Minutes of Proceedings

1. APOLOGIES

1.1 No apologies were received. 

2. DECLARATION OF INTERESTS

2.1 There were no declarations of interests.

3. MINUTES OF THE PREVIOUS MEETING

3.1 The minutes of the SARC meetings held on 10 April and 20 May 2014 were approved without amendment.

4. MATTERS ARISING

4.1 Paragraph 4.1

SARC members noted that the revised policy on Business Cases would be presented at the next SARC meeting.

ACTION: RICHARD STEWART

4.2 Paragraph 5.23

 SARC members noted that a paper detailing lessons learnt from NI Assembly and public sector audits was in preparation, and it was confirmed by officials that this was likely to become an annual dissemination of information to senior managers.

5 INTERNAL AUDIT ACTIVITY / ASSURANCE

5.1 Eddie Kelly advised that since the SARC meeting on 10 April 2014, two Internal Audit reports have been issued in final form:

Review of Procurement – Satisfactory

Review of Usher Services - Satisfactory

5.2 In addition, the draft Financial Planning report was issued on 16 May 2014, with a satisfactory level of assurance.  The final report will be issued following receipt of management’s responses to the recommendations made.

5.3 Follow-up audits have been completed and reports issued in respect of the Use of Consultants (satisfactory) and Risk Management (raised to substantial from satisfactory).

5.4 The final report on the Procurement Office was issued on 28 April 2014, with a total of five recommendations, one at risk rating one, three at risk rating two and one rated as three.  Internal Audit arrived at a satisfactory level of assurance.  Recommendations have been made in respect of the use of framework agreements, training records and the retention of records of advice given to contract managers.

5.5 SARC members queried why Central Procurement Directorate (CPD) had declined to sign a Service Level Agreement with the NI Assembly, particularly in the light of the focus placed on utilising CPD contracts in the Public Accounts Committee’s recent report on Collaborative Procurement and Aggregated Demand.  Officials undertook to raise the issue again with the Department of Finance and Personnel.

ACTION: RICHARD STEWART

5.6 SARC members received assurance that all Contract Managers have undertaken Contract Management training.

5.7 The final report on Usher Services was issued on 6 June 2014, with a total of 14 recommendations, two at risk rating 1, four at risk rating 2, and eight at risk rating 3.  Internal Audit arrived at a satisfactory level of assurance.
Recommendations have been made in respect of the mandatory use of scanners; enhanced vehicular access control; enhanced management of car park and access passes; and reviewing the Directorate Risk Register to include the risk of security threats.  Internal Audit recognises that recommendations in relation to the first two categories are outside the control of management, and are dependent upon the NI Assembly Commission. 

5.8 SARC members noted the nature of the risks and recommendations and agreed to be kept informed of any developments through the normal process for tracking the implementation of audit recommendations.

5.9 Mr Kelly advised that the draft report on Financial Planning was issued on 16 May 2014, with a total of 10 recommendations, two at risk rating 2, with the remaining eight recommendations at risk rating 3.  Internal Audit arrived at a satisfactory level of assurance.  Recommendations include the need to enhance clarity over roles and responsibilities for financial planning across the organisation; ensuring adequate resources are dedicated to the annual budget setting exercise; management of GAE within directorates; realistic budget setting within directorates; and general support, awareness, training and compliance issues.  The final report will issue on receipt of management responses.

5.10 Internal Audits are currently in progress in respect of Members’ expenses, information assurance and ethics.

5.11 In relation to Building Services, Internal Audit has been given access to the remaining contract documentation and is satisfied that the information provided meets the requirements of the recommendation in the final report. A formal follow-up audit will be performed to re-assess the level of assurance.

5.12 SARC members were informed that progress on the 2014/15 Internal Audit plan is in line with the overall plan.

5.13 The overall level of assurance for the period 1 April 2013 to 31 March 2014 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 91% of the audits completed resulted in either substantial or satisfactory assurances, with the remaining 9% being limited.  The high percentage of audits resulting in substantial and satisfactory assurances was noted and welcomed by SARC.

5.14 Mr Kelly advised SARC members that the next meeting of the Inter-Parliamentary Head of Internal Audit Group is due to be held in Cardiff in July 2014. An agenda has yet to be agreed, and SARC will be notified of details in due course.

5.15 No whistleblowing cases have been reported to Internal Audit during the year.

5.16    Initial discussions have been held with Michael Watson, Head of Audit, Governance and Risk Services, Craigavon Borough Council to schedule a follow-up External Quality Assurance review in the 2014/15 year.  SARC will be updated when this review has been scheduled.

5.17    The House of Lords Head of Internal Audit has requested Eddie Kelly to conduct an External Quality Assurance Review, in conjunction with the Isle of Man Government Head of Internal Audit.  A planning meeting took place earlier in June and fieldwork has been scheduled for July 2014.

5.18    The SARC Chair enquired whether the House of Lords External Quality Assurance Review could pave the way for benchmarking of Internal Audit provision standards across the various legislatures.  The Head of Internal Audit agreed to raise the issue at the forthcoming meeting of the Inter-Parliamentary Head of Internal Audit Group.

ACTION: BRIAN MORELAND

5.19 All members of the Internal Audit unit have identified relevant generic and  specialist training for the year ahead.

