Minutes of Proceedings

1 APOLOGIES

1.1 No apologies were received.  It was noted that the Assembly Commission is due to nominate a member to serve on SARC at the Commission meeting to be held on 24 June 2015.

2 DECLARATION OF INTERESTS

2.1 In relation to audit recommendation 10 of agenda item 6, Richard Stewart declared an interest as Treasurer of the NI Assembly and Business Trust.

3 MINUTES OF THE PREVIOUS MEETINGS

3.1 The minutes of the SARC meetings held on 3 April and 19 May 2015 were approved without amendment.

4 MATTERS ARISING

4.1 Having been given assurance that the principle of receiving specific documents from Central Procurement Directorate, if required, had been established, and that the Director of Legal and Governance Services and the Head of Internal Audit had undertaken to keep the Audit Plan under review as the year progressed, SARC members noted that all the action points relating to both sets of minutes were now complete.

5 INTERNAL AUDIT ACTIVITY / ASSURANCE

5.1 Brian Moreland reported that, since the SARC meeting on 3 April 2015, three Internal Audit reports have been issued in final form:

• Review of Accounts Preparation – Substantial

• Review of NIABT (Secretariat support) – Satisfactory

• Review of Support Services – Satisfactory

5.2 In addition, the draft Social Media report was issued on 29 May 2015, and the

draft Post-Contract Benefit Realisation report was issued on 8 June 2015, both with a satisfactory level of assurance. The final reports 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 Financial Planning – Satisfactory, and the Justice Committee - Substantial (raised from satisfactory)

5.4 The final report on Support Services was issued on 1 June 2015, with a total of five recommendations, one at risk rating 1 and two each at risk ratings 2 and 3.  Internal Audit arrived at a satisfactory level of assurance. Recommendations have been made in respect of business plan objectives, office keypad code and the payment method for designer/makers.

5.5 The final report on Accounts Preparation was issued on 27 May 2015, with two recommendations made at risk rating 3. The recommendations made were in respect of a step-by-step guide for accounts preparation, and the password protection of the capital expenditure spreadsheet.  The level of assurance for this assignment was substantial.

5.6 The draft report in respect of Social Media was issued on 29May 2015.  A total of nine recommendations have been made, four at risk rating 2 and five at risk rating 3.  Recommendations have been made in respect of staff training, monitoring of compliance, and guidance for the use of social media.

The level of assurance for this assignment is satisfactory.

5.7 The draft report on Post-Contract Benefits Realisation was issued on 8 June 2015, with three recommendations; two at risk rating 1 and one at rating 3.Recommendations were made in respect of certificates of performance, contract closure forms and post-contract project reports. The assurance rating for this audit is satisfactory.

5.8 The Internal Audit plan detailed at the April SARC meeting is now under way, starting with the audit of Members’ expenses. On-site visits to constituency offices, as part of this assignment, are in progress. The approach now being taken on this audit was outlined for SARC members.  Preparation in respect   of the audit of iTrent will begin shortly, with the assignment due to begin in June.

5.9 Brian Moreland reported that the overall level of assurance for the period 1 April 2015 to 1 June 2015 is satisfactory. With the results of the final assignments from the 2014/15 Internal Audit plan known, the overall level of  assurance for that year can now be confirmed as satisfactory and all audits were completed in accordance with the Public Sector Internal Audit Standards (PSIAS).

5.10 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. Assurance ratings were 67% satisfactory and 33% substantial.

As was noted in the April SARC meeting, 100% of the audits completed for the 2014/15 plan resulted in either substantial or satisfactory assurance.

5.11 Brian Moreland advised that the next meeting of the Inter-Parliamentary Head of Internal Audit Group will be held in the Isle of Man in late June 2015. Agenda items will include physical and cyber security, governance within Parliamentary administrations and risks associated with austerity.

5.12 No whistleblowing cases have been reported to Internal Audit to date this year.

5.13    Brian Moreland updated SARC members in relation to a number of PSNI investigations.  Final recommendations from the PSNI are still awaited.

5.14    The Head of Internal Audit informed SARC members of the current Internal Audit staffing position and the fact that all members of the 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 13 recommendations currently “in progress”.  Members were content for recommendations 2, 8 and 9 to be removed from the monitoring schedule, as they had been overtaken by events.  In relation to recommendation 10, relating to the NI Assembly and Business Trust and the creation of a “Reserve Policy”, should implementation still be ongoing at monitoring in October, it was agreed that wording would be amended to better reflect the Secretariat’s (rather than Trustees’) responsibilities.

