Meeting of the Audit and Risk Committee
A meeting of the Audit and Risk Committee was held on Friday 21 February 2014 at
10:30 am in the Large Meeting Room, Denholm House, Livingston.
1.
Apologies/welcome*
Members present:
Moi Ali
Kate Dunlop
Iain Nisbet
Linn Phipps
Education Scotland attendees:
Laura Burman
Stephen Coulter
Alastair Delaney
Gillian Howells
Graeme Logan
Bill Maxwell
Linda Rae (for start of meeting only)
Stuart Robinson
Audit attendees:
Alasdair Craik
Les Henderson
Jennifer Inglis-Jones
Laura Nelson
(External Auditor)
(Internal Auditor)
(Internal Auditor)
(External Auditor)
Apologies:
Alan Armstrong
Gayle Reilly
Kate opened the meeting by welcoming Jennifer Inglis-Jones and in particular
Graeme Logan to his first meeting.
Noted 1: Bill provided the Committee with an update on an on-going situation relating
to the closure of The Hamilton School.
2.
Minute of previous meeting and action log*: 11 December 2013
Noted 1: A fair and proper record subject to changes discussed.
Noted 2: The action log has been amended to reflect discussions.
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3.
Matters arising*
Noted 1: No other matters arose, other than those which would be progressed as
part of the agenda.
4.
Declarations of interest*
Noted 1: No changes to the current declarations were made.
Items for discussion
5.
Internal Audit*
Noted 1: Internal audit, provided a verbal update to the Committee on the progress
of the audit plan for 2013/14. The main points raised were:
 IT review – almost complete pending further discussion with Stuart
Robinson and Stephen Coulter with the report circulated by early March.
 Annual governance review – Committee members will be sent draft
terms of reference in week commencing 24 February. The review will
cover the governance structure, effectiveness and quality, with an
emphasis on budgets and budgetary control.
Noted 2: The issue regarding the process for undertaking additional projects by
Scottish Government and how these additional pressures are absorbed
within the organisation was discussed.
Noted 3: The review of business planning will include a decision making process
which ensures that individuals are not making decisions and that they are
part of a strategic approach which will better identify where spending will be
allocated, as well as considering the People Strategy aim of having the right
people in the right place at the right time.
Noted 4: It was suggested that the process could be based on a risk management
approach with a further look ahead.
Noted 5: The governance review will be light touch this year with a focus on budgets
and budgetary control. A more specific review is planned for next year to
identify the decision making process and how well it works.
Noted 6: An invitation was extended to internal audit to join the review of business
planning itself, to provide the group with the benefit of experience.
Action:
Non-Executive Directors should provide any comments on the terms
of reference for the reviews to internal audit.
Noted 7: The first two internal audit reports will be published in March with the third
in early April to meet External Audit timetable.
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Noted 8: Internal audit met with Bill Maxwell to discuss the areas for 14/15 audit
plan. The likely areas will be:
 Corporate: business planning process and performance management
 Budgetary control
 Operational: grants, rewarding and outcomes and alignment with
Education Scotland’s vision and mission.
Action:
Internal audit will circulate the list of areas for comment in week
commencing 24 February.
Action:
Internal audit to provide a written report, rather than verbal update at
subsequent meetings at the request of Non-Executive Directors.
Noted 9: The annual assurance and annual plan will be presented to the Committee
at the next meeting.
6.
External Audit*
Noted 1: Audit Scotland provided the Committee with an overview of the annual audit
plan for 2013/14. The main points raised were:
 The appendices include a timetable for the delivery of the financial
statements. The aim is to have agreement of statements and reports by
the end of June with the final audit opinion ready by the end of July.
 Appendix B: key risks facing the organisation, Audit Scotland will review
the work of Internal Audit with regards to the IT review, any areas of
concern can be further investigated.
7.
Performance report
Noted 1: The Committee was invited to discuss the performance report. Although
the intended focus of the discussion was to be around the amber projects,
the Committee discussed the performance report in general terms and
highlighted a number of actions.
Action 1: As requested at the previous meeting: definitions of the RAG status
are to be included in the report; commentary provided against each
project regardless of RAG status; and an indication of the direction of
travel.
Action 2: The performance report should be circulated in advance to the
Committee.
Action 3: The colours used on the report should be changed to ensure that the
text is readable.
