Minutes
Meeting of the Audit and Risk Committee
The Inaugural meeting of the Audit and Risk Committee was held on Friday 26 August 2011
at 10:30 am in the Ash Room, Denholm House, Livingston
Present:
Sir Andrew Cubie (Chair)
Bill Maxwell
Ruth Brown (External Auditor)
Les Henderson (Internal Auditor)
Charles Lovatt
Iain Nisbet
Allan Smith (Internal Auditor)
Shirley Young
Apologies:
Geoff Lees (External Auditor)
David Morrison
In attendance:
Laura Burman
Gillian Howells
Catherine MacIntyre
Stuart Robinson
Deborah Spratt
1.
2.
Apologies and welcome
Noted 1 :
Bill welcomed and thanked the non executives for joining the Audit
and Risk Committee and for attending the first meeting. Bill also
extended his thanks to Sir Andrew for agreeing to Chair the
Committee.
Noted 2 :
The above apologies were noted.
Declarations of Interest
Noted 1 :
Charles declared that he was on the Board of Directors at Elmwood
College.
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3.
Draft Terms of Reference
Noted 1 :
The Committee agreed that it would be useful to review the Matters
for Consideration which includes the Terms of Reference (ToR)
Noted 2 :
Stuart confirmed that the first paragraph ( ltalics ) would be included
as part of the ToR.
Action 1:
All references to HMIE should be replaced with Education
Scotland. Catherine and Stuart agreed to action this.
Action 2:
Stuart confirmed that reference to the first paragraph
Inspectorate’s administration budget does mean in fact
Education Scotland’s budget. Stuart will make this amendment.
Meetings
Agreed 1:
Action 3:
Papers should be issued to Committee Members at least one week
prior to a meeting taking place, but sooner if possible. Audit
Scotland indicated that it would be difficult to work to this deadline
but it may be possible to submit a later paper to allow all other
papers to be issued.
Catherine agreed to pass a copy of the Corporate Calendar on to
the Auditors.
Responsibilities
Agreed 2:
There was no mention of monitoring performance. The Committee
agreed that they were responsible for the assurances that effective
monitoring systems exist and not the outcomes.
Action 4:
This section within the draft Terms of Reference is to be
updated to reflect the Committees comments. Catherine and
Stuart will amend.
Agreed 3:
Charles raised a question about accounting policies which Stuart
confirmed would go to the Corporate Management Group for
approval. It was agreed that it would be useful if the Audit and Risk
Committee had an opportunity to advise on policies.
Agreed 4:
Page 3 / 2nd bullet should reflect that as well as the Internal Audit
Strategy the Internal Audit Charter would be required at the same
time. The ToR should be amended.
Action 5 :
Catherine and Stuart will amend the ToR to reflect this.
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Noted 3:
Stuart confirmed that Education Scotland uses the Scottish
Government Fraud, Whistleblowing and IT security policies. A
reminder and link to these is issued to staff on an annual basis. Any
instances of suspected fraud are reported to the Audit and Risk
Committee and the Fraud Unit in Scottish Government. The SG
Fraud Unit may request Education Scotland to look into these and
produce a report. Audit Scotland would also review the report and
any cases would be reported at the Audit and Risk Committee.
Appendix 2 – Core Annual Programme of Business for Audit and Risk Committee
Action 6:
Audit Scotland plan to be added in to the February meeting.
Catherine to note.
Agreed 5:
There needed to be scrutiny of Health and Safety arrangements and
there was a clear view from Committee members that this should be
part of their remit. An annual report should also go to the
Management Board. The Management Board also have Health and
Safety on their ToR in terms of policy setting.
Agreed 6:
A paper should be prepared for the next meeting of the Committee
describing how Health and Safety issues are managed and how
performance would be reported. A starting point for this will be to
look at the report which goes to the CMG.
Action 7 :
Stuart to note paper for next Audit and Risk Committee meeting.
Noted 4:
Allan noted that there was no mention of the Internal Audit Annual
Report to the Committee.
Action 8 :
Allan agreed to send details to Stuart for this to be updated.
Annex 1
Noted 5:
Sir Andrew said that it would be useful to think about what additional
learning/training opportunities there are for Committee members.
Catherine confirmed that steps are already being taken to develop a
programme.
Noted 6:
It was noted that CIPFA Training Courses would be a good place to
start as well as Audit Scotland courses but that more focus should be
on showcasing key aspects of Education Scotland’s work.
Action 9:
Ruth agreed to send on any course material to Catherine.
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Noted 7:
Annex 4
Action 10:
Annex 5
Noted 8:
4.
Charles asked that the Secretariat keep a log of all training and
development that the Committee is involved in, for example, the All
Staff Meeting / Away Day / CIPFA Training courses.