ACTION: JOHN STEWART / BRIAN MORELAND

7 RTTCWG 2013 AUDIT RECOMMENDATIONS SCHEDULE

7.1 SARC members noted that all but two of the 17 recommendations in the Report to those charged with Governance 2013 have been fully implemented.

Members regarded recommendation 5 as complete, and it will be removed from future monitoring schedules.

8 RTTCWG 2014 AUDIT RECOMMENDATIONS SCHEDULE

8.1 SARC members noted that, of the seven recommendations in the Report to those charged with Governance 2014, five have been fully implemented to date.  Members were content that the two remaining recommendations were now complete.

9 OUTSTANDING AUDIT RECOMMENDATIONS SCHEDULE

9.1 SARC members noted the nil return.

10 CORPORATE RISK REGISTER

10.1 SARC members noted the focus on budget allocations and discussed and noted the changes made to the contents of the Corporate Risk Register since the April 2015 SARC meeting,

11 STEWARDSHIP STATEMENTS  (at 31 March 2015)

11.1 SARC members discussed and noted the contents of the Stewardship Statements as at 31 March 2015.

12 PROCUREMENT COMPLIANCE REPORT

12.1    Richard Stewart gave SARC members an overview of the Procurement Compliance Report, and the fact that compliance was at 99.8% in 2014-15.  It was noted that up-to-date Business cases in relation to three longstanding contracts are being processed, and SARC members were assured that this would bring all existing contracts under the new Business Justification / Business case policy, and that the new policy was well embedded across the Secretariat.  Assurances were also sought and received in relation to Procurement card use and Single Tender Actions (STAs).  It was noted that Rates, PSNI cover and DFP Estate Security had all been classified as STAs, which if not so classified would significantly reduce the figure for STA expenditure.  SARC members were content for these services to be excluded from STA figures but included in a footnote in any future reports.  SARC members found the document useful but, given the staff resource involved in producing it, were content that the best mechanism for bringing the key Procurement Compliance issues to the attention of SARC be reviewed prior to the production of next year’s accounts.

ACTION: RICHARD STEWART

13 Draft final Report to those Charged with 

Governance

13.1    Louise Mason gave SARC members an overview of the draft Final Report to those charged with Governance and acknowledged that Management responses are still awaited.  Matters relating to procurement compliance and the quality of the accounts had been raised but the key issue was an Excess   Vote arising from the end-March final valuation from the Government Actuary’s Department for provision for Members’ pension liabilities, and this         would result in a qualified regularity opinion for the accounts.  The possibility of this situation arising had been raised by SARC members a year ago     and as recently as the SARC meeting on19 May 2015 but officials’ discussions with DFP had failed to provide any solutions to date.  It was    acknowledged that the issue was largely outside of the Assembly’s control. The Accounting Officer will review ways to manage the risks arising from this largely uncontrollable transaction and brief the Assembly Commission.

ACTION: TREVOR REANEY

14  NIA RESOURCE ACCOUNTS 2014-15

14.1 Paula McClintock gave an overview of the Resource Accounts and advised SARC members of some minor drafting changes that had recently been agreed between the NI Audit Office and the Secretariat.  SARC members and the Accounting Officer thanked Richard Stewart, Paula McClintock and the Finance team for the timely production of the 2014-15 Accounts.  Subject to the wording for “Principal risks and uncertainties” being replicated in the

Governance Statement, SARC members were content for the Accounting Officer to sign the Accounts.

ACTION: PAULA McCLINTOCK / TREVOR REANEY

15 NIAO CONFLICTS OF INTEREST GOOD PRACTICE 

GUIDE – “COMPLY OR EXPLAIN” ANALYSIS

15.1    SARC members were grateful for the Secretariat’s “comply or explain” analysis that had been undertaken in relation to the NI Audit Office’s Conflicts of Interest Good Practice Guide which had been issued at the end of March 2015.  Members were content with the levels of Assembly compliance and agreed that no further action is required.

16  A.O.B.

16.1 It was noted that DFP correspondence dated 14 April 2015 in relation to Voluntary Exit Schemes had been appropriately reflected in the Resource Accounts.

17 DATE OF NEXT MEETING

17.1 It was agreed that the next meeting of SARC would take place on Thursday 8 October 2015 at 2.00 pm.