Minutes of Proceedings
Date: 14 March 2012
Venue: Room 115
Colm McKenna, Chairperson
Pat Ramsey MLA
1.1 No apologies were received. Louise Mason advised SARC that she had to attend the Public Accounts Committee at 2.00 pm and was therefore unable to be present for all of the SARC meeting.
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 December 2012 were approved without amendment.
4. MATTERS ARISING
4.1 11 October minutes, Paragraph 3.5
Trevor Reaney advised SARC that further investigation had established that no criterion exists in the public sector on the use of confidentiality clauses. The Director of Legal and Governance Services had subsequently issued advice to colleagues that such clauses should only be used in exceptional and unavoidable circumstances and, if ever proposed, would need to be assessed on a case to case basis.
4.2 11 October minutes, Paragraph 3.6
Richard Stewart informed SARC that, in relation to guidance on handling anonymous allegations, the Staff Handbook’s whistleblowing guidance is being updated in consultation with TUS. This should be completed by 31 May 2012.
4.3 9 December minutes, Paragraph 4.1
Richard Stewart advised that the report on the creation and management of contracts should be available by end June 2012.
4.4 9 December minutes, Paragraph 4.2
Trevor Reaney confirmed that external procurement expertise had been engaged in relation to the Support Services contract and was proving useful.
4.5 9 December minutes, Paragraph 4.3
Paula McClintock informed SARC that all political parties had provided information and subsequent letters from auditors had also been received.
4.6 9 December minutes, Paragraph 5.7
Brian Moreland confirmed that letters had issued to MLAs prior to visits to Constituency Offices taking place.
5. INTERNAL AUDIT ACTIVITY / ASSURANCE
5.1 Brian Moreland reported that a total of eight Internal Audit reports were issued in final form in the year April 2011 to March 2012:
Review of Procurement Cards – Limited
Review of Members Expenses – Satisfactory
Review of N.I. Assembly & Business Trust – Limited
Review of Print Contract – Unacceptable
Review of Learning & Development – Satisfactory
Review of Bill Office – Substantial
Review of Events Office – Satisfactory
Review of Freedom of Information Unit – Satisfactory
5.2 A total of seven follow-up audits were also completed in the 2011/12 year:
Building Services Branch –Satisfactory
Secretariat Travel & Subsistence –Substantial
N.I. Assembly & Business Trust –Limited
Legal Services - Substantial
Procurement Cards –Substantial
5.3 Brian Moreland outlined the main issues arising from assignments in 2011/12.
5.4 Following a request from management, Internal Audit performed a review
of information held by the supplier in respect of the fixed fee element of the managed print contract. Although several attempts were made, it was not possible to identify information in support of invoices and as a result, an unacceptable level of assurance has been recorded.
5.5 The Director of Information and Outreach advised SARC that he has been involved in a number of discussions with the supplier in an attempt to reach an acceptable solution for both parties. He reported that a mutually agreed contact variation should soon be in place.
The Chair of SARC requested that the matter be expedited and that a follow-up audit be carried out before the next meeting of SARC.
ACTION: GARETH McGRATH / BRIAN MORELAND
5.6 Brian Moreland advised that the Internal Audit of the NI Assembly and Business Trust yielded a number of recommendations regarding the Assembly’s financial contribution to the Trust and in terms of general financial management. A limited level of assurance was given following the completion of the audit which remained so after the follow-up because of the non-implementation of several recommendations. Management has now given assurance that the remaining recommendations have been implemented. Internal Audit will revisit these to verify implementation.
SARC members requested that a verification follow-up take place in the first quarter of the 2012-13 Financial Year.
ACTION: BRIAN MORELAND
5.7 The recommendations made regarding the use of procurement cards (which included the correct approval of business justification forms, inappropriate use in respect of travel and subsistence, and physical security) were implemented rapidly and the assurance level during the follow-up review increased from limited to substantial.
5.8 Brian Moreland informed SARC that the draft report in respect of Secretariat Payroll was issued on 22 February 2012 with a satisfactory level of assurance. A total of eleven recommendations have been made, three of which are risk rating 2 and the remaining eight are rated 3.
Among the recommendations made were those referring to the contingency arrangements for monthly pay-overs, system access restrictions and the on-going requirement for the extensive checking procedures that are in place.
5.9 Mr Moreland advised SARC that the report on Members’ Expenses is currently being drafted with an anticipated satisfactory level of assurance. This year’s exercise included on-site verification visits to constituency offices, and the results have been positive. This is expected to form a routine element of the audit in future years.
