Tabled/Supplementary Papers: the following supplementary paper was provided:

Transcription

1 BOARD OF GOVERNORS AUDIT AND QUALITY COMMITTEE 1600, Wednesday 30 April 2014, Room 3.01, St Andrew s Court MINUTES Present: Clerk: Dr Peter Bunyan, External Governor (Chairman) Mark Greenwood, External Governor Martin James, External Governor Paul Myers, External Governor Sally Hartley, Clerk to the Board of Governors Helen Malbon, Governance Officer In attendance: Sue Barratt, External Auditor, Deloitte LLP (up to Min 70, excluding minute 69) Professor Graham Galbraith, Vice-Chancellor (up to Min 71) Doug Fenton, Procurement Manager (up to Min 64) Matthew Hepenstal, External Auditor, Deloitte LLP (up to Min 70, excluding minute 69) Ruth Ireland, Internal Auditor, BDO LLP Stuart May, Internal Auditor, BDO LLP Bernie Topham, Chief Operating Officer (from Min 64 to Min 66) Emma Woollard, Director of Finance Tabled/Supplementary Papers: the following supplementary paper was provided: Agenda item 9.2 Risk Register template To accommodate the availability of some members, item 10 (Minute 67 refers) was taken after item 13 (minute 70 refers). 58 ELECTION OF CHAIRMAN It was agreed that the election of Committee Chairmen for the 2014/2015 session should be deferred to the September 2014 round of meetings. 59 WELCOME AND APOLOGIES The Chair welcomed Helen Malbon, Governance Officer, to her first meeting of Audit and Quality Committee. Apologies were received from Rebecca Bunting, Deputy Vice- Chancellor. 60 MINUTES The minutes of the meeting held on 12 February 2014 were confirmed as a correct record. Audit and Quality Committee Minutes 30 April 2014 Page 1 of 7

2 61 MATTERS ACTIONED SINCE THE LAST MEETING OR UNDER CONTINUING CONSIDERATION Action was reported on five matters: two were for note, two items were covered later in the agenda, and there was one oral report. Ruth Ireland provided an update regarding the responsibility for the funding and management of the destination of leavers in HE (DLHE) survey. In the meeting on 12 February 2014 there had been a suggestion that the funding mechanism would be changing but investigations revealed that in fact no significant changes to the process were planned. An additional item was brought to the Committee s attention. In 2013, the University s bank account, along with the bank accounts of several other companies unrelated to the University, had been subject to a series of small scale thefts via electronic transfer. The bank s internal processes had picked this up and refunded the money quickly. The perpetrators had recently been prosecuted and sentenced. Committee was reassured that the University s bank processes were sound. 62 MATTERS ARISING Ruth Ireland introduced her paper, written in the light of the recent Panorama programming which had revealed joint research undertaken by University Staff and staff from BDO. The following points were noted: The Committee was informed that this had been a long standing relationship but, because there was no financial conflict of interest, BDO had not felt it necessary to bring this to Committee s attention. Since writing her paper, Ruth Ireland had become aware that, in addition to the joint research relationship, Kim Heyward of BDO was a member of the Portsmouth Business School Advisory Board. The Committee agreed that such relationships could be mutually beneficial but was unequivocal that all such relationships must be documented formally for the record, so that Committee was able to take a view on whether or not any actual or perceived conflict of interest might exist. 63 CHAIRMAN S ACTION Chairman s Action had been taken on 15 April 2014 to approve BDO Human Capital providing tax advice in respect of a member of staff who was to be working overseas. However, the services were not in fact taken up because the member of staff s circumstances changed. 64 VALUE FOR MONEY The Committee welcomed Doug Fenton, Procurement Manager, to introduce a discussion on Value for Money (VFM). It was acknowledged that VFM was an issue relevant across Audit and Quality Committee Minutes 30 April 2014 Page 2 of 7