The Committee requested a copy of the CEO’s letter of
appointment which was issued from the Scottish Government.
Catherine to arrange.
Appraisal / self appraisal had been factored in to the work of the
Committee. It was noted that all A&R Committee meetings have
been scheduled in the diary prior to the Management Board
meetings.
Corporate Performance
4.1
4.2
Handover Statement from LTS Accountable Officer
Noted 1 :
This arose from the final Audit Committee meeting of
Learning and Teaching Scotland as Committee members felt
it important that outstanding audit recommendations should
be drawn to the new CEO’s attention. Action had been taken
to incorporate outstanding recommendations in to Education
Scotland’s Corporate Performance Report.
Agreed 1 :
It was agreed that Sir Andrew, as Chair of Education
Scotland Audit and Risk Committee should write to the
Depute Chair of the Residual LTS Board. Confirming that
the outstanding LTS audit recommendations have now been
considered by the Committee and any follow through action
agreed where appropriate.
Action 1 :
Catherine to draft letter for Audit and Risk Committee
Chair.
Reports as at June 2011
Noted 1 :
Laura Burman was undertaking a review of reporting across
the organisation. Committee members were invited to
provide comment with a view to developing an integrated
performance report.
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Noted 2 :
Iain asked for some clarity under Directorate 6 deliverables
regarding ‘HMI contribution to complaints under section 70 of
the Education (Scotland) Act’. Stuart confirmed that this is
based on historical arrangements and a new complaints
procedure would need to be established for Education
Scotland.
The Ombudsman requires this to be in place by October
time.
4.3
Action 1 :
The Committee requested that they see a final draft by
email. Stuart would arrange this.
Action 2 :
Shirley made reference to equalities and good practice
and asked that this be reflected in the commentary
around equality assessment as this is important for
Education Scotland. Laura to include details on equality
assessment in the commentary box.
Noted 3 :
As the Organisational Development Programme was
underway, it was noted that the content of some of the
programmes could change and that all areas of work would
need to be captured as part of the business planning
exercise which was work in progress. The OD review would
help establish a new programme structure which in turn
would underpin performance reporting.
Noted 4 :
Stuart confirmed that the Business Planning Tool was being
developed and tailored to ensure that it was fit for purpose
going forward.
Agreed 1 :
Committee members thanked Laura for the work done so far
to integrate the performance reporting.
LTS Governance Structure Diagram
Noted 1:
Stuart explained that the purpose of presenting the diagram
was to stimulate discussion/thinking around development of
governance arrangements for Education Scotland.
Noted 2:
The Committee discussed the purpose of the Programme
Review Board which was to provide assurance to the CMG
and sought further clarity about respective responsibilities of
the groups included in the diagram.
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Action 1 :
4.4
5.
The Committee requested to see the Terms of Reference
for each of the groups outlined on the diagram as they
would like to gain clarity of responsibility. Catherine
would arrange for the Committee to receive a copy of
these.
Final Action Points from LTS + HMIE Audit Committees
Noted 1 :
The Committee were content to note that actions had been
completed and agreed that this should be reported to the
Management Board.
Action 1 :
Catherine to note for the Management Board Agenda
and Chair’s Report to the Management Board.
Risk Management
5.1
5.2
Education Scotland Risk Strategy / Policy
Noted 1 :
Stuart advised that he would roll forward HMIE’s
management of risk, the reason being it iwas imbedded in
the business planning system. However, rating the risk by
using likelihood/impact scoring was largely the same across
the predecessor organisations. The Business Planning tool
could be adapted so that risk is embeded within each project.
Noted 2 :
The Committee noted that Laura was carrying out a review of
all policies and strategies followed in the predecessor
organisations. This review would include Risk Strategy and
a proposal for Education Scotland’s Risk Framework which
would be developed for discussion with CMG in the first
instance.
Review of Corporate Risk Register
Noted 1 :
Laura explained that the Risk Register for the set up
programme risks should be replaced by the OD
Programme’s own Risk Register which was owned by
Maggie Tierney. The OD Programme was a high level risk
and would also be reflected on the Corporate Level Risks
(owned by CMG).
Noted 2 :
The Directorate owned Risks would need to be reviewed to
reflect the risks for tasks / projects that each Directorate
would undertake. Minor typing error noted in description 2
which should be ‘reputational’ and not ‘technological’.
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6.
Agreed 1 :
The Committee thanked Laura for the work taken forward so
far. The Committee confirmed that they were content with
the approach and looked forward to seeing a further draft at
their next meeting.
Action 1 :
Laura to have a further Risk Register / approach
available for the Committee’s next meeting on 5
December.
