Minutes of Proceedings

1. APOLOGIES

1.1 No apologies were received. 

2. DECLARATION OF INTERESTS

2.1 In respect of agenda item 5, Pat Ramsey MLA declared an interest as a Trustee of the NI Assembly Legislative Strengthening Trust.  Leslie Cree MLA declared an interest as a Trustee of the NI Assembly and Business Trust and a Trustee of the NI Assembly Legislative Strengthening Trust.  Trevor Reaney declared an interest as a Trustee of the NI Assembly Legislative Strengthening Trust.

3. MINUTES OF THE PREVIOUS MEETINGS

3.1 The minutes of the SARC meetings held on 5 March and 21 May 2013 were approved without amendment.

4. MATTERS ARISING

4.1 It was noted that all actions arising from these minutes were now complete.  SARC members noted the production of the NI Secretariat Assurance Framework and requested some further development of the framework for the next meeting of SARC.

ACTION: HUGH WIDDIS / BRIAN MORELAND / DAVID JOHNSTON

5. INTERNAL AUDIT ACTIVITY / ASSURANCE

5.1 Brian Moreland reported that a total of 14 Internal Audit reports were issued in final form during the period 1 April 2012 to 31 March 2013. Of these, two received a substantial assurance rating, nine were assessed as being satisfactory and three 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

Review of Mobile Phones – Limited

Review of Assembly Members Pension Scheme – Satisfactory

Review of Use of Consultants – Satisfactory

Review of Vacancy Management Group – Satisfactory

Review of Committee for the Environment – Substantial

5.2 During the same period, follow-up audits were completed and reports issued in respect of:

Learning & Development – Substantial (increased from satisfactory)

Support Services – Satisfactory

Northern Ireland Assembly & Business Trust – Satisfactory (increased from limited)

Freedom of Information – Substantial (increased from satisfactory)

Events – Substantial (increased from satisfactory)

Bill Office – Substantial

Systems Under Development – Satisfactory

Managed Print Contract – Satisfactory (increased from unacceptable) 

5.3 Mr Moreland advised that, in relation to Members’ Expenses, the final report in respect of this year’s exercise was issued on 29 April 2013, with a total of six recommendations; three at risk category 2 and the remaining three at category 3.  Recommendations were made in relation to the statement of particulars of employment, trigger points for the £1,000 limit on stationery expenditure and the administration of rental payments. The recommendation rejected by management related to supporting documents in respect of claims to purchase.  However, Internal Audit is satisfied with the management response.  The assurance level for the audit was satisfactory.

5.4 The final report on the Legal Services Office was issued on 3 April 2013 and a total of six recommendations were made and accepted, all of which were risk rating 3.  These recommendations included recording advice in the database, recording evidence of approval of advice and the encryption of legal advice being sent to clients.  The assurance level for the audit was substantial.

5.5 The final report on Risk Management was issued on 7 June 2013 with a total of 18 recommendations made, four of which were risk category 2 and the remaining 14 were category 3.  Recommendations were made to broaden the matrix for assessing risk, the use of scores to aid the determination of risk appetite and re-establishing the links between risks and objectives. The assurance level for this audit was satisfactory.

5.6 The draft report in respect of the audit of the Public Accounts Committee was issued on 31 May 2013.  Only four recommendations have been made for management consideration, two each at risk categories 2 and 3. The final report is expected to receive a substantial assurance rating.

SARC will be advised of management’s responses on the final report which is expected shortly.

5.7 Mr Moreland advised SARC that Internal Audits are currently in progress in respect of Building Services and Secretariat support to the Independent Financial Review Panel.  Early indications on the audit of Building Services are that there might be a limited rating, but SARC members will be advised of the outcome in due course.

5.8 Mr Moreland informed SARC that, as had previously been the case for the Statement on Internal Control, Internal Audit had submitted a short section for inclusion in the Governance Statement for the 2012/13 financial year.

Although this concentrated on the three areas which were allocated limited assurance, i.e. Business Continuity Planning, Office Resources and Mobile Phones, it was also noted that management had taken early action on many of the issues raised and work was on-going on the remainder.

5.9 In relation to Audit Planning, as agreed at the SARC meeting in March 2013, a revised plan for 2013/14 was issued to members for consideration.  Work on the plan has begun and SARC will be updated on progress. The revised return date for the audit manager is now October 2013, and this may have some additional impact on the completion of the plan.

5.10 The implications of a request from the NI Assembly Legislative Strengthening Trust to avail of Internal Audit’s services were discussed.  It was confirmed that, subject to agreement on how the service would be provided, and hard charging, there would be no impact on the Audit programme. SARC members requested a background paper with recommendations on how this request should be handled for the next SARC meeting.

ACTION: BRIAN MORELAND

5.11 The external quality assurance review of the Internal Audit unit began on 18 June 2013. As previously agreed by SARC, the exercise will be completed by Michael Watson, the Head of Internal Audit for Craigavon Council.

5.12 Mr Moreland informed SARC that the overall level of assurance for the period 1 April 2012 to 31st March 2013 is satisfactory. This now represents the completed programme for the 2012/13 year and confirms the initial assessment provided in the draft report to SARC at the March meeting.  As for previous years, this assessment is based on the levels of assurance arising from the 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% being limited.  This represents a marginal improvement since the draft report to SARC in March 2013. 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.  The SARC Chair noted the progress to date and thanked the staff of the Internal Audit unit for their work.  It was agreed that the graphic representation in the Head of Internal Audit’s report could, in future, be amended to reflect rising levels within the “Satisfactory” rating.

ACTION: BRIAN MORELAND

5.13 Brian Moreland reported on the most recent meeting of the Inter-Parliamentary Head of Internal Audit Group held in Guernsey on 19 and 20 June 2013. Items discussed included contract audit; tracking recommendations, arms-length bodies and risk/assurance mapping.  Colleagues had requested a copy of the NI Assembly’s recently developed Assurance Framework.