3 the University but that procurement was a key area where the concept of VFM should be embedded. In discussion, the following key points were noted: (iv) (v) (vi) (vii) In procurement, Doug Fenton reported that VFM was achieved through such processes as a) competitive tendering using transparent processes, b) being part of Consortia with other Universities to achieve best value when purchasing common services or products and c) establishing user groups within the University to make best use of any equipment/software purchased. It was agreed that Doug Fenton should produce a paper for the Committee giving an example of each of these three areas showing how best value had been achieved. Action: Doug Fenton It was acknowledged that VFM did not necessarily mean awarding the contract to the lowest bidder but the long term cost benefits were a factor in consideration. The rationale for selecting each tender was well documented to make it clear why one had been chosen above another. In securing VFM for students, it was acknowledged that this may not be measurable in quantitative terms e.g. quality and availability of Library resources, ability to secure employment after graduating. The Chief Operating Officer and Director of Finance would review processes during the coming academic year to assess their efficiency and effectiveness. The outcome of the size, shape and profile debate would inform which areas would be most suited as initial foci for a VFM agenda item for each Audit and Quality Committee. The concept of VFM should be embedded in all areas of University life with some responsible for the macro issues of final outcomes, whilst others should consider it at the micro level of their daily processes. The new strategic and financial planning process would assist in embedding and reviewing VFM with the linking of Business objectives to expenditure and the follow up review of anticipated outcomes. 65 DIRECTOR OF ESTATES AND CAMPUS SERVICES PORTFOLIO Bernie Topham joined the meeting to update the Committee on the appointment of a Director of Estates and Campus Services. The following points were highlighted: 130 applications had been received and after long listing and a round of interviews, four candidates would be interviewed on 1 May The key skills required would be the ability to master plan and implement change, to build a unified team, to have broad technical knowledge and the ability to be creative in introducing and embedding effectiveness and efficiency across all Estates departments. It was acknowledged that the range of skills required was an ambitious aim but that an appointment would not be made if there was no suitable candidate. 66 RISK MANAGEMENT 66.1 The Committee noted the risk register that had been discussed by the University Executive Board on 7 April No new risks had been added and seven risks had been amended. Audit and Quality Committee Minutes 30 April 2014 Page 3 of 7

4 66.2 Ruth Ireland tabled a single sided paper showing a risk management colour coded template that could be adapted to meet the requirements of the University. It was noted that: (iv) (v) The spreadsheet could be set up to link to corporate objectives to clearly show identified risks, by category with an overview of the current and previous status of each. Colour coding easily identified if the risk was low, medium or high. Risks not need necessarily be financial; the definition of the three levels of risk would be defined by the University. It was possible to build in layers of risks, with one spreadsheet extract showing the high level strategic risks and another showing the department level processes that contributed to each. It was acknowledged the current risk register should be reformatted to give fewer top level risks, with associated risks linked as sub sections to the main ones. Bernie Topham, Emma Woollard and Fiona Loughran would look at risks linked to the Business Plan in the coming academic year and then report to UEB to assist in the development of their risk register. Action: Bernie Topham If required, Deloitte LLP and BDO LLP were able to offer training or materials to support in the introduction of a wider understanding of corporate risk management The Committee noted the extract from the CUC Handbook and agreed it may be useful in future discussions of risk management. 67 INTERNAL AUDIT REPORTS Committee considered the following reports from BDO LLP: 67.1 Progress Update Report 2013/2014: Stuart May presented the report. He confirmed that a change in legislation from April 2015 could lead to new build student accommodation no longer being eligible for zero rated VAT (page 64 of the agenda papers refer). This would apply to the proposed Greetham Street project. Management would consider the appropriate balance between commercial use of the facilities and longer letting periods for students Health and Safety Governance Final Report: the overall conclusion was moderate/ moderate. There were four recommendations for improvement. It was noted that some areas of responsibility appeared to overlap and it was important that only one department should have the lead on the provision of Health and Safety advice. Bernie Topham had this in hand to address. Sally Hartley agreed to ascertain what progress had been made regarding recommendation three. Action: Sally Hartley 67.3 HEIF (Higher Education Innovation Fund) Final Report: the overall conclusion was substantial/ substantial. There were two recommendations for improvement. The controls were operating well but the monitoring and reporting systems could be further improved. Alistair McDermott was already working on addressing the recommendations. Audit and Quality Committee Minutes 30 April 2014 Page 4 of 7

