Minutes of Proceedings

VIA MICROSOFT TEAMS

Present:

Jim Brooks, Chairperson

Derek Martin, Independent Member

John O'Dowd, MLA

In Attendance:

Lesley Hogg, Clerk/Chief Executive

Kathy Doey, NIAO

Tara Caul, Director of Legal, Governance and Research Services

Gareth McGrath, Director of Parliamentary Services

Richard Stewart, Director of Corporate Services

Billy Mahoney, Deputy Head of Finance

Eddie Kelly, Acting Head of Internal Audit

Julie Devlin, Governance Officer

The meeting commenced at 11 am.

1. Opening remarks

Jim Brooks asked if SARC members would be content to take the Annual Report and Accounts 2020-21 (item 7) and the draft Report to Those Charged with Governance (item 6) first to ensure that adequate time was given to the scrutiny of these items of business.

SARC agreed to discuss agenda items seven and six first and in that order.

7. Draft Northern Ireland Assembly Commission Annual Report and Accounts 2020-2021

Richard Stewart presented the draft Northern Ireland Assembly Commission Annual Report and Accounts 2020-21. Richard stated that there had only been one change to the financial figures in the accounts since SARC had reviewed the draft accounts at its May meeting, which related to an adjustment of £15k in the liability for Consolidate Fund Extra Receipts (CFERs). Richard also stated that, subject to any views expressed by the Northern Ireland Audit Office (NIAO), these accounts would be forwarded to the Comptroller and Auditor General (C&AG) for certification.

Jim said that he had reviewed the accounts and there were no surprises or areas of concern. He commented that the tone and quality of the accounts was good and queried whether the underspend would have any effect on future budget allocations.
Richard explained that the underspend would not have any impact on future budget allocations.

Jim said that he was content with the assurance provided.

Derek Martin and John O'Dowd concurred with Jim's comments and stated that their only area of concern was the underspend, but that they were content with the explanation provided.

Jim recorded the thanks of SARC to the Finance Office for their hard work in preparing the accounts.

SARC recommended that the Clerk/Chief Executive sign the Annual Report and Accounts 2020-21.

Action Lesley to sign the Annual Report and Accounts 2020-21.

6. Draft Report to Those Charged With Governance

Kathy Doey presented the draft Report to Those Charged With Governance (RTTCWG) to SARC and advised that there would be an unqualified audit opinion. She explained that while the NIAO was awaiting an expert's report on the pension liability figures provided by the Government Actuary's Department, Lesley could sign and submit the Annual Report and Accounts 2020-21 to the NIAO, although the C&AG would not be in a position to certify them until the expert's report was received. Kathy also stated that the deadline for laying the accounts in the Assembly had been changed to 9 July 2021.

Kathy gave an overview of the RTTCWG and findings.

A discussion took place around the findings and the priorities allocated to each finding. Richard Stewart said that he had some concerns about the priorities given to both recommendations and that he did not think that either priority level was correct.

John was concerned that affording sufficient time to management to respond to the draft recommendations might delay the account certification process.

Richard advised that management's views would be reflected in the formal response to the draft RTTCWG and Kathy stated that finalisation did not impact certification.

Kathy acknowledged the comments made and said that Richard could return to her on the points raised regarding the recommendations. She asked SARC to note the content of the letter of representation and the draft Audit Certificate of the C&AG.

SARC noted the draft Report to Those Charged with Governance and recorded its thanks to the staff of the NIAO for their work.

SARC returned to the agenda running order.

2. Apologies

Apologies were received from Rodney Allen and Paula McClintock.

3. Declaration of Interests

No interests were declared.

4. Minutes of Previous Meeting

Minutes of the previous meeting, held on 19 May 2021, were approved without amendment.

5. Matters Arising

There were no matters arising.

8. Financial Assistance for Political Parties (FAPP) Scheme 2016 – Audit Report 2020-21

Richard presented SARC with the FAPP Audit Report 2020-21. He advised that there was one point raised in the management letter but that the Finance Office did not agree with it and that the Finance Office would be formally responding.

John asked if there was a conflict of interest for him on this agenda item as he was the signing officer for claims for funding under the FAPP Scheme 2016 for his political party. Lesley advised him that there was no conflict of interest.

John then said that he concurred with Richard's view of the recommendations in the management letter.

SARC noted the FAPP Scheme 2016 Audit Report 2020-21.

9. Internal Audit Activity / Assurance

Eddie Kelly provided an overview of the Internal Audit activity. He highlighted that since 1 April 2021 six final reports had been issued, of which four received a substantial assurance and two satisfactory assurance. He also advised that three follow-up reports had been issued, all of which received a substantial level of assurance. Overall, he advised that he could provide satisfactory assurance for the year ended 31 March 2021.