6 “IN PROGRESS” AUDIT RECOMMENDATIONS SCHEDULE

6.1 SARC members noted the continuing high level of implementation of accepted Internal Audit recommendations, with 25 recommendations currently “in progress”.  

7. RTTCWG 2013 AUDIT RECOMMENDATIONS SCHEDULE      

7.1 SARC members also noted the encouraging level of implementation to date of recommendations contained in the Report to those charged with Governance 2013, with all but four of the 17 recommendations fully implemented.  

8. OUTSTANDING AUDIT RECOMMENDATIONS

SCHEDULE 

8.1 SARC members noted the nil return.

9. BUSINESS IMPROVEMENT PLAN SCHEDULE

9.1. SARC members were impressed with the Business Improvement Plan and noted further progress on implementation.  The need for central guidance to be developed to take forward three generic BEP recommendations was discussed, and the Director of Legal and Governance Services undertook to provide implementation dates for these recommendations by the next SARC meeting.

ACTION: HUGH WIDDIS

10. CORPORATE RISK REGISTER

10.1    SARC members discussed a number of residual risk ratings and noted the minor changes made to the contents of the Corporate Risk Register since the April 2014 SARC meeting.  The Director of Legal and Governance Services informed SARC members that a refresh of the Corporate Risk Register would take place in the near future, including accurate assessments of inherent and residual risk. 

11. Compliance with Audit and Risk Assurance  

Committee Handbook (NI)

11.1 In relation to the Audit and Risk Assurance Committee Handbook (NI), issued by the Department of Finance and Personnel on 18 March 2014, SARC members were impressed with the in-depth analysis of the key principles that had been carried out, and noted with pleasure SARC’s high level of compliance. It was agreed that the SARC Chair’s / Independent member’s attendance at Assembly Commission meetings would be added to the commentary.

ACTION: DAVID JOHNSTON

11.2 It was noted that there is some “external review” of SARC’s effectiveness provided in the External Quality Assurance Review of Internal Audit every five years.  It was agreed to bring an element of external review to the annual assessment of SARC’s effectiveness by adding a box to the template to allow the NI Audit Office’s representative on SARC to provide comments in this regard.

ACTION: DAVID JOHNSTON

11.3 In relation to enhanced engagement with, and understanding of, the NI Assembly Secretariat, it was agreed that the SARC Chair and Independent member would be invited to attend one meeting per annum of the Assembly Leadership Forum.

ACTION: TREVOR REANEY 

11.4    It was agreed that the SARC Independent member would be provided with electronic copies of the Assembly Commission Handbook and the proposed updates to it.

ACTION: TREVOR REANEY

12. STEWARDSHIP STATEMENTS  (at 31 March 2014)

12.1    SARC members discussed and noted the contents of the Stewardship Statements as at 31 March 2014. 

13 PROCUREMENT COMPLIANCE REPORT

13.1 Richard Stewart gave SARC members a detailed briefing on the Procurement Compliance Report.  The report analyses a review of all the NI Assembly Commission’s expenditure excluding staff salaries, pension and related expenses; Procurement Card expenditure; Single Tender Actions; a comparison of approved Business Case budgets versus the actual expenditure; and a review of Assembly expenditure through Central Procurement Directorate, Department of Finance and Personnel (CPD) framework contracts.  SARC members thanked Richard for the helpful report and format, noting that the report is provided on a voluntary basis and that the provision of such a report in this format is not common public sector practice.

14. draft final Report to those Charged with Governance

14.1    Louise Mason gave SARC members an overview of the Audit Completion Letter dated 19 June 2014. Louise acknowledged the staffing pressures in the Finance Office at present but raised concerns regarding how this had impacted on the audit process.  She informed SARC that the NI Audit Office was close to finalising its audit and with full co-operation from Assembly staff it was anticipated that the audit would be completed pre summer recess.   Louise confirmed that no issues had been identified to date which would impact on the Comptroller and Auditor General’s opinion.  SARC members also considered the Management Responses in the Draft Interim Report to those Charged with Governance, which had been forwarded to the NI Audit Office on 19 June 2014. 

15 NIA RESOURCE ACCOUNTS 2013-14

15.1    In light of the Audit Completion Letter and assurances to date, the SARC Chair and the Accounting Officer agreed to clear the NIA Resource Accounts 2013-14, when finalised, by correspondence.  However, should any major issue emerge, a further meeting of SARC will be arranged. 

ACTION: PAULA McCLINTOCK / LOUISE MASON 

16 A.O.B.

16.1 The SARC Chair reported back to SARC on the presentation of the SARC Annual Report 2013-14 to the Assembly Commission and on a private briefing session with Commission members on 18 June 2014.  In particular, Commission members appreciated the progress that had been made on the timely implementation of audit recommendations.

16.2 The SARC Chair reported to members and the Accounting Officer that a Commission member had requested that SARC’s remit cover the Equality agenda.  Following discussion of the issue, SARC members were agreed that the oversight of equality matters is the responsibility of the Equality Commission for Northern Ireland and is outside the remit of an Audit and Risk Committee, apart from those occasions when Good Relations / Equality Systems are the subject of an Internal Audit report.

17. DATE OF NEXT MEETING

17.1 It was agreed that the next meeting of SARC will be held on Thursday

2 October 2014 at 3.30 pm.