5 67.4 Overtime, TOIL and Recording of Leave Final Report: the overall conclusion was moderate/ limited. There were six recommendations for improvement. There was a new accounting requirement to record how much annual leave was un-used each year. The audit had revealed that a significant number of staff were not using the on line system to record when they had taken annual leave. Other problems had been identified with the system used to process overtime claims but it appears that the software could not be changed to overcome them. A paper would be presented to the HR Committee when it met on 21 May 2014 summarising the strategic HR issues raised by this and other recent internal audit reports. Committee was assured that Management were working on addressing all issues Business Engagement Final Report: the overall conclusion was moderate/ moderate. There were six recommendations for improvement. The new planning process would assist the cascading of KPIs and Business objectives into action plans. Work was underway to consider all recommendations Fire Alarm Testing Final Report: the overall conclusion was substantial/ substantial. There were no recommendations for improvement 67.7 UPEL Bar Operations Final Report: the overall conclusion was substantial/ substantial for Cash and stock but limited/limited for Staffing. There were five recommendations for improvement in staffing. Committee was assured that work had been done on implementing all recommendations Widening Participation: University Bursary Scheme Final Report: the overall conclusion was substantial/ substantial. There was one recommendation for improvement which related to documenting the robust processes that were already in place Update on Outstanding Management Actions: the Committee received the report from Ruth Ireland and Stuart May. The items listed as in progress, relating to Corporate Governance, had been addressed as outlined in the cover sheet to the paper. 68 REPORT ON PROGRESS AGAINST DELOITTES EXTERNAL AUDITORS MANAGEMENT LETTER FOR 2012/2013 Committee received a report from Emma Woollard, Director of Finance, which included potential issues in relation to capital projects in the 2013/2014 Financial Statements. The following points were noted in discussion: (iv) Emma Woollard highlighted paragraphs 3.1 to 3.4 of the report which detailed issues associated with three capital projects. The Victoria project may require a substantial sum to be written off and discussion was ongoing regarding the extent of capitalisation. Sue Barratt and Emma Woollard would meet to discuss issues around the balance of revenue and capital expenditure. The interim valuation that was due to take place in 2014 would be deferred until a more appropriate time when the Estates Master plan was more fully developed. The requirement to revalue has been removed from IFRS. Therefore, it had been agreed with the auditors that a paper based external valuation was not required at Audit and Quality Committee Minutes 30 April 2014 Page 5 of 7

6 (v) this time and a more useful valuation linked to business need would take place in the future. Committee was content with the progress reported. Sue Barratt and Matthew Hepenstal left the meeting for the next item. 69 EXTERNAL AUDITORS APPOINTMENT 69.1 Emma Woollard explained that Deloitte LLP had been appointed for five years in 2011 but that each year there was an opportunity to renew the arrangement. The staff team in the Finance Department was satisfied with the services given and had developed a good working relationship Committee agreed to recommend to the Board that Deloitte LLP be appointed as external auditors to report on the statements for the financial year 2013/ EXTERNAL AUDITORS MANAGEMENT PLAN 2013/2014 Members had received the plan electronically on 23 April 2014 and Sue Barratt of the External Auditors Deloitte LLP was present to introduce it. She confirmed that there were no significant changes planned to the standard approach. The ongoing discussions about the UPEL bar would not affect the figures for the 2013/2014 year. 71 HEFCE ANNUAL INSTITUTIONAL RISK ASSESSMENT 2012/2013 Committee received the HEFCE institutional risk assessment for 2012/2013 confirming that the University of Portsmouth was not at higher risk. Members were reminded that this was the highest level that could be achieved. 72 ANNUAL REPORT ON ACADEMIC STANDARDS AND QUALITY 2012/2013 (Quality and standards item) Members received the annual quality report received previously by Academic Council on 24 March 2014 together with the draft minute of that meeting. Members noted that one external examiner had some concerns about the standard of work in the Journalism course but that action had now been taken to address this issue. Academic Council had been assured that the University s assessment processes were robust and that academic standards were being maintained. 73 QUALITY ASSURANCE AGENCY (QAA) HIGHER EDUCATION REVIEW UPDATE (Quality and standards item) A report was received for members information from David Hughes on arrangements for the QAA Higher Education Review that would take place in w/c 16 March Audit and Quality Committee Minutes 30 April 2014 Page 6 of 7

7 74 DATA MANAGEMENT AND QUALITY ASSURANCE Prior to the meeting, Rebecca Bunting had confirmed that there was nothing to report. 75 NON-CORE AUDIT SERVICES Committee noted planned non-core audit services to be provided by the internal and external auditors between April and June Committee confirmed the service provided by BDO LLP was appropriate and would not compromise the auditors independence. 76 SOCA DISCLOSURE There were no SOCA disclosures to report on this occasion. 77 HEFCE CIRCULARS Committee was reminded that the full list of publications and circulars could be found on the HEFCE web site at 78 CONFIRMED MEETING DATES 2014/2015 The following dates were proposed at the meeting on 12 February 2014: 1600, Wednesday 24 September , Wednesday 12 November , Wednesday 11 February , Wednesday 13 May DELEGATION OF AUTHORITY TO CHAIRMAN Committee agreed to delegate authority to the Chairman to take action on audit business before the next meeting if necessary. 80 NEXT MEETING 1600, Wednesday 24 September PRIVATE SESSION The External Governors took the opportunity for a private discussion on the way forward for the self- assessment process. It was agreed that it was a good opportunity to undertake this exercise because membership of the Committee had a degree of stability. Therefore, over the summer, the Clerk would send the external Governors and auditors the questionnaire used previously to review the Committee s effectiveness. A summary of responses would be presented to a future meeting. Audit and Quality Committee Minutes 30 April 2014 Page 7 of 7