Minutes of Proceedings
Date: Tuesday, 04 December 2012
Venue: Room 106, Parliament Buildings
1.1 No apologies were received.
2 DECLARATION OF INTERESTS
2.1 There were no declarations of interests.
3 MINUTES OF THE PREVIOUS MEETINGS
3.1 The minutes of the SARC meeting held on 9 October 2012 were approved without amendment.
4 MATTERS ARISING
4.1 It was noted that all actions arising from the October minutes were completed. It was agreed that a schedule of Action Points, including details of implementation, would be provided along with future minutes.
ACTION: DAVID JOHNSTON
4.2 Paragraph 5.8
In relation to the Print Contract, Trevor Reaney confirmed that he was content with the wording of the Contract Variation, and he advised SARC members that the follow-up audit was about to commence.
5 INTERNAL AUDIT ACTIVITY / ASSURANCE
5.1 Brian Moreland informed SARC that eleven Internal Audit reports were issued in draft or final form during the period 1 April 2012 to 30 November 2012. Of the nine final reports, one received a substantial assurance rating, six were assessed as being satisfactory and two were limited.
Review of Members' Expenses – Satisfactory
Review of Systems Under Development – Satisfactory
Review of Examiner of Statutory Rules – Substantial
Review of Office Resources – Limited
Review of Commission & Corporate Support Unit – Satisfactory
Review of Business Continuity Planning – Limited
Review of Research – Satisfactory
Review of Gifts & Hospitality – Satisfactory
Review of Information Security – Satisfactory
Draft reports in respect of the audits of Mobile Phones and the Assembly Members' Pension Scheme were issued on 30 October and 16 November 2012 respectively. In addition, audits are currently in progress in respect of Vacancy Management and the Use of Consultants.
5.2 Follow – up audits have been completed as follows:
Learning & Development – Substantial (increased from satisfactory)
Support Services – Satisfactory
NI Assembly & Business Trust – Satisfactory (increased from limited)
Freedom of Information – Substantial (increased from satisfactory)
Events – Substantial (increased from satisfactory)
Bill Office - Substantial
5.3 Brian Moreland advised SARC of the main issues arising from the draft reports issued since the October SARC meeting:
The draft report in respect of the Mobile Phones audit was issued on 30 October 2012 with a total of 14 recommendations. Of these, two were risk rating 1 and 12 were risk rating 2. Recommendations were made regarding the establishment and application of sanctions for breaches of policy; returns of declarations of personal usage; and the exchange of information between directorates. The overall level of assurance from the audit was limited. SARC members stressed the need for robust recommendations to be made and implemented in relation to this audit.
The draft report on the Assembly Members' Pension Scheme (Administration) was issued on 16 November 2012 with a total of five recommendations. SARC members had received the final report on 3 December 2012. Three of the recommendations were risk rating 2 and the remaining two were rated 3. Recommendations included the preparation of the annual report and accounts; the timely payment of lump sum amounts, and training in respect of conflicts of interest. The audit resulted in a satisfactory level of assurance.
5.4 Brian Moreland informed SARC that work has progressed well against the audits identified on the annual audit plan. It is anticipated that, by utilising the external support budget for one assignment, the plan should be completed as agreed. SARC members stressed the importance of keeping risk to the forefront in respect of any new areas emerging from the Business Efficiency programme.
5.5 An external quality assurance review is due to be completed in the 2013/14 year. In preparation for this, and in accordance with best practice, an internal quality assurance review has been completed and a draft report is expected shortly. SARC members will be consulted in due course on who should carry out the external review. The Accounting Officer stated that Internal Audit has contributed to improvements in organisational delivery.
5.6 Mr Moreland advised SARC members that the overall level of assurance for the period 1 April 2012 to 30 November 2012 is satisfactory. This assessment is based on the levels of assurance arising from individual Internal Audit assignments, the action taken by management to implement recommendations and the results of follow-up audits. Some 78% of the audits completed result in either substantial or satisfactory assurance with the remaining 22% limited. Internal Audit has been encouraged by the positive approach taken to reports where a limited level of assurance has been recorded and the early implementation of recommendations will help to improve these ratings at follow-up stage. It was agreed that the Internal Audit Annual report should include comparisons of the overall level of assurance over a number of years. The good progress made in recent years was highlighted by the Chair.
ACTION: BRIAN MORELAND
5.7 The overall rate of acceptance of Internal Audit recommendations remains high. All recommendations at risk ratings 1 and 2 have been accepted, with 91% of those at risk rating 3 accepted. This represents an improvement from the October SARC meeting.