Eddie summarised the reports that had issued since the May 2021 meeting of SARC and the recommendations made as follows:

• Review of the Procurement Office made three recommendations and a satisfactory level of assurance was awarded;
• Review of Members Expenses (Final Testing) 2020/21 made no recommendations and substantial assurance was provided;
• Review of the Commission and Clerk/Chief Executive's Office made no recommendations and substantial assurance was provided;
• The Follow-Up Review of IS Infrastructure (Cyber Security) concluded that both of the recommendations made in the previous report had been fully implemented and the substantive level of assurance was retained; and
• The Follow-Up Review of the Administration of Secretariat Pensions found that of the five recommendations made in the previous report, four had been implemented and one was in progress and the assurance level had been raised to substantial.

Eddie provided an overview of the Internal Audit reviews in progress and asked SARC to note that no cases of whistleblowing or fraud had been reported to Internal Audit since the last meeting.

Jim said that the delivery of planned Internal Audit work was an important source of the assurance that SARC provided to the Assembly Commission and that there were no substantial weaknesses in the internal control environment. He commended the fact that the work of Internal Audit had matured towards providing added value and that the planning, scope, risk based nature and range of audits had improved.

Jim asked if Eddie was content with resources currently available to Internal Audit. Eddie confirmed that he was but would keep it under review.

Derek and John concurred with Jim's comments.

SARC noted the Internal Audit Activity / Assurance Report.

10. Internal Audit Continuous Improvement Plan

Eddie advised SARC that when developed in 2019, the Internal Audit Continuous Improvement Plan (CIP) contained five recommendations of which only one action remained in progress. He said that this related to the development of an Internal Audit Manual containing a centralised set of desk instructions setting out the procedures within the Internal Audit Unit which had been hampered by other priorities, but would be progressed over the summer.

Eddie noted that the other recommendations included in the CIP were new recommendations arising from the recent Internal Audit External Quality Assessment Report. He said that these were challenging recommendations that would make an important contribution to the ongoing development of the Internal Audit Unit, and a progress report would be presented to SARC in 12 months' time.

SARC noted the Internal Audit Continuous Improvement Plan.

11. Internal Audit External Quality Assessment Report

Eddie presented the Internal Audit External Quality Assessment Report. He highlighted that the report had found that the Internal Audit was in general conformance with the Public Sector Internal Audit Standards. He advised that Assembly Commission management had worked with the reviewer to develop the value added recommendations to further the development of the Internal Audit Unit, and that the recommendations had been added to the Internal Audit Continuous Improvement Plan.

Jim stated that it was a good report and that Internal Audit should be congratulated for meeting Public Sector Internal Audit Standards. He added that the section on added value was welcome.

Jim asked Eddie to pass on SARC's thanks for the report which he described as a professional and useful document.

SARC noted the Internal Audit External Quality Assessment Report.

12. Audit Recommendations Schedule

Julie Devlin summarised the status of the outstanding audit recommendations advising that four recommendations had been completed since the last meeting, five recommendations were in progress and five were outstanding but that it was planned that the recommendations would be completed before the next SARC meeting.

Jim noted that the recommendations were well monitored and actioned by management, and that this was indicative of good governance within the organisation.

SARC noted the status of the Audit Recommendations Schedule.

13. Corporate Risk Register

Julie presented the CRR for June 2021. She advised SARC that a quarterly review of the CRR had been carried out by SMG and that it would be formally agreed by SMG at its meeting later that day. She advised that there had been no change to the risk scores and that there were no risks with a red status.

Jim thanked Julie for presenting the CRR and commended its tone and content. He said that the CRR was clearly subject to regular review, presented a realistic summary of the risk profile of the organisation and was an area of strength.

SARC noted the Corporate Risk Register.

14. Procurement Office Activity Report

Tara Caul presented the Procurement Office Activity Report and gave an overview of the Procurement Office staffing. She also provided a summary of the work undertaken by the Procurement Office including procurements over £30K, new frameworks, Single Tender Actions and an overview of the major procurements planned for 2021-22.

Tara also advised that with the UK exiting the European Union, the Cabinet Office had announced a formal review of UK Public Procurement which was likely to lead to some fundamental changes to how procurements were conducted and that the Procurement Office would be monitoring the developments closely.

Jim stated that procurement was a challenging area, subject to constant change and that it was important to have a Procurement Office which could consider the big picture. He said that SARC welcomed the approach of the Procurement Office in relation to the overarching Procurement Strategy.

SARC noted the Procurement Activity Report.

15. Key Guidance from Department of Finance

Julie advised SARC that since SARC last met in May 2021, no key guidance had been issued by the Department of Finance.

SARC noted that no key guidance had been issued by the Department of Finance since the May 2021 SARC meeting.

16. AOB

There were no additional items of business.

17. Date of Next Meetings

It was agreed that the next meeting would be held in October 2021, date to be confirmed.

The meeting ended at 12.13 pm