Action 4: The current report is a temporary measure whilst a more robust
corporate performance report is developed. The new corporate
performance report will be one which provides the Committee with: a
sufficiently strategic view of the organisation’s performance; assures
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them that the organisation is able to manage the projects, rather than
the management of each project; indicates the priorities of the
organisation, through the use of key performance indicators (KPIs);
cross references with the corporate risks.
Action 5: Clarity of the concept of the Committee’s role in looking at
performance is required.
All actions to be progressed by Stephen Coulter.
8.
Corporate risk*
Noted 1: Having taken on board the previous comments from A&RC Members, the
organisation is developing the corporate risk register with a view to
cascading the changes throughout the organisation. In addition, CMG have
agreed to undertake a workshop on risk.
Noted 2: Risk 1 has increased to High following the swing of budget from overspend
to underspend. Work is in hand to review the financial management
systems.
Noted 3: The staffing profile will be reviewed alongside the review of business
planning. The longer term resourcing plan is in its early stages of
development and is likely to take several months to complete.
Noted 4: The Committee should be aware of work undertaken to review the
arrangements in place for seconded staff and the attendant issues such as
whether or not this model actually builds capacity within the system.
Noted 5: Risk 6 was reduced given our current circumstances. Risk 7 is likely to
reduce by the next meeting in light of work being transferred to the ICT in
Learning Project Board.
8.1
Risk Management Group Terms of Reference
Noted 1: The Risk Management Group terms of reference were approved by the
Committee, subject to a minor action below.
Action:
The Risk Management Group should consider inviting a member of the
Audit and Risk Committee to join. Laura to progress.
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9.
Partnership working with local authorities
Noted 1: The Committee had the opportunity to discuss an important development
in our work by hearing an overview of the paper.
Noted 2: Committee members noted that they were very satisfied that this new
initiative had been well handled and would welcome more papers of this
standard which covered risks and issues linked together. This approach
would allow Non-Executive Directors the opportunity to learn and allow
them to contribute to the discussions in a timely manner – as part of the
development rather than being informed after the fact.
Noted 3: Committee members suggested an additional section on the challenges
being considered and the risks and controls not owned by Education
Scotland.
Items for noting
10.
Procurement capability assessment
Noted 1: The Finance Team has been working to make improvements in order to
increase the scoring of the procurement capability assessment (PCA).
Committee members were keen to recognise the work that’s been
undertaken to improve results.
Noted 2: Due to the nature of the PCA and the way in which Education Scotland
operates it’s unlikely that a 100% score could be achieved.
Noted 3: The PCA is a new way of auditing capacity, not a benchmarking tool.
11.
Health and safety report
Noted 1: A brief overview of health and safety issues was presented.
Action:
All staff should be informed of the location of the defibrillators and
alerted to the fact that all staff can use them not just those first aid
certified. Stuart to completed.
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12.
Finance report
Noted 1: Committee members were provided with a full and summary version of the
finance report, which reflects feedback previously provided by members.
Committee members welcomed the revised reports.
Noted 2: The finance report currently shows an underspend of £500k and that it is
likely to reduce over the coming weeks. T&S appears slightly higher and
£1.6m remains to be issued in grant funding, therefore we are not able to
confirm if these funds will be allocated within the current financial year.
Noted 3: Meetings are ongoing with senior staff to review this year’s budget as well
as next year’s to help improve forecasting. Committee members should be
aware that the discussions have been very challenging to ensure that the
budget bids are accurate and viable. However, further work is required
which will include training for senior staff with input from Internal Audit and
the Finance Team.
12.1
Certificates of assurance
Noted 1: Committee considered draft certificates of assurance.
Noted 2: The certificates of assurance are based on a Scottish Government
template, and underpin the statement of governance.
Noted 3: Committee members were keen to ensure that this process allowed the
organisation to learn and make improvements. The manner in which it has
been nuanced is helpful, as are the extensive comments which should be
included in all sections. Some additional commentary could be considered
in later sections.
13.
Any other business
Action:
A meeting to be arranged between all Auditors (Internal and External)
and the Non-Executive Directors.
14.
Date of next meeting*
The next meeting is scheduled to take place on Friday 13 June 2014 at 10.30 am,
Denholm House, Livingston.
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