5.8 In relation to staffing, Mr Moreland reported that Paul Jameson, who came to the unit as a result of an Interchange opportunity, has been successful in an external competition and left the Assembly on 30 November 2012.
Approval was sought and obtained at the Vacancy Management Group to proceed with a second Interchange exercise to fill this post until at least June 2013. Alternatives are also being considered which may be used should Interchange prove unsuccessful.
5.9 Brian Moreland reported on the useful meeting of the Inter-Parliamentary Head of Internal Audit Group held on 30 November 2012, hosted by the Heads of Internal Audit for the Houses of Commons and Lords. The agenda included issues such as the proposed content of Governance Statements, and "Black Swan" risks.
5.10 In relation to fraud investigations, following receipt of advice from Legal Services, a draft Memorandum of Understanding has been agreed with the head of the investigation unit for the Department of Agriculture and Rural Development. The Head of Internal Audit is also planning to have informal discussions with external providers that have specialist fraud investigation resources to determine the likely cost and availability of this type of service. SARC members will be kept informed of progress.
5.11 Mr Moreland advised that shortly after the Postmaster detailing the Assembly's whistleblowing policy was issued, he had been approached in relation to an issue that had caused some concern to a member of Secretariat staff. Following initial discussion it was agreed that Internal Audit would perform an exercise to determine if evidence existed in support of the allegations made.
This exercise is now complete and no evidence was found that would support the allegation. A meeting has been held with the originator of the allegation to confirm this finding. Issues of confidentiality and anonymity were discussed by SARC members. Officials reported that consideration is being given as to how, in time, the whistleblowing policy might be improved. It was agreed that the Internal Audit Annual report should include annual details of all whistleblowing cases, even if that is a nil return.
ACTION: BRIAN MORELAND
5.12 An exercise is currently under way to review and update the working papers used during Internal Audit assignments. This is being supported by the IS Office and is intended to reduce duplication, facilitate time recording per assignment and streamline the production of Internal Audit reports.
5.13 All members of the Internal Audit unit continue to identify relevant generic
and specialist training. Catherine Dornan-Weir has enrolled on the IT
Auditing Certificate course with the Institute of Internal Auditors, which will
bring valuable additional skills to the unit.
6 OUTSTANDING AUDIT RECOMMENDATIONS
6.1 SARC members noted the position at end November 2012 in relation to the implementation of audit recommendations. In relation to Business Continuity Management, clarification was sought as to whether there was any cost attached to the further guidance being supplied by PWC.
ACTION: STEPHEN WELCH
7 EXTERNAL AUDIT STRATEGY FOR 2012/13
7.1 Louise Mason gave a brief overview of the External Audit Strategy for
2012-13, including the significant risks and the outline timetable. SARC members were content with the strategy. SARC members asked that a draft of the new Governance Statement be produced by end March 2013.
ACTION: PAULA McCLINTOCK
8 SARC 2013/14 OBJECTIVES
8.1 The proposed SARC objectives for 2013-14 were discussed and a number of suggested amendments were put forward. Revised wording is to be drafted and circulated to SARC members for approval.
ACTION: DAVID JOHNSTON
9 CORPORATE RISK REGISTER
9.1 SARC members noted the contents of the Corporate Risk Register dated
November 2012 and the changes that had been made since the October
10 STEWARDSHIP STATEMENTS
10.1 The contents of the Stewardship Statements at 30 September 2012 were
discussed. Trevor Reaney informed SARC that he was content with the
assurances provided through the statements to support him in his role as
Accounting Officer. The Chair of SARC commented that the Stewardship
Statements were very clear and comprehensive working documents.
11 MANAGEMENT ACCOUNTS
11.1 SARC members noted the financial position at end October 2012 and
were given further detail relating to Admin costs and Salaries, and the
anticipated underspend on Members' costs.
12.1 Trevor Reaney advised SARC members of the recent leak of confidential
privileged legal advice provided to an Assembly Committee. He has subsequently written to all Members and staff reinforcing the importance of retaining legal advice as confidential. The Code of Conduct is to be updated in line with recommendations arising from an earlier Public Accounts Committee leak.
12.2 SARC members were advised that a determination from the Independent Financial Review Panel in relation to contracts with connected parties is expected in the near future.
13 DATE OF NEXT MEETING
13.1 SARC members agreed that the next meeting of SARC would take place
on Tuesday 5 March 2013 at 2.00pm in Room 106, Parliament Buildings.