Schools and Offices were required to manage their own risks but the arrangements varied across the institution. The absence of a consistent approach led to concern that local processes could be inappropriate, unreliable, and not fit for purpose. More importantly, there was no mechanism for regularly escalating local risks to an institutional level.
The issues set out in the internal auditor’s report were discussed in detail. Members recognised that the current risk management process for Schools and Offices lacked coordination and believed that remedial action was necessary. The Vice-Chancellor stated that he shared the Committee’s concerns about some of the features of the existing devolved system and acknowledged that there needed to be a different set of processes and framework put in place. Work to develop a new five-year strategic plan was under way and a review of risk management would be considered once the overall strategy had been clarified. He estimated the timescale for the start of the review to be July 2012. The Members confirmed that they were satisfied with the proposals and timeframe for taking the matter forward.
23.1.2Follow-Up Review – Part 3 (A 11/27)
It was noted that the final part of the follow-up review had covered 62 recommendations raised from six separate reviews conducted during 2009/10. The Committee was pleased to note the Internal Auditor’s overall conclusion that good progress had been made in implementing the internal audit recommendations. This was the highest level of assessment and was achieved once 75% or more of the recommendations were fully implemented. The Internal Auditor agreed to update the Internal Audit Annual Report to reflect the outcome of the review.
23.2Internal Audit Progress Report (A 11/28)
In relation to the 2011/12 internal audit plan, the Committee noted that one draft report had been issued to date.
23.3Draft Internal Audit Annual Report 2010-2011 (A 11/29)
The Committee considered the revised draft annual internal audit report for the year ended 31 July 2011. The Internal Auditor was asked to make a number of amendments to the report, mainly for purposes of clarification, and to update relevant sections to reflect earlier discussion. It was agreed that the updated report would be circulated to the Committee for review prior to submission to Court.
23.4Internal Audit Strategy 2011/12 – 2013/14
In finalising the internal audit programme for 2011-12, the Committee:
iendorsed the proposal of the Vice-Chancellor’s Group that the academic audit should focus on the administration of examinations and examinations boards
iiendorsed the request of the Vice-Chancellor’s Group that the audit on league tables (improvements) scheduled for January 2012 be removed. This was to avoid duplication of effort since the Deputy Vice-Chancellor (Research & Enterprise) had recently undertaken a similar review. Suggestions from the Vice-Chancellor’s Group for a replacement audit would be considered at the next meeting.
iiiagreed that the risk management review scheduled for February 2012 should take the form of an advisory review looking at risk management processes, particularly in Schools and Offices, and strategies.
11/24MATTERS FOR REPORT (A 11/30)
24.1External Audit – Approval of non-Audit Services
The Committee received a schedule setting out the non-audit work carried out by Grant Thornton during the current session to date.
24.2Institutional Risk Register
The Committee received:
ian updated version of the Institutional Risk Register
iia history of the risk register.
Having considered the changes made to risks 23, 26 and 28 as a result of review by the Academic Council and the Vice-Chancellor’s Group, the Committee approved the Institutional Risk Register dated November 2011.
11/25MEETINGS WITH DEANS OF SCHOOLS
The Chairman reported that the Audit Committee Members wished to have an opportunity to meet Deans of Schools. The Members believed that the visits would help promote the work of the Audit Committee.
The meeting ended at 7.05 pm.
T.A.Brighton
20.11.11
LC/AuditCtte/Minutes/Audit/14 November 2011
Audit Committee: 14 November 2011 page 1