External Audit
6.1
HMIE Annual Report on the 2010/11 Audit
Noted 1 :
The Committee noted the HMIE Annual Report on the
2010/11 Audit.
Noted 2 :
The Committee asked for sight of Education Scotland’s first
balance sheet and Stuart confirmed that he would be able to
provide this to the Committee at the next meeting on 5
December.
Noted 3 :
Page 10 / paragraph 34 notes the financial position at 31
March 2011. In relation to the final sentence it was noted that
Education Scotland was engaged in scenario planning and
discussions with Scottish Government about baseline
budget. Efficiencies were expected to arise from that
process.
Noted 4 :
Referring to paragraph 36, Ruth confirmed that there were
good management of processes within HMIE. However,
Ruth was not familiar with LTS and, therefore, this paragraph
was a marker only at this stage.
Noted 5 :
Regarding T&S systems, it was noted that this was a central
Scottish Government system and Education Scotland have
no control over this. Allan reported that T&S systems would
be changing in due course but the timing of this was still
unclear as it is being driven by the Treasury.
Action 1 :
Stuart to provide the Committee with a copy of
Education Scotland’s first balance sheet at the meeting
on 5 December.
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7.
Internal Audit
7.1
8.
Education Scotland Internal Audit Plan 2011/12
Noted 1 :
It was noted that further discussion needed to take place with
Stuart on how Internal Audit would approach the audit and
when.
Noted 2 :
Iain asked about the number of audit days/days for field work
and review days. Allan said the number of days in total for
internal audit still needed to be discussed and agreed.
Agreed 1 :
The Committee agreed the proposed Internal Audit Plan.
Finance
8.1
Education Scotland set up costs
Noted 1 :
8.2
The Committee noted the costs associated with the set up of
Education Scotland and discussed the pension liability costs
and the way in which the costs had been calculated.
Education Scotland Budget 2011 / 12 and SR11
Noted 1 :
The Committee noted the first consolidated financial report
for Education Scotland. It was hoped that by the next
meeting of the Committee there would be more to report as
Education Scotland’s 3 year budget should have been set by
then.
Noted 3 :
It was noted that all financial reporting at the moment was
work in progress as the systems within the two predecessor
organisations were brought together.
Noted 4 :
Gillian confirmed that the Education Scotland Management
Accounts are currently work in progress.
Agreed 1 :
As previously discussed, the Committee confirmed its
request for sight of a balance sheet for Education Scotland
which outlines liability and contingencies for the next meeting
on 5 December.
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9.0
10.
Education Scotland Draft Framework Document
Noted 1 :
The fully developed framework document would outline the role of
the Chief Executive and how that relates to the functions of what was
carried out by the HM Senior Chief Inspector : conventional Chief
Executive of the organisation/Chief Professional Adviser to
Ministers/Guarantor of inspections and inspection process.
Noted 2 :
Leslie Evans, DG Learning and Justice and the Permanent Secretary
needed to be satisfied about how these roles are configured in
Education Scotland. This was being discussed and a clear view was
expected soon. There was a need to give reassurance to
stakeholders about the way in which the inspection process was
carried out.
Noted 3 :
A Code of Practice would need to be developed and this could
strengthen the case for a strong complaints process.
Noted 4 :
For clarity Bill confirmed that, as all staff in Education Scotland were
Civil Servants, there would be no Remuneration Committee and any
complaints in relation to the CEO would be directed to Leslie Evans.
Agreed 1 :
It was agreed that Sir Andrew and also Graeme Ogilvy should meet
Leslie Evans to discuss the Framework document. It would be
helpful if this could be agreed before the Scottish Learning Festival in
September.
Action 1 :
Bill to arrange for Sir Andrew / Graeme / Leslie to meet in the
next few weeks to discuss the Framework document.
Health and Safety
Noted 1 :
Health and Safety Committee meetings continue to take place within
both predecessor organisations. Stuart confirmed that there were no
significant matters to report.
Agreed 1 :
The Committee confirmed that they were satisfied that all systems
were in place and working and they are content with this verbal
report.
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11.
12.
Any Other Business
Noted 1 :
Education Scotland logo : Shirley commented that the font style of
the new logo did not meet the required guidelines. It was noted that
Denise Brock, Head of Communications, was currently checking this
out with the company used to develop the logo.
Agreed 1 :
It was agreed that Bill would report back to the non executives on the
outcome of the discussions.
Action 1 :
Bill to provide an update to the Committee on the outcome of
discussions regarding the font style of the logo.
Date of Next Meeting
The next meeting of the Audit and Risk Committee will take place on Monday
05 December 2011 at 10.30am in the Optima, Glasgow.
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