5.14 On fraud investigations, Mr Moreland advised that the Department of Agriculture and Rural Development had resiled from the prospective agreement.  A business case for the provision of investigative services has been prepared and has been sent for approval. When this has been obtained the specification will be finalised and tender action will follow.  The importance of costs being clearly stated in any subsequent contract was emphasised by SARC members.

SARC members also requested that the Department of Finance and Personnel should be approached again on the possibility of a shared investigative service.

ACTION: BRIAN MORELAND

5.15 No further whistleblowing cases have been referred to Internal Audit since the last meeting.  Following a number of issues that arose from the whistleblowing case investigated in 2012, the Head of Internal Audit met with a representative of Human Resources (HR) and provided a number of suggestions on how the current policy might be improved and training provided. This is being taken forward by HR.

5.16 Brian Moreland advised that DAO (DFP) 07/13 had recommended some amendments to the narrative used in support of the assurance levels attributed by Internal Audit.  As a result of this DAO, the working papers employed by Internal Audit have been amended to take account of the revised wording and this was previously circulated to SARC.

5.17 Mr Moreland informed SARC that Catherine Dornan-Weir had completed the tuition for the IT Auditing Certificate course with the Institute of Internal Auditors and had undertaken the exam in June 2013.

5.18 SARC members noted the return detailing “In Progress” implementation of audit recommendations.  They sought and received assurances from the Director of Information and Outreach that dates shown for the full implementation of IS Office recommendations were realistic. They requested that dates in relation to the regular updates on Business Continuity Planning recommendations be reviewed and subsequently forwarded by correspondence to SARC members.

ACTION: STEPHEN WELCH

6. OUTSTANDING AUDIT RECOMMENDATIONS SCHEDULE 

6.1 SARC members noted the latest position on the Equality Impact Assessment recommendations.

7. CORPORATE RISK REGISTER

7.1 SARC members noted the contents of the Corporate Risk Register at June 2013, showing tracked changes since March SARC.  The Governance Officer advised that, following the Risk Management audit, SMG members had been tasked with basing the Risk Register on a 5x5 risk matrix for the SMG meeting in September 2013.  The revised Corporate Risk Register will be tabled at the next SARC meeting.

ACTION: DAVID JOHNSTON

8. STEWARDSHIP STATEMENTS 

8.1 SARC members noted the contents of the Stewardship Statements as at 31 March 2013.  It was noted that the Director of Information and Outreach had stated that controls were not appropriate.  This related to the filling of specialist posts given the freeze on external recruitment.  Trevor Reaney indicated that a review of this policy was imminent.  Louise Mason requested that the Governance Statement be amended to reflect this matter.

ACTION: PAULA McCLINTOCK

9. PROCUREMENT COMPLIANCE REPORT

9.1 Trevor Reaney advised SARC that there was a very healthy overall picture on procurement compliance.  He drew attention to information, reported on for the first time, in relation to Business cases.  The Accounting Officer stated that he was content that there was no cause for concern as to the appropriateness of the expenditure involved but stated that the management and review of Business cases needed to be reviewed.  The matter will be addressed at the July meeting of SMG.

9.2 SARC members requested that a paper on a formal system for Business case management, including post-project evaluation, be tabled at the next SARC meeting.

ACTION: RICHARD STEWART

9.3 SARC members requested further details on the contracts identified in the Procurement Compliance Report and details of central contracts registration for the next SARC meeting.

ACTION: RICHARD STEWART

9.4 Louise Mason requested that the Governance Statement be amended to reflect the Business case management issue.

ACTION: PAULA McCLINTOCK

10. DRAFT FINAL REPORT TO THOSE CHARGED WITH GOVERNANCE

10.1 Louise Mason gave SARC members an overview of the draft final Report to those charged with Governance.  Seven issues had been discussed previously at SARC and a further seven issues had subsequently been raised.  The report will need to be reviewed in light of the procurement compliance issues that had arisen.  Subject to satisfactory clarification on these matters, an unqualified audit opinion is anticipated.

11. NIA RESOURCE ACCOUNTS 2012-13

11.1 Paula McClintock gave SARC members an overview of the Resource Accounts and advised that the changes identified by the NI Audit Office had been made and statements had been adjusted accordingly. 

11.2 Subject to the clarification now being sought by the NI Audit Office, SARC members were content for the Accounting Officer to sign the Resource Accounts 2012-13 and submit them to the NI Audit Office on 25 June 2013.

12. A.O.B.

12.1 SARC members noted the Bribery Risk Assessment which has been carried out in relation to the NI Assembly Secretariat, in line with guidance issued by the Ministry of Justice in relation to the Bribery Act 2010.

12.2 SARC members noted receipt of “Corporate governance in central government departments: Code of good practice NI 2013”. Officials are considering how its contents apply to the Assembly Commission and will report back to the next meeting of SARC.

ACTION: HUGH WIDDIS / BRIAN MORELAND / DAVID JOHNSTON

12.3 SARC members noted that the Governance Statement embraced the key elements set out in the HM Treasury factsheet and, in particular, that the Assembly’s Governance Statement had been described as being of “good quality” by the NI Audit Office.

12.4 The SARC Chair paid tribute to Mr Pat Ramsey MLA, who is stepping down as the Assembly Commission member on SARC.  The Chair thanked Pat for the stability that he had provided and for his excellent input to the work of SARC.  The Chair welcomed Commission member Mr Leslie Cree MLA to the work of SARC.

13. DATE OF NEXT MEETING

13.1 SARC members agreed that the next meeting of SARC would take place in late September/ early October 2013.

ACTION: DAVID JOHNSTON