Pat Ramsey MLA requested that Internal Audit write to the MLAs involved in the sample to advise them of the satisfactory outcomes.
ACTION: BRIAN MORELAND
5.10 The assignment in relation to Business Continuity Planning is being completed by PWC following a procurement exercise for external support. Discussions around the initial findings are taking place with management, and a draft report is expected in March 2012.
5.11 Work in relation to Systems Under Development is also being performed by PWC, and the first draft report is expected in a similar timescale. SARC will be notified of the results of these assignments in due course.
5.12 Brian Moreland advised SARC that the overall level of assurance for the period 1 April 2010 to 7 March 2011 is satisfactory. Although during the year the level had reduced temporarily to limited, the impact of implemented recommendations and the balance of output from the areas reviewed have permitted the assessment to return to 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. A final assessment of the overall level of assurance will be provided on completion of the reviews currently in progress and for which final reports are available by 31 March 2012. SARC members will be informed of the final assessment as soon as possible after that date.
5.13 The SARC Chairperson requested that the internal audits currently in progress be finalised by 31 March 2012, if at all possible.
ACTION: BRIAN MORELAND
5.14 Trevor Reaney welcomed the increase in “substantial” assessments over the past year, reflecting enhanced corporate governance arrangements in place throughout the Secretariat.
6. OUTSTANDING AUDIT RECOMMENDATIONS SCHEDULE
6.1 SARC members noted with approval the nil return and welcomed this evidence of a growing culture of accountability within the Secretariat.
7. NIAO Update on Audit of 2011-12 Financial Statements
7.1 Richard Emerson informed SARC that NIAO’s interim fieldwork is now complete and that clarification is being sought from Finance Office staff on a number of issues. Draft emerging issues were outlined to SARC members. An interim Report to those charged with Governance will issue shortly and, when available, it is to be copied to SARC members.
ACTION: RICHARD EMERSON / DAVID JOHNSTON
8. DRAFT INTERNAL AUDIT STRATEGY AND PLAN 2012-15
8.1 Brian Moreland informed SARC that work has been continuing to develop a revised Internal Audit Strategy and periodic plan for 2012/13. Discussions have taken place with Directors and Heads of Business to discuss key risks and areas of concern or interest, and to establish priorities for Internal Audit resources.
8.2 The initial risk assessment will be used to inform the allocation of Internal Audit resources but will not be the sole factor in determining how the available number of days will be best utilised. Additional factors, including those arising from risk registers, stewardship statements, Internal and External audit assessments, and direction by SARC, will all contribute to the final Internal Audit plan for each year.
8.3 It is also recommended that the year one periodic audit plan be supported by an indicative list of areas to be audited in subsequent years. This will afford increased flexibility to the audit programme by specifying higher risk areas which are more likely to attract Internal Audit attention and permitting emerging areas and unscheduled work to be integrated into the programme.
8.4 The continuing involvement of the Audit Manager on the Business Efficiency Project will impact on the initial stages of the 2012/13 programme. However, the timing of specific reviews and the internal quality assurance review have been timed to take account of an anticipated return to Internal Audit by October 2012.
8.5 Brian Moreland confirmed to SARC members that a contingency element had been built into the plan. SARC members noted the draft strategy and plan, and requested that the final version be issued to them by email.
ACTION: BRIAN MORELAND
8.6 SARC members agreed that progress in relation to the audit plan should be reviewed in September 2012.
ACTION: BRIAN MORELAND
9. CORPORATE RISK REGISTER
9.1 SARC members discussed the latest version of the Corporate Risk Register, dated 10 February 2012, and noted the temporary increased risk assessment for Corporate Risk 2, attributable to Clerking staffing pressures.
10. MANAGEMENT ACCOUNTS
10.1 Richard Stewart provided an overview of Assembly expenditure and budgeting to end February 2012. SARC members discussed potential underspends in Members’ travel and Secretariat General Administrative Expenditure and noted the position.
11. SARC ANNUAL REPORT AND SELF ASSESSMENT
11.1 The draft SARC Annual Report and Self Assessment for 2011/12 was agreed by SARC. Once provisional outturn figures are available, the document will be submitted to the Assembly Commission.
ACTION: DAVID JOHNSTON / COLM McKENNA
12.1 Douglas Bain suggested that SARC members should complete a personal register of interests. It was agreed that a template would be developed and circulated, with a view to publication of SARC members’ interests on the website.
ACTION: DAVID JOHNSTON
13. DATE OF NEXT MEETING
13.1 It was agreed that the next meeting of SARC would take place on Tuesday 22 May 2012 at 4.00 pm in Room 106, Parliament Buildings.